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MRF Reports 51% YoY Decline in Net Profit in Q4 – Top Indian Market News

MRF Q4 Results: Net profit declines 51% YoY to Rs 332 crore

MRF Limited reported a 51.1% YoY decline in consolidated net profit to Rs 332.15 crore for the quarter ended March (Q4). Net profit has declined by 36.2% when compared to the previous quarter. Its revenue from operations rose 30.7% YoY to Rs 4,816.46 crore during the same period. Net profit for the financial year ended March 31, 2021 (FY21) declined by 10.2% YoY to Rs 1,277.07 crore. The tyre manufacturer’s board has recommended a final dividend of Rs 94 per share and a special dividend of Rs 50 per share.

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Centre to provide free Covid-19 vaccines to all adults from June 21: PM Modi

In his address to the nation, Prime Minister Narendra Modi stated that the Centre will take over the task of vaccination from state governments and provide Covid-19 vaccines free of cost to all adults from July 21. Out of the total vaccine being produced in India, the Centre will buy 75% and give it to states for free. Private hospitals will continue to have access to 25% of all vaccines. The government has also decided to extend the Pradhan Mantri Garib Kalyan Anna Yojana (free ration scheme) till Diwali in November. 

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L&T Construction wins significant orders for various businesses

The construction arm of Larsen & Toubro (L&T) has secured significant orders (in the range of Rs 1,000-2,500 crore) for its various businesses. Its water and effluent treatment business has received an order from Bangalore Water Supply & Sewerage Board to design, build, and operate sewage treatment plants and pumping stations in the city. The buildings and factory business of L&T Construction has secured an order for the construction of sports infrastructure facilities at Kalinga Stadium in Odisha. 

Read more here. 

Central Bank of India Q4 Results: Net loss at Rs 1,349 crore

Central Bank of India reported a standalone net loss of Rs 1,349.21 crore for the quarter ended March 2021 (Q4 FY21). It had posted a net loss of Rs 1,529.07 crore in the corresponding period last year (Q4 FY20). The bank’s total income declined by 14% YoY to Rs 5,779.84 crore in Q4 FY21. The gross non-performing assets (GNPA) ratio fell to 16.55%, compared with 18.92% in the year-ago period. Net profit for the entire financial year 2020-21 fell 20.84% YoY to Rs 887.58 crore.

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Lupin launches Digital Asthma Educator platform

Lupin Limited announced the launch of its Digital Asthma Educator platform for guiding patients on the correct technique of using inhalers. The platform is part of the pharma company’s long-running umbrella program, Joint Airways Initiative (JAI), for patients suffering from respiratory ailments. 

In a separate filing, Lupin announced it has received approval from the US Food & Drug Administration (USFDA) to market generic Emtricitabine and Tenofovir Disoproxil Fumarate tablets in the US market. The drug is used for the treatment of human immunodeficiency virus (HIV)-1 infection.

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ED transfers UBL shares worth over Rs 5,600 crore to recovery officer’s demat account

The Enforcement Directorate (ED) has transferred 4.13 crore equity shares of United Breweries Ltd (UBL) to the Demat account of the recovery officer of the Debt Recovery Tribunal. The shares are worth over Rs 5,600 crore. In March 2019, UBL had informed the exchanges that the Debt Recovery Tribunal in Bengaluru had transferred a 2.80% stake worth over Rs 1,025 crore held by United Breweries (Holdings) Ltd in the company in its name. UBL and United Breweries (Holdings) Ltd are promoted by Vijay Mallya.

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Union Bank of India Q4 Results: Net profit rises 83% QoQ to Rs 1,330 crore

Union Bank of India reported an 83% quarter-on-quarter (QoQ) rise in standalone net profit of Rs 1,330 crore for the quarter ended March (Q4). Net interest income (NII) declined by 18% QoQ to Rs 5,403 crore during the same period. The gross non-performing assets (GNPA) ratio stood at 13.74%, compared with 13.49% in Q3. The bank stated that the results for the quarter and year ended March 31, 2021, include operations of Andhra Bank and Corporation Bank. The two banks were amalgamated into Union Bank of India on April 1, 2021. Hence, the results are not comparable.

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Average spot power price rises 10% to Rs 2.83 per unit in May at IEX

The average spot power price (or market clearing price) in the day-ahead market (DAM) increased over 10% YoY to Rs 2.83 per unit in May 2021 at the Indian Energy Exchange (IEX). The day-ahead market traded 4,364 million units (MU) volume in May with the average monthly price at Rs 2.83 per unit. The average spot power price saw a decline of 24% on a month-on-month basis, as the average monthly price was Rs 3.70 per unit in April. IEX traded 6,540 MU of electricity volume in May, achieving 9% YoY growth.

