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

<div><p><a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOM IN)</a> raised US$1.3bn in its India IPO, making it the the largest listing in India from the technology sector.</p></div><div>We have covered various aspects of the deal in our earlier notes  </div><div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/zomato-pre-ipo-filings-lack-narrative-a-little-bit-of-history-helps" target="_blank" rel="noopener">Zomato Pre-IPO - Filings Lack Narrative, a Little Bit of History Helps, </a></li>
<li><a href="https://www.smartkarma.com/insights/zomato-pre-ipo-food-delivery-revenue-was-probably-up-16x" target="_blank" rel="noopener">Zomato Pre-IPO - Food Delivery Revenue Was Probably up 16x, and</a></li>
<li><a href="https://www.smartkarma.com/insights/zomato-pre-ipo-peer-comparison-listed-and-domestic" target="_blank" rel="noopener">Zomato Pre-IPO - Peer Comparison - Listed and Domestic</a></li>
<li><a href="https://www.smartkarma.com/insights/zomato-ipo-strong-4q21-has-a-very-long-runway" target="_blank" rel="noopener">Zomato IPO - Strong 4Q21, Has a Very Long Runway</a></li>
</ul></div><div><p>In this note, we will talk about the updates and the trading dynamics.</p></div>

Zomato (ZOM IN) raised US$1.3bn in its India IPO, making it the the largest listing in India from the technology sector.We have covered various aspects of the deal in our earlier notes  
Zomato Pre-IPO - Filings Lack Narrative, a Little Bit of History Helps, 
Zomato Pre-IPO - Food Delivery Revenue Was Probably up 16x, and
Zomato Pre-IPO - Peer Comparison - Listed and Domestic
Zomato IPO - Strong 4Q21, Has a Very Long Runway
In this note, we will talk about the updates and the trading dynamics.

Zomato IPO Trading - Ample Demand for Unique Exposure

<p><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> plans to raise around US$2.2bn via a mix of selling primary and secondary shares in its India IPO. The company is backed by <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a> (<a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a>), <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and counts <a href="https://www.smartkarma.com/entities/berkshire-hathaway-inc-cl-a" target="_blank" data-smartkarma-citation="entities:1044:1" rel="noopener">Berkshire Hathaway Inc Cl A (BRK/A US)</a> among its investors.</p><p>Paytm offers payment services, commerce and cloud services, and financial services to 333m consumers and over 21m merchants, as of Mar 21. It offers consumers a wide selection of payment options on the Paytm app. It also offers merchants solutions that allow them to accept payments, acquire and retain consumers, improve their business operations and access financial services.</p><p>The company clocked payment gross merchant value (GMV) of INR4tn (US$50bn) in FY21 for 114m transacting users during the year. Its users undertook a total of 7.4bn transactions in 2020. Along with its payment infrastructure, PayTM also runs a payment bank, in which it owns a 49% stake. The payment bank had a deposit base of INR52bn across 64m payment bank accounts.</p><p>In this note we will talk about the positive aspects of the deal.</p>

Paytm (PAYTM IN) plans to raise around US$2.2bn via a mix of selling primary and secondary shares in its India IPO. The company is backed by Ant Financial Services Group (6688 HK) (Alibaba Group (BABA US)), Softbank Group (9984 JP) and counts Berkshire Hathaway Inc Cl A (BRK/A US) among its investors.Paytm offers payment services, commerce and cloud services, and financial services to 333m consumers and over 21m merchants, as of Mar 21. It offers consumers a wide selection of payment options on the Paytm app. It also offers merchants solutions that allow them to accept payments, acquire and retain consumers, improve their business operations and access financial services.The company clocked payment gross merchant value (GMV) of INR4tn (US$50bn) in FY21 for 114m transacting users during the year. Its users undertook a total of 7.4bn transactions in 2020. Along with its payment infrastructure, PayTM also runs a payment bank, in which it owns a 49% stake. The payment bank had a deposit base of INR52bn across 64m payment bank accounts.In this note we will talk about the positive aspects of the deal.

