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

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<p>Indigo Paints (IP) raised around US$160m in its India IPO and will start trading tomorrow. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.</p>
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<p>I've covered the background and company performance in my previous insight, <a href="https://www.smartkarma.com/insights/indigo-paints-ipo-growing-fast-but-future-growth-won-t-come-as-easy" target="_blank" rel="noopener">Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy</a> and <a href="https://www.smartkarma.com/insights/indigo-paints-ipo-not-leaving-a-whole-lot-on-the-table" target="_blank" rel="noopener">Indigo Paints IPO - Not Leaving a Whole Lot on the Table</a>.</p>
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<p>In this insight, I'll talk about deal updates and provide a table with implied valuations at different share price levels.</p>
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Indigo Paints (IP) raised around US$160m in its India IPO and will start trading tomorrow. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.


I've covered the background and company performance in my previous insight, Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy and Indigo Paints IPO - Not Leaving a Whole Lot on the Table.


In this insight, I'll talk about deal updates and provide a table with implied valuations at different share price levels.


Indigo Paints IPO Trading - Already the Most Expensive Amongst Peers

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Thematic (Sector/Industry)

<p>The earnings momentum behind the sector is currently extraordinarily strong, with all four companies reporting an acceleration in revenue growth rates, record operating margins and a continued strong medium-term demand outlook, driven by accelerated cloud adoption and digitalisation, across many verticals and geographies. </p><p>These companies are also set to record strong y/y growth numbers over the next two quarters given the low base from last year’s pandemic-hit fiscal 4Q20 and 1Q21. However, following phenomenal share price performance from its March-2020 lows, this has been reflected in valuations as these companies now trade at record valuation multiples, on based on significantly upgraded earnings growth expectations. </p><p>In this insight, after a brief overview of the recent reporting season and the outlook for the industry, I look at what long-term growth expectations are implied by current valuation levels, based on the Justified PE calculation. I also compare this to other high-quality Indian companies.</p>

The earnings momentum behind the sector is currently extraordinarily strong, with all four companies reporting an acceleration in revenue growth rates, record operating margins and a continued strong medium-term demand outlook, driven by accelerated cloud adoption and digitalisation, across many verticals and geographies. These companies are also set to record strong y/y growth numbers over the next two quarters given the low base from last year’s pandemic-hit fiscal 4Q20 and 1Q21. However, following phenomenal share price performance from its March-2020 lows, this has been reflected in valuations as these companies now trade at record valuation multiples, on based on significantly upgraded earnings growth expectations. In this insight, after a brief overview of the recent reporting season and the outlook for the industry, I look at what long-term growth expectations are implied by current valuation levels, based on the Justified PE calculation. I also compare this to other high-quality Indian companies.

Indian IT Services: What Justified PE Ratios Tell Us About Sustainable Growth Expectations

Apollo Hospitals Enterprise / Equity Capital Markets

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<p><a href="https://www.smartkarma.com/entities/apollo-hospitals-enterprise" target="_blank" data-smartkarma-citation="entities:880:1" rel="noopener">Apollo Hospitals Enterprise (APHS IN)</a> plans to raise around US$140m via a QIP which was launched last night.</p>
<p>I have covered various aspects of the deal in my earlier note,  <a href="https://www.smartkarma.com/insights/apollo-hospital-placement-qip-early-look-this-time-it-s-different" target="_blank" rel="noopener">Apollo Hospital Placement/​QIP Early Look - This Time It’s Different</a>.</p>
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<p>In this insight, I'll run the deal through our ECM framework and talk about recent updates.</p>
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Apollo Hospitals Enterprise (APHS IN) plans to raise around US$140m via a QIP which was launched last night.
I have covered various aspects of the deal in my earlier note,  Apollo Hospital Placement/​QIP Early Look - This Time It’s Different.


In this insight, I'll run the deal through our ECM framework and talk about recent updates.


Apollo Hospital Placement/​​QIP - Well Flagged Deal with Well Planned Use of Proceeds

<p>Indigo Paints (IP) aims to raise around US$165m in its India IPO. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.</p><p>Revenue from operations have grown at 41.9% CAGR over FY10-19 and 24.7% CAGR over FY18-20. Margins have been on an uptrend as well and hence, over FY18-20, gross profit grew at 36% CAGE, EBITDA at 87.8% and PATMI at 92.8%. </p><p>The company has adopted a strategy of targeting smaller cities and rural areas to build its dealer network and then work its way up to the larger cities. It also claims to have introduced a host of differentiated products which have helped in brand building.</p><p>IP aims to expand its distribution network further, and is focusing on installing tinting machines. However, it hasn’t been able to ramp-up the installation per year. In addition, some of the margin gains recorded over 6M21 might not be sustainable.</p>

