Tag: zomato ipo

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Zomato IPO Subscribed 38.25 Times on Final Day of Bidding – Top Indian Market News

Zomato IPO subscribed 38.25 times on final day of bidding

The Rs 9,375 crore initial public offering (IPO) of Zomato Limited was subscribed 38.25 times on the final day of bidding. The IPO has received bids for 2,751.25 crore equity shares against the issue size of 71.92 crore shares. Retail investors have subscribed 7.45 times against their reserved portion. Non Institutional investors (NIIs) and Qualified Institutional Buyers (QIBs) have subscribed 32.96 times and 51.79 times, respectively, against their reserved portions. 

HDFC AMC Q1 Results: Net profit rises 14% YoY to Rs 345.45 crore

HDFC Asset Management Company (AMC) reported a 14% YoY increase in net profit to Rs 345.45 crore for the quarter ended June (Q1 FY22). Net profit has increased by 9.3% when compared to the previous quarter. Its revenue from operations rose 23% YoY (or 0.8% QoQ) to Rs 507.1 crore during the same period. The company’s Quarterly Assets Under Management (QAAUM) rose 17% YoY to Rs 4,16,900 crore in Q1. HDFC AMC holds a 12.6% market share in QAAUM of the mutual fund industry.

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One97 Communications files DRHP for Rs 16,600 crore IPO

One97 Communications Ltd, the parent company of digital payments platform Paytm, has filed a Draft Red Herring Prospectus (DRHP) for its IPO with market regulator SEBI. The company aims to raise Rs 16,600 crore via the public issue. The fresh issue of shares (of the face value of Rs 1 each) aggregates to Rs 8,300 crore. Existing shareholders of the firm will offload their stake worth Rs 8,300 crore. The company will use the IPO proceeds to strengthen its payment ecosystem and drive new business initiatives and acquisitions.

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JMC Projects secures orders worth Rs 1,624 crore

JMC Projects (India) Ltd has secured new orders worth Rs 1,624 crore. The work includes a road project in Ghana, South Africa, and a few building projects in India. The company’s order inflow has reached Rs 4,659 crore in the current financial year (FY22). JMC Projects (India) is a subsidiary of Kalpataru Power Transmission Ltd. It is one of the leading civil construction and infrastructure EPC companies in India.

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Tata Power partners with HPCL to set up EV charging stations at petrol pumps

Tata Power has signed an agreement with Hindustan Petroleum Corp Ltd (HPCL) to provide electric vehicle (EV) charging stations at HPCL’s petrol pumps across the country. Under the agreement, Tata Power will provide EV charging infrastructure at HPCL’s retail outlets for EV users. People can use the Tata Power EZ Charge mobile application to utilise charging facilities. Tata Power Company owns a network of over 500 public chargers in petrol pumps, metro stations, and shopping malls in 100+ cities in India.

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L&T Finance Q1 Results: Net profit rises 20% YoY to Rs 178 crore

L&T Finance Holdings Ltd reported a 20% YoY increase in net profit to Rs 178 crore for the quarter ended June (Q1 FY22). Net profit has declined by 33% when compared to the previous quarter. Its revenue from operations declined by 7% YoY (or 8% QoQ) to Rs 3,140 crore during the same period. L&T Financial Services is a leading non-banking finance company (NBFC) that offers farm equipment finance, two-wheeler finance, micro-loans, etc. It is a subsidiary of Larsen & Toubro (L&T).

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NIIT partners with Sushant University to offer future-ready programs

NIIT Limited has partnered with Gurugram-based Sushant University to offer their upcoming batches of Bachelors in Computer Application (BCA) and BTech in Computer Science specialization in Banking & Finance and StackRoute – Full Stack Product engineering, respectively. The partnership aims to deliver future-ready programs to improve learning and employability for fresh graduates. The programs would empower them with the necessary skills to become ‘Day-1 job-ready industry professionals’.

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DEN Networks Q1 Results: Net profit falls 29% YoY to Rs 41 crore

DEN Networks Ltd reported a 29% YoY decline in net profit to Rs 41.15 crore for the quarter ended June (Q1 FY22). Net profit has increased by 11% when compared to the previous quarter. Its revenue from operations increased by 0.6% YoY to Rs 302 crore during the same period. DEN Networks distributes and promotes television channels through an extensive digital cable distribution network in India. It also offers over-the-top (OTT) entertainment and broadband services.

Tatva Chintan Pharma Chem IPO subscribed 4.5 times on first day

The Rs 500 crore IPO of Tatva Chintan Pharma Chem was subscribed 4.51 times on the first day of bidding. The IPO has received bids for 1.46 crore equity shares against the issue size of 32.61 lakh shares. Retail investors have subscribed 8.24 times against their reserved portion. Non Institutional investors (NIIs) and Qualified Institutional Buyers (QIBs) have subscribed 1.14 times and 50%, respectively, against their reserved portions.

To learn more about the IPO, click here.  

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Wipro Reports 36% YoY Rise in Net Profit in Q1 – Top Indian Market News

Wipro Q1 Results: Net profit rises 36% YoY to Rs 3,243 crore

Wipro Limited reported a 36.65% year-on-year (YoY) increase in consolidated net profit to Rs 3,242.6 crore for the quarter ended June (Q1 FY22). Net profit has increased by 9.09% when compared to the previous quarter. The IT company’s revenue from operations rose 22.4% YoY (or 12.4% QoQ) to Rs 18,252 crore during the same period. Wipro secured eight large deals worth $715 million (~Rs 5,330 crore) in Q1. However, the attrition rate jumped from 12.1% in Q4 FY21 to 15.5% in Q1 FY22.

