Tag: IPO

Cabinet Approves Proposal to Set Up Development Finance Institution – Top Indian Market News

Post author By marketfeed Team
Post date March 16, 2021

Cabinet approves proposal to set up Development Finance Institution

The Union Cabinet, on Tuesday, approved the creation of a Development Finance Institution (DFI) for funding infrastructure and development activities in the country. The government will initially infuse Rs 20,000 crore into this institution. Finance Minister Nirmala Sitharaman said that the DFI is expected to raise up to Rs 3 lakh crore in the next few years. The DFI will start with 100% ownership of the Government of India. This figure will gradually be brought down to 26%.

Read more here.

L&T secures multiple orders across business segments in domestic market

Larsen & Toubro (L&T) Limited has received multiple orders across its business segments in the domestic market. The company’s water and effluent treatment business has secured EPC (engineering, procurement, and construction) orders from the Rural Water Supply and Sanitation Department, Odisha. L&T’s buildings and factories business has secured an order from a leading cement manufacturer to construct a 10,000 TPD (tonnes per day) Integrated Cement Plant in Pali, Rajasthan. The value of the orders ranges between Rs 1,000 crore and Rs 2,500 crore.

Read more here.

Godrej Properties raises Rs 3,750 crore via QIP

Godrej Properties Ltd has raised Rs 3,750 crore through a qualified institutional placement (QIP). The company’s board has issued 2.59 crore equity shares (of the face value of Rs 5 each) to eligible qualified institutional buyers (QIBs) at Rs 1,513.39 per share. Godrej Properties will utilise the funds to buy land and expand its business.

Read more here.

GMM Pfaudler acquires assets of HDO Technologies

GMM Pfaudler announced that it has participated in the e-auction process for the sale of assets owned by HDO Technologies, which is currently under liquidation. The company has been declared as the successful bidder for assets including factory land, building, plant & machinery, office equipment, etc. A consideration of Rs 58.46 crore will be paid for the proposed assets. The tentative date for the completion of the transaction is April 30, 2021.

Read more here.

TCS launches SaaS-based platform to secure enterprises from cyber risks

Tata Consultancy Services (TCS) has launched a software-as-a-service (SaaS)-based automated vulnerability remediation platform to protect enterprises from cyber attacks. The platform will identify and prioritise vulnerabilities in the software libraries of enterprises and proactively fix them. It provides risk-based analytics that helps security and IT operations teams to mitigate known risks.

Read more here.

BEML receives orders worth $23 million from Bangladesh, Cameroon

State-owned BEML Limited has received export orders from Cameroon and Bangladesh under the Government of India- Lines of Credit. The company will supply 71 units of construction equipment consisting of bulldozers, excavators, motor graders, etc to the Ministry of Economy-Planning & Regional Development, Cameroon. It will also supply equipment for road construction and infrastructure projects to the Ministry of Roads & Highways Department, Bangladesh. The total value of the orders is estimated at $23 million (~Rs 167 crore)

Read more here.

HG Infra Engineering secures order from NTPC

HG Infra Engineering Ltd has received an order worth Rs 122.38 crore from state-owned NTPC Limited. The order is for the transportation of 26.41 lakh cubic metres of pond ash from NTPC Ramagundam to the NHAI-PIU-Mancherial road construction project. The project has to be completed within 15 months.

Read more here.

Gland Pharma to supply 252 million doses of Sputnik V vaccine

Gland Pharma Limited has entered into an agreement with the Russian Direct Investment Fund (RDIF) to supply up to 252 million doses of Sputnik V Covid-19 vaccine. The company will utilise its Drug Substance and Drug Product facilities at its sites in Hyderabad. The production is expected to commence from the third quarter of 2021.

Read more here.

IPO Updates:

Kalyan Jewellers

The Rs 1,175-crore initial public offering (IPO) of Kalyan Jewellers was subscribed 60% on the first day of bidding. The portion reserved for retail investors was subscribed 1.10 times. The portion set aside for non-institutional investors (NIIs) saw a subscription of 20% and that of employees 1.15%. To know more about the IPO, click here.

Laxmi Organic Industries

The Rs 600-crore initial public offering (IPO) of Laxmi Organic Industries was subscribed 6.05 times on the second day of bidding. The portion reserved for retail investors was subscribed 10.38 times. The portion set aside for non-institutional investors (NIIs) saw a subscription of 2.48 times and that of qualified institutional buyers (QIBs) 1.15 times. You can learn more about the IPO here.

Craftsman Automation

The Rs 823.70-crore initial public offering (IPO) of Craftsman Automation was subscribed 1.26 times on the second day of bidding. The portion reserved for retail investors was subscribed 2.11 times. The portion set aside for non-institutional investors (NIIs) saw a subscription of 19% and that of QIBs 56%. To know more about the IPO, click here.

Anupam Rasayan India

The Rs 760-crore initial public offering (IPO) of Anupam Rasayan India was subscribed 44.06 times on the final day of bidding. The portion reserved for retail investors was subscribed 10.77 times and that of employees 1.71 times. The portion set aside for non-institutional investors (NIIs) saw a subscription of 97.42 times and that of QIBs 65.74 times. To know more about the IPO, click here.

Tags beml, cabinet DFI, Gland Pharma, gmm pfaudler, Godrej Properties, hg infra, IPO, kalyan jewellers, larsen & toubro, laxmi organics, TCS

Editorial

Kalyan Jewellers IPO: All You Need to Know

Post author By marketfeed Team
Post date March 16, 2021

One of the most awaited IPOs, especially amongst Keralites, has opened for subscription today— March 16, 2021. Kalyan Jewellers, which is part of one of the oldest business groups with a strong legacy in India, will soon go public. This IPO will be amongst four others that are hitting the markets this week. Let us have a detailed understanding of Kalyan Jewellers and its IPO.

Company Profile – Kalyan Jewellers

Kalyan Jewellers is one of the largest jewellery companies in India. It primarily designs, manufactures, and sells gold, studded, and other jewellery products for special occasions such as weddings and festivals. They offer a wide variety of traditional and contemporary jewellery designs in gold, diamond, and other precious metals. It opened its first showroom in Thrissur, Kerala in 1993. Since then, it has expanded rapidly and has established 107 showrooms across 21 states and union territories in India. The jewellery company has a strong presence in the Middle East with around 30 showrooms. Kalyan Jewellers also operates a network of 766 ‘My Kalyan’ stores (service centres) around the world. As of December 2020, nearly 78.19% of its revenue came from India, and the remaining 21.81% from the Middle East.

Graph showing the segment-wise revenue of the firm (as of December 31, 2020)

Over the years, Kalyan Jewellers has allocated a major part of its finances towards eye-catching advertisements or promotional activities. It has roped in a large number of prominent stars such as Amitabh Bachan, Katrina Kaif, Nagarjuna, and Manju Warrier, to name a few. These campaigns have played a vital role in driving sales growth.

The company’s strong growth and expansion can be attributed to the vision and efforts of the Kerala-based Kalyan Group. The jeweller is run by a set of experienced promoters and managers, headed by T.S. Kalyanaraman Iyer. It is also backed by one of the largest private equity firms in the world— Warburg Pincus. Kalyan Jewellers has established itself as the second-largest pan-India jeweller after Titan Company (Tanishq).

About the IPO

Kalyan Jewellers had received approval from market regulator SEBI to float an initial public offering (IPO) in October 2020. The public issue will open on March 16, 2021, and close on March 18, 2021. The total issue size of the IPO is Rs 1,175 crore. This comprises a fresh issue of 9.19 crore equity shares aggregating up to Rs 800 crore. It also includes an offer for sale (OFS) of 4.31 crore equity shares (aggregating up to Rs 375 crore) by its promoters. The price band for the IPO has been fixed at Rs 86-87 per share.

Retail investors like you and I can bid for a minimum of 172 equity shares (1 lot), which will amount to Rs 14,964. The maximum number of shares that can be applied by an individual investor is 2,236 equity shares (or 13 lots). Thus, the maximum amount one can invest in the IPO is Rs 1,94,532. But take care not to apply for more than 1 lot, as your capital may get blocked for no reason if the IPO is oversubscribed.

Kalyan Jewellers will utilise the net proceeds from the IPO for two main purposes:

To finance the company’s working capital requirements. A sum of Rs 600 crore from the total proceeds will be allocated for the same.
The remaining amount will be used to meet general corporate purposes.

The promoters, led by T.S Kalyanaraman and Highdell Investments Ltd, currently hold a 67.99% stake in the company. This figure will fall to 60.53% post the successful completion of the IPO.

Financial Overview

.	31 Dec 2020(FY 21)	31 March 2020 (FY20)	31 March 2019 (FY19)	31 March 2018 (FY18)
Total Assets	8,122.9	8,218.6	8,059.9	8,551.2
Total Revenue	5,549.79	10,181	9,814.02	10,580
Profit/Loss After Tax	(79.94)	142.27	(4.86)	140.9

(Values in Rs crore)

From the chart, it is clear that Kalyan Jewellers’ revenues have been fairly consistent/stable since 2018. However, it posted a net loss of Rs 4.8 crore in FY19. This can be attributed to the effect of the flash floods in 2018-19 in the southern regions of India (where the company has a strong foothold). It was able to return to a profit of Rs 142 crore in the next financial year. And now, the Covid-19 pandemic has severely impacted its overall operations and revenues in the current financial year. The company faced a one-time hit of Rs 40.2 crore for closing down showrooms in the Middle East (as they were making losses).

