Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.</li>
<li>In the IPO space, the coming week will see <a href="https://www.smartkarma.com/entities/tryt-inc" target="_blank" data-smartkarma-citation="entities:39870:1" rel="noopener">Tryt Inc (9164 JP)</a> and <a href="https://www.smartkarma.com/entities/genda-inc" target="_blank" data-smartkarma-citation="entities:39911:1" rel="noopener">Genda Inc (9166 JP)</a> listing, along with <a href="https://www.smartkarma.com/entities/fadu-inc" target="_blank" data-smartkarma-citation="entities:39896:1" rel="noopener">Fadu (440110 KS)</a> bookbuild.</li>
<li>For placements, Japan and India placements continue to flow, while there are no signs of any major Hong Kong activity.</li>
</ul>


Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
In the IPO space, the coming week will see Tryt Inc (9164 JP) and Genda Inc (9166 JP) listing, along with Fadu (440110 KS) bookbuild.
For placements, Japan and India placements continue to flow, while there are no signs of any major Hong Kong activity.


ECM Weekly (23rd July 2023) - Tryt, Genda, Rakuten, Mobovi, Samhi, Indigo, Federal Bank, Invincible

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>A news report has indicated that SEBI is looking to tighten criteria used for inclusion and continued availability of stocks in the Futures &amp; Options (F&amp;O) segment of the market.</li>
<li>Our analysis shows 30 stocks could be deleted from the F&amp;O segment while another 12 are close to deletion zone. If applied objectively, 22 stocks could be added to F&amp;O.</li>
<li>Deletion from the F&amp;O segment could see two stocks dropped from the <a href="https://www.smartkarma.com/entities/nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">Nifty Next 50 Index</a> while inclusion in F&amp;O could see two stocks added to the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index</a>.</li>
</ul>


A news report has indicated that SEBI is looking to tighten criteria used for inclusion and continued availability of stocks in the Futures &amp; Options (F&amp;O) segment of the market.
Our analysis shows 30 stocks could be deleted from the F&amp;O segment while another 12 are close to deletion zone. If applied objectively, 22 stocks could be added to F&amp;O.
Deletion from the F&amp;O segment could see two stocks dropped from the Nifty Next 50 Index while inclusion in F&amp;O could see two stocks added to the NIFTY Index.


Impact of Potential Changes to India F&O Eligibility Criteria

The Indian mutual fund industry has assets of almost INR 7.93 trillion (US$106.3bn) across Multi cap, Large Cap, Large and Mid Cap, Mid Cap, Small Cap and Flexi Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks. Flexi cap funds can invest across market caps.The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.We are just past halfway through the review period for the second half of 2021. Using data to the close on 4 October, at the next recategorization in January 2022, we see 10 stocks moving from the mid cap segment to the large cap segment, 11 stocks moving from the large cap segment to the mid cap segment , 11 stocks are expected to move from the small cap segment to the mid cap segment, with16 stocks moving from the mid cap to the small cap segment. <a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOMATO IN)</a> will be a part of the large cap universe, while 4 other newly listed stocks will be a part of the mid cap universe.Historically, stocks moving to a higher market cap category have outperformed stocks that migrate to a lower market cap category over the back half of the review period. In some cases, the outperformance continues past the announcement of the changes as well. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.

The Indian mutual fund industry has assets of almost INR 7.93 trillion (US$106.3bn) across Multi cap, Large Cap, Large and Mid Cap, Mid Cap, Small Cap and Flexi Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks. Flexi cap funds can invest across market caps.The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.We are just past halfway through the review period for the second half of 2021. Using data to the close on 4 October, at the next recategorization in January 2022, we see 10 stocks moving from the mid cap segment to the large cap segment, 11 stocks moving from the large cap segment to the mid cap segment , 11 stocks are expected to move from the small cap segment to the mid cap segment, with16 stocks moving from the mid cap to the small cap segment. Zomato (ZOMATO IN) will be a part of the large cap universe, while 4 other newly listed stocks will be a part of the mid cap universe.Historically, stocks moving to a higher market cap category have outperformed stocks that migrate to a lower market cap category over the back half of the review period. In some cases, the outperformance continues past the announcement of the changes as well. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.

