Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>This is our first report on Cloudflare, one of the leading cloud-based security solutions providers in the world.</li><li>Cloudflare has recently equipped partners to deliver a comprehensive Zero Trust solution with the Cloudflare One Partner program.</li><li>Moreover, the company recently expanded its platform zero trust for becoming the only provider of cloud-native with Network scale.</li></ul>

This is our first report on Cloudflare, one of the leading cloud-based security solutions providers in the world.Cloudflare has recently equipped partners to deliver a comprehensive Zero Trust solution with the Cloudflare One Partner program.Moreover, the company recently expanded its platform zero trust for becoming the only provider of cloud-native with Network scale.

Cloudflare Inc.: Initiation of Coverage – Market Presence & Scope For Expansion. Other Key Drivers

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares Russell 2000 ETF / Technical Analysis

<ul>
<li>The market continues to send mixed signals - some neutral or healthy signals but some risk-off signals as well.</li>
<li>As long as the Russell 2000 index (IWM) is above $208, Russell Micro Cap index (IWC) is above $134-$135, and the S&amp;P 500 is above 4495, we cannot be bearish.</li>
<li>Treasury yields are not breaking down below 1.40%-1.45% support on the 10-year Treasury yield and 1.76% support on the 30-year Treasury yield.</li>
</ul>


The market continues to send mixed signals - some neutral or healthy signals but some risk-off signals as well.
As long as the Russell 2000 index (IWM) is above $208, Russell Micro Cap index (IWC) is above $134-$135, and the S&amp;P 500 is above 4495, we cannot be bearish.
Treasury yields are not breaking down below 1.40%-1.45% support on the 10-year Treasury yield and 1.76% support on the 30-year Treasury yield.


Continued Absence Of Breakdowns Is A Positive Sign; Many Bottoms-Up Stock Recommendations

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<ul>
<li>There are 6 inclusions and 6 exclusions for the <a href="https://www.smartkarma.com/entities/nasdaq-100-stock-index" target="_blank" data-smartkarma-citation="entities:26197:1" rel="noopener">Nasdaq-100 Stock Index (NDX INDEX)</a> at the annual December reconstitution. The estimated one-way trade is US$11.05bn.</li>
<li>Impact on the inclusions ranges from 0.25-2.22 days of ADV to buy, while the impact on the deletions varies from 1.4-3.38 days of ADV to sell.</li>
<li>There will be large inflows on <a href="https://www.smartkarma.com/entities/meta-platforms-inc-class-a-facebook" target="_blank" data-smartkarma-citation="entities:665:1" rel="noopener">Meta Platforms (FB US)</a> and large outflows on Tesla, Apple, NVidia, Amazon and Google.</li>
</ul>


There are 6 inclusions and 6 exclusions for the Nasdaq-100 Stock Index (NDX INDEX) at the annual December reconstitution. The estimated one-way trade is US$11.05bn.
Impact on the inclusions ranges from 0.25-2.22 days of ADV to buy, while the impact on the deletions varies from 1.4-3.38 days of ADV to sell.
There will be large inflows on Meta Platforms (FB US) and large outflows on Tesla, Apple, NVidia, Amazon and Google.


NASDAQ 100 Index Rebalance: Six Changes at the Annual Reconstitution

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/paytm-mobile-solutions-pvt-ltd" target="_blank" data-smartkarma-citation="entities:26149:1" rel="noopener">Paytm (PAYTM IN)</a>, India’s largest digital ecosystem for consumers and merchants has opened its book-building which will run from 08th November to the 10th of November. Paytm plans to raise INR183bn (approx. US$2.4bn) through the issuance of a mix of new shares (approx. INR83bn) and existing shares (INR00bn) at an indicative price range of INR2,080-2,150 per share. At the above price range, Paytm will have a market capitalisation of INR1,351.1-1,396.6bn and a post-money enterprise value of INR1,254.1-1,296.8bn.<table class="table table-striped"><tbody>
<tr>
<td style="width: 192.0pt;">Paytm IPO Details</td>
<td style="width: 137.0pt;">@ INR2,080 </td>
<td style="width: 87.0pt;">@ INR2,150</td>
</tr>
<tr>
<td style="width: 192.0pt;">Shares Outstanding Pre-IPO (m)</td>
<td style="width: 137.0pt;">                                            609.7</td>
<td style="width: 87.0pt;">                       609.7</td>
</tr>
<tr>
<td style="width: 192.0pt;">Offer Shares/New Shares Issued (m)</td>
<td style="width: 137.0pt;">                                              39.9</td>
<td style="width: 87.0pt;">                         38.6</td>
</tr>
<tr>
<td style="width: 192.0pt;">Total Shares Outstanding post-IPO (m)</td>
<td style="width: 137.0pt;">                                            649.6</td>
<td style="width: 87.0pt;">                       648.3</td>
</tr>
<tr>
<td style="width: 192.0pt;">Market Cap (INRm)</td>
<td style="width: 137.0pt;">                                1,351,111.5</td>
<td style="width: 87.0pt;">           1,393,788.4</td>
</tr>
<tr>
<td style="width: 192.0pt;">Post-Money Enterprise Value (INRm)</td>
<td style="width: 137.0pt;">                                1,254,116.5</td>
<td style="width: 87.0pt;">           1,296,793.4</td>
</tr>
</tbody></table>Source: Company disclosures (offer shares calculated by dividing new share issue of INR83bn by the IPO price, Enterprise value after adjusting for net debt and net IPO proceeds (we have assumed underwriting and other costs to be about 7.25% of gross proceeds) and cash and debt as of June 2021)The company has already raised INR82.3bn from anchor investors (about 45.0% of the total offer) ahead of its IPO at a price of INR2,150 per share, and according to the company, its cornerstone investment was oversubscribed by more than 10x. These anchor investors include BlackRock, Vanguard, CPPIB, BirlaMF and GIC.Paytm plans to use the net proceeds from the IPO on growing and strengthening its Paytm ecosystem, investing on new business initiatives, acquisitions and strategic partnerships and for other general corporate purposes.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/240/442/original/image_54411635561636403842771.png?1636403843" class="editor-image img-responsive" data-smartkarma-image-id="240442"></figure>Source: Company disclosures