Over the past 3 years, the company’s revenue has grown at a CAGR of -2%. Earnings Before Interest and Tax (EBIT) has grown at a yearly rate of -0.9% during the same period. Total assets have remained in the range of Rs 8,000-crore levels. Thus, it is clear that Kalyan Jewellers is showing very sluggish (slow-paced) growth. Its Return on Net Worth (RoNW) is just 6.63%, which is very low compared to Titan Company’s RoNW of 22.38.

The company’s large debts are also a cause of concern. Currently, it has Rs 55.7 crore in long-term borrowings and Rs 2,635.5 crore in short-term borrowings. Total debt, including metal gold loans, stood at Rs 3,667 crore as of December 2020.

Risk Factors

The Covid-19 pandemic is likely to have caused a significant impact on the company’s business operations, revenues, and future results. Kalyan Jewellers had to temporarily close down its showrooms and ‘My Kalyan’ centres in India and the Middle East for a few months due to lockdown restrictions.
To a large extent, the company’s revenue and operations are impacted by global and domestic economic conditions. If there is a downturn in these factors (such as large fluctuations in gold prices), consumer spending on Kalyan’s products may be affected.
The company may be unable to respond to changes in consumer demands and market trends in a timely manner. It is quite difficult to assess or predict the preferences of customers, which keeps changing rapidly.
Kalyan Jewellers may not be able to establish arrangements with contract manufacturers and suppliers. It may also experience supply-chain disruptions or quality control risks in the operations of such parties.
The current geographic concentration of Kalyan’s operations exposes it to regional economic downturns or natural disasters. For example, the company’s operations were severely hit in 2018-19 due to flash floods in Kerala. The Kerala market accounts for nearly 10% of the overall revenue.
The ownership of retail outlets in Middle East countries is subject to restrictions of the Gulf Cooperation Council (GCC).

IPO Details in a Nutshell

IPO Date	March 16, 2021 – March 18, 2021
Issue Type	Book Built Issue IPO
Face Value	Rs 10 per equity share
IPO Price	Rs 86 to Rs 87 per equity share
Lot Size	172 shares
Issue Size	Aggregating up to 1,175 crore
Fresh Issue (goes to the company)	Aggregating up to Rs 800 crore
Offer for Sale (goes to promoters)	Aggregating up to Rs 375 crore
Listing Date	March 26, 2021
Listing At	BSE, NSE

Axis Capital, Citigroup Global, ICICI Securities, SBI Capital Markets, and BOB Capital Markets have been appointed as the book-running lead managers to the public issue. Kalyan Jewellers had filed draft papers for its IPO in August 2020. You can read it here.

Conclusion

In the current scenario, Kalyan Jewellers is having a tough time improving its revenues. However, the power behind its brand and legacy is well-known by most of us. Over the years, the company has been able to cater to the needs of Indians and their never-ending love for buying gold. As always, do consider the risks associated with this company and come to your own conclusion.

Before applying for Kalyan Jewellers’ IPO, I will personally wait to see if the portion reserved for institutional investors gets oversubscribed. Looking at the recent trend, most IPOs are providing a select few with amazing listing gains. Kalyan Jewellers’ IPO is most likely to attract significant investor participation as well.

What are your opinions on this IPO? Will you be applying for it? Let us know in the comments section.

Tags Editorial, gold jewellery, IPO, kalyan jewellers, kalyan jewellers ipo, kerala

Editorial

Craftsman Automation IPO: All You Need to Know

Post author By marketfeed Team
Post date March 15, 2021

Craftsman Automation has launched its three-day initial public offering (IPO) today- March 15, 2021. This is the first IPO to be launched by an auto components manufacturer in the past 3 years. Let us take a closer look into the company and its IPO.

Company Profile – Craftsman Automation

Craftsman Automation Limited is an engineering company based in Coimbatore. It was incorporated in 1986 and is primarily engaged in the design, development, and manufacturing of automotive components. The company is well-known for the machining of cylinder blocks and cylinder heads in commercial vehicles and tractors. A cylinder block is the basic framework of a vehicle’s engine that plays an important role in maintaining stability and controlling temperature. The company offers a wide range of such components to automobile manufacturers in India and abroad.

The company’s products and services segments are divided into three verticals:

Automotive- Powertrain and others: This includes engine parts such as cylinder heads, cylinder blocks, transmission parts, turbocharges, etc. These components are used in the production of commercial vehicles, special utility vehicles, and tractors. This segment contributes nearly 17.3% to the overall revenue of the company.
Automotive- Aluminium products: This segment includes key products such as cylinder blocks, as well as crankcases for two-wheelers, passenger vehicles, and commercial vehicles. This division contributes 47.5% to the company’s overall revenue.
Industrial and Engineering: The main products in this segment include high-end precision products (castings) and storage solutions. It caters to the pharma, fast-moving consumer goods (FMCG), and e-commerce industry. This segment contributes 35.2% to the total revenue.

Craftsman Automation owns and operates 12 state-of-the-art manufacturing facilities across 7 cities in India. These units are strategically located near major automobile manufacturing hubs. The company has established itself as a leading provider of essential components to large automakers. Some of their prominent clients include Mahindra & Mahindra, Tata Motors, Escorts, Ashok Leyland, Daimler India, JCB India, and TVS Motors. 90% of their revenue comes from the domestic market and the remaining 10% from exports.

About the IPO

In February 2021, Craftsman Automation received approval from SEBI to float an initial public offering (IPO). The public issue will open on March 15, 2021, and close on March 17, 2021. The total issue size of the IPO is Rs 823.70 crore. This comprises a fresh issue of equity shares aggregating up to Rs 150 crore. It also includes an offer for sale (OFS) of 45.21 lakh equity shares (aggregating up to Rs 673.70 crore) by promoters and existing shareholders. The price band for the IPO has been fixed at Rs 1,488-1,490 per share.

Individual investors can bid for a minimum of 10 equity shares (1 lot), which will amount to Rs 14,900. The maximum number of shares that can be applied by a retail investor is 130 equity shares (or 13 lots). Thus, the maximum amount one can invest in the IPO is Rs 1,93,700. But take care not to apply for more than 1 lot, as your capital may get blocked for no reason if the IPO is oversubscribed.

Craftsman Automation will utilise the net proceeds from the IPO for two main purposes. The main priority is to make repayment or pre-payment of its existing debts. As per reports, around 80% of the IPO proceeds will be used for repaying debts. The remaining amount will be used for general corporate purposes. The company’s promoters, lead by Srinivasan Ravi, currently hold a 63.4% stake. The total promoter holding in Craftsman Automation will reduce to 59.76% post the successful completion of the IPO.

Financial Overview

.	31 Dec 2020(FY 21)	31 March 2020 (FY20)	31 March 2019 (FY19)	31 March 2018 (FY18)
Total Assets	2,246.29	2,303.13	2,325.39	1,999.4
Total Income	1,029.9	1,501.05	1,831.6	1,522.86
Profit After Tax	50.6	41.07	97.36	31.5

(Values in Rs crore)

From the table, it is clear that Craftsman Automation’s financial performance has not been consistent over the years. The company’s revenue grew at a CAGR of ~20% between 2017 and 2019. After this period, it faced a decline in both domestic and international demand across all three product verticals (due to a slowdown in the automobile industry). The Industrial & Engineering division is the only segment that has shown positive growth in the last three years. The fall in revenue was also due to the high capital expenditure it incurred for setting up production plants. On the other hand, it shows how they have focused on scaling up production activities.

The company’s profit has shown a strong rebound at Rs 50.6 crore for the 9 months ended December 2020, despite a heavy fall in revenue. This was primarily because their interest costs (for loans) had fallen due to the moratorium introduced by the government amidst the Covid-19 pandemic.

Another factor to consider is the overall debt burden of the company. Between 2016 and 2020, Craftsman Automation’s long-term debt has grown at a CAGR of around 20%. This is quite alarming indeed. Its total debt as of December 31, 2021, stood at Rs 890.11 crore. As mentioned before, the company will use a major part of its IPO proceeds to reduce this debt.