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NCLT approves Piramal Group’s resolution plan for DHFL

The National Company Law Tribunal (NCLT) approved Piramal Capital & Housing Finance’s resolution plan for the stressed mortgage lender Dewan Housing Finance Ltd (DHFL) with a few conditions. The Mumbai bench of NCLT has rejected former DHFL promoter Kapil Wadhawan’s plea to consider his offer for settlement. The tribunal has asked DHFL’s Committee of Creditors (CoC) to consider giving more money to small fixed deposit holders under the resolution plan. The Piramal Group has offered Rs 37,250 crore to DHFL’s creditors.

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Mrs. Bectors Food Q4 Results: Net profit rises 41% to Rs 12.77 crore

Mrs. Bectors Food Specialities reported a 41% YoY increase in consolidated net profit to Rs 12.77 crore for the quarter ended March (Q4). Net profit has declined by 38.3% when compared to the previous quarter. Its revenue from operations rose 15.26% YoY to Rs 223.98 crore during the same period. For the financial year ended March 31, 2021 (FY21), net profit jumped 138.47% YoY to Rs 72.28 crore. The company’s board has recommended a final dividend of Rs 2.40 per share.

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Infosys partners with Archrock for digital technology integration

Infosys Limited has collaborated with Archrock Inc to integrate digital technologies and mobile tools for its field service technicians. Archrock is a leading provider of natural gas compression services in the US. As part of the agreement, Infosys will leverage its pre-configured accelerator for Microsoft Dynamics 365 Field Service Application. This will help streamline and enhance Archorck’s field services and operational efficiencies.

Read more here.

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Editorial

Top 5 IPOs of 2020 Revisited

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.

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Editorial

Mrs Bectors Food Specialities IPO: Should You Subscribe?

Another week, another IPO. 2020 may have disrupted a lot of businesses worldwide, yet it has failed to demotivate companies to take a public route to raise funds. Mrs Bectors Food Specialities Ltd initial public offer will open on 15th December 2020. Let’s dig deeper and understand more about this IPO.

About the Company

Mrs Bectors Food Specialities Ltd was founded by Mrs Rajni Bector. She built this Indian company in 1978 by unveiling her passion for making ice creams, bread and biscuits. It is one of the few leading companies in the premium bakery segment. It is also present in the premium and mid-premium biscuit segment in North India. Thus, the company caters around two categories which are biscuits and bakery products. Few examples of products are bread, buns, pizza bases, cakes, cookies, creams, crackers, etc. Manufacturing and selling of biscuits take place through the brand “Mrs Bector’s Cremica”. Similarly, bakery products are sold via the “English Oven” brand. 

It has 6 manufacturing units in India. They are present in Rajasthan, Maharashtra, Uttar Pradesh, Karnataka, Punjab and Himachal Pradesh. All of the products are manufactured in-house, thus, saving them from incurring additional cost. As of Q1 FY21, Mrs Bectors has 96 products and 384 products in its bakery segment and biscuits segment respectively. Apart from in-house manufacturing, Mrs Bectors has a strong distribution network as well. They have 154 super-stockists and 644 distributors. These distributors supply products through 458,000 retail outlets and 3,594 preferred outlets. They are also the largest supplier of biscuits to the Canteen Stores Department of Government of India across 33 locations in the country.

Interestingly, Mrs Bectors supplies buns to quick-service restaurant (QSR) chains such as McDonald’s, KFC, Burger King and Carl’s Jr among others.

Mrs Bectors has both, national and international presence. Its products are sold in 23 states around the country and are exported to 64 countries all over the world under its brand name and third-party labels.

About the IPO

The investors are allowed to bid only in multiples of 50 equity shares. The minimum and maximum bid for the IPO will be Rs 14,300 [Rs 286 x 50 shares] and Rs 1,87,200 [Rs 288 x 650 shares].

This IPO consists of two parts: a fresh issue and an offer for sale(OFS). As a part of OFS, which is money going to promoters, shares worth Rs 500 crore will be sold by Linus Private Limited, Mabel Private Limited, GW Crown Pte Ltd and GW Confectionary Pte Ltd. The biggest seller will be Linus Private Limited who is going to sell shares worth Rs 245 crore. All the qualified employees will get a discount of Rs 15 per share. Total shares worth Rs 50 lakh will be kept aside completely for these eligible employees.

