ECM Daily Briefs | Page 3 of 120

In today’s briefing:

Interglobe Aviation (Indigo) Placement – Another US$800m+ Deal, This Time by the Correct Co-Founder
Niva Bupa Health Insurance Pre-IPO – Strong GWP Growth, However Some Risks Remain
IGI (India) Pre-IPO Tearsheet
Inventurus Knowledge Solutions Pre-IPO Tearsheet
Pre-IPO Zhou Liu Fu Jewellery – The Potential Risks and Concerns Brought by the Business Model

Interglobe Aviation (Indigo) Placement – Another US$800m+ Deal, This Time by the Correct Co-Founder

InterGlobe Aviation Ltd (INDIGO IN)’s co-founder, Rakesh Gangwal, aims to raise around US$850m via selling around 3.8% stake in Indigo.
He had earlier stated his intention to pare down his stake after a long drawn, and very public battle, with his co-founder Rahul Bhatia. He has sold many times before.
In this note, we will talk about the lockup dynamics and possible placement.

Niva Bupa Health Insurance Pre-IPO – Strong GWP Growth, However Some Risks Remain

By Clarence Chu

Niva Bupa Health Insurance (1226871D IN) is looking to raise US$360m from its upcoming India IPO. The IPO will consist of both primary and secondary shares.
Niva Bupa Health Insurance (Niva Bupa) is a health insurance firm. Its portfolio consists of health (including retail and group), personal accident, and travel insurance.
In this note, we look at the firm’s past performance.

IGI (India) Pre-IPO Tearsheet

IGI (India) Limited (2261751D IN) is looking to raise about US$480m in its upcoming India IPO. The deal will be run by Axis, Kotak, MS, and SBI Caps.
IGI India is part of the International Gemmological Institute (IGI) group. As of 22nd August 2024, IGI India handled operations of the IGI business in India and Türkiye.
Its primary business is in provision of services related to certification and accreditation of natural diamonds, laboratory-grown diamonds, studded jewellery and coloured stones as well as offering of educational programs.

Inventurus Knowledge Solutions Pre-IPO Tearsheet

Inventurus Knowledge Solutions (IKSINCD IN) is looking to raise up to US$400m in its upcoming India IPO. The deal will be run by ICICI, JM Financial, Jefferies, Nomura and JPM.
Inventurus Knowledge Solutions (Inventurus from hereon) is a technology-enabled healthcare solutions provider, offering a care enablement platform which assists physician enterprises in the US, Canada and Australia.
Its physician-oriented platform includes clinical documentation solutions, patient scheduling assistance, automated prescription refill solutions and clinical document management, amongst others.

Pre-IPO Zhou Liu Fu Jewellery – The Potential Risks and Concerns Brought by the Business Model

By Xinyao (Criss) Wang

The franchise model of Zhou Liu Fu is the biggest performance contributor, which is also the main reason for the Company’s rapid expansion and high gross profit margin.
However, the CSRC questioned the rationality of franchise model and thus rejected its A-share IPO. We think the high revenue growth/profit margin may not be sustainable in the long term.
Pre-IPO post-investment valuation was approximately 7.407 billion yuan. Zhou Liu Fu has applied for H-Share full circulation, which may put pressure on stock price performance after the lockdown period expires.

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Aug 28

Daily Brief ECM: Keppel Infra Trust Placement – While the Raising Is Relatively Large and more

In today’s briefing:

Keppel Infra Trust Placement – While the Raising Is Relatively Large, Its past Deals Have Done Well
Initial Thoughts on the Kioxia IPO – Impact on SK Hynix and Samsung Electronics
Latest Information on LG Electronics India Subsidiary’s IPO on the Indian Stock Market
Manjushree Technopack Pre-IPO Tearsheet
Bicara Therapeutics IPO: A Promising Combination with Merck’s Keytruda For Patients With HNSCC
Bajaj Housing Finance Pre-IPO – Thoughts on Valuation
Poly Medicure (PLM IN): Placement to Fund Capex and M&A Initiatives Amid Favorable Demand Backdrop

Keppel Infra Trust Placement – While the Raising Is Relatively Large, Its past Deals Have Done Well

By Clarence Chu

Keppel Infrastructure Trust (KIT SP) is looking to raise around S$206m (US$158m) in its primary placement.
Proceeds will be used to pay down its bridge loan facility linked to its Ventura acquisition. KIT also appears to have secured its unitholders’ approval for the raising earlier.
In this note, we run the deal through our ECM framework and comment on deal dynamics.

