NIFTY started the day flat at 19,761 with a gap-up of 45 points. Initially, the index fell 90 points to 19,670 levels, made a double-bottom, rose 80 points to 19,750 levels, and took rejection. Then, it gave a sharp fall of nearly 260 points till 19,490. Nifty closed at 19,523, down by 192 points or 0.98%.
BANK NIFTY (BNF) started the day at 44,700 with a gap-up of 112 points. Similar to Nifty, BNF gave a sharp fall of 200 points till the round levels of 44,500 initially, made a double-bottom, shot up 200 points till the day’s high, and took resistance. Then, the index fell gradually to 44,250 levels– a fall of 500 points! BNF closed at 44,300, down by 287 points or 0.64%.
All other indices closed in the red. Nifty IT (-2.19%) and Nifty FMCG (-1.9%) fell the most!
Major Asian markets closed mixed. European markets are currently trading mixed.
Today’s Moves
Larsen & Toubro (+1.52%) was NIFTY50’s top gainer. The stock hit a 52-week high of ₹3,050.5 after brokerage firm UBS increased its price target for L&T from ₹3,040 to ₹3,600 per share.
MCX (+8.24%) surged after the company confirmed that it will implement a new web-based Commodity Derivatives Platform (CDP) next week.
CE Info Systems (+7.4%) jumped up to 11% on the back of strong volumes. The stock hit a 52-week high of ₹2,108.95 today.
Tech Mahindra (-4.59%) was NIFTY50’s top loser.
IT stocks LTI Mindtree (-3.16%), Wipro (-2.48%), Infosys (-1.88%), TCS (-1.46%), and others fell sharply.
Shares of HAL have split in the ratio of 1:2. The shares, which had a face value of ₹10 before Sept 28, have halved and are trading at a face value of ₹5 each now.
Berger Paints (-5.6%) fell after Kotak Institutional Equities downgraded the stock to ‘Sell’, citing weak demand and rising competition.
Markets Ahead
Markets are taking rejections from the high levels. As discussed in the post-market report yesterday, the 23% Fibonacci levels acted as good resistance. The indices continued the fall and hit our targets: 19,560 in Nifty and 44,300 in Bank Nifty.
Both indices are still under a sell-on-rise structure.
Nifty: The immediate support for Nifty is near the 19,500 round levels. A breakdown from there could take the index down to 19,400 levels. The important resistance to watch out for is the 19,560-600 levels. A breakout from these levels may give us targets of 19,700-740.
Bank Nifty: The immediate support for BNF is near 44,200 levels. A breakdown could give us targets of 44,000. The index has an important resistance near 44,500 levels. A breakout from there can give us targets of 44,700-750.
Every rise is being sold. So wait for vital reversal levels to be crossed for confirmation of a trend reversal and option buying trades.
As per reports, the increased selling activity by foreign institutional investors (FIIs) is one of the main factors contributing to high volatility in the Indian market. FIIs have sold shares worth nearly ₹12,475 crore in September! The US Federal Reserve’s hawkish stance on interest rates has added to the market’s anxiety.
How was monthly expiry trading today? Did you trade in Nifty or Bank Nifty (or both)? Let us know in the comments below!
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Here are some of the major updates that could move the markets tomorrow:
SpiceJet to send 80 pilots on leave without pay
SpiceJet Ltd will send around 80 pilots on Leave Without Pay (LWP) as the airline finds itself with excess pilots. Around 40 pilots from the Boeing 737 fleet and 40 from the Q400 fleet have been asked to go on LWP for three months. The airline will call them back gradually as it deploys new aircraft into its fleet. SpiceJet plans to add seven new Boeing 737 Max starting from December 2022.
Hero MotoCorp, HPCL to set up charging infrastructure for EVs
Hero MotoCorp Ltd has partnered with Hindustan Petroleum Corporation Ltd (HPCL) to set up charging infrastructure for electric vehicles across India. The companies will first set up charging stations in select cities and expand to other key markets to establish a high-density of EV charging station network. They will initially establish charging infrastructure at HPCL’s existing network of energy stations.
Piramal Enterprises Ltd’s board has approved a proposal to raise ₹750 crore through the issuance of non-convertible debentures (NCDs). It will raise market-linked NCDs on a private placement basis up to ₹100 crore along with an option to retain oversubscription of up to ₹650 crore. The debentures will be listed on the debt segment and capital market segment of NSE and BSE, respectively.