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Reliance in advanced talks to acquire Justdial: Report

According to a report from ET Now, Reliance Industries Ltd (RIL) is in advanced talks to acquire local search engine Justdial from its promoters in a deal worth Rs 5,920 crore-6,660 crore. The report further states that this acquisition will allow Reliance Retail to leverage the merchant database of the 25-year-old local discovery platform and its network across India. Justdial will evaluate fundraising proposals at its scheduled board meeting tomorrow (July 16).

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RBL Bank partners with Visa after RBI bans Mastercard

RBL Bank has entered into a partnership with Visa Worldwide to start the issuance of credit cards on the Visa platform. The lender will be able to issue new cards after technology integration with Visa, which is expected to take 8-10 weeks. The move comes after the Reserve Bank of India (RBI) indefinitely barred US-based Mastercard from issuing new credit, debit, and prepaid cards for its failure to comply with data storage norms. The ban takes effect on July 22.

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Zomato IPO subscribed 4.8 times on second day of bidding

The Rs 9,375 crore initial public offering (IPO) of Zomato Limited was subscribed 4.8 times on the second day of bidding. The IPO has received bids for 344.76 crore equity shares against the issue size of 71.92 crore shares. Retail investors have subscribed 4.73 times against their reserved portion. Non Institutional investors (NIIs) and Qualified Institutional Buyers (QIBs) have subscribed 45% and 7.07 times, respectively, against their reserved portions. 

To learn more about the IPO, click here.

Kolte-Patil Developers partners with Planet Smart City to develop 15,000 housing units

Kolte-Patil Developers Ltd has created a residential development platform with Planet Smart City to develop 15,000 housing units. The joint entity will primarily focus on developing aspirational housing projects in Pune, Mumbai, and Bengaluru. The platform will enable Kolte-Patil Developers to capture structured outright land purchase transactions while maintaining a sound balance sheet.

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Angel Broking Q1 Results: Net profit jumps 156% YoY to Rs 121.36 crore

Angel Broking Ltd reported a 156% YoY jump in consolidated net profit to Rs 121.36 crore for the quarter ended June (Q1 FY22). Net profit has increased by 19.09% when compared to the previous quarter. Its total income rose 92.42% YoY (or 13.28% QoQ) to Rs 474.48 crore during the same period. The company’s board has declared an interim dividend of Rs 5.15 per share. Angel Broking crossed the 5 million client milestone in June 2021. Its board has also approved a proposal to change the company name to ‘Angel One’ or ‘Angel One Fintech’.

USFDA issues import alert on Jubilant Pharmova’s Roorkee plant

The US Food & Drug Administration (USFDA) has placed an import alert on Jubilant Pharmova’s manufacturing plant in Roorkee (Uttarakhand). USFDA had conducted an inspection of the formulations plant in March 2021. Earlier, the Roorkee facility had received an Official Action Indicated (OAI) from the agency in December 2018, followed by a warning letter in March 2019. Jubilant Pharmova said it will engage with USFDA to resolve the import alert at the earliest and ensure Current Good Manufacturing Practice (cGMP) compliance. 

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LTI Q1 Results: Net profit rises 19.13% YoY to Rs 496 crore

Larsen & Toubro Infotech (LTI) Ltd reported a 19.13% YoY increase in net profit to Rs 496.3 crore for the quarter ended June (Q1 FY22). Net profit has declined by 8.97% when compared to the previous quarter. Its total income rose 18.88% YoY (or 6.28% QoQ) to Rs 3,584 crore during the same period. LTI is a global information technology (IT) solutions and services company based in Mumbai.

BLS International ties up with Flipkart for last-mile delivery services

BLS International Services Ltd has announced a partnership with Flipkart to provide last-mile delivery services across India. The company works with over 46 client governments, including Diplomatic Missions, Embassies & Consulates, and leverages technology and processes that ensure data security. BLS has more than 12,000 centres globally, with 15,000+ employees and associates that provide consular, biometrics, and citizen services. 

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Tata Elxsi Q1 Results: Net profit rises 64% YoY to Rs 113.37 crore

Tata Elxsi Limited reported a 64.61% YoY increase in net profit to Rs 113.37 crore for the quarter ended June (Q1 FY22). Net profit has declined by 1.55% when compared to the previous quarter. Its total income rose 39.11% YoY (or 9.63% QoQ) to Rs 575.81 crore during the same period. Tata Elxsi is a leading design and technology services provider based in Bengaluru.  

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Infosys Reports 23% YoY Rise in Net Profit in Q1 – Top Indian Market News

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Infosys Q1 Results: Net profit rises 23% YoY to Rs 5,195 crore

Infosys Limited reported a 22.7% year-on-year (YoY) increase in consolidated net profit to Rs 5,195 crore for the quarter ended June (Q1 FY22). Net profit has increased by 2.3% when compared to the previous quarter. Its revenue from operations rose 17.87% YoY (or 6% QoQ) to Rs 23,665 crore during the same period. The IT company signed large deals worth $2.6 billion (~Rs 19,300 crore) in Q1. Infosys has announced plans to hire 35,000 college graduates globally in the current financial year (FY22).