Initial Thoughts on the Kioxia IPO – Impact on SK Hynix and Samsung Electronics

Kioxia is getting ready to complete its IPO in Japan as soon as in October. Kioxia’s valuation is expected to exceed JPY 1.5 trillion (about USD 10.3 billion).
SK Hynix’s stake in Kioxia (through Bain led consortium) is 19%. SK Hynix’s stake in Kioxia would rise to 34% if the CBs are converted into equity.
The IPO of Kioxia has mixed implications for SK Hynix which is a major shareholder. However, the IPO of Kioxia has a more direct negative impact on Samsung Electronics.

Latest Information on LG Electronics India Subsidiary’s IPO on the Indian Stock Market

By Sanghyun Park

LG Electronics has already picked the bankers for the Indian IPO. JP Morgan and Morgan Stanley are on board as the lead underwriters, along with two unnamed local Indian banks.
LGEIL is aiming to submit the Draft Red Herring Prospectus (DRHP) to India’s SEBI by the fourth quarter of this year.
LG Electronics plans to raise about USD 700 million by selling around 25% of its stake in a secondary offering.

Manjushree Technopack Pre-IPO Tearsheet

Manjushree Technopack (MTPL IN) is looking to raise about US$360m in its upcoming India IPO. The deal will be run by Avendus, Citi, GS, JM Fin and ICICI Sec.
Manjushree Technopack Limited is a one stop packaging solutions provider with end-to-end capabilities (from design to delivery) across containers, preforms, caps and closures, pumps and dispensers and captive recycling capabilities.
It is the largest rigid plastic packaging (RPP) player in terms of installed capacity in India as of March 31, 2024, according to the Technopak Report.

Bicara Therapeutics IPO: A Promising Combination with Merck’s Keytruda For Patients With HNSCC

By Andrei Zakharov

Bicara Therapeutics, a clinical-stage biotech company with focus on the treatment of patients with HPV-negative head and neck cancer, files for a $200M IPO.
The biotech firm was backed by Biocon Limited, India’s largest biopharmaceutical company, venture capital and investment firms, among others.
I believe Bicara Therapeutics will succeed in its pivotal Phase 2/3 trial of their bifunctional antibody in combination with Keytruda (pembrolizumab) during 2025.

Bajaj Housing Finance Pre-IPO – Thoughts on Valuation

Bajaj Housing Finance (BHF IN) is looking to raise around US$830m in its upcoming India IPO.
BHF is a non-deposit taking housing finance company engaged in mortgage lending since FY18. Its mortgage products include home loans, loans against property, lease rental discounting and developer financing.
We have looked at the company’s past performance and undertaken a peer comparison in our earlier notes. In this note we talk about valuations.

Poly Medicure (PLM IN): Placement to Fund Capex and M&A Initiatives Amid Favorable Demand Backdrop

By Tina Banerjee

Poly Medicure (PLM IN) raised INR10B through QIP and allotted ~5M equity shares to eligible institutional buyers. Lighthouse India Fund IV AIF has been issued 20.5% of the QIP shares.
The company intends to use the proceeds to fund capex and inorganic initiatives. The company is setting up three new plants, to expand offerings in high-value therapeutic areas.
Poly Medicure intends to acquire businesses that offer similar products, which will help the company to expand product portfolio and increase reach in various global markets.

