APAC IPOs & Placements, Aequitas Research

Akshat Shah

APAC 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

Carraro India Limited / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/carraro-india-limited" target="_blank" data-smartkarma-citation="entities:43890:1" rel="noopener">Carraro India Limited (810618Z IN)</a> is looking to raise about US$216m in its India IPO.</li>
<li>Carraro India Limited (CIL), is an independent tier 1 solution provider of axles, transmission systems and gears for the agricultural tractor and construction vehicle industries in India.</li>
<li>In this note, we talk about the company’s historical performance.</li>
</ul>



Carraro India Limited (810618Z IN) is looking to raise about US$216m in its India IPO.
Carraro India Limited (CIL), is an independent tier 1 solution provider of axles, transmission systems and gears for the agricultural tractor and construction vehicle industries in India.
In this note, we talk about the company’s historical performance.


Carraro India Pre-IPO - Strategic Partnerships and Related Party Risks

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>Near the end of the review period, we see 7 stocks moving from MidCap to LargeCap, 6 from LargeCap to MidCap, 8 from SmallCap to MidCap and vice versa.</li>
<li>One spin-off should be added to the MidCap segment, while a bunch of recent listings will be added to the SmallCap segment.</li>
<li>Stock migrating upwards have outperformed stocks migrating downwards and we expect there could be some mean reversion from the middle of January.</li>
</ul>


Near the end of the review period, we see 7 stocks moving from MidCap to LargeCap, 6 from LargeCap to MidCap, 8 from SmallCap to MidCap and vice versa.
One spin-off should be added to the MidCap segment, while a bunch of recent listings will be added to the SmallCap segment.
Stock migrating upwards have outperformed stocks migrating downwards and we expect there could be some mean reversion from the middle of January.


AMFI Stock Reclassification Preview (Dec 2022): A Bunch of Migrations

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)

External broker reports(aggregated public sources), Geojit BNP Paribas

Geojit

External broker reports(aggregated public sources)

Equity Bottom-Up

ZF Commercial Vehicle Control Systems India / Equity Bottom-Up

ZF Commercial Vehicle Control Systems India (ZCVCS IN)

ZF Commercial Vehicle Control Systems India

Q1FY22 revenue de-grew by -31% QoQ due to significant decline in the commercial vehicle volume, down by 92% YoY. This was largely due to production lockdown and lower demand globally. EBITDA margin came at 8.6% due to higher input cost and other expenses. Net profit tanked by 55% QoQ. Wabco ZF technological advantage in the CV segment will provide significant growth in product intelligence and will result in higher value enhancing offer for the domestic and global customers....<div class="content-highlight">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.</div>

Q1FY22 revenue de-grew by -31% QoQ due to significant decline in the commercial vehicle volume, down by 92% YoY. This was largely due to production lockdown and lower demand globally. EBITDA margin came at 8.6% due to higher input cost and other expenses. Net profit tanked by 55% QoQ. Wabco ZF technological advantage in the CV segment will provide significant growth in product intelligence and will result in higher value enhancing offer for the domestic and global customers....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.

Wabco India Limited: Long Term Growth Remains Intact

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Sona Comstar (Sona) aims to raise 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.Sona delivered a steady performance in 2019 with revenue up 16.6% and PAT up 24.1%. However, its revenue fell by 14.5% in FY20, although it still managed to grow its PAT by 4%. It registered a strong bounce bank in FY21 with 28.4% revenue growth but PAT was flat.While the company enjoys a long customer relationship, its largest customers haven’t consistently grown their contribution to revenue over the past few years.We have covered the deal background in our earlier note, <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>In this note, we will talk about the recent updates and run the deal through our ECM framework.

Sona Comstar (Sona) aims to raise 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.Sona delivered a steady performance in 2019 with revenue up 16.6% and PAT up 24.1%. However, its revenue fell by 14.5% in FY20, although it still managed to grow its PAT by 4%. It registered a strong bounce bank in FY21 with 28.4% revenue growth but PAT was flat.While the company enjoys a long customer relationship, its largest customers haven’t consistently grown their contribution to revenue over the past few years.We have covered the deal background in our earlier note, Sona Comstar Pre-IPO - Inconsistent growth, patchy disclosures. In this note, we will talk about the recent updates and run the deal through our ECM framework.

Sona Comstar - Has Its Positives, but We Remain Unconvinced

India

ZF Commercial Vehicle Control Systems India Limited is a market leader in India for advanced braking systems, conventional braking products, and related air-assisted technologies and systems for commercial vehicles. The company provides industry-leading solutions in the Autonomous, Connected, and Electric (ACE) domains, including integrated systems for braking, stability, and transmission automation. It serves automotive original equipment manufacturers (OEMs), distributors, government agencies, and retailers. Headquartered in Chennai, India, the company was incorporated on November 18, 2004, and was formerly known as WABCO India Limited before changing its name in March 2022.

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ZF Commercial Vehicle Control Systems India (ZCVCS IN)

AMFI Stock Reclassification Preview (Dec 2022): A Bunch of Migrations

Near the end of the review period, we see 7 stocks moving from MidCap to LargeCap, 6 from LargeCap to MidCap, 8 from SmallCap to MidCap and vice...

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

Wabco India Limited: Long Term Growth Remains Intact

Q1FY22 revenue de-grew by -31% QoQ due to significant decline in the commercial vehicle volume, down by 92% YoY. This was largely due to production...

Geojit

Sona Comstar - Has Its Positives, but We Remain Unconvinced

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

Sumeet Singh

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Carraro India Pre-IPO - Strategic Partnerships and Related Party Risks

Carraro India Limited is looking to raise about US$216m in its India IPO. In this note, we talk about the company’s historical performance.

Akshat Shah

AMFI Stock Reclassification Preview (Dec 2022): A Bunch of Migrations

Near the end of the review period, we see 7 stocks moving from MidCap to LargeCap, 6 from LargeCap to MidCap, 8 from SmallCap to MidCap and vice...

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

Wabco India Limited: Long Term Growth Remains Intact

Q1FY22 revenue de-grew by -31% QoQ due to significant decline in the commercial vehicle volume, down by 92% YoY. This was largely due to production...

Geojit

Sona Comstar - Has Its Positives, but We Remain Unconvinced

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

Sumeet Singh