Daily Brief Energy/Materials: JSW Steel Ltd, Zhejiang Yongtai Tech A, SKC Co Ltd and more

In today’s briefing:

SENSEX Ad Hoc Rebalance: JSW Steel Replaces HDFC
Zhejiang Yongtai Technology GDR Listing – Discount Wider than Recent Deals & Inline with Average
SKC: Aggressive Plans to Expand Rechargeable Battery & Semiconductor Materials – But At What Price?

SENSEX Ad Hoc Rebalance: JSW Steel Replaces HDFC

Following HDFC Limited (HDFC IN)‘s delisting, JSW Steel Ltd (JSTL IN) will be added to the S&P BSE SENSEX Index (SENSEX INDEX EQUITY) at the close on 12 July.
The change was largely expected, but passive trackers need to buy over 5 days of ADV and nearly 12 days of delivery volume of JSW Steel Ltd (JSTL IN) .
The HDFC Limited (HDFC IN) delisting could help Wipro Ltd (WPRO IN) in avoiding deletion from the S&P BSE SENSEX Index (SENSEX INDEX EQUITY) in December.

Zhejiang Yongtai Tech A (002326 CH) is looking to raise US$107m in its London GDR listing. Huatai is the sole bookrunner on the deal.
The firm is offering 11.4m GDRs (1 GDR to 5 ordinary A-shares) for sale, at a fixed 12.7% discount to last close on its A-share leg.
The deal is a relatively small one for the firm to digest, representing just 3.9 days of three month ADV on its A-share leg.

SKC announced aggressive plans to expand its rechargeable battery, semiconductor, and ecofriendly materials and it plans to invest about 5 trillion to 6 trillion won in these businesses by 2027.
We believe that the company will use a combination of asset sales, sale of its treasury shares, and additional debt and equity raising in the next 3-5 years.
While the market welcomes sale of non-core businesses such as SK Pucore and sale of treasury shares, it is likely to have greater concerns about additional debt and equity raising.

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