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Aug 27

Daily Brief ECM: Hyundai Motor India IPO Valuation Analysis and more

In today’s briefing:

Hyundai Motor India IPO Valuation Analysis
STCube: Rights Offering Capital Raise of 89 Billion Won
JSW Cement Pre-IPO Tearsheet
Kioxia IPO Early Re-Look – Better Placed This Time Around
Premier Energies IPO – RHP Updates & Quick Thoughts on Peer Comp and Valuation

Hyundai Motor India IPO Valuation Analysis

Our base case valuation of Hyundai Motor India is market cap of US$18.6 billion, based on P/E of 24.4x our estimated net profit of 64.1 billion INR in FY25.
There have been some increasing concerns about Hyundai Motor India paying out higher royalty to its parent Hyundai Motor and dividend to shareholders, which could lower profit.
According to a recent article by livemint, the expected valuation of Hyundai Motor India has fallen to about USD16 billion to USD20 billion.

STCube: Rights Offering Capital Raise of 89 Billion Won

STCube announced it plans to increase capital by 89 billion won (13 billion won through a third party rights offering and 75.7 billion won through shareholder preferred capital increase).
We have a positive view of STCube’s capital raise and there could be some alpha generating returns in our view.
The fact that the company’s share price surged nearly 5x from the last rights offering in May 2022 (to October 2022) is likely to positively impact capital raise this time.

JSW Cement Pre-IPO Tearsheet

JSW Cement Limited (9858514Z IN) is looking to raise about US$480m in upcoming India IPO. The deal will be run by JMFin, Axis, Citi, DAM, GS, Jefferies, Kotak, SBI Caps.
JSW Cement (JSWC) is a cement manufacturing company in India focused on manufacturing green cementitious products comprising blended cement, ordinary portland cement, ground granulated blast furnace slag among other products.
According to CRISIL, JSWC was the fastest growing cement manufacturing company in India, in terms of increase in installed grinding capacity and sales volume from FY14-24.

Kioxia IPO Early Re-Look – Better Placed This Time Around

Kioxia Holdings (6600 JP) aims to list in Japan by Oct 2024 at a valuation of over US$10bn, as per media reports.
Kioxia is a manufacturer and a global leader in flash memory and solid state drives for smartphones, PCs, enterprise servers and data centers
In this note, we take an early look at the possible listing.

Premier Energies IPO – RHP Updates & Quick Thoughts on Peer Comp and Valuation

Premier Energies Limited (0377949D IN) is looking to raise up to US$337m in its India IPO, after upsizing from an earlier reported float of US$300m.
The firm manufactures solar photovoltaic (PV) cells, and solar modules. It also executes engineering, procurement, and construction (EPC) projects and provides follow-up operation and maintenance (O&M) services.
Previously, we talked about the company’s historical performance. In this note, we provide a summary of its RHP updates and share our quick thoughts on peer comparison and valuation.

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Aug 26

Daily Brief ECM: ECM Weekly (26th Aug 2024) – Zomato and more

In today’s briefing:

ECM Weekly (26th Aug 2024) – Zomato, Colowide, Star Asia, Yamaha, 99Speed, Hero Fin, Bajaj Housing

ECM Weekly (26th Aug 2024) – Zomato, Colowide, Star Asia, Yamaha, 99Speed, Hero Fin, Bajaj Housing

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, we looked at a number of upcoming listings in India.
There was a revival in placement flows during the week, after a lull over the past few weeks.

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Aug 25

Daily Brief ECM: Narrative and Numbers | Housing Finance – PSUs | FY24 and more

In today’s briefing:

Narrative and Numbers | Housing Finance – PSUs | FY24
Yamaha Motors Placement – A Relatively Small Cross-Shareholding Unwind

Narrative and Numbers | Housing Finance – PSUs | FY24

By Pranav Bhavsar

This Insight focuses on PSU owned Housing Finance companies – PNB Housing Finance Ltd (PNBHOUSI IN) , LIC Housing Finance (LICHF IN) and Can Fin Homes (CANF IN).
PNB Housing aims to focus on affordable housing, LIC Housing Finance is possibly struggling due to its size and a conservative risk appetite.
Can Fin Homes exhibits some serious questions regarding its internal controls and underwriting policies.