C E Info Systems Ltd (CEISL) has completed the acquisition of a 26.37% stake in Kogo Tech Labs Pvt. Ltd for ₹10 crore. This acquisition would help automotive OEMs deliver a premium and engaging user-first approach to travel experiences for their vehicle owners. Kogo is a gamified social travel commerce platform. Users earn KOGOCOIN as they step out and can spend it on hotels, experiences, and stores on the KOGO Marketplace.
Zydus Lifesciences launches cancer drug in the US
Zydus Lifesciences Ltd has announced the launch of Lenalidomide capsules in the US. The drug is used to treat various types of cancer. It works by slowing or stopping the growth of cancer cells. Lenalidomide can also treat anemia in patients with certain blood/bone marrow disorders. Zydus will maufacture the drug at its manufacturing facility at the Special Economic Zone (SEZ) in Ahmedabad.
Adani pledges stake worth $13 billion in newly acquired Holcim cement units
The Adani Group has pledged shares valued at around $13 billion (~₹1.03 lakh crore) in two cement firms days after it completed the acquisition from Holcim Ltd. Stakes in two companies (57% of ACC and 63% in Ambuja Cements Ltd.) have been pledged for “the benefit of certain lenders and other finance parties”. The buyouts from Holcim earlier this year marked the group’s entry into the cement business.
Adani Transmission to invest over ₹5,000 crore in FY24-25
Adani Transmission Ltd. is planning to invest over ₹5,000 crore to add more capacity in each of the next two financial years. The company aims to increase the share of its renewable energy capacity to 60% by FY26-27. Currently, Adani Trans holds a portfolio of 18,795 circuit kilometers (ckm) of transmission lines and 40,001 megavolt-amperes (MVA) of power transformation capacity across 13 states.
Mindtree secures multi-year engagement with UK-based Currys
UK’s leading retailer of technology products and services, Currys, has selected Mindtree Ltd. to deliver a highly personalised shopping experience to its customers across multiple markets. Mindtree will design and implement an omnichannel solution that provides a unified customer experience across online, mobile, and in-store shopping while driving cross-channel fulfillment and inventory optimisation for Currys.
NPCI in talks with govt as Zomato, Swiggy plans entry into UPI space
The National Payments Corporation of India (NPCI) is worried over the delay in implementing its mandate requiring payment apps to hold no more than 30% market share in the UPI ecosystem. NPCI is in talks with the govt. and industry stakeholders over the effect of late implementation. The recent action comes at a time when Zomato and Swiggy are reportedly planning an entry into the UPI payments platform as third-party payments apps.
Wipro, Finastra to power digital transformation for corporate banks
Wipro Ltd has partnered with UK-based Finastra to help corporate banks accelerate digital transformation. This partnership combines Wipro’s expertise in consulting and digital infrastructure with Finastra’s cutting-edge solutions to deliver modern API-enabled platforms for banks. The solution will help banks streamline and digitize core trade finance processes and reduce cost overheads.
Chief Economic Advisor V Anantha Nageswaran said the Indian economy will grow at 7% in FY23, down from the 8-8.5% growth rate projected in January. The aftereffects of the COVID-19 pandemic and Russia’s invasion of Ukraine are hurting economic growth. India can sustain the 7% growth rate for the rest of the decade, he added.
C.E. Info Systems Ltd, popularly known through its brand MapmyIndia, has launched its three-day initial public offering (IPO) yesterday— Dec 9. In this article, we take a closer look into the company and learn more about its IPO.
Company Profile – C.E Info Systems Ltd
Incorporated in 1995, C.E. Info Systems Ltd (CEISL) offers advanced digital maps, geospatial software, and location-based Internet of Things (IoT) technologies. They provide products, platforms, application programming interfaces (APIs), and solutions across a range of digital map data and software under the MapmyIndia and Mappls brands. The digital maps offered by the company cover 6.29 million kilometers of roads in India, representing 98.5% of the total road network.
CEISL is an early mover in India’s digital mapping space. It has pioneered several digital mapping technologies such as AI-powered 4D HD digital maps and NCASE mobility suite for vehicles. The company offers the widest range of location-powered software and the most comprehensive set of offerings compared to its global competitors. MapmyIndia’s digital maps and solutions are localized for the challenging Indian geography and are extensive in terms of coverage.
Strong Customer Base:
The company caters to marquee global tech giants, new-age consumer IT companies, and leading automotive manufacturers. CEISL also offers its products to large businesses across industry segments, including banking, financial services and insurance (BFSI), telecom, fast-moving consumer goods, logistics, and government organisations. Their customer base includes PhonePe, Flipkart, Yulu, HDFC Bank, Bharti Airtel, Hyundai, MG Motors, and the government’s Goods and Services Tax (GST) Network.