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India’s WPI inflation eases to 12.07% in June

The inflation based on the Wholesale Price Index (WPI) eased to 12.07% in June 2021, compared with 12.94% in May. There was a decline in the prices of crude oil, power, and food items last month. Inflation in manufactured products stood at 10.88% in June, compared with 10.83% in May. The inflation in food articles stood at 3.09% YoY in June, compared to 4.31% in May. The fuel and power index rose 32.83% annually in June, against an increase of 37.61% in May. The data was released by the Ministry of Commerce and Industry.

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Zomato IPO subscribed 1.05 times on first day of bidding

The Rs 9,375 crore initial public offering (IPO) of Zomato Limited was subscribed 1.05 times on the first day of bidding. The IPO has received bids for 75.60 crore equity shares, compared to the issue size of 71.92 crore shares. Retail investors have subscribed 2.7 times against their reserved portion. Non Institutional investors (NIIs) and Qualified Institutional Buyers (QIBs) have put in bids for 13% and 98%, respectively, against their reserved portions. The IPO closes on July 16 (Friday).

To learn more about the IPO, click here.

ITC to enter boutique lifestyle hotel segment with ‘Storii’

ITC Limited will venture into the boutique lifestyle hotel segment with a new brand— Storii. The launch is part of the company’s strategy to focus more on managing properties rather than owning them. With Storii, ITC aims to offer curated travel experiences to new-age travellers. The company revealed that its new hotel signings and openings took a hit in 2020-21 due to the Covid-19 pandemic. However, it has assured of bouncing back again as the state of affairs normalises.

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L&T Tech Q1 Results: Net profit rises 84% YoY to Rs 216 crore

L&T Technology Services (LTTS) reported an 84% YoY increase in net profit to Rs 216.2 crore for the quarter ended June (Q1 FY22). Net profit has increased by 11% when compared to the previous quarter. Its revenue from operations rose 17% YoY to Rs 1,518 crore during the same period. The company secured six deals with a total contract value (TCV) of more than $10 million (~Rs 74.5 crore) in Q1. LTTS is the engineering services arm of Larsen & Toubro.

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CEAT to supply tyres for M&M’s new seven-seater Bolero Neo

CEAT Limited will supply its range of high-performance CZAR HP tyres for Mahindra & Mahindra’s (M&M) new seven-seater Bolero Neo SUV. The seven-seater SUV is built on third-generation chassis, shared with Scorpio and Thar. CEAT’s tyres are designed to provide better steering control and higher fuel efficiency. The company said the tyres have been optimised to perfectly complement the exceptional performance of Bolero Neo.

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Quess Corp counters IT department, denies concealing income of Rs 880 crore

Quess Corp has denied allegations of concealing income after the Income Tax (IT) Department claimed that it had revealed undisclosed income of ~Rs 880 crore during raids of the company’s two premises in Bengaluru. “We extended full cooperation to the Department, including providing complete information in a timely manner, and have not received any claims to date,” said Quess Corp in a statement. Quess Corp said the IT Dept had conducted surveys at its registered offices during July 8-10.

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IndiGrid acquires 100 MW solar assets from FRV for Rs 660 crore

India Grid Trust (IndiGrid) has acquired the entire stake in two solar energy assets from Fotowatio Renewable Ventures (FRV) for Rs 660 crore. The cumulative capacity of the solar assets is 100 megawatts (MW). IndiGrid has become the first infrastructure investment trust (InvIT) to acquire renewable energy assets in India. With this acquisition, IndiGrid’s asset portfolio will consist of 14 diversified projects— 40 transmission lines, 11 substations, and 100 MW solar power plants across 18 states and one Union Territory.

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Mahanagar Gas hikes prices of CNG, domestic PNG

Mahanagar Gas Limited (MGL) has announced a hike in prices of Compressed Natural Gas (CNG) and Domestic Piped Natural Gas (PNG) for Mumbai and surrounding areas. The rate of CNG has been hiked by Rs 2.58 per kilogram, taking it up to Rs 51.98 per kg. Domestic PNG rates have been hiked by Rs 0.55 per standard cubic meter (SCM). MGL has increased prices to offset operational costs and high gas pipeline transportation costs.

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Marico to acquire 60% stake in Apcos Naturals

Marico Limited will acquire a 60% stake in Apcos Naturals Pvt Ltd over the next two years through primary infusion and secondary buyouts. Apcos owns Just Herbs, a range of ayurvedic and organic skin and hair care products. The brand had posted sales of Rs 17.5 crore during the financial year 2020-21 (FY21). Marico will acquire a 52.4% stake in Apcos by the end of July, while the balance 7.6% stake will be bought by March 2023.

Read more here.

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The Most In-Depth Zomato IPO Review: All You Need to Know

What an exciting week in the Indian stock market! Zomato’s IPO is finally here! What started as Foodiebay in 2008 by two IIT graduates has grown multifold and expanded to 24 countries. They have pushed boundaries and revolutionised the Indian food-tech industry. An Indian startup launching an IPO is a truly commendable feat. There has been so much buzz on the startup’s public issue and its valuations over the past few months. 