Graph showing the company’s long-term debt figures from 2017-2020 (Values in Rs crore)

Risk Factors

There has been a significant decline in automobile sales due to the ongoing Covid-19 pandemic. The company is uncertain whether its sales will recover even after the impact of the Covid-19 pandemic is over.
Craftsman Automation has not been able to meet debt obligations through its debt financing arrangements. Also, some of the company’s assets have been mortgaged as securities with lenders. In case they are unable to pay off debts, it may adversely affect their business operations, financial results, and cash flows.
As mentioned before, the company has prominent clients from the automobile industry. There could be instances wherein the firm loses key customers, which could lead to a decline in production and sales. This could affect its overall business operations and financial results.
The company operates in a highly competitive business environment. Its market share and profits could decline if they are unable to respond to competition and pricing pressures. This could ultimately affect their operations and financial results. [Craftsman Automations’ peers in the auto-components industry include Bharat Forge, Endurance Technologies, Mahindra CIE Automotive, and Sundaram Fasteners]
Craftsman Automation is also involved in certain legal proceedings amounting to Rs 21.24 crore.
The company does not have long-term contracts or exclusive arrangements with its suppliers. Its operations could be severely affected by supply chain disruptions, which has been a major issue for many firms amidst the Covid-19 pandemic.

IPO Details in a Nutshell

IPO Date	March 15, 2021 – March 17, 2021
Issue Type	Book Built Issue IPO
Face Value	Rs 5 per equity share
IPO Price	Rs 1,488 to Rs 1,490 per equity share
Lot Size	10 shares
Issue Size	Rs 823.70 crore
Fresh Issue (goes to the company)	10,06,711 equity shares of Rs 5 each (aggregating up to Rs 150 crore)
Offer for Sale (goes to promoters)	45,21,450 equity shares of Rs 5 each (aggregating up to Rs 673.70 crore)
Allotment Date	March 22, 2021
Listing Date	March 25, 2021
Listing At	BSE, NSE

Axis Capital and IIFL Securities have been appointed as the book-running lead managers to the public issue. Craftsman Automation had filed draft papers for its IPO in December 2020. You can read it here.

Conclusion

Craftsman Automation had filed draft papers for an IPO with SEBI way back in June 2018. It had even received the regulator’s approval for the same. However, the company could not launch the public issue as market conditions were not favourable during that period. Now, the question arises whether investors would show interest in this company amidst a slowdown in the automobile sector. Moreover, there are red flags such as declining revenues and large debts. Do consider the risks associated with this company and come to your own conclusion.

Ahead of the IPO, the company was able to raise Rs 247.11 crore from 21 anchor investors. HSBC Global Investment Funds, Tata Mutual Fund (MF), Aditya Birla Sunlife MF, The Nomura Trust are some of the prominent anchor investors of the firm.

In the current scenario, almost every IPO is providing some lucky investors with great listing gains. Before applying for Craftsman Automation’s IPO, I will personally wait to see if the portion reserved for institutional investors gets oversubscribed.

What are your opinions on this IPO? Will you be applying for it? Let us know in the comments section.

Tags auto components, auto parts manufacturers, automobile industry, craftsman automation ipo, Editorial, IPO, ipo news

Market News Top 10 News

Prestige Estates Sells Assets Worth Rs 7,467 crore to Blackstone Group – Top Indian Market News

Post author By marketfeed Team
Post date March 11, 2021

Prestige Estates sells assets worth Rs 7,467 crore to Blackstone Group

Prestige Estate Properties Ltd has sold assets worth Rs 7,467 crore to investment firm Blackstone Group as part of the first phase of a Rs 9,160 crore deal. Phase-1 of the transaction included the sale of 12 assets comprising of completed retail, office, and hotel properties. With the completion of this transaction, Prestige Estate’s net debt has reduced to Rs 997.5 crore (compared with Rs 8,464.5 crore as of December 31, 2020). Phase-2 of the transaction is expected to be completed by the end of the next quarter.

Read more here.

Have adequate spectrum to be competitive in market: Vodafone Idea

P Balaji, Chief Regulatory and Corporate Affairs Officer of Vodafone Idea Ltd (VIL), said the company has an adequate spectrum to meet customers’ requirements and to be competitive in the market. He said that VIL had bid for just as much radiowaves as it needed to boost its services and coverage. This commentary comes after several reports stated that VIL may not have acquired large amounts of spectrum in the recent auctions due to financial constraints. Vodafone Idea’s spectrum holding after the recent auction stands at 1,768.60 MHz.

Read more here.

Kalyan Jewellers IPO to open on March 16; price band fixed at Rs 86-87

Kalyan Jewellers, on Thursday, announced that it will open its initial public offering (IPO) on March 16. The price band of the IPO has been fixed at Rs 86 to Rs 87 per share. The offer size is Rs 1,175 crore, which comprises a fresh issue aggregating to Rs 800 crore and an offer for sale (OFS) of Rs 375 crore. The company will utilise the funds for meeting working capital requirements and for general corporate purposes. The issue will close on March 18.

Read more here.

JSW Steel’s crude steel production declines 1% YoY in February

JSW Steel Limited reported that its crude steel production declined by 1% year-on-year (YoY) to 13.06 lakh tonnes in February 2021. The average capacity utilisation was 93% last month. The production of flat-rolled products declined 6% YoY to 9.27 lakh tonnes. The production of long-rolled products increased by 10% YoY to 3.4 lakh tonnes during the same period.

Read more here.

Infosys BPM extends strategic partnership with Newmont Corp

Infosys BPM announced a five-year extension of its strategic collaboration with the world’s largest gold mining company- Newmont Corporation. The company will standardise and digitise delivery models across Newmont’s mining sites. Infosys BPM will leverage its automation, artificial intelligence (AI), and design thinking capabilities to deliver increased value for Newmont. Infosys BPM is the business process management arm of Infosys Limited.

Read more here.

SpiceJet to offer RT-PCR test for Rs 500 in Mumbai, Delhi

SpiceJet Limited has launched the country’s cheapest Covid RT-PCR testing facility for the general public at Rs 499 through its subsidiary, SpiceHealth. It will also offer the testing facilities at a special price of Rs 299 (which is one-third of the prevailing market rate) to its passengers. In the first phase, SpiceHealth will make its testing facility available in Mumbai and Delhi.

Read more here.

NMDC declares interim dividend of Rs 7.76 per share

NMDC Limited’s board has approved an interim dividend of Rs 7.76 per share for the financial year 2020-21. The company has fixed March 23, 2021, as the record date for payment of the interim dividend. State-owned NMDC is India’s largest iron ore miner and produces about 35 metric tonnes (MT) of iron ore from its three iron ore complexes in the country.

Read more here.

Ramco Systems goes live at Nigeria-based Caverton Helicopters

Ramco Systems Limited announced that it has gone live at Caverton Helicopters with its Aviation M&E MRO Suite V5.8, thereby integrating and digitally transforming its business processes. The installed Aviation Suite helps Caverton Helicopters to track transactions, generate flight contract billing, and execute work packages. Caverton Helicopters is a Nigerian aerospace company that serves the West African offshore oil and gas industry.

Read more here.

Ares SSG Capital completes acquisition of Altico Capital

Hong Kong-based Ares SSG Funds has completed the acquisition of debt-ridden Altico Capital. This buyout marks the first resolution of a defaulting non-banking finance company (NBFC) outside India’s Insolvency and Bankruptcy Code (IBC). State Bank of India (SBI), Bank of Baroda, Yes Bank, ACRE ARC, and Aditya Birla Finance were the main lenders to Altico Capital that have credit exposure.

Read more here.

Firms of Rakesh Jhunjunwala, Samir Arora file for mutual fund licenses

Helios Capital Management and Alchemy Capital Management are among four investment firms that have applied for mutual fund licenses with market regulator SEBI within the past 4 months. Singapore-based Helios Capital is founded by Samir Arora, while Alchemy Capital is co-founded by ace investor Rakesh Jhunjunwala. Bajaj Finserv, Capitalmind (Wisemarkets Analytics), Frontline Capital Services, Unifi Capital, and Zerodha Broking are other firms that have applied for mutual fund licenses.

Read more here.

USTPO grants patent to Newgen Software for invention of advanced binarization process

The United States Patent and Trademark Office (USTPO) has granted a patent to Newgen Software Technologies Ltd for an invention entitled “Image Processing System and Method”. The patent is for a period of 20 years, which starts from March 2018. The invention is an image processing system that binarizes images, which refers to converting colored and grey images to black and white images. The process of binarization is used to reduce image size and to facilitate document analysis.

Tags Infosys, IPO, JSW Steel, kalyan jewellers, Market News, newgen software, nmdc, prestige estate, ramco systems, Vodafone Idea

Market News Top 10 News

Reliance Jio Launches ‘JioBusiness’ to Digitally Transform MSMEs – Top Indian Market News

Post author By marketfeed Team
Post date March 9, 2021

Reliance Jio launches ‘JioBusiness’ to digitally transform MSMEs

Reliance Jio has launched an integrated technology solution- JioBusiness to transform around 5 crore micro, small, and medium enterprises (MSMEs) in India. The company will provide enterprise-grade fiber connectivity that offers voice and data services. It will also provide digital solutions that help enterprises manage and grow their businesses. JioBusiness will offer devices to enable leading digital solutions for MSMEs.

Read more here.

Vehicle registrations fell 13.43% YoY in February: FADA

As per data released by the Federation of Automobile Dealers Associations (FADA), overall vehicle registrations declined by 13.43% year-on-year (YoY) to around 14.99 lakh in February 2021. The figure stood at over 17.31 lakh units in the corresponding period last year (Feb 2020). However, the data shows that registration of passenger vehicles grew by 10.59% YoY to 2.54 lakh units last month.