Paytm (PAYTM IN), India’s largest digital ecosystem for consumers and merchants has opened its book-building which will run from 08th November to the 10th of November. Paytm plans to raise INR183bn (approx. US$2.4bn) through the issuance of a mix of new shares (approx. INR83bn) and existing shares (INR00bn) at an indicative price range of INR2,080-2,150 per share. At the above price range, Paytm will have a market capitalisation of INR1,351.1-1,396.6bn and a post-money enterprise value of INR1,254.1-1,296.8bn.

Paytm IPO Details
@ INR2,080 
@ INR2,150


Shares Outstanding Pre-IPO (m)
                                            609.7
                       609.7


Offer Shares/New Shares Issued (m)
                                              39.9
                         38.6


Total Shares Outstanding post-IPO (m)
                                            649.6
                       648.3


Market Cap (INRm)
                                1,351,111.5
           1,393,788.4


Post-Money Enterprise Value (INRm)
                                1,254,116.5
           1,296,793.4

Source: Company disclosures (offer shares calculated by dividing new share issue of INR83bn by the IPO price, Enterprise value after adjusting for net debt and net IPO proceeds (we have assumed underwriting and other costs to be about 7.25% of gross proceeds) and cash and debt as of June 2021)The company has already raised INR82.3bn from anchor investors (about 45.0% of the total offer) ahead of its IPO at a price of INR2,150 per share, and according to the company, its cornerstone investment was oversubscribed by more than 10x. These anchor investors include BlackRock, Vanguard, CPPIB, BirlaMF and GIC.Paytm plans to use the net proceeds from the IPO on growing and strengthening its Paytm ecosystem, investing on new business initiatives, acquisitions and strategic partnerships and for other general corporate purposes.Source: Company disclosures

Paytm IPO: More Expensive than Global Payment Giants and SOTP Suggests More Than 40% Discount

Latest News from the World’s Leading Innovators

Granite Bay Capital

An innovation focussed investment company

Granite Bay Capital is an innovation focussed investment company with a deep focus on the companies at the leading edge of innovation across major themes such as AI, ubiquitous computing, sustainability, automation and longevity.

Thematic (Sector/Industry)

<h2>Headline Developments</h2>Not the best week for Facebook (FB) !  Firstly, the entire company’s ecosystem (FB, Instagram, WhatsApp and Messenger) ground to a halt for several hours.  This is an extraordinary occurrence for a company of this size.  Trying to keep this as simple as possible, this was an internal problem.

Headline DevelopmentsNot the best week for Facebook (FB) !  Firstly, the entire company’s ecosystem (FB, Instagram, WhatsApp and Messenger) ground to a halt for several hours.  This is an extraordinary occurrence for a company of this size.  Trying to keep this as simple as possible, this was an internal problem.

United States

Cloudflare, Inc. designs and develops software solutions. The Company offers platform for load balancing, video streaming, security, analysis, and domain registration. Cloudflare serves customers worldwide.

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Cloudflare (NET US)

Cloudflare Inc.: Initiation of Coverage – Market Presence & Scope For Expansion. Other Key Drivers

This is our first report on Cloudflare, one of the leading cloud-based security solutions providers in the world. Cloudflare has recently equipped...

Baptista Research

Continued Absence Of Breakdowns Is A Positive Sign; Many Bottoms-Up Stock Recommendations

As long as the Russell 2000 index (IWM) is above $208, the Russell Micro Caps index (IWC) is above $134-$135, and the S&P 500 is above 4495, we...

Vermilion Research

NASDAQ 100 Index Rebalance: Six Changes at the Annual Reconstitution

There are 6 changes for the NASDAQ-100 index at the annual December reconstitution. Apart from the flows on the adds and deletes, there will be...

Brian Freitas

Paytm IPO: More Expensive than Global Payment Giants and SOTP Suggests More Than 40% Discount

With not so conservative assumptions, our SOTP valuation suggests that Paytm's shares are significantly overvalued at the IPO price range. At the...

Shifara Samsudeen, FCMA, CGMA

Weekly Innovation Review (WIRE) #52

Not the best week for Facebook (FB) ! Firstly, the entire company’s ecosystem (FB, Instagram, WhatsApp and Messenger) ground to a halt for several...

Granite Bay Capital

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