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From: The Sharekhan Research Team [mailto:marketwatch
Sent: 16 September 2008 17:13
To: The Sharekhan Research Team
Subject: Sharekhan Post-Market Report dated September 16, 2008
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Lehman Brothers' move to file for bankruptcy wiped off more than Rs 2,000 crore from the market valuation of those Indian companies in which the US financial major has made equity investments.
Lehman itself recorded a loss of more than Rs 50 crore on its investments in India, which is nearly 10 per cent of its current holding worth an estimated over Rs 500 crore.
The loss would have been much higher if Lehman had not started offloading its equity holding in Indian companies late last month.
In a major selling spree that started on August 21, Lehman has sold shares worth close to Rs 400 crore in nearly 10 companies, including NIIT Ltd, Cranes Software, Amtek Auto, Amtek India, Fedders Llyod, Northgate, Mastek, Triveni Engg and Prajay Engg.
Prior to this sell-off, Lehman's Indian equity portfolio is estimated to have been worth more than Rs 1,000 crore, which has now nearly halved to about Rs 500 crore.
Most of the shares offloaded by Lehman in India, including those in NIIT, Cranes, Amtek Auto, Amtek India and Northgate, has been purchased by Deutsche Bank, according to the bulk and block deal data available with the bourses.
Besides the 10 companies where Lehman has offloaded its shares, Lehman had equity holding in about two dozen firms at the end of June quarter.
These firms include Spice Communications, Spice Mobile, Anant Raj Industries, Edelweiss Cap, IVRCL Infra, Tulip Telecom, Consolidated Construction, PSL, Orbit Corp, Development Credit Bank, Champagne Indage, Godawari Power, KPIT Cummins, West Coast Paper, IOL Netcom, Dhampur Sugar, Prithvi Info, Golden Tobacco, Emkay Global, Vijay Shanti Builders and Pioneer Embroidery
Experience is the teacher of all things.
- Julius Caesar
Lehman Brothers, an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide. Founded in 1850, Lehman Brothers maintains leadership positions in equity and fixed income sales, trading and research, investment banking, private investment management, asset management and private equity. The Firm is headquartered in New York, with regional headquarters in London and Tokyo, and operates in a network of offices around the world.
History Timeline
1840–1859
The history of Lehman Brothers parallels the growth of the United States and its energetic drive toward prosperity and international prominence. What would evolve into a global financial entity began as a general store in the American South. Henry Lehman, an immigrant from Germany, opened his small shop in the city of Montgomery, Alabama in 1844. Six years later, he was joined by brothers Emanuel and Mayer, and they named the business Lehman Brothers.
1850
Henry, Emanuel and Mayer Lehman founded the Firm in Montgomery, Alabama.
1858
Cotton was the cash crop of the time, and the Lehmans accepted it from the local farmers as currency to settle accounts. The brothers traded the cotton for cash or merchandise, becoming brokers for buyers and sellers of the crop. In 1858, they opened an office in New York, which was the commodity trading center of the country.
1860–1869
The Civil War disrupted the Lehmans' business. When hostilities ended, the brothers moved north and concentrated their operations in New York, where they helped establish the Cotton Exchange.
The post-war period witnessed the rapid growth of railroads, sparking the transformation of the nation from an agrarian to an industrial economy. At the time, Lehman Brothers' future merger partner, Kuhn, Loeb, was underwriting much of the financing for railroad construction.
Railroad bonds represented a significant advance in the development of capital markets. Their affordable price attracted a great number of individual investors and Lehman Brothers, recognizing a trend, expanded its commodities business to include the sale and trading of securities. The Firm also moved into the area of financial advisory, which provided the foundation for underwriting expertise.
1880–1889
During the vigorous economic expansion of the second half of the 19th century, Lehman Brothers broadened its expertise beyond commodities brokerage to merchant banking. Building a securities trading business, they became members of the New York Stock Exchange in 1887.
Setting the stage for future global growth, Jacob Schiff, a Kuhn, Loeb partner, led the Firm to establish investment-banking relationships in Europe and Japan.
1887
The Firm acquires a seat on the New York Stock Exchange
1889
Lehman Brothers underwrites its first stock offering
1900–1909
At the turn of the century, Lehman Brothers was a founding financier of emerging retailers, including Sears, Roebuck & Company, F.W. Woolworth Company, May Department Stores Company, Gimbel Brothers, Inc. and R.H. Macy & Company.
1920–1929
In the 1920s, Robert Lehman perceived dynamic changes occurring in the nation's economy, and focused the company on rapidly developing consumer industries such as retailing, airlines and communications. Lehman Brothers was a strong supporter of the entertainment sector and advised on the consolidation of major movie theater chains. Start-up ventures, including film studios RKO, Paramount and 20th Century Fox, benefited from financing arranged by the Firm.