Yamaha Motors Placement – A Relatively Small Cross-Shareholding Unwind

A group of shareholders aims to raise around US$330m via selling around 3.6% of Yamaha Motor (7272 JP).
This will be another cross-shareholding unwind and hence, won’t be a huge surprise, although the stock hasn’t been doing particularly well lately.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

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Aug 24

Daily Brief ECM: CMES AI Robotics IPO Preview and more

In today’s briefing:

CMES AI Robotics IPO Preview

CMES AI Robotics IPO Preview

CMES AI Robotics is getting ready to complete its IPO on KOSDAQ in October. The expected IPO price is 20,000 won to 24,000 won.
CMES provides intelligent robot solutions that combine artificial intelligence (AI) and three-dimensional (3D) vision technology. CMES’s core technologies include 3D vision sensors and image processing algorithms.
Robotics related IPOs have generated enormous interest in Korea. Although CMES is a small cap name, this robotics related IPO is also likely to garner high interest as well.

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Aug 23

Daily Brief ECM: Asirvad Micro Finance Pre-IPO – Accelerating Profitability Growth but with a Litany of Legal Cases and more

In today’s briefing:

Asirvad Micro Finance Pre-IPO – Accelerating Profitability Growth but with a Litany of Legal Cases
Kalpataru Pre-IPO Tearsheet

Asirvad Micro Finance Pre-IPO – Accelerating Profitability Growth but with a Litany of Legal Cases

Asirvad Micro Finance Limited (1053198D IN) is looking to raise around US$183m in its upcoming India IPO.
Asirvad Micro Finance Limited (Asirvad) is a non-banking finance company (NBFC), and a microfinance institution (MFI) offering small loans to low-income women in India.
In this note, we talk about the company’s historical performance.

Kalpataru Pre-IPO Tearsheet

Kalpataru Limited (KTARU IN) is looking to raise about US$189m in its upcoming India IPO. The deal will be run by ICICI, JM Fin and Nomura.
Kalpataru is an integrated real estate development company involved in activities associated with real estate development, including identification and acquisition of land, planning, designing, execution, sales, and marketing of projects.
It is a prominent real estate developer in the Mumbai Metropolitan Region (MMR) and is present across all micro-markets in MMR, as per an Anarock Report.

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Aug 22

Daily Brief ECM: Ecom Express Pre-IPO Tearsheet and more

In today’s briefing:

Ecom Express Pre-IPO Tearsheet
99 Speedmart Holdings IPO – Digestible Valuation
99 Speed Mart IPO: The Bear Case
Bajaj Housing Finance Pre-IPO – Peer Comparison – Bigger and Faster

Ecom Express Pre-IPO Tearsheet

Ecom Express Limited (1062300D IN) is looking to raise about US$310m in its upcoming India IPO. The deal will be run by Axis, IIFL Securities, Kotak and UBS.
Ecom Express operates a pan-India express logistics network covering first-mile pick-up, mid-mile transportation and last-mile delivery as well as reverse logistics (returns) and fulfilment services (warehousing).
According to Redseer, the company had the widest pan-India coverage and in Tier 2+ regions compared to its peers, covering over 27,000 PIN codes, as of March 31, 2024.

99 Speedmart Holdings IPO – Digestible Valuation

By Clarence Chu

99 Speed Mart Retail Holdings (99SPD MK) is looking to raise US$530m in its Malaysia IPO. The IPO will be a mix of primary and secondary shares.
99 Speed Mart Retail Holdings (99 Speedmart) operates the “99 Speedmart” chain of mini-market outlets, retailing daily necessities across Malaysia.
In our previous notes, we looked at the firm’s past performance. In this note, we undertake a peer comparison and discuss our thoughts on valuation.

99 Speed Mart IPO: The Bear Case

By Arun George

99 Speed Mart Retail Holdings (99SPD MK), a leading grocery retailer in Malaysia, is seeking to raise US$530 million at RM1.65 per share.
In 99 Speed Mart IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on lacklustre outlet KPIs, indications of margin pressure, significant pre-IPO dividends and a significant secondary offering.

Bajaj Housing Finance Pre-IPO – Peer Comparison – Bigger and Faster

Bajaj Housing Finance (BHF IN) is looking to raise around US$830m in its upcoming India IPO.
BHF is a non-deposit taking housing finance company engaged in mortgage lending since FY18. Its mortgage products include home loans, loans against property, lease rental discounting and developer financing.
We have looked at the company’s past performance in our earlier notes. In this note we will undertake a peer comparison.