India: Stock Reclassification & Active Portfolio Management (Dec 2021)

<div>Sona Comstar (Sona) raised around US$761m in its Indian IPO. The company is backed by Blackstone, which held a 66.2% stake prior to listing.</div><div>Sona is an automotive technology company, designing, manufacturing and supplying highly engineered, mission critical automotive systems and components to automotive OEMs across US, Europe, India and China, for both electrified and non-electrified powertrain segments.</div><div></div><div>
We have covered the deal background in our earlier notes:
<ul>
<li><a href="https://www.smartkarma.com/insights/sona-comstar-pre-ipo-inconsistent-growth-patchy-disclosures" target="_blank" rel="noopener">Sona Comstar Pre-IPO - Inconsistent growth, patchy disclosures </a></li>
<li><a href="https://www.smartkarma.com/insights/sona-comstar-has-its-positives-but-we-remain-unconvinced" target="_blank" rel="noopener">Sona Comstar - Has Its Positives, but We Remain Unconvinced</a></li>
</ul>
</div><div>In this note, we will talk about the trading dynamics.</div>

Sona Comstar (Sona) raised around US$761m in its Indian IPO. The company is backed by Blackstone, which held a 66.2% stake prior to listing.Sona is an automotive technology company, designing, manufacturing and supplying highly engineered, mission critical automotive systems and components to automotive OEMs across US, Europe, India and China, for both electrified and non-electrified powertrain segments.
We have covered the deal background in our earlier notes:

Sona Comstar Pre-IPO - Inconsistent growth, patchy disclosures 
Sona Comstar - Has Its Positives, but We Remain Unconvinced

In this note, we will talk about the trading dynamics.

Sona Comstar IPO Trading - Strong Anchors but Tepid Demand

Independent Research Analyst

Mamta Verma

DC India Research

DC India Research LLP (DCIR) is based out of Mumbai, India.

We specialize in providing customized, independent research across listed and unlisted companies in India across equities and credit including sectoral research. Our customers include India focussed PE funds, special situation funds, domestic AMCs, Wealth Advisory& PMS firms, Rating Agencies & Investment Advisors. 

The DCIR board consists of prominent names from the industry as well as CIO’s of Hedge funds.

Equity Bottom-Up

Amara Raja Energy & Mobility / Equity Bottom-Up

Amara Raja – P&amp;L Snapshot<table class="table table-striped"><tbody>
<tr>
<td>(Rs. Mn.)</td>
<td>Q4FY17</td>
<td>Q3FY18</td>
<td>Q4FY18</td>
<td>FY17</td>
<td>FY18</td>
</tr>
<tr>
<td>Net Sales</td>
<td>13,445</td>
<td>15,535</td>
<td>15,807</td>
<td>53,172</td>
<td>60,592</td>
</tr>
<tr>
<td>YoY (%)</td>
<td>17.4%</td>
<td>17.1%</td>
<td>17.6%</td>
<td>15.1%</td>
<td>14.0%</td>
</tr>
<tr>
<td>QoQ (%)</td>
<td>1.3%</td>
<td>8.8%</td>
<td>1.8%</td>
</tr>
<tr>
<td>Raw Material</td>
<td>9,144</td>
<td>10,390</td>
<td>10,866</td>
<td>35,619</td>
<td>41,163</td>
</tr>
<tr>
<td>as % of net sales</td>
<td>68.0%</td>
<td>66.9%</td>
<td>68.7%</td>
<td>67.0%</td>
<td>67.9%</td>
</tr>
<tr>
<td>YoY (%)</td>
<td>28.3%</td>
<td>20.4%</td>
<td>18.8%</td>
<td>19.5%</td>
<td>15.6%</td>
</tr>
<tr>
<td>QoQ (%)</td>
<td>6.0%</td>
<td>10.3%</td>
<td>4.6%</td>
</tr>
<tr>
<td>Employee Costs</td>
<td>705</td>
<td>758</td>
<td>783</td>
<td>2,778</td>
<td>3,090</td>
</tr>
<tr>
<td>as % of net sales</td>
<td>5.2%</td>
<td>4.9%</td>
<td>5.0%</td>
<td>5.2%</td>
<td>5.1%</td>
</tr>
<tr>
<td>YoY (%)</td>
<td>13.1%</td>
<td>4.7%</td>
<td>11.0%</td>
<td>14.3%</td>
<td>11.2%</td>
</tr>
<tr>
<td>QoQ (%)</td>
<td>-2.5%</td>
<td>2.2%</td>
<td>3.3%</td>
</tr>
<tr>
<td>Optg. &amp; Mfg. Exp</td>
<td>1,752</td>
<td>1,972</td>
<td>2,051</td>
<td>6,282</td>
<td>7,507</td>
</tr>
<tr>
<td>as % of net sales</td>
<td>13.0%</td>
<td>12.7%</td>
<td>13.0%</td>
<td>11.8%</td>
<td>12.4%</td>
</tr>
<tr>
<td>YoY (%)</td>
<td>-1.2…</td>
</tr>
</tbody></table>