Triggered by the stock market crash of 1929, the Depression placed tremendous pressure on the availability of capital. Lehman Brothers was one of the pioneers of innovative financing techniques such as private placements, arranging loans between blue-chip borrowers and private lenders. These loans offered strict safeguards and solid returns for lenders, while enabling borrowers to raise much-needed capital.
1929
The Lehman Corporation is created, a prominent closed-end investment company
1930–1939
The 1930s witnessed the explosive growth of radio and experimentation with a developing technology called television. Lehman Brothers underwrote the initial public offering for DuMont, the first television manufacturer, and helped fund the Radio Corporation of America, known as RCA.
Beginning in the 1930s, the increasing demand for oil set off waves of wildcat drilling in search of the resource. Companies like Halliburton and Kerr-McGee relied on Lehman Brothers for capital to fund their activities.
1940–1949
The end of World War II ignited an unprecedented era of prosperity, fueling the growth of consumer industries such as home appliances and auto manufacturing. Lehman Brothers became an important financial advisor and underwriter for many growing companies and established a number of long-term relationships that are still active today.
1949
The Firm establishes its 10 Uncommon Values® Portfolio.
1950–1959
Economic expansion accelerated in the 1950s with the dawn of the Electronics Age, and Lehman Brothers arranged start-up financing for companies such as Litton Industries. The Firm also lent its expertise and advisory skills to Burlington Mills, Schenley Industries and American Export Lines.
This period was also the beginning of the computer era, and Lehman Brothers provided IPO underwriting for industry pioneer Digital Equipment. The Firm later arranged the acquisition of Digital by Compaq.
The travel industry benefited from the sustained economic growth of the period, and Lehman Brothers sponsored the IPO of Hertz Rent-a-Car. The focus on transportation and travel continued into the 1960s, with Lehman Brothers advising Ford Motor Company, TWA, American Airlines and Continental Airlines.
At this time, consumer-driven companies such as General Foods, Campbell Soup and Philip Morris turned to Lehman Brothers to help finance the growth necessary to satisfy burgeoning demand for their products.
1960–1979
By the 1960s and 1970s, many of Lehman Brothers' clients were expanding overseas. To meet their financial needs, the Firm opened an office in Paris in 1960, followed by a location in London in 1972 and Tokyo in 1973. This growing international presence was enhanced by the merger with Kuhn, Loeb.
With continued advances in electronics and information technology in the 1970s, Lehman Brothers worked with leading players such as IBM, Digital Equipment Corporation and Loral.
1975
The Firm acquires Abraham & Co.
1980–1989
In the 1980s, Lehman Brothers played an important role in the dawn of the Information Age, helping fund such companies as Intel and new technology businesses of the period, which later became the leading players in the high-tech revolution.
During the robust merger and acquisition activity of the 1980s, Lehman Brothers advised companies such as Chrysler, American Motors, General Foods, Philip Morris and Hoffman-LaRoche on expanding domestic and international operations.
In the mid-1980s, breakthrough research in the life sciences introduced the biotech era, revolutionizing the healthcare industry. Lehman Brothers assisted a number of new businesses in obtaining the capital needed to fund research and development. A leading advisor to the healthcare sector, the Firm worked with major pharmaceutical companies during the international consolidation and globalization of the industry.
1984
American Express acquires Lehman Brothers and merges the Firm with Shearson.
1986
Lehman Brothers acquires a seat on the London Stock Exchange.
1988
Lehman Brothers acquires a seat on the Tokyo Stock Exchange.
1990–1999
American Express divested Shearson in 1993, and the independent Firm once again became known solely as Lehman Brothers.
1994
The Firm becomes independent through a public stock offering and Lehman Brothers Holding Inc. common stock commences trading on the New York & Pacific stock exchanges.
Lehman Brothers opens an office in Tel Aviv, Israel, building upon its long-term presence in that country.
1995
The Firm earns recognition as "Global Bond House of the Year" by International Finance Review.
1998
Lehman Brothers joins the S&P 500 Index and establishes its 10 Uncommon EuroValues portfolio.
1999
Lehman Brothers establishes its first venture capital fund and celebrates the 50th year of its 10 Uncommon Values® portfolio.
Lehman Brothers establishes an alliance with Bank of Tokyo-Mitsubishi for Japanese M&A.
The Firm passes the $1 billion mark in annual net income for the first time.
2000+
Lehman Brothers celebrates its 150th year anniversary.
The Firm joins the S&P 100 Index and its stock price hits $100 for the first time.