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Aug 21

Daily Brief ECM: COLOWIDE (7616) – UGLY Register On Expensive Co Needs a Capital Construct Upgrade and more

In today’s briefing:

COLOWIDE (7616) – UGLY Register On Expensive Co Needs a Capital Construct Upgrade, Won’t Get It Here
Colowide Placement – Needs a Very Large Correction
I-Scream Media IPO Book Building Results Analysis
Hyosung Siblings’ Cross-Transfers Are Done: The 10%+ Hyosung Corp Stake Block Deal Remains
CJ Darcl Logistics Pre-IPO – Diversifying and Integrating Operations for a Larger Pie
Lumir IPO Valuation Analysis
Hero Fincorp Pre-IPO – The Negatives – Still Has Issues to Contend With
Pre-IPO Tong Ren Tang Healthcare Investment – Profitability and Growth Sustainability Are Worrying

COLOWIDE (7616) – UGLY Register On Expensive Co Needs a Capital Construct Upgrade, Won’t Get It Here

By Travis Lundy

Colowide Co Ltd (7616 JP) is an industrial fastish-food operator in Japan. They sell several dozen kinds of cuisine under several dozen brands, owned and franchised in Japan and overseas.
The company “philosophy” is “Everything we do is for our customers and employees.” The stock is up 30% in 10yrs. It pays no dividend, but it pays a big yutairimawari.
This means Real World Float is 100% owned by retail who want restaurant coupons. This offering will be bought by index, short covers, and another 20-30k coupon holders.

Colowide Placement – Needs a Very Large Correction

Colowide Co Ltd (7616 JP) aims to raise around US$230m in order to fund its prospective M&A transactions over the next few years
While the company has undertaken a number of M&A transactions in the past, it hasn’t clearly stated its intended targets for this round.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

I-Scream Media IPO Book Building Results Analysis

I-Scream Media reported its IPO book building results. The IPO price has been determined at 32,000 won, which is at the low end of the IPO price range.
A total of 561 institutional investors participated in the IPO survey. The final demand ratio was 31.3 to 1.
Our valuation analysis suggests an implied price per share of 41,450 won, which represent a 29.5% upside from the IPO price.

Hyosung Siblings’ Cross-Transfers Are Done: The 10%+ Hyosung Corp Stake Block Deal Remains

By Sanghyun Park

The Hyosung siblings swapped ₩60B in shares over August 13-14, raising the elder brother’s Hyosung Corp stake to 40.9% and lowering HS Hyosung below 3%.
The younger brother must sell additionally at least 11.2% of his 14.2% Hyosung Corp stake. The elder brother may buy, but his cash position and 40% stake limit his need.
This block deal will be the first to apply the new pre-disclosure rule. So, we should use it to test how the rule affects price movements for better entry timing.

CJ Darcl Logistics Pre-IPO – Diversifying and Integrating Operations for a Larger Pie

CJ Darcl Logistics Limited (1506129D IN) is looking to raise around US$100m in its upcoming India IPO.
CJ Darcl Logistics (CJDL) is a diversified logistics company in India, with market leadership in full truck load (FTL) vertical in terms of revenue for FY23, according to CRISIL.
In this note, we talk about the company’s historical performance.

Lumir IPO Valuation Analysis

Base case valuation of Lumir is target price of 18,542 won per share. Given the low upside relative to IPO price range, we have a Negative view of this IPO.
Our net profit estimates in 2025 and 2026 are 38% and 63.3% lower than the company’s estimates.
Lumir provides key technologies for satellite systems, including small synthetic aperture radar (SAR) satellite systems and payloads.

Hero Fincorp Pre-IPO – The Negatives – Still Has Issues to Contend With

Hero FinCorp (HF) is looking to raise around US$438m in its upcoming India IPO.
HF is a non-deposit taking NBFC. It offers a suite of financial products catering primarily to the retail segment and the MSME customer segment in India.
In this note, we talk about the not-so-positive aspects of the deal.