Before going ahead, we recommend that you go through our detailed analysis of Zomato’s DRHP. It will give you an idea of the company’s business and financials. In this article, we dive into Zomato a little deeper and learn more about its IPO. 

Brief Profile on Zomato Ltd

Zomato Limited is one of the leading online food service platforms in India. It connects customers, restaurants, and delivery partners. The company’s business-to-consumer (B2C) segment offers food delivery and dining-out services. Customers can easily search and discover restaurants, order food, reserve a table, and make payments through Zomato’s mobile application. On the other hand, its business-to-business (B2B) segment generates revenue through Hyperpure. It supplies high-quality ingredients and kitchen products to restaurants. It allows restaurants to buy organic vegetables, fruits, poultry, groceries, meats, seafood, and beverages. Hyperpure works directly with farmers, mills, producers, and processors to source these products. 

The company also offers Zomato Pro, a customer loyalty program. The subscription-based program offers privileges and discounts on the best restaurants across dining-out and delivery. It is an interesting business model that allows Zomato to generate more revenue, and at the same time, help restaurants drive sales. They also host Zomaland, a food and entertainment carnival that brings some of the top eateries, musicians, DJs, and comedians under one roof. 

The Zomato brand is widely recognized across India. They have a widespread and efficient hyperlocal network. The company made headlines when it acquired the Indian operations of Uber Eats in 2020. Recently, Zomato received approval from the Competition Commission of India (CCI) to acquire a 9.3% stake in Grofers, an online grocery delivery platform. They have also ventured into the cloud kitchen space, whereby multiple brands/restaurants can prepare food for takeaway or delivery. 

Factsheet

The Zomato App has been the most downloaded application under the food & drinks category in India during the last three years on both iOS App Store and Google Play. As a result, restaurants pay certain fees for better visibility of their names on the platform. Currently, the company has more than 1.69 lakh delivery partners and 3.89 lakh active restaurant listings. It has 15 lakh Zomato Pro members and ~3.2 crore monthly active users. They are present in more than 500 cities in India. Their operations are also spread across 24 countries, including Australia, the United Arab Emirates (UAE), New Zealand, and Canada. Zomato has committed to 100% adoption of electric vehicles (EVs) for delivery by 2030.

About the IPO

The public issue opens on July 14 and closes on July 16. The price band for the IPO has been fixed at Rs 72-76 per share. 

The fresh issue of shares (of the face value of Re 1 each) aggregates to Rs 9,000 crore. The IPO also consists of an offer for sale (OFS) by Info Edge India Ltd (a promoter), which aggregates up to Rs 375 crore. Individual investors can bid for a minimum of 195 equity shares (1 lot) and in multiples of 195 shares thereafter. You will need a minimum of Rs 14,820 to apply for Zomato’s IPO. The maximum number of shares that can be applied by a retail investor is 2,535 equity shares (13 lots). 

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

  1. Around 75% of the net issue will be used to fund organic and inorganic growth initiatives. 
  2. The remaining 25% will be used to meet general corporate purposes.

Looking at the structure of the IPO, we can confidently say that Zomato will prioritise its efforts on achieving growth objectives. Meanwhile, the promoters will continue to hold a significant stake in the firm, which fosters a sense of confidence and validation in the company’s future prospects.

Financial Performance

From the table given above, it is clear that the startup is incurring significant losses. Zomato’s ambitious expansion plans have caused a serious dent in their financial performance (and will continue to do so). It has to pump crores into advertising and promotional activities to drive customer growth. They incur huge customer acquisition costs for offering frequent discounts and referral bonuses.

However, the company has posted an increase in average order value (AOV) during the pandemic. The AOV rose from Rs 264 in March-June 2019 to nearly Rs 400 in Q4 2020. Many Indians have spent more on ordering their favourite food/beverages during lockdowns. Unfortunately, there was still a major decline in the total number of orders during certain months.

Over the last three financial years, Zomato has posted a negative average Earnings Per Share (EPS) of Rs -(2.99). The company has revealed that it may not be posting profits anytime soon. Many investors/analysts are planning to stay away from the IPO due to the poor financial performance. 

Risk Factors

The major risk factors mentioned in Zomato’s DRHP are:

  • Zomato has expanded and grown substantially over the past few years. However, the company has stated that it may not be able to sustain its historical growth rates. At the same time, its historical performance may not be indicative of its future growth and financial results.
  • The company has posted huge losses over the past three financial years. It expects a further rise in costs and losses in the future as well. Zomato’s overall financial performance and operations could be adversely affected if they are unable to increase revenues, manage costs, and maintain sufficient cash flows.
  • The Covid-19 pandemic had severely impacted the company’s food delivery business and dining-out services. Most restaurants were temporarily closed due to strict lockdowns. Similar health threats in the future could further affect its financial results.
  • Zomato’s business would be negatively affected if they fail to retain existing restaurant partners or food delivery partners. They will also need to focus on adding new customers, restaurant partners, and delivery partners in a cost-effective manner.
  • They face intense competition in food delivery and other businesses. Apart from Swiggy, localised food delivery apps are gaining popularity across India. Zomato will need to maintain quality and competitive rates to retain customers.

IPO Details

Kotak Mahindra Capital, Morgan Stanley India, Credit Suisse Securities (India), BofA Securities India, and Citigroup Global Markets India were selected as the book-running lead managers to the public issue. Zomato Ltd had filed draft papers for its IPO in April 2021. You can read it here.

