Equity Capital Markets

Weekly Top Ten Equity Capital Markets – Feb 18, 2024

By February 18, 2024 No Comments
This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

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1. Toei Animation (4816) – Shareholder Selldown To Meet Listing Hurdles – Bigly, Heavy, More to Come

By Travis Lundy, Quiddity Advisors

  • In December 2021, when companies were required to file statements with the TSE as to plans to meet continuing listing requirements, Toei Animation (4816 JP) had a Plan.
  • That plan? Get from a then-current 15.5% Tradable Shares level to 25.0% by 31 March 2025. That was “OK” though later, the TSE asked companies to speed it up.
  • Today, shareholders Sony and Bandai Namco announced an equity offering to sell down up to 4.48mm shares in a domestic+overseas offering. It’s big, heavy, and there is more to come.

2. Toei Animation Placement – Looks Ripe for a Correction

By Sumeet Singh, Aequitas Research

  • Bandai Namco (7832 JP) and Sony Pictures are looking to raise up to US$525m via selling around 10.66% of Toei Animation (4816 JP) (TA).
  • The purpose of the placement is to unwind some of the cross-shareholding, as well as help TA to maintain its listing in the Standard Segment.
  • In this note, we will talk about the placement and run the deal through our ECM framework.

3. Toei Animation (4816 JP): A US$550 Million Secondary Offering

By Arun George, Global Equity Research Ltd

  • Toei Animation (4816 JP) has announced a secondary offering of up to 4.5 million shares (including overallotment). Bandai Namco Holdings (7832 JP) and Sony Corp (6758 JP) are the sellers.
  • The offering will allow Toei Animation to maintain its listing in the TSE Standard Market and enable Bandai Namco and Sony to reduce and liquidate cross-shareholdings.
  • Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will likely fall between 27 February and 4 March (likely 27 February).

4. Initial Thoughts on Hyundai Motor India IPO

By Douglas Kim

  • Hyundai Motor India has been taking initial steps for an IPO. We believe this IPO could be completed sometime in 4Q 2024. 
  • Hyundai Motor India Limited (HMIL) IPO offering size is estimated to be at least US$3 billion, which would be one of the largest in India and the world this year.
  • If HMIL is valued at US$25 billion and HMC sells a 15% stake, its remaining 85% stake would be worth US$21 billion, representing 55% of HMC’s market cap. 

5. APR IPO Book-Building Results Analysis

By Douglas Kim

  • APR reported a very strong IPO book-building results. APR IPO price has been determined at 250,000 won, which is 25% higher than the high end of the IPO price range.
  • A total of 1,969 institutional investors participated in this IPO book-building. The demand ratio was 663 to 1. APR IPO will start trading on 26 February. 
  • Our base case valuation of APR is target price of 370,809 won per share which represents a 48% upside from the IPO price of 250,000 won. 

6. KB Financial Placement – Momentum Has Been Strong and the Last Clean-Up Sale Has Done Well

By Clarence Chu, Aequitas Research

  • The Carlyle Group / (CG US) via Kingsman Investment, is looking to raise US$244m from selling its entire stake in KB Financial (105560 KS).
  • Carlyle has been invested in the firm since mid-2020, where it then expressed that it would hold on to its stake for at least three and a half years. 
  • The deal would be a small one to digest at just 3.8 days of KB Financial’s three month ADV, representing 1.2% of its current mcap.

7. ECM Weekly (12th Feb 2024) – Nissan/Renault, Metcash, Digital Core, SBFC, Thai Credit, Park Hotel

By Sumeet Singh, Aequitas Research

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • On the IPO front, Thai Credit Bank finally ended Thailand’s long dry spell, although it wasn’t a happy ending.
  • For placements, REITs appear to be coming back to life with rates now having peaked.

8. Industrial & Infrastructure Investment Corp Placement – Back to the Markets for the 12th Time

By Ethan Aw, Aequitas Research

  • Industrial & Infrastructure Fund Investment (3249 JP) is looking to raise around US$341m in its primary follow-on offering to acquire 28 properties and an equity interest in a silent partnership. 
  • The deal is a somewhat large one to digest, at 83 days of three month ADV and 16.2% dilution.
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

9. CICC-Backed Chinese Chip Design Firm Fined Over Fraudulent IPO Application

By Caixin Global, Caixin Global

  • A semiconductor company sponsored by China International Capital Corp. Ltd. (CICC), one of the country’s top investment banks, has been fined over IPO application fraud, the China Securities Regulatory Commission (CSRC) said in a statement Friday.
  • S2C Ltd., which specializes in electronic design automation, has been fined 4 million yuan ($563,095) for fraudulent activities in its attempt to list on Shanghai’s tech-heavy STAR Market.
  • The move marks the CSRC’s latest effort to enforce strict information disclosure requirements and tough penalties for market violations under its registration-based IPO mechanism.

10. Bharti Hexacom Pre-IPO – The Negatives – No Clear Rationale for Listing

By Sumeet Singh, Aequitas Research

  • Bharti Hexacom is looking to raise up to US$1bn in its upcoming India IPO.
  • Bharti Hexacom (BH) is a communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services to customers in the Rajasthan and the North East telecommunication circles in India.
  • In this note, we talk about the not-so-positive aspects of the deal.