Indigo Paints (IP) aims to raise around US$165m in its India IPO. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.Revenue from operations have grown at 41.9% CAGR over FY10-19 and 24.7% CAGR over FY18-20. Margins have been on an uptrend as well and hence, over FY18-20, gross profit grew at 36% CAGE, EBITDA at 87.8% and PATMI at 92.8%. The company has adopted a strategy of targeting smaller cities and rural areas to build its dealer network and then work its way up to the larger cities. It also claims to have introduced a host of differentiated products which have helped in brand building.IP aims to expand its distribution network further, and is focusing on installing tinting machines. However, it hasn’t been able to ramp-up the installation per year. In addition, some of the margin gains recorded over 6M21 might not be sustainable.

Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy

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

Tata Consultancy Svcs / Technical Analysis

<p style="text-align: justify;">The IT services industry continues to benefit from secular tailwinds, and below we lay out what we believe is a compelling case to add exposure to Indian IT consulting stocks at current levels. In today’s report we highlight the following actionable names which display bullish price and RS trends: <strong>Tata Consultancy Services Limited</strong> (532540-IN), <strong>Infosys Limited </strong>(500209-IN), and <strong>Wipro Limited </strong>(507685-IN). Add exposure..</p>

The IT services industry continues to benefit from secular tailwinds, and below we lay out what we believe is a compelling case to add exposure to Indian IT consulting stocks at current levels. In today’s report we highlight the following actionable names which display bullish price and RS trends: Tata Consultancy Services Limited (532540-IN), Infosys Limited (500209-IN), and Wipro Limited (507685-IN). Add exposure..

Indian IT Consulting Stocks Resuming Uptrends; Buy Tata Consultancy Svcs, Infosys, & Wipro

India

Tata Consultancy Services, a division of Tata Sons Limited, is a global IT services organization that provides a comprehensive range of IT services to its clients in diverse industries. The Company, caters to finance and banking, insurance, telecommunication, transportation, retail, manufacturing, pharmaceutical, and utility industries.

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Tata Consultancy Svcs (TCS IN)

Indigo Paints IPO Trading - Already the Most Expensive Amongst Peers

Indigo Paints (IP) raised around US$160m in its India IPO and will start trading tomorrow. It was the 5th largest in the Indian decorative paint...

Sumeet Singh

Indian IT Services: What Justified PE Ratios Tell Us About Sustainable Growth Expectations

In this insight, I look at the long-term growth expectations implied by current valuation levels, based on a Justified PE calculation. I also...

Wium Malan, CFA

Apollo Hospital Placement/QIP - Well Flagged Deal with Well Planned Use of Proceeds

Apollo Hospitals Enterprise plans to raise around US$140m via a QIP which was launched last night. I have covered various aspects of the deal in my...

Sumeet Singh

Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy

Indigo Paints aims to raise around US$165m in its India IPO. Revenue grew at 41.9% CAGR over FY10-19. Over FY18-20, Revenue grew at 24.7% CAGR,...

Sumeet Singh

Indian IT Consulting Stocks Resuming Uptrends; Buy Tata Consultancy Svcs, Infosys, & Wipro

In today’s report we highlight the following actionable names which display bullish price and RS trends: Tata Consultancy Services Limited, Infosys...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Indigo Paints IPO Trading - Already the Most Expensive Amongst Peers

Indigo Paints (IP) raised around US$160m in its India IPO and will start trading tomorrow. It was the 5th largest in the Indian decorative paint...

Sumeet Singh

Indian IT Services: What Justified PE Ratios Tell Us About Sustainable Growth Expectations

In this insight, I look at the long-term growth expectations implied by current valuation levels, based on a Justified PE calculation. I also...

Wium Malan, CFA

Apollo Hospital Placement/​​QIP - Well Flagged Deal with Well Planned Use of Proceeds

Apollo Hospitals Enterprise plans to raise around US$140m via a QIP which was launched last night. I have covered various aspects of the deal in my...

Sumeet Singh

Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy

Indigo Paints aims to raise around US$165m in its India IPO. Revenue grew at 41.9% CAGR over FY10-19. Over FY18-20, Revenue grew at 24.7% CAGR,...

Sumeet Singh

Indian IT Consulting Stocks Resuming Uptrends; Buy Tata Consultancy Svcs, Infosys, & Wipro

In today’s report we highlight the following actionable names which display bullish price and RS trends: Tata Consultancy Services Limited, Infosys...

Vermilion Research

Apollo Hospital Placement/QIP - Well Flagged Deal with Well Planned Use of Proceeds