Conclusion

Zomato’s IPO is very likely to get oversubscribed on the first day itself. There is no doubt about that. It is a brand that most of us love, respect, and rely on. A quick interview with some of Zomato’s delivery partners in our area gave us an idea that they are happy with all perks and remuneration. There is a lot of room for growth in the food services industry in India, and Zomato will continue to expand its operations. They have announced strategic plans to scale up the Hyperpure and Zomato Pro offerings as well. 

Due to oversubscription and a favourable grey market premium (GMP), investors of the IPO are likely to receive substantial listing gains. 

However, many feel that the startup’s valuation is very high. We cannot conduct a full-fledged comparison since it does not have any listed peers in India. Moreover, many investors are likely to avoid the IPO due to its disappointing financials. There are also reports that Amazon would enter the Indian food delivery space, which ultimately means more competition for Zomato. Over the past few years, many of its global acquisitions have failed to deliver results, and the company is yet to crack the international markets. As we can see, there are a lot of uncertainties surrounding Zomato. The GMP of Zomato’s IPO shares had declined to Rs 7.75 or 10% on July 13 (Tuesday). The shares were being traded in the grey market at a premium of 25% last week!

Applying for an IPO is purely subjective, and if you are planning to subscribe to Zomato’s public issue, make sure you carefully weigh out the pros and cons.

What are your opinions on Zomato’s IPO? Will you be applying for it? Let us know in the comments section of the marketfeed app.

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Zomato Gains 20% in Grey Market Before IPO – Top Indian Market News

Zomato grey market premium hits 20%, Info Edge slashes OFS by half

Zomato, a food delivery aggregator, has reportedly hit 20% in the grey market according to sources trading in unlisted shares. This comes in light of investor excitement after SEBI approved Zomato’s IPO plans to raise Rs 8,250 crores. Info Edge, a key shareholder, has reduced its share of Offer For Sale (OFS) in half from Rs 750 crore to Rs 375 crore. Market speculation suggests that the price band of the IPO could be anywhere between Rs 70 to Rs 72 per share. 

Read more here.

HealthifyMe acquires Under45, launches vaccination slot booking

HealthifyMe has acquired Under45, a platform developed by Chennai-based techie Berty Thomas. Under45 is a platform that sends vaccination slot alerts to users opting for the service via the Telegram texting app and covers 4.1 million subscribers across 700+ channels on Telegram. Berty Thomas, the brain behind Under45, shall join HealthifyMe as an Associate Director. HealthifyMe had earlier launched vaccinateme.in, a site that helped over 80 lakh people find vaccination slots. Suchdeep Juneja (who developed mhVaccineTracker) and Chandraaditya Putuveru (who launched the Twitter bot BloreVaccine) have also onboarded the project. 

Read more here.

GRSE bags $1.8 million order for patrol boats from Bangladesh

Kolkata-based Miniratna PSU Garden Reach Shipbuilders and Engineers (GRSE), an NSE-listed company, has received an order to manufacture patrol boats for the Bangladesh Department of Fisheries. These boats will be used for surveillance to curb illegal fishing and also be used for rescue operations. The order is worth $1.8 million (~13.42 crore).

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NTPC to buy hydrogen buses for Delhi and Ladakh

NTPC Vidyut Vyapar Nigam Ltd (a subsidiary of NTPC) has invited bids to buy hydrogen buses for Delhi and Ladakh. The company has already placed orders for 15 hydrogen cell buses with Tata Motors last week. NTPC Renewable Energy (another subsidiary of NTPC) will provide the buses with green hydrogen.

Read more here.

Ashok Leyland to ramp up production in July.

Automaker Ashok Leyland has said in an exchange filing that it is going to increase its production capacity in the coming months as demand eases. The company had intimated the closure of plants in April and May amidst the second wave of COVID-19. “The overall market demand in July’21 is better than in June’21. Consequently, our plants will be working for more number of days in July compared to May and June, ranging from 6 to 25 days across various plant locations,” said the automaker in an exchange filing. The stocks of Ashok Leyland closed down at -2.04% on the same day. 

Read more here. 

Airline stocks up as the aviation ministry increases flight capacity.

The Ministry of Civil Aviation has increased the flight capacity allowance of passengers from 50% to 65% in an official intimation. The ministry had cut down the capacity allowance from the earlier 80% to 50% in May 2021 in wake of the second wave of COVID-19 in India. Shares of Interglobe Aviation (IndiGo), Spicejet, Global Vectra Helicorp, and TAAL Enterprises surged between 2-4% the same day.

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Sugarcane production in Maharashtra could increase by more than 200 lakh tonnes: NFCSF Chief

Jayprakash Dandegavkar, the president of the National Federation of Cooperative Sugar Factories (NFCSF), has said that Maharashtra’s sugarcane production would increase by more than 237 lakh tonnes this year. He also stated that sugar mills might have to work overtime to crush the produce by over half a month. Last year, Maharashtra had produced close to 1,012 lakh tonnes of sugarcane.

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Maruti Suzuki Increases Production 4x in June from the previous month.

Maruti Suzuki’s production for the month of June is 1,65,576 units. This is a four-fold increase from the 40,924 units that Maruti Suzuki produced in May 2021. The company has announced a partial shutdown of factories in the month of May. 

