Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Home First Finance / Equity Capital Markets

Home First Finance (HFF) is an affordable housing finance company targeting first time home buyers in low and middle-income groups. The company aims to raise around US$160m in its India IPO. It is backed by True North, GIC and Bessemer and has recently obtained an investment from Warburg Pincus as well.HFF has grown rapidly over the past few years, driven by an expansion in its branch network and large number of new customers. Over FY17-20, HFF’s loan grew at a CAGR of 62%, while its earnings grew even faster with NII growing at 68%, PPoP at 117% and PAT at 128% CAGR.  It still remains largely focussed on housing loans and has pristine asset quality.However, its funding sources lack diversity and its margin is artificially inflated by its high capitalisation. Furthermore, the company talks a lot about tech but a lot of its functions appear to be still very contact heavy and hence, salesforce/customer service dependent.I have covered various aspects of the deal in my earlier notes,  <a href="https://www.smartkarma.com/insights/home-first-finance-pre-ipo-riding-on-affordable-housing" target="_blank" rel="noopener">Home First Finance Pre-IPO - Riding on affordable housing</a> and <a href="https://www.smartkarma.com/insights/home-first-finance-pre-ipo-earnings-not-showing-the-covid-strain-but-other-metrics-are" target="_blank" rel="noopener">Home First Finance Pre-IPO - Earnings not showing the COVID strain but other metrics are</a>.In this note I’ll run the deal through our ECM framework and talk about recent updates.

Home First Finance (HFF) is an affordable housing finance company targeting first time home buyers in low and middle-income groups. The company aims to raise around US$160m in its India IPO. It is backed by True North, GIC and Bessemer and has recently obtained an investment from Warburg Pincus as well.HFF has grown rapidly over the past few years, driven by an expansion in its branch network and large number of new customers. Over FY17-20, HFF’s loan grew at a CAGR of 62%, while its earnings grew even faster with NII growing at 68%, PPoP at 117% and PAT at 128% CAGR.  It still remains largely focussed on housing loans and has pristine asset quality.However, its funding sources lack diversity and its margin is artificially inflated by its high capitalisation. Furthermore, the company talks a lot about tech but a lot of its functions appear to be still very contact heavy and hence, salesforce/customer service dependent.I have covered various aspects of the deal in my earlier notes,  Home First Finance Pre-IPO - Riding on affordable housing and Home First Finance Pre-IPO - Earnings not showing the COVID strain but other metrics are.In this note I’ll run the deal through our ECM framework and talk about recent updates.

Home First Finance IPO - It’s Not Really Cheap, Banking on Momentum

Indigo Paints (IP) aims to raise around US$160m in its India IPO. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.I've covered the background and company performance in my previous insight, <a href="https://www.smartkarma.com/insights/indigo-paints-ipo-growing-fast-but-future-growth-won-t-come-as-easy" target="_blank" rel="noopener">Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy</a>.In this insight, I'll talk about earnings forecast and valuations.

Indigo Paints (IP) aims to raise around US$160m in its India IPO. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.I've covered the background and company performance in my previous insight, Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy.In this insight, I'll talk about earnings forecast and valuations.

Indigo Paints IPO - Not Leaving a Whole Lot on the Table

Apollo Hospitals Enterprise / Equity Capital Markets

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<a href="https://www.smartkarma.com/entities/apollo-hospitals-enterprise" target="_blank" data-smartkarma-citation="entities:880:1" rel="noopener">Apollo Hospitals Enterprise (APHS IN)</a> plans to raise around US$140m via a QIP which was launched last night.
I have covered various aspects of the deal in my earlier note,  <a href="https://www.smartkarma.com/insights/apollo-hospital-placement-qip-early-look-this-time-it-s-different" target="_blank" rel="noopener">Apollo Hospital Placement/​QIP Early Look - This Time It’s Different</a>.
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In this insight, I'll run the deal through our ECM framework and talk about recent updates.
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Apollo Hospitals Enterprise (APHS IN) plans to raise around US$140m via a QIP which was launched last night.
I have covered various aspects of the deal in my earlier note,  Apollo Hospital Placement/​QIP Early Look - This Time It’s Different.


In this insight, I'll run the deal through our ECM framework and talk about recent updates.


Apollo Hospital Placement/​​QIP - Well Flagged Deal with Well Planned Use of Proceeds

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

*NIM Driven Bottom-line: L&amp;T Finance Holdings (LTFH.IN) [LTFH] reported FY 3Q21 operating results of INR 2.9 bn, increasing INR 260 mn (9.8%) linked quarter. Much of LTFH’s strength during the quarter was attributed to net interest income growth of INR 2.1 bn (15.8%) associated with improving cost of funds (down 72 bp linked quarter) on liquidity improvement.*Credit Risk Challenges: While LTFH would like to have the investment community believe that it has turned the corner with credit, that notion is patently false. Inclusive of INR 12.8 mn in NCOs, we calculate a continued acceleration of net new NPL growth to 101% on an annualized basis – which is troubling. We calculate that reserves need a boost close to INR 80 bn or nearly five years of pre-tax earnings; and   *Banking License May Be Out of Reach: LTFH's Tier-1 ratio was 17.8% at FY 3Q21. However, if our reserve shortfall analysis is correct, LTFH’s stated Tier 1 capital ratio will be quite challenged, leaving it short of the Reserve Bank of India’s (RBI) plan for larger NBFCs to become banks.