Read more here.

Puravankara to invest Rs 450 crore to develop residential project in Mumbai

Puravankara Limited will invest Rs 450 crore to develop a mixed-use residential project in Chembur, Mumbai. The project, named ‘Purva Clermont’, will come under the developer’s luxury portfolio World Home Collection. The project will be built on a 2.25-acre land parcel and will have five towers— four residential buildings with 233 units and one commercial office building. Construction of the project will begin in 3 months and is expected to be completed by 2025.

Read more here.

L&T delivers 700 MW steam generator ahead of schedule

Larsen & Toubro (L&T) has despatched the first out of four 700 MWe (megawatt electrical) steam generators for the Gorakhpur Haryana Anu Vidyut Pariyojana (GHAVP) ahead of schedule. With this, the company has created a new global benchmark in the nuclear manufacturing industry. The hi-tech equipment was manufactured at L&T’s manufacturing facilities at Hazira and Vadodara Heavy Engineering Works (VHEW).

[GHAVP is a proposed 2,800 MW nuclear power plant that is being built on a 560-hectare area near Gorakhpur village in Haryana]

Read more here.

JMC Projects signs agreement with FDC to construct 2,000 social housing units in Maldives

JMC Projects (India) Limited has signed an agreement with Fahi Dhiriulhun Corporation Ltd (FDC) for the design, finance, and construction of 2,000 social housing units in Hulhumale Island of Maldives. FDC is a state-owned company of the Government of Maldives. The total value for the project is estimated to be around $137 million (~Rs 1,000 crore). Mumbai-based JMC Projects is a leading construction company. It is also a subsidiary of Kalpataru Power Transmission Limited.

Read more here.

Inox Wind signs pact for 92 MW-projects with Integrum Energy

Inox Wind Limited has signed an agreement with Integrum Energy Infrastructure to supply, erect, and commission 92 megawatts (MW) of wind power projects. The projects comprise 2 MW turbines with a combination of total turnkey and limited scope supply services. The company will supply and commission wind turbines at Gujarat, Karnataka, Maharashtra, and Tamil Nadu by the third quarter of the next financial year (FY 2021-22).

Read more here.

Aurionpro Solutions enters into partnership with UK-based Future-Tech

Aurionpro Solutions Ltd has entered into a strategic partnership with UK-based Future-Tech for data center design and consultancy projects in India & South Asia. In recent years, the company has ventured into data centre building, consulting, and hybrid cloud services. Aurionpro will provide consultancy and assistance for rolling out 100 MW data centres for one of its customers within the next few years. Mumbai-based Aurionpro Solutions is an IT services company. It is also engaged in the sale of equipment and software licenses.

Read more here.

Easy Trip Planners IPO subscribed 7.20 times on second day of bidding

The Rs 510-crore initial public offering (IPO) of Easy Trip Planners was subscribed 7.20 times on the second day of bidding. The issue received bids for 10.85 crore equity shares against an offer size of 1.5 crore shares. The portion reserved for retail investors was subscribed 32.71 times. The portion set aside for non-institutional investors (NIIs) saw a subscription of 4.05 times and that of qualified institutional buyers (QIBs) 28%.

To know more about the IPO, click here.

Praj Industries secures order from HPCL for setting up biogas plant

Praj Industries has received an order from Hindustan Petroleum Corporation Ltd (HPCL) for setting up a compressed biogas (CBG) plant at Badaun, Uttar Pradesh. The company will offer its RenGas technology to produce CBG from rice straw. The project will have the capacity to process 35,000 metric tonnes (MT) of rice straw as feedstock to generate 5,250 MT of CBG annually. Praj Industries stated that this project will be completed and commissioned within 12 months.

Read more here.

Indoco Remedies launches Brinzolamide Ophthalmic Suspension in the US

Indoco Remedies Limited has announced the launch of Brinzolamide Ophthalmic Suspension in the United States. The product is developed and manufactured by Indoco Remedies for TEVA Pharmaceuticals at its facility in Goa. It is used to treat high pressure inside the eye due to ocular hypertension and open-angle glaucoma. As per IQVIA data, the US market size of this product stood at $184 million (~Rs 1,343 crore) as of December 2020.

Read more here.

Jubilant Foodworks completes acquisition of 100% stake in Fides Food

Jubilant Foodworks announced that its wholly owned subsidiary, Jubilant Foodworks Netherlands B.V., has successfully completed the acquisition of 100% stake of Fides Food Systems Coöperatief U.A. Fides Food is the beneficial owner of 32.81% equity shares in DP Eurasia, which is the master franchisee of Domino’s Pizza in four countries— Turkey, Azerbaijan, Russia, and Georgia. The total value of the acquisiton was nearly Rs 252 crore.

Tags aurionpro, Easy Trip Planners, fada data, indoco remedies, inox wind, IPO, jmc projects, larsen & toubro, praj industries, puravankara, reliance jio

Editorial

Easy Trip Planners IPO: Should You Invest?

Post author By marketfeed Team
Post date March 9, 2021

We all love consumer-facing companies, ones that we see every day. Easy Trip Planners Pvt. Ltd., the parent company of easemytrip.com, is all set to go public with its IPO applications starting on 8th March 2020. For the travel industry, the winds are against it, revenues are down and so are valuations because of the pandemic-led lockdown, yet the company has decided to come up with an IPO. Let’s find out more about the company and its IPO.

About the Company

Easy Trip Planners, is an online travel portal that offers a variety of products and services like rail tickets, taxis, bus tickets, holiday packages, hotels, and other services like travel insurance, VISA services, etc. The company offers most of its services through its website (easemytrip.com) and its mobile application(available on iOS and Android).

Segment	% Contribution To Revenue
Flight Bookings	94.0%
Hotels and Holiday Packages	0.6%
Others	5.4%

Segmental Revenue

Flight bookings contribute the highest to its revenue stream at 94% followed by Hotels and Holiday Packages at 0.6% and others at 5.4%. In flights bookings, ~75 percent of its revenue comes from domestic flight bookings

In FY20, 86% of the users who booked flights on the portal were repeat users who had previously used the portal for a booking

The company follows three kinds of distribution channels
- Business To Business To Customer(B2B2C) for travel agents to use the platform for offline customers
- B2E or Business to Enterprise for corporates to book tickets for their employees
- B2C or Business To Customer – For customers to make bookings online using either the website or app. This segment had the highest volume amongst the three.

The company’s gross booking volumes almost doubled after the company pumped up its mobile application interfaces. However, the booking volumes have definitely taken a hit due to the COVID-19 pandemic.

The company faces a tiff from companies like MakeMyTrip which has more than half the market share followed by Yatra. EaseMyTrip however has managed to gain a 3% market share in a short period of time and therefore exhibits great potential as a competitor to MakeMyTrip. Both Yatra and MakeMyTrip are listed on NASDAQ and have a strong foreign presence which EaseMyTrip lacks.

Financial Vitals

Financial Vital	FY2018	FY2019	FY2020
Revenue	1001.8	1011.07	1409.85
Net Profit	66.13	293.5	346.48
Assets	1558.02	2248.36	2526.19

Financial Vitals(In Rs Crore)

Easy Trip Planners has recorded positive and consistent growth in Revenue, Net Profit, and Total Assets. Even in the COVID-19 pandemic situation, the company has recorded a Net Profit for FY2021 9 Months ended.

In the third quarter ended December 2020, EaseMyTrip recovered recovered 70% of the booking volumes, MakeMyTrip covered 46% and Yatra stood at 44%, as compared to last year’s booking volumes.

Easy Trip Planners happens to be the only online travel portal to have a positive return on equity(RoE) and Return on Capital Employed(RoCE) consistently for three consecutive years. MakeMyTrip has recorded a negative RoE and RoCE for the past two years.

The company is debt-free as of December 2020.

Risks

COVID-19 pandemic has impacted the travel industry as a whole. Any change in domestic or international travel regulation will have an impact on the flight booking volumes of the company.

94% of the company’s revenue comes from online flight bookings. Any change in the market conditions of the segment will have a serious impact on the company’s revenue The company is yet to expand on hotel, travel package, rail booking, bus booking, taxi rental and other such segments. Essentially, the needs to diversify its revenue mix

The company has litigations amounting to Rs 140 crore pending in the Indian courts of law. Out of these one is a serious case amounting to Rs 37 crores in compensation, where a ticketing partner of the company has alleged manipulation and fraud in company books of accounts.

The company has previously lent money to movie producers and other branding companies for advertisement and branding of travel, tour, and ticketing business during the making and release of movies and award functions.

The company faces high competition in the flight booking segment from big market players like PayTM, MakeMyTrip, Amazon, and many more.