Pre-IPO Tong Ren Tang Healthcare Investment – Profitability and Growth Sustainability Are Worrying

By Xinyao (Criss) Wang

Tong Ren Tang’s performance growth is mainly driven by M&As. Its organic growth and operation management capability are not strong, leading to the concerns on the sustainability of future growth.
Profit margin is disappointing.If Tong Ren Tang fails to balance the interests of different parties and control costs/expenses,low profit margins will be the norm despite the growth of revenue scale.
From the perspectives of revenue scale, profitability, operational efficiency, business model, there’s still a gap between Tong Ren Tang and Gushengtang. Tong Ren Tang’s valuation should be lower than Gushengtang.

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Aug 20

Daily Brief ECM: Peptron Rights Issue: The 25% Discount Is an Attractive Outright Position Opportunity and more

In today’s briefing:

Peptron Rights Issue: The 25% Discount Is an Attractive Outright Position Opportunity
Lumir IPO Preview
99 Speed Mart IPO: The Bull Case
Zomato Placement – Momentum Is Very Strong, past Ant Related Deals Have Been Mixed
Star Asia Investment Corp Placement – Needs a Decent Correction Leading up to Pricing
Pre-IPO Medtide – The Industry, the Business and the Concerns
Hero Fincorp Pre-IPO – The Positives – Riding on the Parent’s Brand

Peptron Rights Issue: The 25% Discount Is an Attractive Outright Position Opportunity

By Sanghyun Park

Peptron’s lack of single-stock futures means no risk-free arbitrage but also less speculative selling, making the 25% discount an attractive outright position opportunity.
The low capital increase rate may stabilize the stock price, and more forfeited shares could lower the cost of securing subscription rights during the trading window.
Consider buying rights during the trading period or targeting forfeited shares. Conservatively estimate the final offering price range to set a profitable cost for securing rights.

Lumir IPO Preview

Lumir is getting ready to complete its IPO on KOSDAQ in September. The IPO which is expected to raise between 49.5 billion won to 61.5 billion won.
Lumir specializes in the development of observation satellite technology including image data processing devices and onboard computers for a number of government satellite series.
Lumir had sales of 12.1 billion won (up 90.5% YoY) in 2023. Its sales surged by 477% YoY to reach 8.2 billion won in 1H24.

99 Speed Mart IPO: The Bull Case

By Arun George

99 Speed Mart Retail Holdings (99SPD MK), a leading groceries retailer in Malaysia, is seeking to raise US$530 million at RM1.65 per share.
99 Speed Mart is Malaysia’s largest mini-market player and leading grocery retailer, holding a market share of 40.1% and 11.6% in 2023, respectively.
The bull case rests on a large TAM, rising market share, robust revenue growth underpinned by SSSG, a store expansion-driven growth strategy, profitability, cash generation, and modest leverage.

Zomato Placement – Momentum Is Very Strong, past Ant Related Deals Have Been Mixed

AntFin is looking to raise around US$400m by selling around 2% of Zomato (ZOMATO IN).
Ant Group had earlier sold some of its stake in Nov 2023 and Mar 2024, with the deals producing a mixed bag result.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.

Star Asia Investment Corp Placement – Needs a Decent Correction Leading up to Pricing

Star Asia Investment (3468 JP) is looking to raise around US$118m in its primary follow-on offering to acquire four hotels. The acquisition will amount to a total of JPY34.7bn (US$237.5m).
The deal is a somewhat large one to digest, at 83 days of three month ADV and 13.3% of TSO .
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Pre-IPO Medtide – The Industry, the Business and the Concerns

By Xinyao (Criss) Wang

Medtide relies heavily on limited number of customers to contribute performance. If there is any significant reduction in demand by its major customers, Medtide’s performance growth would be materially/adversely affected.
Due to geopolitical conflicts, pharmaceutical companies are becoming more cautious about their reliance on China CXO. So, the development of Medtide’s overseas business would become more uncertain in this context.
Medtide’s business scale is still small and its position in the global peptide CXO industry is not as strong as described. Valuation of Medtide should be lower than peers.

Hero Fincorp Pre-IPO – The Positives – Riding on the Parent’s Brand