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Tata Motors shares dip sharply after pressure over JLR profit warning over chip shortage

The shares of Tata Motors dipped 8% after its subsidiary JLR issued a warning over negative profit numbers for September 2021 owing to chip shortage that could impact production. There is currently a global shortage of integrated circuits (also known as semiconductor chips) that are vital in manufacturing control systems of a car. To know more about the global chip crisis, click here.

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Godawari Power turns debt-free

Godawari Power and Ispat Limited (GPIL) has officially turned debt-free after it paid its outstanding debt of Rs 457 crore. The company owed Rs 1,369 crore in standalone long-term debt, which was to be repaid by FY 2032. Due to an improvement in financial performance, GPIL was able to fully repay its outstanding debt from internal accruals.

Read more here.

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Avenue Supermarts Reports 31% Rise in Revenue in Q1 – Top Indian Market News

Avenue Supermarts reports 31% YoY rise in revenue in Q1

Avenue Supermarts Ltd reported a 31.27% YoY increase in standalone revenue to Rs 5,031.75 crore for the quarter ended June 2021 (Q1 FY22). It had posted a revenue of Rs 3,833.23 crore in the corresponding quarter last year (Q1 FY21). The total number of stores at the end of June 30, 2021, stood at 238. Avenue Supermarts owns and operates the chain of ‘D-Mart’ supermarkets across India.

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Zomato gets SEBI approval for Rs 8,250 crore IPO

Food delivery platform Zomato has received approval from the Securities and Exchange Board of India (SEBI) to raise funds via an initial public offering (IPO). The IPO will consist of a fresh issue of equity shares worth Rs 7,500 crore and an offer for sale (OFS) by Info Edge India Ltd worth Rs 750 crore. Zomato aims to use Rs 5,625 crore of the net proceeds of the IPO towards funding organic and inorganic growth initiatives. According to reports, the company plans to launch its IPO by mid-July.

Read more here.

Lumax Auto to set up joint venture with Alpine Co. for electric parts

Lumax Auto Technologies Ltd has signed a joint venture (JV) agreement with Japan-based Alpine Co. Ltd. The parties have agreed to establish a 50:50 joint venture in India to manufacture and sell electronic devices and components, as well as software related to the automotive industry. Lumax Auto Technologies is a leading manufacturer of shifters, telematics, antennas, two-wheeler chassis, seat structures, etc.

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Tata Steel transfers stake in HSMS, TSAML to subsidiary companies

Tata Steel Ltd has announced the transferring of its 26% stake in Himalaya Steel Mill Services Pvt Ltd to Tata Steel Utilities and Infrastructure Services Ltd (TSUISL) for an undisclosed amount. The company has also transferred its 100% stake in Tata Steel & Advanced Materials Ltd (TSAML) to another subsidiary company— Tata Steel Downstream Products Ltd (TSDPL).

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Gujarat Industries restores Unit-2 of Surat plant

Gujarat Industries Power Company Ltd (GIPCL) announced the restoration of Unit-2 (125 megawatts) of its Surat Lignite Power Plant (SLPP) situated at Surat, Gujarat. The company operates a 4×125 MW power plant at SLPP. GIPCL had declared forced shutdown at Unit-2 of SLPP from December 16, 2020, due to a major technical snag in economizer beams. The beams have been replaced, and maintenance works at the plant have been completed.

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CSB Bank’s deposits grow 14%, advances up 24% in Q1

CSB Bank Ltd reported a 14.17% YoY increase in total deposits to Rs 18,652.80 crore for the quarter ended June 2021 (Q1 FY22). The current and savings account (CASA) deposits grew 7.95% YoY to Rs 6,171.71 crore in Q1. Gross advances rose 23.71% YoY to Rs 14,146 crore during the same period. CSB Bank’s advances against gold and gold jewellery rose 46.16% YoY to Rs 5,617.68 crore at the end of the April-June quarter.

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Bharat Dynamics to set up test facility in Vishakhapatnam

Bharat Dynamics Ltd (BDL) will set up a first-of-its-kind environmental test facility (ETF) in Vishakhapatnam. Vice Admiral Biswajit Dasgupta, Chief of Staff, Eastern Naval Command, laid the foundation stone for establishing the ETF at the Vishakhapatnam unit of BDL. The ETF will consist of vibration testing, thermal chamber, and walking chamber for a whole torpedo (underwater missile).

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HCL announces multi-year agreement with Fiskars Group

HCL Technologies has announced a multi-year agreement with Finland-based Fiskars Group. The IT company will accelerate Fiskars Group’s digital journey through applications and infrastructure modernisation. HCL Tech will standardise Fiskars’ IT and business processes, drive operating model transformation, and increase overall digital maturity. Fiskars Oyj Abp manufactures and markets consumer products across Europe, the Americas, and the Asia Pacific.

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Bharat Biotech’s Covaxin 77.8% effective against symptomatic Covid-19

Bharat Biotech said the final efficacy analysis of Covaxin shows that it is 77.8% effective against symptomatic Covid-19. The vaccine offers 65.2% protection against the emerging Delta variant. Covaxin was also found to be 93.4% effective against severe cases of symptomatic Covid-19. The Phase-3 clinical trial was an event-driven analysis of 130 symptomatic Covid-19 cases (reported at least two weeks after the second dose) conducted at 25 sites across India. The data from the trials are yet to be peer-reviewed.