India is still in a recovery mode after facing a huge economic contraction in Q1FY21 due to lockdown. Thus, a question arises: why is the company looking to take the public route during this tough period? Just like other companies, Mrs Bectors will use the proceeds to finance their projects related to expansion. The sum acquired will be used to fund its Rajpura expansion project. This project involves opening a completely new production line for biscuits. The money left after financing will be used for general corporate purposes like fulfilling short-term and long-term working capital needs. The equity shares of Mrs Bectors Food will debut on the markets on December 28, 2020. 

As mentioned before, Mrs Bectors work closely with Burger King whose IPO hit the market on 2nd December 2020. Burger King’s IPO was a very successful event for the quick-service restaurant (QSR) as it was subscribed 156.65 times. Burger King’s IPO will also debut on the market on December 14, 2020.

Financial Overview of Mrs Bectors Foods

30 September 202031 March 202031 March 201931 March 2018
Total Assets608.73565.72577.04511.06
Total Income438.56764.98786.03695.76
Total Expenses386.50725.83735.44642.93
Profit after Tax38.8830.4033.1535.89
Values in Rs crores

Mrs Bectors Foods’ profits have been declining for the last three years but are looking stable in the last few quarters. The main reason behind this is their intent to expand. Negative profits are very common for the company which is trying to grow. This year seems to be going financially well for the company. Till the end of Q2 FY21, the company has reported a revenue of Rs 438 crore and a profit of Rs 38 crore. Mrs Bectors’ strengths lie in its strong sales and distribution network. Also, their production plants are well-equipped with modern infrastructure which will help them in the long run. To prove how safe their products are, the company has acquired major food certifications of authorities like RC, USFDA, FSSAI and FSSC.

Their biggest competitors amongst the listed companies are Nestle and Britannia. A table below shows a brief comparison between the three companies.

CompanyTotal Income ’20EPSROE
Nestle IndiaRs 11,600 crores21470%
Britannia IndiaRs 12,369 crores71.432%
Mrs Bectors FoodRs 764 crores4.9310%

IPO Details in a Nutshell

IPO DateDec 15, 2020 – Dec 17, 2020
Issue TypeBook Built Issue IPO
Face ValueRs 10 per equity share
IPO PriceRs 286 to Rs 288 per equity share
Lot Size50 shares (Rs 14,400 per lot)
Offer for Sale(goes to promoters)Up to Rs 500 crore
Fresh Issue(goes to company)Up to Rs 40.54 crore
Issue SizeUp to Rs 540.54 crore
Listing AtBSE, NSE

ICICI Securities, SBI Capital Markets and IIFL Securities are the lead managers for the IPO.

Risk Factors for Mrs Bectors Foods

  • Covid-19 forced the Indian government to implement nation-wide lockdown in March. Mrs Bectors closed its manufacturing plants only for 6 days and then reopened them as they service ‘essential goods’. Though their retail sales were not affected, their sales to QSR customers and Indian Railway canteen were affected as they were forced to close due to lockdown.
  • As the company services in the Fast Moving Consumer Goods(FMCG) segment, the companies are required to constantly monitor customer’s changing taste and preferences. If they fail to adapt, customers will move to another brand in no time.
  • The biscuits and bakery industry requires a lot of capital to meet expenditure. Thus, the company might be willing to incur debt in future. Thus, exposing themselves to interest rate fluctuations and other risks.
  • Any adverse change in the macroeconomic policy by the government can cause disruptions in the company’s business. As the company requires a huge number of human resource, any type of strikes by the labours can affect its operations.

Conclusion

The Indian biscuits and bakery retail market is expected to grow at a CAGR of 9% over the next 5 years. The current biscuit market is dominated by Britannia Industries Ltd and Parle Products with a market share of 28% and 27% respectively. Currently, Cremica holds only 1% market share. The main reason behind low market share is that their products are present in only very limited markets. The more they expand, the greater the market share they will be able to capture.

The industry in which Mrs Bectors Food Limited is surely bound to expand in future. Keeping the positive industry outlook and the robust foundation of the company in mind, Mrs Bector Food does look like an exciting prospect. Let’s not forget how amazing returns Burger King was able to deliver. Their shares surged 131% from the issue price on its first day of trading. Can we expect Mrs Bectors Food to take a similar path?

