In this briefing:
- Yes Bank: In the Cross Hairs of the Regulator
- ECM Weekly (16 February 2019) – ByteDance, Embassy Office REIT, AB InBev Asia, CStone, Dexin
- Bharti Airtel – Performance Is Inflecting at Last. Vodafone IDEA, Not so Much.
1. Yes Bank: In the Cross Hairs of the Regulator
Yes Bank is in the cross hairs of the Reserve Bank of India (RBI), the banking regulator. On February 13, 2019, the bank issued a press release stating that the regulator’s risk assessment report (RAR) for the year ended March 31, 2018 revealed nil divergence, i.e. the bank’s net profits and asset quality were in conformity with the regulatory norms, unlike in FY2016 and FY2017. However, on February 15, 2019, the bank released a note stating that the RBI had pulled up the bank, as publicly disclosing a part of the RAR breaches regulatory confidentiality and is in violation of regulatory guidelines. While the RAR is indeed confidential, the RBI did not publicly admonish other banks like HDFC Bank, Axis Bank and Kotak Mahindra Bank (KMB) when they had publicly revealed nil divergence from their RARs. It is apparent that Yes Bank is the bad boy in the eyes of the regulator, and the bank will have to renew its efforts to change that perception. Shareholders have to therefore exercise caution and take the surge in the share price with a pinch of salt.
2. ECM Weekly (16 February 2019) – ByteDance, Embassy Office REIT, AB InBev Asia, CStone, Dexin
Aequitas Research puts out a weekly update on the deals that have been covered by Smartkarma Insight Providers recently, along with updates for upcoming IPOs.
It has been a fairly quiet week in the ECM space.
We are hearing that Douyu (game streaming like HUYA Inc (HUYA US), Tiger Brokers (backed by Jim Rogers), Genshuixue (education) have either filed confidentially or seeking to list in the US.
In Hong Kong, Bank of Guizhou is said to be planning for a US$1bn IPO and we heard that Zhejiang New Century Hotel Management is pre-marketing for its US$200m IPO. The PHIP has already been filed on the Hong Kong Exchange.
For upcoming IPOs, Dexin China Holdings (2019 HK) opened its books on Thursday, seeking to raise up to US$220m. We covered the IPO in Dexin China (德信中国) IPO Review – Key Issues Remain but 9M Results Showed Strong Growth.
In India, Embassy Office Parks REIT (EOP IN) pushed back its IPO to March – April. Sumeet Singh has already written a pre-IPO note, Embassy Office Parks REIT – Good Assets but Projections Might Be a Tad Too Bullish.
Last but not least, in Korea, Douglas Kim has already written an note on the Homeplus REIT (HREIT KS)‘s US$1.5bn IPO in Homeplus REIT IPO – The Largest Ever REIT IPO in Korea.
Other pre-IPO notes on upcoming mega IPOs that Aequitas Research have covered include ByteDance (字节跳动) IPO: How Jinri Toutiao Paves The Way for a Bigger Empire (Part 1), ByteDance (字节跳动) IPO: Tiktok the No.1 Short Video App for a Good Reason (Part 2), and Ab InBev Asia Pre-IPO – A Brief History of the Asia Pacific Operations – Eeking Out Growth in China.
Accuracy Rate:
Our overall accuracy rate is 72.1% for IPOs and 63.8% for Placements
(Performance measurement criteria is explained at the end of the note)
New IPO filings
- Reliance General Insurance (re-filed, India)
Below is a snippet of our IPO tool showing upcoming events for the next week. The IPO tool is designed to provide readers with timely information on all IPO related events (Book open/closing, listing, initiation, lock-up expiry, etc) for all the deals that we have worked on. You can access the tool here or through the tools menu.
News on Upcoming IPOs
- PineBridge-backed Uniparts gets SEBI nod to float IPO
- Cal-Comp Philippines eyes IPO by third quarter
- JERA new president says IPO is an option
- Singapore’s Zalora explores listing to fuel expansion
- S. Korea’s Homeplus files for up to $1.5 bln REIT IPO
- Korean bio unicorn in the making, Voronoi, to join the Kosdaq this year
Smartkarma Community’s this week Analysis on Upcoming IPO
- Homeplus REIT IPO – The Largest Ever REIT IPO in Korea
- Ecopro BM IPO: Valuation Analysis
- Embassy Office Parks REIT – Good Assets but Projections Might Be a Tad Too Bullish
- CStone Pharma (基石药业) IPO: Thoughts on Valuation (Part 2)
- Hansoh Pharma IPO Preview: A Decent Story Tarnished by a Huge Pre-IPO Dividend
- Ab InBev Asia Pre-IPO – A Brief History of the Asia Pacific Operations – Eeking Out Growth in China
- ByteDance (字节跳动) IPO: How Jinri Toutiao Paves The Way for a Bigger Empire (Part 1)
- ByteDance (字节跳动) IPO: Tiktok the No.1 Short Video App for a Good Reason (Part 2)
- Dreamtech IPO: Valuation Analysis
- Dexin China (德信中国) IPO Review – Key Issues Remain but 9M Results Showed Strong Growth
List of pre-IPO Coverage on Smartkarma
3. Bharti Airtel – Performance Is Inflecting at Last. Vodafone IDEA, Not so Much.
Bharti Airtel’s (BHARTI IN) recnt 3Q19 results hold out a glimmer of hope for the sector. After a precipitous decline in margins and returns since Jio entered the Indian telecom market in 2016, things have started to stabilize at last for Bharti. The same cannot be said for Vodafone Idea (IDEA IN) where extremely high leverage is limiting options. Chris Hoare does not expect a real turnaround in 2019 as Jio looks to create a 2+2 market (two operators (JIo and Bharti) and two weak/failing operators (IDEA and BSNL). While the pressure on Bharti is intense they have substantial other businesses (esp Africa) which ease the pressure somewhat. It may be difficult to put money to work in Indian telecoms at the moment given the pressure, but at some stage we believe a recovery does start and the stock to own will be Bharti. A turning point is close.
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