IPO Snapshot

IPO Opening Date	March 8, 2021
IPO Closing Date	March 10, 2021
Issue Type	Book Built Issue IPO
Face Value	Rs 2 per equity share
IPO Price	₹186 to ₹187 per equity share
Market Lot	80 Shares
Issue Size	Rs 510 crore
Offer for Sale	Rs 510 crore
Listing Date	March 19, 2020

Conclusion

EaseMyTrip might not have the market share or huge numbers but has definitely fared better than its giant competitors in recovering in the post-pandemic market. The company has a grey market premium of close to 90%. It is trying to list at a 58 times valuation than last year’s revenue numbers. Although, a small player in the market, the company still has huge growth potential in the space. They have shown excellent financials and fairly good management. The company is also debt-free. In the current IPO bull run, it can be a perfect runner for listing gains, but long term gains is questionable as competition gets tougher.

Tags Easy Trip Planners, Editorial, IPO, MakeMyTrip, tourism, travel

Market News Top 10 News

Reliance to Spin-Off Oil-to-Chemicals Segment With $25 Billion Loan – Top Indian Market News

Post author By marketfeed Team
Post date February 23, 2021

Reliance to spin-off Oil-to-Chemicals segment with $25 billion loan

Reliance Industries Ltd (RIL) announced that it has initiated the process of carving out its Oil-to-Chemicals (O2C) business into an independent subsidiary. RIL will retain 100% management control in the subsidiary. It has also extended an interest-bearing loan of $25 billion (~Rs 1.81 lakh crore) to the O2C business. RIL expects to receive necessary approvals for the reorganisation by the second quarter of FY 2021-22.

Read more here.

Cochin Shipyard secures Rs 10,000 crore order from Indian Navy

Cochin Shipyard Limited (CSL) has been declared as the lowest (L1) bidder by the Ministry of Defence for the construction of six next-generation missile vessels for the Indian Navy. The estimated value of the order is Rs 10,000 crore. The final announcement of the contract will be subject to the satisfactory completion of necessary formalities.

Read more here.

Amazon India partners with Mahindra Electric to deploy 10,000 EVs for delivery

Amazon India has partnered with Mahindra Electric to deploy 10,000 electric vehicles (EVs) in its local delivery fleet by 2025. Mahindra’s electric three-wheeler, Treo Zor, is already used by Amazon’s delivery service partners in seven cities, including New Delhi, Bengaluru, and Hyderabad. This is part of Amazon.com Inc’s commitment to having 100,000 EVs in its global delivery fleet by 2030.

Read more here.

Fire breaks out at UPL’s Jhagadia plant in Gujarat

UPL Limited announced that a serious fire broke out at its Jhagadia plant (in Gujarat) in the early hours of Tuesday morning. The company’s emergency team and the local fire brigade brought the massive fire under control. UPL confirmed that two people were killed and around 26 have been injured. It was reported that the fire may have been caused due to an electric short circuit.

Read more here.

Adani Enterprises forms joint venture with EdgeConneX to develop data centres in India

Adani Enterprises has formed a 50:50 joint venture with US-based data centre operator EdgeConneX to build data parks in India. AdaniConneX JV has started the development of hyperscale facilities in Chennai, Navi Mumbai, Noida, Vizag, and Hyderabad. It will also develop scalable edge data centres across India.

Read more here.

Bharti Airtel partners with Qualcomm for 5G rollout in India

Bharti Airtel has partnered with US-based Qualcomm Technologies for accelerating 5G services in India. The telecom company will utilise Qualcomm 5G Radio Access Network (RAN) platforms to roll-out virtualised and Open RAN-based 5G networks. Recently, Airtel became India’s first telco to demonstrate 5G over a live commercial network in Hyderabad.

Read more here.

Bharat Forge receives order worth Rs 178 crore from Defence Ministry

Bharat Forge has received an order worth Rs 177.95 crore from the Ministry of Defence (MoD) for the supply of Kalyani M4 armoured vehicles to the Indian Army. As per reports, the contract from MoD entails the production of 200 Kalyani M4 vehicles under emergency procurement protocols. On Monday, Bharat Forge had signed an agreement with South Africa-based Paramount Group to manufacture Kalyani M4 vehicles in India.

Read more here.

Heranba Industries IPO subscribed 85% on first day of bidding

The Rs 625-crore initial public offering (IPO) of Heranba Industries was subscribed 85% on the first day of bidding. The issue received bids for 58.76 lakh equity shares against an offer size of 69.81 lakh shares. The portion reserved for retail investors was subscribed 1.64 times. The portion set aside for non-institutional investors (NIIs) witnessed a subscription of 9%.

To know more about the IPO, click here.

Zuari Agro Chemicals to sell Goa unit to Pradeep Phosphates for $280 million

Zuari Agro Chemical’s board has approved the sale of the company’s fertilizer plant in Goa and associated businesses to Pradeep Phosphates Ltd. The unit will be sold on a slump sale basis for an agreed enterprise value of $280 million (~Rs 2,030 crore). The business transfer agreement will be executed by the end of February 2021.

Gayatri Projects receives LoA for NHAI road project worth Rs 1,323 crore

Gayatri Projects Limited has received a Letter of Award (LoA) from the National Highways Authority of India (NHAI) for a road project worth Rs 1,323.5 crore. The order includes the development of six-lane access-controlled roads in the Uttar Pradesh portion of the Delhi-Saharanpur Highway. The project comes under the Economic Corridor in Phase-1 of the Bharatmala Pariyojana.

Sun Pharma to launch complete range of generic anti-epilepsy drug

Sun Pharmaceutical Industries said it plans to launch a complete range of anti-epilepsy drug- Brivaracetam in India. The drug is indicated for the treatment of partial-onset seizures in patients 16 years of age and older with epilepsy. Sun Pharma introduced Brevipil (Brivaracetam) tablet in the strengths of 25 mg/50 mg/75 mg/100 mg on Feb 21.

Read more here.

Tags bharat forge, Bharti Airtel, cochin shipyard, gayatri projects, Heranba Industries IPO, IPO, nhai, reliance o2c, Sun Pharma, UPL, zuari agro

Editorial

RailTel IPO: Should You Invest?

Post author By marketfeed Team
Post date February 17, 2021

RailTel Corporation of India Limited has come up with an IPO. The issue opens on February 16, 2021, and closes on February 18, 2021. RailTel Corporation of India Limited is an Information and Communications Technology (ICT) company. You might have heard about RailTel broadband near your houses. It is a Mini Ratna (Category I) PSU, wholly owned by the Government of India and run by the Ministry of Railways. Let us find out more about the IPO.

The Business of RailTel

RailTel was incorporated on Sept. 26, 2000, in order to modernize the existing telecom infrastructure for train control, operation, and safety. It also aimed to generate additional revenue by creating a nationwide broadband and multimedia network by laying optical fiber cable by using the right of way(ROW) along the railway tracks. It intends to host telecom players at railway stations and assist them in disbursing 5G networks.

The company provides a number of services such as:

Telecom Network Services: National Long Distance to carry long-distance telecommunication services and includes various teleservices including voice, data, fax, text, video, and multimedia. Also, act as an internet service provider(ISP) and offer retail broadband services through the ‘RailWire’ platform.
Telecom Infrastructure Services: To provide storage, power, cooling, and physical security for servers and networking equipment of our customers and connect them with a variety of telecommunications and network service providers.
Projects (System Integration Services): National Knowledge Network and Bharat Net (formerly, the National Optical Fiber Network).
Data Center and Managed Hosting Services: Data Centre and Managed Hosting Services: It offers a variety of data center services including Infrastructure as a Service or IaaS, dedicated hosting, managed services, cloud computing, managed e-Office services, disaster recovery services, Aadhar authentication services, and other IT related services such as load balancing services, application hosting, bandwidth services, and advanced firewall services
ICT Hardware, Software, and Service System Integration Projects
To Provide Digital Services To Customers

Financial Position of RailTel

The company revenue has grown at ~7.5% CAGR for FY20. Earnings Before Interest, Tax, Depreciation, and Amortization(EBITDA) has grown at ~4.5% over 3 years. The company’s net worth has grown ~3.6% over the past 3 years.

The company holds a net profit margin of 13% and close to zero-debt.

It has right of way along 67,145 route km of railway track connecting 7,321 railway stations for laying optical fiber cables. As of now, It has an optical cable network of 59,098 route km connecting 5,929 railway stations.

Risk and Rewards

The company will help set up internet and broadband services in rural areas. The Indian Railways’ connectivity even in the remotest corners of the country will be an added advantage to its revenue source. At the same time, the company will not have to pay for fixed land assets as it will be using the railway track’s right of way to lay cables.

It has helped the Indian Railways in implementing payroll system, ticketing system, freight operations information system and is currently involved in the execution of various other projects. RailTel is required to share 7 percent of its gross revenue with Indian Railways.

The company will also have an added advantage with the upcoming 5G infrastructure. Telecom companies might prefer using RailTel’s infrastructure because of its efficiency and geographic reach.

It holds regulatory risks like changes in laws, license terms, and government policies that can potentially affect the business. The company needs to keep pace with growing technology, it can lose customers and subscriber base.