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Editorial

Zomato IPO – A leap of faith for investors?

zomato ipo

We all can associate with Zomato very well. Many of us would be even its prime members. When we think of food delivery, one of the first names on our mind is Zomato. This is the power of this young venture. The startup has become a household name in India and now are looking to make its way into the Indian stock market. The entity filed its Draft Red Herring Prospectus (DRHP) with SEBI last week. 

The online food ordering and delivering company has proposed an IPO worth Rs 8,250 crore. They are also considering a Rs 1,500 crore pre-IPO placement. They will utilize 75% of the net issue for organic and inorganic growth and the remaining 25% for administration expenses. Kotak Investment Banking, Morgan Stanley, Citi Bank, Credit Suisse, Bank of America are the book running lead managers for their IPO.

Here we dig deeper into their Red Herring Prospectus and analyse the interesting findings.

Company Profile – Zomato 

Zomato is a technology platform that connects customers, restaurant partners and delivery partners. Customers can search and discover restaurants, view photos of food and the ambience of the restaurant, read and write reviews, book a table and order food delivery. Zomato is not just a regular food-tech company but a giant in this sector. They are present in more than 500 cities in India and are spread in 25 countries in all.

They don’t only serve individual customers like you and me but also restaurants by providing them industry-specific marketing tools which enable them to acquire customers to grow their business. According to App Annie’s estimates, since 2018, Zomato App has been the most downloaded food and drinks application in India in each of the last three years on iOS Appstore and Google Play combined. 

Zomato has 1,61,637 delivery partners and 3,50,174 active restaurant listings. Prime membership is one of the features which are highly regarded by the people as it helps customers to derive great discounts. Currently, the food-tech giant has 14 lakh Zomato Pro members and 25,350 pro restaurant subscribers.

A loss-making company!

In its DRHP, Zomato has stated that “We have a history of net losses and we anticipate increased expenses in the future.” In FY18, the food delivery company reported a net loss of Rs 107 crore. The losses further increased to Rs 1,010 crore and Rs 2,386 crore in FY19 and FY20. Till December 2020, that is Q3FY21, Zomato has reported a loss of Rs 682 crore. All these statistics tell that the one of biggest Indian startups is still far away from making profits. 

Zomato themselves don’t see them minting profits very soon. They have hinted in their filings that they expect their costs to increase even further in the coming years. This is because the company has huge plans of expansion and that will force them to churn out money. 

They have plans to pump in millions of dollars into advertising and promotion. Not only this, they want to expand their services in India and other countries. Their filing tells that the startup is still sceptical of increasing profitability or maintaining positive cash flow consistently.

Their financials do not suggest otherwise. They have had cash outflows in the last three years. Even in the nine months of FY21, they are still recording negative operating cash flow. On one hand, Zomato has been true to its shareholders regarding their future. Not many companies come upfront and say that will be making losses in the near future. 

Also, the losses are not because of high-interest rate or liability but only because the company has huge massive plans to expand. Thus, they are treating themselves as a growing company and willing to put everything forward to capture more market. On the other hand, these financials will not attract investors, especially those who are looking to make money in the short term.

Present vs Future

It won’t be wrong to say that Zomato are banking on their long term future. The previous section will have raised doubts in your mind whether you want to invest in this company or not. Do not worry, this is a huge conundrum even for us. 

In 2020, Tesla – the American electric vehicle company, gave astonishing returns to their investors. Is this because they are making huge profits? Do they have very strong fundamentals? No. In fact, their valuations are sky-high according to the investors worldwide. But one thing which drives investors to invest in stocks like Tesla is the future ambitions of the company. The future will be surrounded by technology and Zomato is using it to the fullest on its platform. The type of business model they have can reap huge benefits in the future.

Do we think that India’s Zomato should be compared to the US’ Tesla? Not at all! But Zomato looks confident about their business. They have a fixed roadmap and are willing to sacrifice short-term benefits for long-term success. If we look back to their history, we don’t see a reason not to trust their ambitions. In FY18, Zomato had 3.06 crore of orders. This increased by more than 10X times to 40.31 crore orders in FY20. 

In India, millennials depend more on outside food services rather than on home-cooked food. This may be due to higher disposable income or just due to a change in taste preferences. But, we don’t see them going backwards. Even in the pandemic, one thing which is missed the most is the food of restaurants. This food consumption market will only increase from here on. If Zomato remains as the leader in their domain, they will be making huge money in the long term. Maybe this is what they are also targeting?

Personally, I am highly interested in Zomato’s IPO. This does not mean that I am surely going to invest. We will take a look at many other things before we can conclude. As soon as the date for going public is finalized, we will bring another article on Zomato so that you can get a clear picture of its IPO as well. 

What are your views on Zomato? Are you also highly excited about the company’s future? Do let us know in the comments section of the Marketfeed application. Lastly, stay at home and take all the precautions. Be safe!

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Market News Top 10 News

Zomato to Raise Rs 8,250 crore via IPO – Top Indian Market News

Zomato to raise Rs 8,250 crore via IPO

Foodtech platform Zomato has filed a Draft Red Herring Prospectus (DRHP) with market regulator SEBI, proposing an initial public offering (IPO) of Rs 8,250 crore. The IPO will consist of a fresh issue of equity shares worth Rs 7,500 crore and an offer for sale (OFS) of Rs 750 crore by promoter Info Edge. Zomato plans to use the proceed from the IPO towards funding growth initiatives and for general corporate purposes.