*NIM Driven Bottom-line: L&amp;T Finance Holdings (LTFH.IN) [LTFH] reported FY 3Q21 operating results of INR 2.9 bn, increasing INR 260 mn (9.8%) linked quarter. Much of LTFH’s strength during the quarter was attributed to net interest income growth of INR 2.1 bn (15.8%) associated with improving cost of funds (down 72 bp linked quarter) on liquidity improvement.*Credit Risk Challenges: While LTFH would like to have the investment community believe that it has turned the corner with credit, that notion is patently false. Inclusive of INR 12.8 mn in NCOs, we calculate a continued acceleration of net new NPL growth to 101% on an annualized basis – which is troubling. We calculate that reserves need a boost close to INR 80 bn or nearly five years of pre-tax earnings; and   *Banking License May Be Out of Reach: LTFH's Tier-1 ratio was 17.8% at FY 3Q21. However, if our reserve shortfall analysis is correct, LTFH’s stated Tier 1 capital ratio will be quite challenged, leaving it short of the Reserve Bank of India’s (RBI) plan for larger NBFCs to become banks.

L&T Finance Holdings – Credit Risk Jeopardizes Bank License

Indigo Paints (IP) aims to raise around US$165m in its India IPO. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.Revenue from operations have grown at 41.9% CAGR over FY10-19 and 24.7% CAGR over FY18-20. Margins have been on an uptrend as well and hence, over FY18-20, gross profit grew at 36% CAGE, EBITDA at 87.8% and PATMI at 92.8%. The company has adopted a strategy of targeting smaller cities and rural areas to build its dealer network and then work its way up to the larger cities. It also claims to have introduced a host of differentiated products which have helped in brand building.IP aims to expand its distribution network further, and is focusing on installing tinting machines. However, it hasn’t been able to ramp-up the installation per year. In addition, some of the margin gains recorded over 6M21 might not be sustainable.

Indigo Paints (IP) aims to raise around US$165m in its India IPO. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.Revenue from operations have grown at 41.9% CAGR over FY10-19 and 24.7% CAGR over FY18-20. Margins have been on an uptrend as well and hence, over FY18-20, gross profit grew at 36% CAGE, EBITDA at 87.8% and PATMI at 92.8%. The company has adopted a strategy of targeting smaller cities and rural areas to build its dealer network and then work its way up to the larger cities. It also claims to have introduced a host of differentiated products which have helped in brand building.IP aims to expand its distribution network further, and is focusing on installing tinting machines. However, it hasn’t been able to ramp-up the installation per year. In addition, some of the margin gains recorded over 6M21 might not be sustainable.

Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy

India

HDFC Bank Ltd. offers a wide range of services to the global corporate sector. The Bank provides corporate banking and custodial services and is active in the treasury and capital markets. HDFC also markets project advisory services and capital market products such as Global Deposit Receipts, Euro currency loans, and Euro currency bonds.

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HDFC Bank (HDFCB IN)

Home First Finance IPO - It’s Not Really Cheap, Banking on Momentum

Home First Finance is an affordable housing finance company aiming to raise around US$160m in its India IPO. It is backed by True North, Warburg,...

Sumeet Singh

Indigo Paints IPO - Not Leaving a Whole Lot on the Table

Indigo Paints (IP) aims to raise around US$160m in its India IPO. It was the fifth largest company in the Indian decorative paint industry and was...

Sumeet Singh

Apollo Hospital Placement/QIP - Well Flagged Deal with Well Planned Use of Proceeds

Apollo Hospitals Enterprise plans to raise around US$140m via a QIP which was launched last night. I have covered various aspects of the deal in my...

Sumeet Singh

L&T Finance Holdings – Credit Risk Jeopardizes Bank License

L&T FINANCE: LTFH reported a FY 3Q21 result increase of 9.8% linked quarter. Continued acceleration of net new NPL growth and a reserve shortfall...

Thomas J. Monaco

Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy

Indigo Paints aims to raise around US$165m in its India IPO. Revenue grew at 41.9% CAGR over FY10-19. Over FY18-20, Revenue grew at 24.7% CAGR,...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

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Dividend (Yield)

Home First Finance IPO - It’s Not Really Cheap, Banking on Momentum

Home First Finance is an affordable housing finance company aiming to raise around US$160m in its India IPO. It is backed by True North, Warburg,...

Sumeet Singh

Indigo Paints IPO - Not Leaving a Whole Lot on the Table

Indigo Paints (IP) aims to raise around US$160m in its India IPO. It was the fifth largest company in the Indian decorative paint industry and was...

Sumeet Singh

Apollo Hospital Placement/​​QIP - Well Flagged Deal with Well Planned Use of Proceeds

Apollo Hospitals Enterprise plans to raise around US$140m via a QIP which was launched last night. I have covered various aspects of the deal in my...

Sumeet Singh

L&T Finance Holdings – Credit Risk Jeopardizes Bank License

L&T FINANCE: LTFH reported a FY 3Q21 result increase of 9.8% linked quarter. Continued acceleration of net new NPL growth and a reserve shortfall...

Thomas J. Monaco

Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy

Indigo Paints aims to raise around US$165m in its India IPO. Revenue grew at 41.9% CAGR over FY10-19. Over FY18-20, Revenue grew at 24.7% CAGR,...

Sumeet Singh

Apollo Hospital Placement/QIP - Well Flagged Deal with Well Planned Use of Proceeds