The company has a high dependence on PSU customers. For FY20, close to 25% of its income from Indian Railways. The Government prefers RailTel as a service provider in telecom and network-infra related services for other PSUs. If the PSUs were to have a change in investment plans, the company might take a dip in revenue. It needs to increase its private customer base.

The IPO in a Nutshell

IPO Opening Date	Feb 16, 2021
IPO Closing Date	Feb 18, 2021
Issue Type	Book Building
Face Value	Rs 10 per equity share
IPO Price	Rs 93 to Rs 94 per equity share
Lot Size	155 Shares
Min Order Quantity	155 Shares/ Rs 14,570
Listing At	BSE, NSE
Issue Size	87,153,369 Eq Shares of ₹10(aggregating up to Rs 819.24 Cr)
Offer for Sale	87,153,369 Eq Shares of RS 10(aggregating up to ₹819.24 Cr)

The entire issue is Offer for Sale, that is, promoters getting money. No extra funds are being raised by RailTel from this IPO. Do not apply for more than 1 lot, as the issue will be oversubscribed anyway.

Will we Invest?

RailTel Corporation of India Limited has had a grey-market premium of 50%. It has seen more interest in the market than its competitor IRFC, which had a not-so-good IPO listing. It is the 6th railway company to go for an IPO. RailTel has shown a fairly good financial performance, but very innovative and strong growth potential. It had shown a good interest from retail investors.

The company needs to look out for private clients, currently, the company only serves major PSUs including the Indian Railways. This is reflecting in its slow but positive revenue growth. The consumer-facing side of the business has also been gaining a lot of buzz recently for the good service being provided, but it is still small. Hopefully, this is sustained in the long term.

Considering the strong financials, good valuation and market sentiments, the IPO can give a good return both for short term and long term and I will be investing.

Tags broadband, indian railways, IPO, multibagger, optic fibre, RailTel, Railway, Telecom

Editorial

Nureca Limited IPO – All You Need to Know

Post author By marketfeed Team
Post date February 16, 2021

Nureca Limited would be the sixth company to come out with its initial public offering (IPO) in the present calendar year- 2021. It is very inspiring to see such a young company doing an IPO just 5 years from its incorporation. The IPO is already open. Let us take a closer look into the company, learn more about its IPO, and check whether you should subscribe or not.

Company Profile – Nureca Limited

Before investing in any company, it is always important to understand what it does or learn about its products and services. Nureca Limited is a business-to-consumer (B2C) firm that deals in home healthcare and wellness products. It was incorporated in November 2016. The company offers specialised medical tools that monitor chronic ailments or diseases and help people improve their lifestyle. [Chronic diseases include diabetes, asthma, obesity— which lasts for a long time]

Nureca has classified its product portfolio into five categories. This includes chronic device products, orthopaedic products, mother and child products, nutrition supplements, and lifestyle products.

The company’s flagship brand, ‘Dr Trust‘, sells blood pressure monitors, pulse oximeters, thermometers, nebulisers, self-monitoring glucose devices, humidifiers, and steamers. A pulse oximeter is used to measure blood oxygen levels, and have seen very high sales during the Covid-19 pandemic.

‘Dr Physio‘ is another brand of Nureca that offers electric massagers, wheelchairs, and walkers.

The ‘Trumom‘ brand sells a variety of products under the mother & child-care category. The company has entered into contracts with third parties to manufacture these products.

Nureca has a strong distribution network that ensures the sale of its premium quality healthcare products to end-consumers. It is a digital-first company, which means that it sells products through online channel partners such as e-commerce platforms, distributors, and retailers. In fact, almost 95% of its total revenues come from online sales. The firm also sells products through its website- www.drtrust.in

A major part of the production is outsourced by the company. However, it has been trying to increase its in-house production recently.

About the IPO

In January 2021, Nureca received approval from the Securities and Exchange Board of India (SEBI) to raise Rs 100 crore through an initial public offering (IPO). The public issue opened on February 15 and will close on February 17.

Price band for the IPO has been fixed at Rs 396-400 per share. Fresh issue of shares (of the face value of Rs 10 each) aggregates to Rs 100 crore.

Individual investors can bid for a minimum of 35 equity shares (1 lot) and in multiples of 35 shares thereafter. The maximum number of shares that can be applied by a retail investor is 490 equity shares (14 lots). But take care to not apply for more than 1 lot, as your capital will get blocked for no reason if the IPO is oversubscribed.

The public issue includes a reservation of shares worth up to Rs 1 crore for Nureca’s employees. The eligible employees will get shares at a discount of Rs 20 per share.

Nureca will utilise the net proceeds from the IPO for two main purposes:

To meet incremental working capital requirements.
Meeting the required funds for general corporate purposes.

The company’s total promoter holding by Saurabh Goyal and others will decrease to 70% post the IPO, from the current shareholding of 93.33%. Ahead of the IPO, Nureca was able to raise Rs 44.55 crore from two anchor investors on February 12.

Financial Overview

*	31 March 2020 (FY20)	31 March 2019 (FY19)	31 March 2018 (FY18)
Total Assets	33.88	23.52	7.02
Total Income	99.49	61.98	20.07
Profit After Tax	6.40	6.23	3.11

(Values in Rs crore)

From the chart, it is clear that Nureca’s revenues and profits have increased exponentially over the past 3 years. The company’s revenue has grown at a CAGR of around 70.5% over FY18-FY20. During the same period, its net profit grew at a yearly rate of 27.2%. The stellar growth in profits in the current financial year was primarily driven by increased demand for their products amidst the Covid-19 pandemic. Earlier, people used to visit diagnostic centres or hospitals for checking their sugar or blood pressure levels. As people were forced to stay at home and avoid hospitals, many turned to Nureca’s medical tools and products. There is high optimism that the company will surpass these figures in the upcoming financial year as well, already posting great results for the first few quarters.

So far, Nureca has been able to effectively manage its costs/expenses. It has allocated sufficient funds for research & development activities, which is a core requirement for such firms. They have also managed to launch an effective advertising campaign, with Rohit Sharma as its brand ambassador. However, an important point to be noted is that these limited financial records are insufficient to assess Nureca’s long-term growth.

Risk Factors

As mentioned earlier, Nureca depends on third-parties to manufacture medical tools and other products. There could be a situation wherein these parties are unable or unwilling to manufacture them. Or, these products could fail to comply with regulatory standards. In such cases, Nureca’s business could be negatively affected.

If third-party e-commerce platforms, distributors, or retailers fail to manage orders or distribution networks effectively, the company’s performance could be harmed.

The products are subject to strict domestic and foreign regulations. Any strong regulatory action might affect Nureca’s financial conditions and business operations.

Nureca’s promoters and directors have been subject to a ‘search and seizure’ operation by the Income-Tax department. There could be an increase in the company’s tax liability if the authorities find any wrongdoings. Ongoing litigation against the company regarding internal transactions of shares of Nectar Life Sciences Limited (the listed company of Saurabh Goyal’s father – Sanjiv Goyal).

The market in which the company operates is highly competitive in terms of pricing, service quality, and product developments. Thus, Nureca’s revenue and profits are highly dependent on its ability to adapt, innovate, and customise its products and services. Also, the medical tools sold by the firm need to maintain a high rate of accuracy.

Over the years, the company has experienced negative cash flows, which may also arise in the future. This could harm its overall operations.

IPO Details in a Nutshell

IPO Date	Feb 15, 2021 – Feb 17, 2021
Issue Type	Book Built Issue IPO
Face Value	Rs 10 per equity share
IPO Price	Rs 396 to Rs 400 per equity share
Lot Size	35 shares
Issue Size	Rs 100 crore
Listing Date	February 25, 2021
Listing At	BSE, NSE

ITI Capital was selected as the book-running lead manager to the public issue. Nureca Ltd had filed draft papers for its IPO in November 2020. You can read it here.

Conclusion

The home healthcare and wellness segment is expected to grow at a CAGR of 11% by 2025. This is primarily driven by rising awareness of health and wellness, increasing disposable income, and the growing burden of chronic diseases such as diabetes and asthma. Currently, Nureca is the only company in this segment. The firm is likely to receive heavy competition over the next few years. At the same time, the company plans to further diversify its product line and enhance its online presence.

As mentioned earlier, the robust growth it has shown in the current financial year was due to a change in consumer sentiments amidst the Covid-19 pandemic. Experts state the high sales and profit growth witnessed during Covid is difficult to sustain in the long term. Do consider the risks associated with this company and then come to your own conclusion.

Before applying for listing gains, I will personally wait to see if the institution portion of the IPO is getting oversubscribed. As per reports, Domestic Institutions have bought in a lot of shares in the recently concluded IPOs. So if that is the case here as well, we may be able to see some listing gains.

What are your opinions on this IPO? Will you be applying for it? Let us know in the comments section.

