In today’s briefing:
- Relative Value Opportunities in Asia-Pac, Pair Trade Roundup (29 Sep)
- IPO Review: India’s Youngest and Largest Player for Ethanol, Worth a Bet?
- ReNew Energy Global (RNW US): Decision Time On NBIO
- Nelcast Ltd – Plant Visit Insights, Small-Cap Rising Star Gearing Up for Explosive Growth
Relative Value Opportunities in Asia-Pac, Pair Trade Roundup (29 Sep)
- Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
- Highlights: Currently ten pair trade opportunities across four markets and four sectors persist.
- Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.
IPO Review: India’s Youngest and Largest Player for Ethanol, Worth a Bet?
- TBL boasts of the largest ethanol distillery capacity (3.6% market share). With capex for input fungibility done, the company has set its sights on becoming the largest producer soon.
- The expansion in Compressed Bio-gas compounds the growth levers, but will require material working capital investments. Sustainable aviation fuel opportunity also seems compelling in light of the recent government push.
- IPO seems priced to perfection with deal multiples of 12x FY26 EBITDA, visibly at the higher end of 6-14x multiple for peers. Faster deleveraging may add to market cap upside.
ReNew Energy Global (RNW US): Decision Time On NBIO
- Back on the 10th December 2024, ReNew Energy Global (RNW US), an Indian renewable energy play, announced a non-binding Offer of US$7.07/share, by way of a Scheme.
- The bidding consortium, comprising (mainly) pre-IPO investors CPP, ADIA, Abu Dhabi Future Energy, and founder Sumant Sinha, collectively holding 64%. Non-binding terms were bumped to US$8/share on the 3rd July.
- ReNew’s Special Committee will provide “public comment regarding these matters at such time as there is a material development in the process, and by no later than 30 September 2025“.
Nelcast Ltd – Plant Visit Insights, Small-Cap Rising Star Gearing Up for Explosive Growth
- We visited two manufacturing plants of Nelcast Ltd (NELC IN) located in the southern part of India. In this insight we present the key takeaways from visit.
- Specifically the Pedapariya plant which was facing low capacity utilization is seeing signs of steep ramp up. Insights on this are provided in the note.
- With no significant capex coming up, the ramp of capacity could make Nelcast Ltd (NELC IN)a dark horse in terms of investor returns. We highlight our projections in this note.
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