Interestingly, MapmyIndia’s data powers Apple Inc.’s Maps and Amazon.com Inc.’s Alexa in India!
More than 93% of CEISL’s revenue comes from subscriptions, annuity, and royalties. It derives ~50% of revenue from the automotive and mobility sector. As of Sept 30, 2021 (Q2 FY22), they have serviced over 2,000 enterprise customers. C.E. Info Systems is now looking to expand its operations to Nepal, Bhutan, Bangladesh, Sri Lanka, Myanmar, Egypt, and the United Arab Emirates (UAE).
About the IPO
C.E. Info Systems’ public issue opens on December 9 and closes on December 13. The company has fixed Rs 1,000-1,033 per share as the price band for the IPO.
The IPO is entirely an offer for sale (OFS) of 1.006 crore equity shares by promoters and early investors, aggregating to Rs 1,039.61 crore. Individual investors can bid for a minimum of 14 equity shares (1 lot) and in multiples of 14 shares thereafter. You will need a minimum of Rs 14,462 (at the cut-off price) to apply for this IPO. The maximum number of shares that can be applied by a retail investor is 182 equity shares (13 lots).
The main objective of the IPO is to provide an exit strategy (or liquidity) to CEISL’s shareholders. The company aims to achieve the benefits of listing the equity shares on NSE and BSE. The total promoter holding in the company will decline from 61.71% to 53.73% post the IPO.
Financial Performance
CEISL has shown stable growth in revenue and profit. They reported a net profit of Rs 59.43 crore in the financial year 2020-21 (FY21), an increase of 156.3% YoY. Total income rose 17.6% YoY to Rs 192.27 crore during the same period. Profit in the six months ended September 2021 (H1 FY22) jumped to Rs 46.76 crore, compared to Rs 17.86 crore in the same period last year. Revenue rose 81% YoY to Rs 100.03 crore during the same period.
In FY21, 25 customers accounted for 80% of revenue. In the first half of FY22, 18 customers accounted for 80% of the company’s revenue.
Risk Factors
CEISL is dependent on trends in the sectors (such as automobile, consumer, logistics) where its enterprise customers operate. Any adverse changes in the conditions affecting these sectors can impact its business.
The inability to maintain or update the company’s map database or errors could harm its reputation and severely affect its ability to sell products and services.
The company is dependent on the success of its Research & Development (R&D) team. The failure to develop competitive new products could adversely affect its business and financial performance.
The inability to protect its intellectual property (IP) or third-party claims could harm CEISL’s reputation and overall operations.
C.E. Info Systems depends on a limited number of customers for a significant portion of its revenues. The loss of key customers or a reduction in demand for its products from them could severely impact its operations and financial condition.
They are dependent on telecom and information technology systems, networks, and infrastructure to operate their business. Any interruption or breakdown of such systems could impair the company’s ability to operate its platforms.
IPO Details in a Nutshell
The book-running lead managers to the public issue are Axis Capital, DAM Capital Advisors, JM Financial Consultants, and Kotak Mahindra Capital. C.E Info Systems Ltd had filed the Red Herring Prospectus (RHP) for its IPO on December 2. You can read it here. Out of the total offer, 50% is reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and 35% for retail investors.
Ahead of the IPO, CEISL raised Rs 312 crore from anchor investors. The marquee investors include Fidelity, Nomura, Goldman Sachs, Morgan Stanley, SBI Mutual Fund (MF), Tata MF, and HDFC MF.
Conclusion
C.E. Info Systems has built a strong moat by capitalising on its early mover advantage, developing integrated technologies, constant innovation, and a robust sustainable business model. Its solutions are adopted by new-age companies and start-up firms across consumer tech, last-mile delivery, shared mobility, and e-commerce segments. As per reports, the total market for Indian digital map services is expected to grow from Rs 12,614 crore in 2019 to Rs 31,164 crore in 2025, at a CAGR of 16.1%. Meanwhile, the global digital map services market is expected to grow at a CAGR of 13.6% to Rs 11.27 lakh crore by 2025.
The company has received significant investor interest in the grey market. CEISL’s IPO shares are trading at a premium of ~Rs 780-795 in the unofficial market. Before applying to this IPO, we will wait to see if the portion reserved for institutional investors gets oversubscribed. As always, consider the risks associated with the company and come to your own conclusion.
What are your opinions on this IPO? Will you be applying for it? Let us know in the comments section of the marketfeed app.
