IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/policybazaar-insurance-web-aggregator" target="_blank" data-smartkarma-citation="entities:33470:1" rel="noopener">Policybazaar Insurance Web Aggregator (1569999D IN)</a>/PB Fintech operates the <em>Policybazaar</em> and <em>Paisabazaar</em> platforms in India. <em>Policybazaar</em> is India’s largest digital insurance marketplace with a 93.4% market share based on the number of policies sold in FY20, according to Frost &amp; Sullivan. <em>Paisabazaar</em> is India’s largest digital consumer credit marketplace with a 51.4% market share, based on disbursals in FY20, according to Frost &amp; Sullivan. PB Fintech’s shareholders include SoftBank Vision Fund, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, Tiger Global and <a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a>.   </p><p>PB Fintech is looking to raise Rs60.2 billion ($809 million) at an $5 billion valuation, according to press reports. The IPO comprises a primary raise of Rs37.5 billion and a secondary raise of Rs22.7 million. PB Fintech is also considering a pre-IPO placement of Rs7.5 billion in new shares. The pre-IPO placement amount will be deducted from the primary portion of the raise. </p><p>India has a highly underpenetrated insurance market due to financial illiteracy, lack of awareness of insurance, low household disposable income, complex products and inefficiencies in distribution system. Insurance penetration (premium as % of GDP) is at 3.8% in India as compared to the global average of 7.2%. However, online distribution channels are changing the insurance distribution landscape in India. A key enabler of online distribution are digital insurance marketplaces which account for 54% of the total online insurance market in FY20, according to Frost &amp; Sullivan. </p><p><em>Policybazaar</em>, which is India’s largest digital consumer credit marketplace, is a direct play on the rising insurance penetration rates in India. <a href="https://www.smartkarma.com/entities/paytm-mobile-solutions-pvt-ltd" target="_blank" data-smartkarma-citation="entities:26149:1" rel="noopener">Paytm (PAYTM IN)</a>, which also has an insurance marketplace amongst its various offerings, offers an alternative but less direct exposure to the Indian insurance market. We discussed the Paytm IPO in <a href="https://www.smartkarma.com/insights/paytm-ipo-initiation-a-payments-led-super-app" target="_blank" data-smartkarma-citation="insights:54983" rel="noopener">Paytm IPO Initiation: A Payments-Led Super-App</a>. </p><div class="content-highlight"><p>PB Fintech operates an asset-light capital model and does not underwrite any insurance or retain any credit risk on loans. Due to its market-leading platforms, the business is well positioned to benefit from the post-COVID-19 recovery in insurance policies sales and loan disbursals by its partners. In July 2021, PB Fintech obtained an insurance brokerage license will allow <em>Policybazaar</em> to broaden its consumer reach through the offline channel. Helped by strong brand recognition and retention rates, the favourable unit economics also suggest that profitability is within reach. Overall, we think that PB Fintech has attractive fundamentals.</p></div>

Policybazaar Insurance Web Aggregator (1569999D IN)/PB Fintech operates the Policybazaar and Paisabazaar platforms in India. Policybazaar is India’s largest digital insurance marketplace with a 93.4% market share based on the number of policies sold in FY20, according to Frost &amp; Sullivan. Paisabazaar is India’s largest digital consumer credit marketplace with a 51.4% market share, based on disbursals in FY20, according to Frost &amp; Sullivan. PB Fintech’s shareholders include SoftBank Vision Fund, Tencent (700 HK), Tiger Global and Info Edge India (INFOE IN).   PB Fintech is looking to raise Rs60.2 billion ($809 million) at an $5 billion valuation, according to press reports. The IPO comprises a primary raise of Rs37.5 billion and a secondary raise of Rs22.7 million. PB Fintech is also considering a pre-IPO placement of Rs7.5 billion in new shares. The pre-IPO placement amount will be deducted from the primary portion of the raise. India has a highly underpenetrated insurance market due to financial illiteracy, lack of awareness of insurance, low household disposable income, complex products and inefficiencies in distribution system. Insurance penetration (premium as % of GDP) is at 3.8% in India as compared to the global average of 7.2%. However, online distribution channels are changing the insurance distribution landscape in India. A key enabler of online distribution are digital insurance marketplaces which account for 54% of the total online insurance market in FY20, according to Frost &amp; Sullivan. Policybazaar, which is India’s largest digital consumer credit marketplace, is a direct play on the rising insurance penetration rates in India. Paytm (PAYTM IN), which also has an insurance marketplace amongst its various offerings, offers an alternative but less direct exposure to the Indian insurance market. We discussed the Paytm IPO in Paytm IPO Initiation: A Payments-Led Super-App. PB Fintech operates an asset-light capital model and does not underwrite any insurance or retain any credit risk on loans. Due to its market-leading platforms, the business is well positioned to benefit from the post-COVID-19 recovery in insurance policies sales and loan disbursals by its partners. In July 2021, PB Fintech obtained an insurance brokerage license will allow Policybazaar to broaden its consumer reach through the offline channel. Helped by strong brand recognition and retention rates, the favourable unit economics also suggest that profitability is within reach. Overall, we think that PB Fintech has attractive fundamentals.

