Reblog: IPO Review – CreditAccess Grameen


IPO Snapshot:

CreditAccess Grameen Limited is entering the primary market on Wednesday, August 8, 2018, to raise upto Rs. 630 crore via fresh issue of equity shares of Rs. 10 each and an offer for sale (OFS) of upto 1.19 crore equity shares by promoter, both in the price band of Rs. 418 to Rs. 422 per share. Representing 18.70% of the post issue paid-up share capital, total issue size is Rs. 1,131 crore at the upper end of the price band, of which 44% is the OFS portion. The issue closes on Friday, August 10, 2018 and listing is likely on 23rd August.

Company Overview:

CreditAccess Grameen is India’s 3rd largest micro finance institution (MFI) providing unsecured loans to women with annual household income upto Rs.1.6 lakh (urban area) and Rs. 1 lakh (rural area), of average ticket size of Rs. 20,000. With asset under management (AUM) of Rs. 4,975 crore (31-3-18) and a deep rural focus (81% customers in rural), 86% of loans provided is for income generating activities, 10% for home improvement and balance for emergency and family welfare. Despite widespread network of 516 branches across 132 districts in 9 Indian States and Union territory, company’s AUM is concentrated in Karnataka (58% of total) and Maharashtra (27%). While other MFIs have converted to banks (Bandhan, Equitas, Ujjivan, Bharat Financial on the verge of merger with Indusind), CreditAccess does not plan to tap the banking route and is comfortable being a standalone MFI.

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Reblog: IPO Analysis: HDFC Asset Management Company (AMC) Limited


Verdict: A ‘no-brainer’ Buy

IPO Snapshot:

HDFC Asset Management Company (AMC) Limited is entering the primary market on Wednesday 25th July 2018, with an offer for sale (OFS) of up to 2.55 crore equity shares of Rs.5 each, by both the promoters, HDFC (34% of OFS) and UK’s Standard Life (66% of OFS), in the price band of Rs. 1,095 to Rs. 1,100 per share. Representing 12.01% of the post issue paid-up share capital, total issue size is Rs. 2,800 crore at the upper end of the price band. The issue closes on Friday 27th July and listing is likely on 6th August, which will be the 5th listing from HDFC stable.

Company Overview:

HDFC AMC, 56.97% subsidiary of HDFC Ltd, with foreign JV partner UK’s Standard Life owning 37.98% stake, is India’s second largest AMC (behind ICICI Prudential) with asset under management (AUMs) of Rs.2.91 lakh crore (31-3-18) and 13.7% market share. Company is the largest AMC with equity oriented funds (at 51.3% of AUM vis-à-vis industry average of 43.2%), which also helps it become the most profitable AMC in India, having earned net profit of Rs. 722 crore in FY18 or 18.1% market share of the industry PAT, due to higher fees earned in equity as against debt product. Thus, with only 13.7% market share in total AUM, 16.8% market share in actively managed equity-oriented AUM help the company garner 18.1% market share in net profits of the industry, comprising of 42 players. Besides high profitability, company also enjoys benefit of retailisation of portfolio, with 62% AUM coming from retail investors, unlike industry average of ~50%, again highest market share in retail AUM of 15.7%. Systematic investment plan (SIP) products, with average ticket size of Rs. 3,800, also provide high revenue visibility, as 77% of company’s SIPs are signed up for 5 years.

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Reblog: IPO Review – TCNS Clothing


Verdict: The Cool and Nice Stock

IPO Snapshot:

TCNS Clothing Co. Limited is entering the primary market on Wednesday 18th July 2018, with an offer for sale (OFS) of up to 1.57 crore equity shares of Rs.2 each by PE investor, promoters, current MD and former employees, all in the price band of Rs. 714 to Rs. 716 per share. Representing 25.63% of the post issue paid-up share capital, total issue size is Rs. 1,125 crore at the upper end of the price band. Issue closes on Friday 20th July and listing is likely on 30th July.

Company Overview:

TCNS Clothing Co. is a New Delhi head quartered branded apparel maker for ethnic women wear, operating 3 brands – W, Aurelia and Wishful, with sales mix of 57:33:8. Its 465 exclusive branded outlets (281 for W, 183 for Aurelia, 1 for Wishful) accounted for approximately 50% of FY18 topline of Rs. 838 crore. Further, products are sold through 1,469 large format stores, 1,522 multi-brand outlets and online/ e-commerce websites, which account for 28%, 11% and 10% of the topline respectively. While design operations are in-house, manufacturing is completely outsourced. The brand outlets, all on long term leases, are either company operated or franchised out. Company plans to open 75-80 new stores each year, to strengthen its brands.