Tags Editorial, health and wellness, IPO, nureca analysis, nureca ipo, nureca ltd

Editorial

Stove Kraft IPO: All You Need To Know

Post author By marketfeed Team
Post date January 27, 2021

The Global Kitchen Appliances Market is expected to grow to $240 Billion in 2022. The kitchen appliances market is dynamic in nature, with rampant innovations that suit consumer preferences. Stove Kraft, an Indian company, has been a part of the growth since its inception by its founder Rajendra Gandhi in 1999 in Banglore. Stove Kraft specializes in kitchen appliances, consumer durables, and light electrical appliances. The IPO was subscribed 98% on Day 1. The offer size was reduced after the company raised ₹185 crores from anchor investors, one night before the IPO. Let us start looking into the company.

About The Company

Stove Kraft Private Limited was incorporated on June 28, 1999, in Bengaluru, Karnataka. Stove Kraft’s products mostly include kitchen appliances. It has its products divided into three segments based on price range.
- Value For Money Brand – Pigeon
- Medium-Range Brand – Gilma
- Premium Brand – Black+Decker.

The company has its major presence in Southern India, in the states of Karnataka, Tamil Nadu, Kerala, Andhra Pradesh, and Telangana. It had two manufacturing facilities at the time of IPO, one each in Bengaluru, Karnataka with a production capacity of 38.4 million units, and Baddi, Himachal Pradesh with a production capacity of 2.8 million units.

The Bengaluru Facility is an integrated facility comprising 12 manufacturing units, tailored to manufacture cookware, cooktops, pressure cookers, mixer grinders, non-stick cookware, LED bulbs, floor mops, handy vegetable chopper, IR thermometer, and induction cooktops.

The company is backed by the American venture-capital fund Sequoia Capital’s Indian arm.

Financial Overview

	Half Year Ended(6 Months)	Annual Results
	30-Sep-20	30-Sep-19	31-Mar-20	31-Mar-19	31-Mar-18
Assets	4,984.99	4,934.77	4,712.91	4,257.26	3,936.42
Liabilities	5,284.42	5,522.82	5312.45	4894.55	5735.30
Revenue	3,288.36	3,155.07	6,698.61	6,409.38	5,289.52
Profit After Tax	287.76	43.89	31.70	7.36	(120.18)

(Values in Rs Crore)

The company’s revenue has grown at a CAGR of 10.7% in the last three years. While the company was in a loss for 4 years, between 2014 and 2018, a sudden jump in Profit After Tax(PAT) is seen between 30-Sep-19 and 30-Sep-20 in half-yearly results. This is because of the reduction in cost in travel and conveyance along with the advertisement. These costs were reduced during the COVID-19 lockdown period and are not sustainable in the long run.

The company operates on a significant amount of debt(Rs 1,194.73 crore) which has accumulated over the years. The company’s current liabilities or short term borrowings have increased consistently over 4 years. The company also has debentures held by Sequoia Capital India(SCI) and its other entities, which will be converted to equity after the IPO.

The Value For Money brand Pigeon contributed 90% to the company’s revenue stream followed by Gilma and Black + Decker.

The total assets of the company grew at a CAGR of 11.45%.

Favorable Factors

Stove Kraft’s products segment generally targets audiences aged 20 and above i.e. young individuals who are ‘settling down’ and buying these utensils to cook. India has a significantly young population.

The company is a market leader in cooktops and free-standing cooking hobs, covering almost 25% in those segments. The company plans to expand in other product segments as well.

Pradhan Mantri Ujjwala Yojana (PMUY)– a scheme where the Government provides free clean cooking gas to those below the poverty line. This scheme might pump the sales and demand for kitchen appliances.

Pradhan Mantri Sahaj Bijli Har Ghar Yojna- A scheme for rural electrification which fuels potential in electrical kitchen appliances and other items that the company sells.

The rise in disposable income per family is another factor that may give rise to medium and premium range products of the company.

Risk Factors

The company irks of not so good profitability as given in the financial overview. The company’s high profits in the last quarter are owed to reduced costs in travelling and branding. This reduction in cost may not be sustainable.

The company sources its material from third parties with whom it does not have a long term contract. This does not fix a price guarantee for the company. The company also excessively depends on third-parties for its supply, distribution, and retailing.

Steel prices have been skyrocketing recently. This has pushed up the production cost for the company, which is eating into profit margins for the company as well as the sales.

The company’s sales are concentrated in southern India. The company’s sales are subject to fluctuations in regional economic conditions. The company faces tough competition from market players like TTK Prestige, Bajaj, Faber, etc.

The company’s products are durable for a long time, the chances of having repeat consumers are less.

The company has faced negative cash flows in the past, which means that it was spending more than what was coming in. A continued negative cash flow in the company can cause a cash crunch.

IPO Details In A Nutshell

Issue Open	Jan 25, 2021
Issue Close	Jan 28, 2021
IPO Price	Rs 384 – Rs 385
Face Value	Rs 10
IPO Size	Rs 412.63 crores
Listing At	BSE, NSE
IPO Lot Size	38

Conclusion

The company’s IPO might be oddly timed, just around India’s Annual Budget Session and also when the steel prices are highly inflated. High steel prices might impact the sales of the company as well as the profits. With rising debt, uneven cash flows, and unsteady profits, the financials of the company do not speak brightly of it. The company’s Price to Earnings(PE) ratio of 366 as compared to Industry PE of 123.8 shows that the company might be overvalued in comparison to its peers. The company has a negative Working Capital and a negative Return on Capital Employed, this means that the company isn’t utilizing its resources efficiently.

On the bright side, the company might have had an IPO to make structural changes and clear its debt. This might give the company a reboot that it needs and expand its horizons geographically and economically. In the future, the company’s decision-making shall decide where the company goes.

We would not be recommending this IPO as financials do not seem interesting. To know more about the company’s future prospects, check out their Red Herring Prospectus(RHP) over here.

Tags Appliances, Durable, IPO, Kitchen, Stove Kraft

Editorial

Indigo Paints IPO: All You Need to Know

Post author By marketfeed Team
Post date January 20, 2021

2021’s IPO series kicked off with IRFC becoming the first company in this year to take the public route. Indigo Paints, from the paints Industry, will be the second company to bring its IPO. The public offer will take place on 20th January 2021 till 22nd January 2021. What is this IPO is all about? Let’s find out.

About Indigo Paints

Before applying for a company’s IPO, it is very important to know what is the business of the company and how do they go about it. Indigo Paints is into the manufacturing of different types of decorative paints. Its product range includes Emulsions, Wood Coatings, Distempers, Enamels, Putties and Cement Paints. Indigo Paints is also the first company to manufacture differentiated products. The list of differentiated products comprises Floor Coat Emulsions, Dirtproof & Waterproof Exterior Laminate, PU Super Gloss Enamel and more.

Indigo Paints has three manufacturing facilities situated in Jodhpur (Rajasthan), Kochi (Kerala), and Pudukkottai (Tamil Nadu). The company find raw materials easily available in these locations. This helps them to decrease the cost of their operations and thus boosting their bottom line.

Based on the revenue generated in FY20, Indigo Paints ranks 5th in the industry. But when you compare companies in terms of growth, Indigo Paints is right at the top. Being a paint company, one thing they need the most is a very strong distribution network. And, this is what which has helped the company to grow massively in recent years. Indigo Paints has its reach into 27 states and 7 territories. In a way, you can say that they have their distribution network spread all over the country. They have 36 depots and over 4000 tinting machines.

About the IPO

The IPO of Indigo Paints will open on 20th January and will close on 22nd January. The total issue size of the IPO is Rs 1,176 crore. The fresh issue aggregates up to Rs 300 crore. The price band of the IPO is Rs1488-Rs 1490 per equity share. You have to apply for a minimum of 10 Shares (1 lot). The upper limit to the number of lots you can apply for is 13, that means, 130 shares. The minimum an investor has to pay for this IPO is Rs 14,900. Similarly, the maximum one can invest in is Rs 1,93,700. But once again, apply for a maximum of 1 lot, as the IPO will be oversubscribed for sure.

Currently, the promoters of the company have 60.05% of the total holdings. After the IPO, this will decrease to 54%. The allotment date and listing date for the IPO are 28th January 2021 and 2nd February 2021 respectively.

The two investors, Sequoia Capital India Investments IV and SCI Investments V will be selling 20.05 lakh equity shares and 21.65 lakh shares respectively. Hemant Jalan, the promoter of the company, will be selling 16.70 lakh equity shares as part of this public issue.

Indigo Paints will use the net proceeds from the IPO in four ways. Firstly, a part of the sum will be used to meet the capital expenditure requirements for expansion. The company is planning to expand its manufacturing facility at Pudukkottai, Tamil Nadu. This will help them to produce more and at a lower cost. The second objective of the IPO is to purchase more tinting machines and gyro shakers. Indigo Paints has a very low amount of borrowings on their sheets yet their third objective is to repay all or certain borrowings. Lastly, the remaining sum will be used to meet general corporate purposes.

Financial Overview

	30 September 2020	31 March 2020	31 March 2019	31 March 2018
Total Assets	411.29	421.95	373.18	297.39
Total Income	260.24	626.43	537.26	403.10
Profit after Tax	27.20	47.81	26.87	12.86

(Values in Rs Crore)

The table above shows how the revenue and profits of the company have increased over the last three years. Here, from FY19 to FY20, the revenue of the company has increased by more than 16%. And, when we look at profits, it has risen by a whopping 80% from Rs 26.87 crore to Rs 47.81 crore during the same period.

