External broker reports(aggregated public sources), Prabhudas Lilladhar

Prabhudas Lilladhar

External broker reports(aggregated public sources)

Equity Bottom-Up

<p>We lower our FY22-23e earnings estimate by 8.7%/5.6% to factor in lower volume assumption even as we increase our margins. FY21 was a difficult year for IGL as pandemic restrictions on vehicle movement hit CNG volumes. However, easing of restrictions along with rising vaccination coverage will limit incidence of lockdown, going ahead. IGL remains an enviable business model with high volume growth due to geographical expansion and addition of new buses and taxis.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

We lower our FY22-23e earnings estimate by 8.7%/5.6% to factor in lower volume assumption even as we increase our margins. FY21 was a difficult year for IGL as pandemic restrictions on vehicle movement hit CNG volumes. However, easing of restrictions along with rising vaccination coverage will limit incidence of lockdown, going ahead. IGL remains an enviable business model with high volume growth due to geographical expansion and addition of new buses and taxis.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q4FY21 Result Update - Tough year ends on strong note - BUY

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

<p>IGL reported a mixed bag result, with lower than our estimate EBITDA/scm (at INR8) and higher than our estimate volumes (at 6.8mmscmd) translating to in line EBITDA at INR4.9b (+31% YoY). CNG volumes rose 8% YoY, although down v/s pre-COVID levels of 4.92mmscmd (in 2Q-3QFY20). EBITDA/scm was lower than our estimate due to higher opex, despite the...</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

IGL reported a mixed bag result, with lower than our estimate EBITDA/scm (at INR8) and higher than our estimate volumes (at 6.8mmscmd) translating to in line EBITDA at INR4.9b (+31% YoY). CNG volumes rose 8% YoY, although down v/s pre-COVID levels of 4.92mmscmd (in 2Q-3QFY20). EBITDA/scm was lower than our estimate due to higher opex, despite the...Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

EBITDA/scm normalizes; stronger crosswinds ahead

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

<p>Indraprastha Gas: Our BUY recommendation on Indraprastha Gas with a target price of INR 603 is premised on (1) robust volume growth, led by its quasi-monopolistic position in Delhi/NCR with regulatory support in the form of prioritised gas allocation and (2) a portfolio of mature, semi-mature and new geographical areas (GA). 4QFY21 EBITDA/APAT were 2/2% below our estimates, owing to higher-than-expected gas cost and lower-than-expected other income, partially offset by lower-than-expected other expenses.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Indraprastha Gas: Our BUY recommendation on Indraprastha Gas with a target price of INR 603 is premised on (1) robust volume growth, led by its quasi-monopolistic position in Delhi/NCR with regulatory support in the form of prioritised gas allocation and (2) a portfolio of mature, semi-mature and new geographical areas (GA). 4QFY21 EBITDA/APAT were 2/2% below our estimates, owing to higher-than-expected gas cost and lower-than-expected other income, partially offset by lower-than-expected other expenses.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: ONGC, Indraprastha Gas

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<div><p>The Indian mutual fund industry has assets of almost INR 6.6 trillion 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.</p></div><div>
<p>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.</p>
<p>At the next recategorization in July 2021, we see 7 stocks moving from the mid cap segment to the large cap segment with an equal number of stocks moving the other way, and 13 stocks are expected to move from the small cap segment to the mid cap segment with the 16 stocks moving from the mid cap to the small cap segment. There are 3 recent listings that will enter the mid cap segment with over 18 joining the small cap segment.</p>
<p>Historically, the stocks migrating upward to a higher market cap segment have outperformed stocks that migrate to a lower market cap segment over the 1 month and 2 month period post the publishing of the AMFI list. 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.</p>
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The Indian mutual fund industry has assets of almost INR 6.6 trillion 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.
At the next recategorization in July 2021, we see 7 stocks moving from the mid cap segment to the large cap segment with an equal number of stocks moving the other way, and 13 stocks are expected to move from the small cap segment to the mid cap segment with the 16 stocks moving from the mid cap to the small cap segment. There are 3 recent listings that will enter the mid cap segment with over 18 joining the small cap segment.
Historically, the stocks migrating upward to a higher market cap segment have outperformed stocks that migrate to a lower market cap segment over the 1 month and 2 month period post the publishing of the AMFI list. 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