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Reblog: ICICI Securities IPO Review


Verdict: I C it as an expensive Security

IPO Snapshot:

ICICI Securities is entering the primary market on Thursday 22nd March 2018, with an offer for sale (OFS) of up to 7.82 crore equity shares of Rs. 5 each by promoter ICICI Bank, in the price band of Rs. 519 to Rs. 520 per share. Representing 23.98% of the post issue paid-up share capital, ICICI Bank will rake in Rs. 4,017 crore at the upper end of the price band, which will help it partly off-set higher loss provisions. Issue is closing on Monday 26th March and listing is likely on 5th April.

Company Overview:

ICICI Securities, a wholly owned capital market arm of ICICI Bank, offers broking (through ICICIdirect.com), investment banking, portfolio management services (PMS) and financial products distribution (mutual fund and insurance) to retail and institutional customers, through its marketing network of 200 own branches, 2,600+ branches of ICICI Bank, 4,600+ sub-brokers and independent financial associates. The technology, whether broking or mutual fund distribution is a ‘me-too’ or easily replicable, and most other full-fledged broking firms like Motilal Oswal or a discount broker such as Zerodha or many fin-tech start-ups in mutual fund distribution have similar offerings. Hence, its technological capabilities are not out-of-the-world and are simply keeping up with the changing times. Approximately 60% of income is generated through broking, 10% from investment banking, 15% from mutual fund distribution and balance through distribution fee of insurance and other products.

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Reblog: Mishra Dhatu Nigam IPO


Verdict: Healthy LT prospects, but not for ST

IPO Snapshot:

Mishra Dhatu Nigam is entering the primary market on Wednesday 21st March 2018 with an offer for sale of up to 4.87 crore equity shares of Rs. 10 each, by the Govt. of India, in the price band of Rs. 87 to Rs. 90 per share, with Rs. 3 per share retail discount. Representing 26% of the post issue paid-up share capital, total issue size is Rs. 433 crore at the upper end of the price band. The issue is closing on Friday 23rd March and listing is likely on 4th April.

Company Overview:

Mishra Dhatu Nigam (Midhani), a wholly owned subsidiary of the Govt. of India, is India’s leading manufacturer of special steels and super alloys and the country’s sole manufacturer of titanium alloys, used in three critical sectors such as defence, space and nuclear energy, as well as in non-strategic sectors such as railways, oil and gas among others. Company has a manufacturing facility at Hyderabad and is undertaking greenfield expansion at two locations (i) Rohtak: operations to commence in FY19, to cater to needs of bullet proof jacket for the army and (ii) Nellore: plant will be operational in two phases – first part to commence in FY19-end, while second phase is under JV with NALCO will come on stream by FY21/22.

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Reblog: IPO Review Hindustan Aeronautics Ltd.


IPO Snapshot:

Hindustan Aeronautics is entering the primary market on Friday 16th March 2018 with an offer for sale (OFS) of up to 3.41 crore equity shares of Rs. 10 each by Government of India, in the price band of Rs.1,215 to Rs. 1,240 per share, with Rs. 25 per share retail and employee discount. Representing 10.2% of the post issue paid-up share capital, Government is expected to rake in Rs. 4,200 crore at the upper end of the price band. The issue is closing on Tuesday 20th March and listing is likely on 28thMarch.

Company Overview:

India’s largest defence PSU and world’s 39th largest aerospace, Navratna company Hindustan Aeronautics designs, develops, manufactures and maintains aircraft, helicopters, aero-engines, avionics, accessories and aerospace structures, including military aircrafts, such as MiG-21, MiG-27, Hawk Mk 132 and Su-30MKI. Over 90% of company’s Rs. 18,000 crore revenue is derived from Indian Defence Services, while exports account for about 3%. Business operations are divided into five verticals (Bangalore, MiG, Helicopter, Accessories and Design) comprising 20 production divisions and 11 R&D centres located across India, in addition to establishing 13 commercial JVs with American, Russian, Israeli and Canadian counterparts. Relying on both indigenous research as well as technology transfer and licence agreements with third parties, company spends ~7% of revenue annually towards R&D. Its Rs. 68,461 crore order book, as of 31-12-17, representing 4x annual topline, is also very encouraging.