In the past year, their long term debt has also decreased from Rs 26.91 crore to Rs 24.71 crore. This is another good sign because as the debt of a company falls, the risk associated with them also decreases. Till the first half of 2020-21, the revenue generated by the company is Rs 260 crore. But with this trend, Indigo Paints might not be able to generate more sales than FY20 but the slowdown is only because of lockdown induced in March due to Covid-19.

Risk Factors

The Indian paint industry already has some established players like Asian Paints, Berger Paints, Kansai Nerolac and AkzoNobel. As said before, Indigo Paints comes behind all of these companies when we talk about the sales number.
Brand loyalty is a very important factor in this business. People often rely on their favourite brand or the brand they have used earlier. Thus, it will be difficult for the company to make its space instantly in the heart of the customers.
Indigo Paints follow the strategy of making short-term agreements with their dealers. They renew their deals regularly but any failure to do so can affect their business severely.
The company imports a few of their products from outside. Any restriction on imports will increase their cost of operations thus decreasing their bottom line.

IPO Details in a Nutshell

IPO Date	Jan 20, 2021 – Jan 22, 2021
Issue Type	Book Built Issue IPO
Face Value	Rs 10 per equity share
IPO Price	Rs 1488 to Rs 1490 per equity share
Lot Size	10 Shares
Offer for Sale (goes to promoters)	58,40,000 Equity Shares
Fresh Issue (goes to the company)	Rs 300 crore
Issue Size	Rs 1,176 Crore
Listing At	BSE, NSE

Kotak Mahindra Capital Co. Ltd., Edelweiss Financial Services Ltd. and ICICI Securities Ltd. are the books running lead managers of this IPO.

Conclusion

When it comes to business, Indigo Paints looks to be a very sound company. They have done well in the last few years and are growing at a very high pace. They are fundamentally strong with an ROE (return-on-equity) of 24% and ROCE (return-on-capital-employed) of 27.5%. The company offers a wide variety of products. This extensive portfolio helps them to cover the needs of different customers. Thus, generating more sales for them. The valuations also look very interesting.

One thing which you have to be mindful is of the intense competition in the industry. Indigo Paints have some good competitors which can hurt their business. Thus, the company will be required to continuously strategize their operations and find new ways to stay ahead. Indigo Paints filed its draft papers last November. You can find it here. What are your opinions on Indigo Paints? Will you be applying for it? Let us know in the comments section below!

Tags Editorial, INDIGO, indigo paints, IPO, Stock market

Editorial

Top 5 IPOs of 2020 Revisited

Post author By marketfeed Team
Post date January 1, 2021

The year 2020 is concluded and it’s the right to look back how it panned out for the IPOs. The Indian stock market touched the rock bottom due to the lockdown announcement in various countries in March. Since then, it has been on a serious uptrend. If there has to be a year where IPO should not perform well, it has to be this year. But, surprisingly, IPOs have generated huge demand this year. In fact, 2020 has been an amazing year for most of the companies who opted to take public routes this year. Out of the 16 companies which launched their IPO in 2020, only four of them gave listing day losses to the investors.

Let’s have a look at the top 5 IPOs of 2020 with the most listing gain percentage.

#5 Rossari Biotech – 74.67%

Mumbai-based Rossari Biotech is a textiles speciality chemicals manufacturer. They provide customized solutions to specific industrial and production requirements. The IPO hit the market from 13th July 2020 to 15th July 2020. The issue price band decided for the IPO was Rs 423-Rs 425 equity per share. Rossari Biotech’s decision to take the public route became an instant hit. It was subscribed 79.37x times on July 15, 2020.

It was subscribed 239.83x times in the NII category. Followed by 85.26x times in the QIB category and 7.23x times in the retail category. We believe that one of the strongest reasons for this success is the wide portfolio under which the company operates. They operate in 18 countries and in several sectors like apparel, animal & poultry feed, and FMCG industries, home & personal care and performance chemicals. Their shares get listed at a price of Rs 670 per share. This was 57% higher than the issue price. On its listing day, their price closed at Rs 742.35 which was 74.67% higher than the issue price. Thus, taking the 5th position on this list.

#4 Route Mobile – 86.02%

Route Mobile Limited is a 16-year old company and is one of the leading Cloud Communication Platform providers. They offer their services to many enterprises, over-the-top (OTT) players and mobile network operators (MNO). Mainly they offer smart solutions in Messaging, Voice, Email, and SMS Filtering, Analytics & Monetization.

Route Mobile raised Rs 600 crore from its IPO which was subscribed by 73.30x times on September 11, 2020. The price band was set at Rs 345 to Rs 350 per share. The issue was subscribed 192.81x in the NII category, 89.76x in the QIB category and 12.67x in the retail category. Their shares get listed at a price of Rs 708 per share which is more than double of its issue price. The stock closed its listing day at Rs 651.10. Thus, giving a massive listing gain of 86.02% to the investors.

#3 Mrs Bectors Food – 106.79%

One of the most recent IPOs to hit the market was that of Mrs Bectors Food. And, it was a grand success for the companies and the people who were allotted the shares. Mrs Bectors Food caters in two categories which are biscuits and bakery products. They operate in the biscuit segment as “Mrs Bector’s Cremica” and in the bakery segment as “English Oven” brand. They possess 96 products and 384 products in its bakery segment and biscuits segment respectively.

Mrs Bectors has a huge presence in north India but they still have the opportunity to explore other locations of the country. According to us, Mrs Bectors Food’s IPO was a hit because of its robust in-house operations. They wholly manufacture and sell their products on their own. Currently, the company has 6 manufacturing units in India. To support the manufacturing domain, they have an exemplary distribution network.

The company raised more than Rs 540 crore via its IPO to expand in other districts. This will help them to spread their brand in other parts of the country, thus boosting their revenues. The price band for this IPO was Rs 286 to Rs 288 per share but due to huge oversubscription, it got listed at Rs 501. The IPO was subscribed by 198.02x times. Their successful run didn’t stop there as the stock closed at Rs 595.55. Thus, giving an astounding 106.79% listing gain to the investors.

#2 Happiest Minds Technologies – 123.49%

The IT sector is destined for a big future. This pandemic reminded us of how important a role these IT companies play in our life. Bangalore based Happiest Minds is an IT service provider company with a global presence in countries like US, UK, Australia and Canada. They are one of the strong brands which offer Digital IT services. It didn’t take long for people to realise that this surely will be a hugely profitable opportunity for them if they are allotted the company’s shares.

Happiest Minds raised Rs 700 crore through their IPO. The price band was set at Rs 165 to Rs 166 equity share and the IPO was subscribed 150.98x times. Thus, the stocks get listed at Rs 351, that is, more than double the issue price. It went even higher and got closed at Rs 371. Thus, giving investors a magical 123.49% listing gain.

#1 Burger King – 130.67%

Who other than the great Burger King? As soon as Burger King announced their intentions to go public, the market knew it would be big. The only question was, how big? Currently, Burger King is India’s one of the fastest-growing quick-service restaurant chains. The youth of India, who is a major part of the population, are well aware of Burger King as a brand. People expect the FMCG industry, especially these QSRs to do well in the future as they expand their Indian portfolio. Thus, many considered Burger King to be a good option for long-term investment.

Burger King raised Rs 810 crore via the public route. The price band for the IPO was Rs 59-60 per share. The company stated that the proceeds from the IPO will be used to open at least 700 restaurants by December 31, 2025. This showed that the American multinational chain has no intentions in slowing down their growth in India. Burger King got listed at Rs 115.35 in comparison to their issue price of Rs 60. It was oversubscribed by 156.65 times.

The stock closed at Rs 138.40 on the day of its debut on the market. That is a mighty 130.67% listing gain! That means, if you had invested Rs 15,000 in its IPO, it would value Rs 34,600 after just one trading day. Not only this, Burger King hit the upper circuit three continuous days which showed how much people were interested in buying the stock. After three trading days, Burger King touched Rs 219 which means a gain of 265.25% over its issue price. To make it simple, your initial investment of Rs 15,000 would value to be Rs 54,787 after just four days!

The Way Forward

It was a rock-solid year for IPO in India. Who could have imagined that only 4 out of the possible 16 IPOs will fail to give listing day profits in 2020? It seems like people are more aware of the pros of an initial public offer and they are ready to invest in future. If you missed out an opportunity to get profits via IPO in 2020, do not worry! New year comes with new opportunities and that’s what 2021 will be offering you. Zomato Ltd, Aditya Birla Sun Mutual Fund Ltd, Grofers, Kalyan Jewellers are few of the probable companies which might come with an IPO this year. marketfeed will bring you a thorough analysis before any IPO hits the market so that you can know all the positives and negatives of the company. Hoping 2021 comes with a jackpot for all of us! Until, next time.

Tags 2020, 2021, burger king, Happiest Minds, Initial Public Offer, IPO, mrs bectors food, Rossari Biotech, route mobile