Lehman Brothers becomes the first firm to underwrite corporate debt on the Internet.
The Firm launches LehmanLive®, a Web site that offers clients around the globe access to a vast array of services and proprietary information 24 hours a day.
2001
The Firm resumes fixed income trading two days after Sept. 11 and equity trading when U.S. markets open.
Lehman Brothers brings the first IPO, Given Imaging, to market after Sept. 11.
The Firm buys 745 Seventh Ave. for its new global headquarters in Midtown Manhattan and purchases additional space in New York City and New Jersey.
Lehman Brothers becomes a member of the Amsterdam Stock Exchange.
2002
Lehman Brothers moves into its new global headquarters in Midtown Manhattan.
The Firm establishes the Wealth and Asset Management Division*.
Lehman Brothers executes the largest financial services IPO in history for CIT Group, and the largest European leveraged buyout in history for KKR and Wendel Investissement.
The Firm lead-manages the largest-ever U.S. dollar denominated debt issue for GECC.
Lehman Brothers acquires Lincoln Capital Management's fixed income business*.
* In 2005, the Wealth and Asset Management Division was renamed the Investment Management Division and Lincoln Capital Fixed Income Management Company, LLC was renamed Lehman Brothers Asset Management LLC.
2003
Lehman Brothers acquires Neuberger Berman, positioning the Firm as an industry leader in the wealth and asset management business.
The Firm moves to its new European headquarters at 25 Bank Street in Canary Wharf.
Lehman Brothers acquires The Crossroads Group*, expanding the Firm's private equity fund investment management business.
Moody's Investors Service raises the Firm's long-term credit rating to A1 and the LBI broker-dealer credit rating to Aa3, representing the third ratings upgrade in the last four years.
* In 2005, Lehman Crossroads Investment Advisers, LP (d/b/a The Crossroads Group) was renamed Lehman Brothers Private Fund Advisers, LP.
2004
Lehman Brothers moves to its new Asia headquarters in Tokyo's Roppongi Hills.
The Firm advises on two of the top five announced Mergers & Acquisitions transactions worldwide: Cingular Wireless' acquisition of AT&T Wireless Services; and Sprint's acquisition of Nextel Communications.
Lehman Brothers executes the largest capital markets transaction in the history of the U.S. utility industry for Pacific Gas & Electric and the largest IPO globally in 2004 for Belgacom SA.
The Firm posts record financial results, including best-ever net revenue, net income, and earnings per share. The Firm increases its dividend by 33%.
Assets under management at the Firm's Investment Management Division rise to a record $137 billion.
2005
Lehman Brothers achieves record revenues, net income and earnings per share based on record results in each business segment and region.
Standard & Poor's upgrades Lehman Brothers' long-term senior debt rating to A+ from A, citing diversified earnings base and strong risk management.
The Firm's assets under management grow to a record $175 billion.
Named "Best Investment Bank" by Euromoney in its 2005 Awards for Excellence.
Lehman Brothers opens an office in Mumbai, India.
2006
Lehman Brothers achieves record net revenues, net income and earnings per share for the third consecutive year based on record results across all business segments and regions.
Ranks #1 in the Barron's 500 annual survey of corporate performance for the largest companies in the U.S. and Canada.
#1 dealer on the London Stock Exchange by trading volume.
Advises clients on the three largest global M&A deals announced in 2006: AT&T's acquisition of BellSouth; Gaz de France's merger with Suez* (pending); Endesa's defense mandate resulting from E.ON's takeover offer** (withdrawn).
The Lehman Brothers Centre for Women in Business officially launches at the London Business School.
All transactions appear as a matter of record only.
Source: Thomson Financial, 1 Jan 2006 - 31 Dec 2006
* Advisor to the Republic of France, Gaz de France's majority shareholder
** Also acted as advisor to Endesa on a consortium's (Enel and Acciona) subsequent takeover offer in 2007
2007
Lehman Brothers ranks #1 "Most Admired Securities Firm" by Fortune.
Achieves record net revenues, net income and earnings per common share (diluted) for the fourth consecutive year based on record results in all three business segments.
Acts as financial advisor on largest-ever M&A transaction in financial institutions sector: $98 billion acquisition of ABN AMRO by a consortium of the Royal Bank of Scotland, Santander and Fortis.*
#1 dealer on the London Stock Exchange by annual trading volume for the third year in a row.
Creates the Lehman Brothers Center for Global Finance and Economic Development at Spelman College, the #1 ranked institution among historically black colleges and universities by U.S. News & World Report.
Establishes the Council on Climate Change to bring together leaders from industry, policy and academia to facilitate constructive dialogue regarding climate change policy formulation and its impact on business.