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Reblog: Newgen Software IPO review


IPO Snapshot:

Newgen Software Technologies is entering the primary market on Tuesday 16th Jan 2018, via a fresh issue-cum-offer for sale of equity shares of Rs. 10 each, in the price band of Rs.240 to Rs. 245 per share. The issue comprises a fresh issue of up to Rs. 95 crore and an offer for sale (OFS) of 1.35 crore equity shares by 4 PE investors. Representing 25.01% of the post issue paid-up share capital at the upper end, total issue size is Rs. 485 crore at the upper end, of which, 80% or Rs. 390 crore is the OFS portion. The issue will close on Thursday 18th Jan while the listing is expected on 29th Jan.

Company Overview:

Newgen Software Technologies is a software product company serving banking, Govt agencies, BPO / IT, insurance, healthcare verticals, through its basket of 3 product platforms – enterprise content management, business process management, customer communication management. While 40% revenue comes from India, approximately 27% comes from the US and Middle East each, and balance from Asia Pacific. Broadly, 27% of revenue is generated through sale of software product, 28% from implementation service, 22% from annuity based support service and 17% from AMC.

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Reblog: HDFC Standard Life IPO Review


IPO Snapshot:

HDFC Standard Life Insurance is entering the primary market on Tuesday 7thNovember 2017, with an offer for sale (OFS) of up to 29.98 crore equity shares of Rs. 10 each, by both the promoters HDFC (64% of OFS) and Standard Life (36% of OFS), in the price band of Rs. 275 to Rs. 290 per share. Representing 14.92% of the post issue paid-up capital, OFS will raise Rs. 8,695 crore at the upper price band and will close on Thursday 9th November. Listing is likely on 17th November.

Company Overview:

HDFC Standard Life, HDFC’s 61.21% subsidiary, with 34.75% owned by foreign partner Standard Life, is India’s 3rd largest private sector life insurer, after ICICI Pru and SBI Life, based on market share of 16.5% among private insurers, on FY17 total premium.

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Reblog: Khadim India IPO review


IPO Snapshot:

Khadim India is entering the primary market on Thursday 2nd November 2017 to raise Rs. 50 crore via fresh issue of equity shares and an offer for sale (OFS) of up to 66 lakh equity shares of Rs. 10 each by promoters (11% of OFS) and Fairwinds PE (89% of OFS), both in the price band of Rs.745 to Rs. 750 per share. Representing 40.32% of the post issue paid-up share capital at the upper end, total issue size is Rs. 543 crore. The issue will close on Monday 6th November and listing is expected on 14thNovember.

Company Overview:

Khadim India is India’s second largest footwear retailer, and the largest in East India, with 853 Khadim’s branded retail outlets (80% of which are franchised out) and 377 distributors, as of 30-6-17, with retail accounting for 73% of Rs. 621 crore FY17 topline and distributors accounting for 22%. The company has a dual strategy to grow both retail outlets and deepen distribution pipeline. The company offers a bouquet of 9 brands across different footwear categories, besides parent brand Khadim. Positioned as a value retailer focusing on mass and mass premium category, 55% of its stores are located in tier 3 cities.

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Reblog: New India Assurance IPO Review


IPO Snapshot:

The New India Assurance Company is entering the primary market on Wednesday 1st November 2017 with an IPO of up to 12 crore equity shares of Rs. 5 each, comprising fresh issue of upto 2.40 crore equity shares and an offer for sale (OFS) of 9.60 crore equity shares by promoter Indian Government, both in the price band of Rs.770 to Rs. 800 per share, with Rs. 30 per share discount for retail investors. Representing 14.56% of the post issue paid-up share capital, issue will raise Rs. 9,474 crore, at the upper end, of which, Rs. 1,895 crore will flow into the company via fresh issue and balance Rs. 7,579 crore will meet FY18 divestment target of Rs. 72,500 crore. Issue will close on Friday 3rd November and listing is expected on 13thNovember.

Company Overview:

New India Assurance, 99.99% subsidiary of Government of India, is the country’s largest general insurance company, with 15% market share (down from FY16’s 15.7%) in gross direct premium, enjoying leadership in all segments, such as motor, health, fire, marine, except crop. In FY17, motor, health, fire, marine, crop segments accounted for 39%, 26%, 15%, 3% and 5% of company’s gross written premium, respectively, which is more-or-less in line with the industry structure, except for crop insurance where all private sector insurers have been more aggressive. Company has a robust pan India multi-channel distribution network, comprising 2,452 offices, 68,389 agents, 16 corporate agents, 25 bancassurance partners (including Bank of India and Canara Bank), with individual agents, direct sales and brokers accounting for 42%, 31% and 26% of business respectively.

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