India

• Aadhar Housing Finance (AHF) is now looking to raise around US$600m in its India IPO, via selling a mix of primary and secondary shares.
• AHF is focused on the low income housing segments (ticket size less than INR1.5m) in India. It offers a range of mortgage-related loan products.
• In this note, we look at the updates from the company’s recent filings.

• Canara Bank has seen stunning profit expansion over the past several years
• Lower NPLs can drive lower credit costs to support profit expansion further
• ROE moved from 11.7% to 17.3% over the past several years

• In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the June 2024 index rebal event.
• Wipro Ltd (WPRO IN)‘s deletion from Sensex is imminent but there are question marks over the top replacement names as this involves some subjectivity.  
• For BSE 100, Jio Financial Services (JIOFIN IN) is a new potential ADD and that has caused major changes to the index change expectations I had previously.

• Company recently demerged from Ghcl Ltd (GHCL IN) and guiding for 30% revenue growth and double margins from here onwards with cotton prices being stable.
• A Debt Free Textile company available at 0.56x Price to Book with growth plan in progress and adding Value added products in its portfolio.
• Due to Forced selling from DII, FII company remained undervalued, now with changing margin profile, the Company will be available at a cheap valuation compared to peers.

• Our flash checks across a couple of dealers indicate pressure on margins across the industry. Voltas Ltd (VOLT IN) is trying hard to gain market share.
• Other names discussed include PNB Housing Finance Ltd (PNBHOUSI IN), Vedant Fashions (MANYAVAR IN) and Bandhan Bank Ltd (BANDHAN IN). 
• Varun Beverages (VBL IN) and Schaeffler India (SCHFL IN) show up as interesting ARs to read. 

• NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.
• In this insight, we take a look at the names leading the race to become ADDs/DELs for the NIFTY 50 and NIFTY Next 50 indices in the September 2024 rebalance.
• There could be at least one change for NIFTY 50 and separately, there could be up to five changes for NIFTY Next 50.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Adani Green Energy

• Downtrend in IVs stall as market sentiment deteriorates. Vol Regime Model sticks to “High & Down” state.
• Consider Equity Tail hedges/ buying OTM puts in current environment. Roll strikes lower if/when equities weaken further.
• Skew compression seen in BankNifty options as preference for out-of-money puts wane. Skew selling an unsuitable strategy at current levels.

• Vodafone Idea (IDEA IN) plans to raise around US$2.2bn via a follow-on public offering.
• The deal has been in the works for years and proceeds will be used for capex and short-term debt repayment.
• In this note, we will run the deal through our ECM framework and talk about the deal dynamics.

• Government of India raised around US$513m via selling some of its stake in Bharti Hexacom’s IPO.
• Bharti Hexacom (BH) is a communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services to customers in the Rajasthan and the North East telecommunication circles in India.
• We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

• Canara Bank (CBK IN) should replace Bandhan Bank Ltd (BANDHAN IN) in the NSE Nifty Bank Index (NSEBANK INDEX) at the September rebalance.
• Passive trackers will need to buy nearly 2 days of ADV in Canara Bank (CBK IN) while selling over 1 day of ADV in Bandhan Bank Ltd (BANDHAN IN). 
• Canara Bank (CBK IN) is one of the best performing banking stocks while Bandhan Bank Ltd (BANDHAN IN) has been the worst performer over the last two years.

• Telecommunications Consultants India Limited (TCIL) raised US$513m by selling 15% of the shares outstanding in Bharti Hexacom (6597372Z IN). Post the sale, they still hold 15% of the company.
• Bharti Hexacom (6597372Z IN) will start trading on 12 April and the grey market indicates the stock will open at INR 664/share, 16.5% higher than the IPO price.
• Bharti Hexacom should be added to one smallcap index in August and another smallcap index in December. A move above INR 700/share could result in midcap inclusion in December.

• Market momentum continues to be strong. As we head into earnings season, the momentum is likely to continue.
• Strong operational updates Info Edge India (INFOE IN); Aavas Financiers Ltd (AAVAS IN) & Sula Vineyards (SULA IN).  
• The overall market sentiment, represented by the average revisions across all sectors, is nearly flat, with a slight positive revision for FY1E at 0.02% and essentially stable for FY2E.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Tata Motors ADR
• Xiaomi Corp

• Afcons Infrastructure Limited (6595396Z IN) is looking to raise US$840m in its upcoming India IPO. The bookrunners are Jefferies, Nomura, ICICI Securities, SBI Capital, DAM Capital, and Nuvama Wealth.
• Afcons Infrastructure Limited (Afcons) is the flagship infrastructure engineering and construction company of the Shapoorji Pallonji group.
• As per the Fitch report, the firm was one of India’s largest international infrastructure companies as per the 2023 ENR top international contractors ranking, based on FY23 international revenue.

• Aster DM Healthcare Ltd (ASTERDM IN) completes a significant restructuring, separating its India and GCC operations, with a consortium led by Fajr Capital acquiring a 65% stake in Aster GCC. 
• The substantial cash consideration received provides financial flexibility for further investments, debt reduction, or strategic opportunities.
• Explore the implications of Aster’s restructuring on shareholder value, with a special dividend of INR 110 to INR 120 per share planned.

• Gland Pharma Ltd (GLAND IN) reported mid-single-digit revenue and EPS growth in its base business (ex-Cenexi) during 9M FY24. The company is confident to end FY24 on a high note.
• Gland Pharma starts FY25 on a strong note with gaining U.S. approval for eribulin mesylate injection, used for breast cancer that has spread to other parts of the body.
• Over the next 12–15 months, Gland Pharma is poised for enhanced geographical foot-print in Europe through Cenexi. The addressable CDMO business opportunity is estimated at €4B.

• P N Gadgil Jewellers (1742652D IN) is looking to raise up to US$132m in its upcoming India IPO. The deal will be run by Motilal Oswal, Nuvama and BOB Capital. 
• P N Gadgil Jewellers (PNGJ from hereon) is an Indian organized jewellery player. According to Technopak, it is the second largest among prominent organized jewellery players in Maharashtra. 
• Its product offerings include traditional jewellery for special occasions such as weddings, engagements and festivities and modern and jewellery designs for everyday wear purpose, in gold, diamond, silver and platinum.

• Nearly 90% of the way through the review period of the June rebalance, we see one potential index change with Wipro Ltd (WPRO IN) in deletion zone.
• Oil & Natural Gas Corp (ONGC IN), Coal India Ltd (COAL IN) and Adani Enterprises (ADE IN) are potential replacements with sector balance likely to come into play.
• Passive trackers will need to trade over 13 days of delivery volume on the potential index changes.

• Equities shrug off hawkish RBI rhetoric – eye on $3 Billion inflows from MSCI rejig & June Elections results
• Short dated IVs trade lower. Quarterly-expiry IVs continue to hold at >13.0% levels as they capture multiple event risks
• Short vega positions recommended as “High & Down” vol state persists. Use current scenario to buy tail hedges as protection for long Equity positions.