Paytm (One 97) Pre-IPO - The Positives - Will Be One of India’s Largest IPOs

Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Equity Bottom-Up

<p>This channel insight focuses on <a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOM IN)</a>, <a href="https://www.smartkarma.com/entities/au-small-finance-bank-limited" target="_blank" data-smartkarma-citation="entities:24196:1" rel="noopener">AU Small Finance Bank Limited (AUBANK IN),</a><a href="https://www.smartkarma.com/entities/hitachi-home-life-solutions-india-ltd" target="_blank" data-smartkarma-citation="entities:6172:1" rel="noopener">Hitachi Home &amp; Life Solutions India Ltd (JCHAC IN)</a>, <a href="https://www.smartkarma.com/entities/nilkamal-ltd" target="_blank" data-smartkarma-citation="entities:5323:1" rel="noopener">Nilkamal Ltd (NILK IN)</a> and <a href="https://www.smartkarma.com/entities/makemytrip-ltd" target="_blank" data-smartkarma-citation="entities:23580:1" rel="noopener">Makemytrip Ltd (MMYT US)</a>. States, where our channels were based, include- West Bengal, Rajasthan, Gujarat, Maharashtra, Madhya Pradesh, Bihar.  </p>
<div>
<h3>About India Channel Insight</h3>
</div>
<div>
<p>Our objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. These snippets emerging out of these interactions and have been aiding us to generate interesting trade ideas and have often proven to be reliable sources of qualitative alpha. </p>
</div>

This channel insight focuses on Zomato (ZOM IN), AU Small Finance Bank Limited (AUBANK IN),Hitachi Home &amp; Life Solutions India Ltd (JCHAC IN), Nilkamal Ltd (NILK IN) and Makemytrip Ltd (MMYT US). States, where our channels were based, include- West Bengal, Rajasthan, Gujarat, Maharashtra, Madhya Pradesh, Bihar.  

About India Channel Insight


Our objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. These snippets emerging out of these interactions and have been aiding us to generate interesting trade ideas and have often proven to be reliable sources of qualitative alpha. 


India Channel Insight | Zomato, AU Bank, Johnson Hitachi, Nilkamal, Makemytrip

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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.

<ul>
<li>The subscription period for the <a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOM IN)</a> IPO ended last Friday (16<sup>th</sup> July 2021) with books covered around 38.25x, mostly at the top end of the offer range of INR 72.0-76.0 per share.</li>
<li>The Indian IPO market is a bit different from other developed markets as there were several previous IPOs (like SBI Cards) without notable listing gains despite around 20.0-50.0x oversubscription.</li>
<li>We think Zomato needed significantly more subscriptions to guarantee a substantial listing gain as the three IPOs that popped over 100% on day one during the last two years (Burger King India, Indigo Paints, and Happiest Minds Technologies) were oversubscribed over 100.0x.</li>
<li>Moreover, the “<a target="_blank">Employees Reservation Portion</a>” of the offer (6.5m shares) was undersubscribed (0.62x), indicating that the 3,755 people who know the ins and outs of the business are less enthusiastic about Zomato’s offer than the retail and institutional investors, even with a 13.0-18.0% premium on the grey market.</li>
</ul>


The subscription period for the Zomato (ZOM IN) IPO ended last Friday (16th July 2021) with books covered around 38.25x, mostly at the top end of the offer range of INR 72.0-76.0 per share.
The Indian IPO market is a bit different from other developed markets as there were several previous IPOs (like SBI Cards) without notable listing gains despite around 20.0-50.0x oversubscription.
We think Zomato needed significantly more subscriptions to guarantee a substantial listing gain as the three IPOs that popped over 100% on day one during the last two years (Burger King India, Indigo Paints, and Happiest Minds Technologies) were oversubscribed over 100.0x.
Moreover, the “Employees Reservation Portion” of the offer (6.5m shares) was undersubscribed (0.62x), indicating that the 3,755 people who know the ins and outs of the business are less enthusiastic about Zomato’s offer than the retail and institutional investors, even with a 13.0-18.0% premium on the grey market.


Zomato IPO: Oversubscribed, But We Reckon Listing Gains Could Be Towards the Low Side

