In today’s briefing:
- Swiggy (SWIGGY IN): US$7.6bn Lock-Up Expiry & Index Inclusion
- MSL: High ROCE, Strong Moat – Rides Energy Capex Surge
- Event Driven: Jubilant Agri & Consumer Products Demerger- Next Value Creator from the Bhartia Group?
- India’s Biggest Small-Cap Shell Game
- Farmers Lock Horns With Scientists Over Rubber Clone Yields In India
- NSE NIFTY50/ Vol Update / Improved Risk Sentiment & Truncated Week Cause Risk-Premia Compression
Swiggy (SWIGGY IN): US$7.6bn Lock-Up Expiry & Index Inclusion
- Swiggy (SWIGGY IN) listed in November 2024 and around 85% of the shares outstanding (US$7.6bn) will unlock on 13 May.
- Nearly 80% of the shares that unlock are held by pre-IPO PE/VC investors and they are 100% in the money in most cases. Expect the selldown to commence soon.
- Swiggy (SWIGGY IN) should be added to one global index in June, while inclusion in the other global index will require a small price increase or selling from PE/VC investors.
MSL: High ROCE, Strong Moat – Rides Energy Capex Surge
- Market leader with 55% share in seamless pipes, Rs2,400 Cr net cash, and stable Rs15,000–17,000/ton EBITDA backed by strong oil & gas demand.
- Efficient capital allocator delivering 20%+ ROCE, with consistent insider buying reflecting high promoter confidence.
- 26% profit CAGR over 5 years, yet trades at ~12x P/E, offering value in a structurally growing industry.
Event Driven: Jubilant Agri & Consumer Products Demerger- Next Value Creator from the Bhartia Group?
- Separation of fertilizer division enables sharper valuation for adhesives, removing drag from losses and unlocking pure-play growth potential.
- High growth with underpriced products; margin expansion likely as brand strength builds, closing gap with Pidilite and Jyoti Resins.
- Once loss-making agri business now EBIT-positive; post-demerger focus may revive segment and surprise on valuations.
India’s Biggest Small-Cap Shell Game
- The Mahadev Betting Scam exposed the infiltration of illegal gambling money into the stock market, manipulating small-cap stocks through offshore shell companies and pump-and-dump strategies.
- This scandal demonstrates how vulnerable markets are to operator-driven speculation, leading to artificial stock price surges, which mislead investors and undermine market integrity, creating systemic risks.
- The episode emphasizes the need for heightened due diligence, transparency, and scrutiny of foreign portfolio investors, encouraging investors to be more cautious of unexplained stock movements and shell company involvement.
Farmers Lock Horns With Scientists Over Rubber Clone Yields In India
- Farmers say RRII 400 clone series performs below par
- RRII Head rejects charges, tells farmers to follow guidance
- Kerala farmers demand introduction of GM crops
NSE NIFTY50/ Vol Update / Improved Risk Sentiment & Truncated Week Cause Risk-Premia Compression
- Improved risk sentiment & holiday truncated week cause compression of risk premia. Monthly IVs fell over -5.0 vol-points over the 3-day session to close at 14.2%.
- Vol-Regime continues to stay in “High & Up” vol-state. Stabilization in IVs & RVs required for switch to “High & Down”. Extreme Backwardation of the Vol-curve has now subsided
- Tactical Implications: (1) Negative Gamma strategies have been battered. Avoid allocation to these while “High & Up” vol-state prevails.
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