Read more here.

SBI board approves raising $2 billion through bonds

The Board of Directors of State Bank of India (SBI) has approved raising up to $2 billion (~Rs 14,895 crore) through bonds. The funds are to be raised through a public offer and/or private placement of senior unsecured notes in US Dollars or any other convertible currency during FY 2021-22. In January, SBI had concluded the raising of $600 (~Rs 4,500 crore) from bonds to fund the expansion of its overseas business.

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Bajaj Finserv Q4 Results: Net profit jumps five-fold to Rs 979 crore

Bajaj Finserv Limited reported a five-fold YoY jump in net profit to Rs 979 crore for the quarter ended March (Q4). Revenue from operations rose 16% YoY to Rs 15,387 crore during the same period. Its life insurance business registered a 515.8% YoY growth in profit to Rs 234 crore, and Bajaj Finance Ltd’s net profit increased by 42% YoY to Rs 1,347 crore in Q4. For the financial year ended March 31, 2021 (FY21), net profit has grown by 32.7% YoY to Rs 4,470.46 crore. The company’s board has declared a final dividend of Rs 3 per share.

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LT Foods partners with Humankind Group to develop commercial-scale biomass plants

LT Foods Limited has entered into a partnership with US-based Humankind Group (HKG) to explore an opportunity to develop commercial-scale biomass plants. The plants would help recycle rice paddy straw into green energy and bio-fertilizer in India under its Environment Sustainability Program. LT Foods and HKG plan to advance the partnership and facilitate the local ownership of the first commercial-scale biomass facility. 

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Hathway Cable Q4 Results: Net profit rises 47% YoY to Rs 72 crore

Hathway Cable & Datacom Ltd reported a 47.68% YoY increase in consolidated net profit to Rs 72.04 crore for the quarter ended March (Q4). Its revenue from operations declined 3.72% YoY to Rs 438.71 crore during the same period. For the financial year ended March 31, 2021 (FY21), net profit has jumped 143.64% YoY to Rs 252.73 crore. 

On April 27, the sovereign wealth fund of the Government of Singapore bought 1.6 crore shares of Hathway Cable & Datacom for Rs 22.22 per share through a bulk deal on the NSE.

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Morepen Labs’ board approves $100 million investment by Corinth Group

The Board of Directors of Morepen Laboratories Ltd has approved an investment of $32.50 million from Switzerland-based Corinth Group, as part of the private investment firm’s proposed $100 million (~Rs 745 crore) investment in the Morepen Group. The balance $67.50 million will be invested in promoter group companies. Corinth would be allotted 5.85 crore new equity shares on a preferential basis. The investment is subject to the approval of shareholders and other regulatory bodies.

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Anupam Rasayan secures order worth Rs 1,100 crore for supply of specialty chemicals

Anupam Rasayan India Ltd has received a Letter of Intent from one of the top 10 multinational life sciences companies for supplying specialty chemicals. The total value of the order is Rs 1,100 crore. The company will provide multiple products from the ‘life sciences related specialty chemicals’ category to the multinational firm for the next five years.

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KPIT Technologies Q4 Results: Net profit rises 23% YoY to Rs 47 crore

KPIT Technologies Ltd reported a 23.6% YoY increase in net profit to Rs 47 crore for the quarter ended March (Q4). On a quarterly basis, net profit has grown by 9.3%. Revenue from operations declined 3.8% YoY to Rs 546.6 crore during the same period. For the financial year ended March 31, 2021, net profit has declined 4.20% YoY to Rs 140.43 crore. The company said that revenue growth momentum will continue in the current financial year (FY22). KPIT Technologies is an IT services company based in Pune.

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PowerGrid InvIT IPO to open for subscription tomorrow

The Rs 7,735 crore initial public offering (IPO) of PowerGrid Infrastructure Investment Trust (InvIT) will open for subscription tomorrow (April 29). The price band of the IPO has been fixed at Rs 99-100 per unit. The offer comprises a fresh issue of Rs 4,993.48 crore and an offer for sale (OFS) of Rs 2,741.51 crore. This will be the first InvIT IPO to be launched by a state-owned company.

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Sundaram Clayton Q4 Results: Net profit declines 17% QoQ to Rs 167 crore

Sundaram Clayton Ltd reported a 17.4% quarter-on-quarter (QoQ) decline in net profit to Rs 167.16 crore for the quarter ended March (Q4). On a yearly basis, net profit has jumped 18-fold (or 1,714%). Revenue from operations rose 0.85% QoQ to Rs 6,451.09 crore during the same period. The company posted sharp growth across its auto components, auto vehicles & parts, and financial services segments. 

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Tata Communications Q4 Results: Net profit at Rs 299 crore

Tata Communications Ltd reported a net profit of Rs 299.2 crore for the quarter ended March (Q4). It had posted a net loss of Rs 275 crore in the corresponding quarter last year (Q4 FY20). Revenue from operations declined 7.38% YoY to Rs 4,073.25 crore in Q4 FY21. Tata Communications’ payment solutions vertical declined 40% YoY, while the voice solutions vertical posted a 30% fall in revenues.