Equity Analyst - Asia Consumer Sector, Investory

Devi Subhakesan

Equity Analyst - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

<p>Zomato's IPO has attracted robust investor interest with anchor institutional investors lapping up 45% of the issue already (<em>shares</em> locked up<em> for 30 days from the day of allotment)</em>. As interest in this high-profile, big-ticket IPO mount ahead of the book closure on Friday, July 16th, <strong>we present 5-year projections for <a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOM IN)</a>'s revenues and earnings based on industry growth estimates and assumptions</strong>. We find the growth outlook for Zomato's food delivery business attractive but sober relative to the IPO's premium valuations; food delivery's potential need for funds isn't significant either. Investor expectations on Zomato expanding into other related/unrelated businesses by effectively deploying part of its IPO proceeds may be driving the bullish sentiment. </p><p><strong>Zomato's projected financials. What is different about our approach and assumptions?</strong> We have adopted a top-down approach to project Zomato's food delivery revenues, deriving it from estimates for the overall market for foodservice and online food delivery. On the operational front, we believe more stimulus will be needed to drive demand growth in the near term as COVID-led circumstances normalize. Hence expect higher discounts and lesser ability to pass on delivery charges leading to higher cash spend in FY22. <strong>However, the IPO proceeds seem significantly higher than the potential cash needs of food delivery operations; Zomato may have plans to expand into other businesses.</strong></p><p>Detailed revenue and operating income projections, as well as key assumptions, for Zomato's food delivery business, are in the report below.</p><p>In our earlier report <a href="https://www.smartkarma.com/insights/zomato-ipo-floating-high-above-sector-reality-not-a-linear-play-on-india-s-rising-ecomm-user-base" target="_blank" data-smartkarma-citation="insights:54087" rel="noopener">Zomato IPO: Floating High Above Sector Reality. Not a Linear Play on India's Rising EComm User Base</a> we had discussed why we believe India's online food delivery players like Zomato is unlikely to witness a steep growth trajectory like those in developed markets. </p>

Zomato's IPO has attracted robust investor interest with anchor institutional investors lapping up 45% of the issue already (shares locked up for 30 days from the day of allotment). As interest in this high-profile, big-ticket IPO mount ahead of the book closure on Friday, July 16th, we present 5-year projections for Zomato (ZOM IN)'s revenues and earnings based on industry growth estimates and assumptions. We find the growth outlook for Zomato's food delivery business attractive but sober relative to the IPO's premium valuations; food delivery's potential need for funds isn't significant either. Investor expectations on Zomato expanding into other related/unrelated businesses by effectively deploying part of its IPO proceeds may be driving the bullish sentiment. Zomato's projected financials. What is different about our approach and assumptions? We have adopted a top-down approach to project Zomato's food delivery revenues, deriving it from estimates for the overall market for foodservice and online food delivery. On the operational front, we believe more stimulus will be needed to drive demand growth in the near term as COVID-led circumstances normalize. Hence expect higher discounts and lesser ability to pass on delivery charges leading to higher cash spend in FY22. However, the IPO proceeds seem significantly higher than the potential cash needs of food delivery operations; Zomato may have plans to expand into other businesses.Detailed revenue and operating income projections, as well as key assumptions, for Zomato's food delivery business, are in the report below.In our earlier report Zomato IPO: Floating High Above Sector Reality. Not a Linear Play on India's Rising EComm User Base we had discussed why we believe India's online food delivery players like Zomato is unlikely to witness a steep growth trajectory like those in developed markets. 

Zomato: Bullish IPO Outlook Vs Sober Financials. Value Lies in the Views of the Investor

India

Eternal Limited is an online restaurant guide and food ordering platform. The Company offers platform connects customers, restaurants, and delivery partners to search and discover restaurants, read and write customer generated reviews, order food delivery, book a table, and make payments while dining-out at restaurants. Eternal serves customers worldwide.

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Eternal (ETERNAL IN)

Zomato IPO Trading - Ample Demand for Unique Exposure

Zomato (ZOM IN) raised US$1.3bn in its India IPO, making it the the largest listing in India from the technology sector.

Sumeet Singh

Paytm (One 97) Pre-IPO - The Positives - Will Be One of India’s Largest IPOs

Paytm plans to raise around US$2.2bn in its India IPO. The company is backed by Ant Fin, Softbank (9984 JP) and counts Berkshire Hathaway among its...

Sumeet Singh

India Channel Insight | Zomato, AU Bank, Johnson Hitachi, Nilkamal, Makemytrip

This channel insight focuses on ZOM IN, AUBANK IN, JCHAC IN, NILK IN and MMYT US. States, where our channels were based, include- West Bengal,...

Pranav Bhavsar

Zomato IPO: Oversubscribed, But We Reckon Listing Gains Could Be Towards the Low Side

In India, 20.0-50.0x subscription rates could be called moderate investor interest and historically those IPOs have had mixed results. It requires...

Oshadhi Kumarasiri

Zomato: Bullish IPO Outlook Vs Sober Financials. Value Lies in the Views of the Investor

Zomato's projected financials for food delivery alone cannot justify the size of fundraising and premium valuations. Robust investor interest may...

Devi Subhakesan

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