I will be waiting till 2 pm on Thursday and look at how institutions portion is subscribed. Only if institutions are showing heavy interest will I go ahead and apply for a (hopefully) quick listing gain.

You can find the company’s red herring prospectus here. What are your thoughts on this IPO? Do let us know by commenting below.

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Market News Top 10 News

Whistleblower Accuses UPL Promoters of Financial Fraud – Top Indian Market News

Whistleblower accuses UPL promoters of financial fraud

According to a report by ET Prime, a whistleblower has alleged that UPL’s promoters have siphoned off money. The whistleblower stated that UPL entered into rent deals with a shell company, which was owned by its employees. The report also states that the company paid crores in rent for properties owned by the shell company. The whistleblower was reported to be a board member of the listed agrochemical company.

UPL has denied claims made in the report and has stated that the whistleblower is not a member of the board. The company said that none of the entities mentioned in the article were wholly or partially owned by promoters or employees.

Read more here.

Snowman Logistics, SpiceJet sign MoU for vaccine distribution

Snowman Logistics has signed a Memorandum of Understanding (MoU) with SpiceJet Ltd for jointly distributing Covid-19 vaccines across India. The cold chain logistics firm will handle ground services such as transportation to/from manufacturers, packing, and storage. SpiceJet will provide air connectivity for temperature-controlled distribution of the Covid-19 vaccine across India, as well as internationally.

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CCI initiates probe into cartelisation of cement companies

The Competition Commission of India (CCI) has initiated an investigation against cement companies regarding alleged anti-competitive behaviour. The CCI also conducted raids at the offices of ACC, Ambuja Cements, and UltraTech Cement. The investigation comes after Roads and Highways Minister Nitin Gadkari hinted at possible cartelisation and “black marketing technique” in the cement industry in September.

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Mrs. Bectors Food IPO to open on December 15

Mrs. Bectors Food Specialities is all set to open its Rs 541 crore initial public offering (IPO) on December 15. The price band for the IPO has been set at Rs 286-288 per share. The company plans to use the proceeds from the IPO for financing its Rajpura expansion project. Mrs. Bectors Food manufactures a range of products such as biscuits, bread, and buns. It is the exclusive supplier of buns for Burger King India.

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L&T Technology Services wins $100 million project from global oil & gas major

L&T Technology Services (LTTS) said that it has been selected as a primary engineering partner by a global oil & gas major.  The company will help to support two integrated refining and chemical manufacturing facilities in the United States. LTTS stated that the five-year engagement has a potential value of more than $100 million (~Rs 737 crore). Under the contract, LTTS will provide multi-discipline plant engineering activities for both facilities of the O&G major.

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NSE to launch derivatives on Nifty Financial Services Index from Jan 11

The National Stock Exchange (NSE) will launch derivatives on the Nifty Financial Services Index from January 11, 2021. Currently, the NSE offers index derivatives on only two equity indices- Nifty 50 Index and Nifty Bank Index. The Nifty Financial Services Index consists of 20 stocks and is designed to reflect the behavior of banks, financial institutions, housing finance, and insurance companies.

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Nokia ties up with Vodafone Idea to offer tech solutions for enterprises

Nokia has partnered with Vodafone Idea Ltd (VIL) to offer technology solutions for VIL’s enterprise division customers. Under this collaboration, Nokia will provide fixed wireless and private wireless technology solutions to VIL’s customers. The partnership will help enterprises to use technologies to increase operational efficiency and improve the security of their infrastructure.

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Equitas Small Finance Bank launches 3-in-1 account

Equitas Small Finance Bank has launched a 3-in-1 account which allows its customers to invest in a wide variety of financial products. The lender stated that a 3-in-1 account (savings+trading+demat) can help customers to keep all their banking and financial investments under one umbrella entity. The bank provides stock broking and demat services through a referral arrangement with brokerage firms for trading and depository services.

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Wipro Infrastructure to acquire industrial automation firm PARI

Wipro Infrastructure Engineering has signed a definitive agreement to acquire Precision Automation and Robotics India (PARI). PARI is a prominent player in industrial automation in India and has a significant overseas presence. The combined capabilities of both companies would help strengthen its ability to forge deeper customer relationships in India and overseas.

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Ircon International secures NHAI road project in Haryana

Ircon International Ltd has received an order from the National Highways Authority of India (NHAI) to upgrade a section of the NH-352W in Haryana. The value of the order has been estimated at Rs 900 crore. Ircon International is an engineering and construction firm established by the Government of India.

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