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

Power Grid Corporation of India / Equity Capital Markets

Power Grid Corporation of India (PWGR IN)

<p>POWERGRID Infrastructure Investment Trust (PGIT) aims to raise around US$1bn in its India IPO. </p><p>PGIT is an investment trust setup to own transmission assets of its sponsor Power Grid Corporation of India Limited (PGCIL). PGCIL is a central public sector enterprise which has been listed since 2007. </p><p>PGIT will initially own five assets with a total network of 11 power transmission lines of approximately 3,698.59 ckm and three substations having 6,630 Megavolt amperes (MVA) of aggregate transformation capacity, as of Sep 2020, across five states in India. The total valuation of the assets was INR105bn (US$1.4bn) as of Sep 2020. </p><p>These assets were awarded to PGCIL on a  build-own-operate-maintain (BOOM) basis. Therefore, the assets are operated under a long 35 years service agreement with largely pre-fixed revenue based on availability. In that sense, they will provide stable returns. </p><p>However, its revenue terms are structured in such a way that its yield will continue to decline, while its sponsor’s government ownership will mean that it's unlikely to diversify away from transmission assets with declining yield.</p>

POWERGRID Infrastructure Investment Trust (PGIT) aims to raise around US$1bn in its India IPO. PGIT is an investment trust setup to own transmission assets of its sponsor Power Grid Corporation of India Limited (PGCIL). PGCIL is a central public sector enterprise which has been listed since 2007. PGIT will initially own five assets with a total network of 11 power transmission lines of approximately 3,698.59 ckm and three substations having 6,630 Megavolt amperes (MVA) of aggregate transformation capacity, as of Sep 2020, across five states in India. The total valuation of the assets was INR105bn (US$1.4bn) as of Sep 2020. These assets were awarded to PGCIL on a  build-own-operate-maintain (BOOM) basis. Therefore, the assets are operated under a long 35 years service agreement with largely pre-fixed revenue based on availability. In that sense, they will provide stable returns. However, its revenue terms are structured in such a way that its yield will continue to decline, while its sponsor’s government ownership will mean that it's unlikely to diversify away from transmission assets with declining yield.

POWERGRID InvIT Pre-IPO - Always Going to Be Tricky with a Declining Yield

India

Indraprastha Gas Limited processes and distributes compressed natural gas and liquefied petroleum gas. The Company has been jointly promoted by Bharat Petroleum Corporation and Gas Authority of India.

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Indraprastha Gas (IGL IN)

Q4FY21 Result Update - Tough year ends on strong note - BUY

We lower our FY22-23e earnings estimate by 8.7%/5.6% to factor in lower volume assumption even as we increase our margins. FY21 was a difficult...

Prabhudas Lilladhar

EBITDA/scm normalizes; stronger crosswinds ahead

IGL reported a mixed bag result, with lower than our estimate EBITDA/scm (at INR8) and higher than our estimate volumes (at 6.8mmscmd) translating...

Motilal Oswal

HSIE Results Daily: ONGC, Indraprastha Gas

Indraprastha Gas: Our BUY recommendation on Indraprastha Gas with a target price of INR 603 is premised on (1) robust volume growth, led by its...

HDFC Securities

India: Stock Reclassification & Active Portfolio Management

There are a lot of segment changes expected in July when AMFI recategorizes stocks and mutual funds start to rebalance their portfolios. We...

Brian Freitas

POWERGRID InvIT Pre-IPO - Always Going to Be Tricky with a Declining Yield

POWERGRID Infrastructure Invt Trust aims to raise around US$1bn in its India IPO. PGIT is an investment trust setup to own transmission assets of...

Sumeet Singh

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