Amara Raja – P&amp;L Snapshot

(Rs. Mn.)
Q4FY17
Q3FY18
Q4FY18
FY17
FY18


Net Sales
13,445
15,535
15,807
53,172
60,592


YoY (%)
17.4%
17.1%
17.6%
15.1%
14.0%


QoQ (%)
1.3%
8.8%
1.8%


Raw Material
9,144
10,390
10,866
35,619
41,163


as % of net sales
68.0%
66.9%
68.7%
67.0%
67.9%


YoY (%)
28.3%
20.4%
18.8%
19.5%
15.6%


QoQ (%)
6.0%
10.3%
4.6%


Employee Costs
705
758
783
2,778
3,090


as % of net sales
5.2%
4.9%
5.0%
5.2%
5.1%


YoY (%)
13.1%
4.7%
11.0%
14.3%
11.2%


QoQ (%)
-2.5%
2.2%
3.3%


Optg. &amp; Mfg. Exp
1,752
1,972
2,051
6,282
7,507


as % of net sales
13.0%
12.7%
13.0%
11.8%
12.4%


YoY (%)
-1.2…



Amara Raja - In-Line, Maintain Buy Investment Thesis

India

Amara Raja Energy & Mobility is a technology-led provider of energy and mobility solutions, and one of India's largest manufacturers of lead-acid and lithium battery technologies. The company serves automotive, industrial, and emerging new-energy applications, including Li-ion cells, battery packs, and charging solutions for electric vehicles and telecom infrastructure. Headquartered in Tirupati, Andhra Pradesh, India, the company was founded in 1985.

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Amara Raja Energy & Mobility (ARENM IN)

ECM Weekly (23rd July 2023) - Tryt, Genda, Rakuten, Mobovi, Samhi, Indigo, Federal Bank, Invincible

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.

Sumeet Singh

Impact of Potential Changes to India F&O Eligibility Criteria

News reports indicate that SEBI is looking to tighten criteria for inclusion and continued availability of stocks in the F&O segment. 30 stocks...

Brian Freitas

India: Stock Reclassification & Active Portfolio Management (Dec 2021)

Halfway through the review period, we take a look at stocks that could migrate across the large, mid and small cap segments. With over US$100bn of...

Brian Freitas

Sona Comstar IPO Trading - Strong Anchors but Tepid Demand

Sona Comstar (Sona) raised around US$761m in its Indian IPO. The company is backed by Blackstone, which held a 66.2% stake prior to listing.

Sumeet Singh

Amara Raja - In-Line, Maintain Buy Investment Thesis

Amara Raja – P&L Snapshot Q4-FY18 update: Topline grew 18% YoY led by 30% YoY value growth in automotive batteries; with industrial batteries...

DC India Research

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