PB Fintech (Policybazaar) IPO Initiation: Insurance Policy

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.

<p>CarTrade Tech aims to raise around US$400m in its India IPO. The company is backed by Warburg Pincus and Temasek.</p><p>CarTrade Tech (CTT) is an online auto portal for sale of cars and two-wheelers in India. It is a multichannel auto platform with coverage and presence across vehicle types and value-added services through its various brands, namely: CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz.</p><p>In 4Q21 (period ending March 21), its platforms had an average of 31.99m unique visitors per month and 814,316 vehicles were listed for auction in FY 2021. </p><p>Although, most of the prior growth appears to have come via acquisitions. Were one to adjust for the acquisitions, the underlying growth doesn’t appear to be very strong.</p><p>We have covered various aspects of the deal in our previous note, <a href="https://www.smartkarma.com/insights/cartrade-tech-pre-ipo-acquisition-adjusted-growth-remains-lows" target="_blank" rel="noopener">CarTrade Tech Pre-IPO - Acquisition adjusted growth remains low</a>.</p><p>In this note, we will run the deal through our ECM framework and talk about pricing.</p>

CarTrade Tech aims to raise around US$400m in its India IPO. The company is backed by Warburg Pincus and Temasek.CarTrade Tech (CTT) is an online auto portal for sale of cars and two-wheelers in India. It is a multichannel auto platform with coverage and presence across vehicle types and value-added services through its various brands, namely: CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz.In 4Q21 (period ending March 21), its platforms had an average of 31.99m unique visitors per month and 814,316 vehicles were listed for auction in FY 2021. Although, most of the prior growth appears to have come via acquisitions. Were one to adjust for the acquisitions, the underlying growth doesn’t appear to be very strong.We have covered various aspects of the deal in our previous note, CarTrade Tech Pre-IPO - Acquisition adjusted growth remains low.In this note, we will run the deal through our ECM framework and talk about pricing.

Cartrade Tech IPO - Too Expensive for Our Taste

<p>CarTrade Tech aims to raise around US$300m in its India IPO. The company is backed by Warburg Pincus and Temasek.</p>
<p>CarTrade Tech (CTT) is an online auto portal for sale of cars and two-wheelers in India. It is a multichannel auto platform with coverage and presence across vehicle types and value-added services through its various brands, namely: CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz.</p>
<p>In 4Q21 (period ending March 21), its platforms had an average of 31.99m unique visitors per month and 814,316 vehicles were listed for auction in FY 2021. </p>
<p>Overall reported revenue grew by 96.9% in FY19 and was up another 22.6% in FY20. While 9M21 revenue points towards a YoY decline in revenue, its user growth has been progressively getting better throughout FY21 showing a strong rebound from COVID-19.</p>
<p>Although, most of the prior growth appears to have come via acquisitions. Were one to adjust for the acquisitions, the underlying growth doesn’t appear to be very strong.</p>

CarTrade Tech aims to raise around US$300m in its India IPO. The company is backed by Warburg Pincus and Temasek.
CarTrade Tech (CTT) is an online auto portal for sale of cars and two-wheelers in India. It is a multichannel auto platform with coverage and presence across vehicle types and value-added services through its various brands, namely: CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz.
In 4Q21 (period ending March 21), its platforms had an average of 31.99m unique visitors per month and 814,316 vehicles were listed for auction in FY 2021. 
Overall reported revenue grew by 96.9% in FY19 and was up another 22.6% in FY20. While 9M21 revenue points towards a YoY decline in revenue, its user growth has been progressively getting better throughout FY21 showing a strong rebound from COVID-19.
Although, most of the prior growth appears to have come via acquisitions. Were one to adjust for the acquisitions, the underlying growth doesn’t appear to be very strong.

CarTrade Tech Pre-IPO - Acquisition Adjusted Growth Remains Low

<div><p><a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOM IN)</a> raised US$1.3bn in its India IPO, making it the the largest listing in India from the technology sector.</p></div><div>We have covered various aspects of the deal in our earlier notes  </div><div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/zomato-pre-ipo-filings-lack-narrative-a-little-bit-of-history-helps" target="_blank" rel="noopener">Zomato Pre-IPO - Filings Lack Narrative, a Little Bit of History Helps, </a></li>
<li><a href="https://www.smartkarma.com/insights/zomato-pre-ipo-food-delivery-revenue-was-probably-up-16x" target="_blank" rel="noopener">Zomato Pre-IPO - Food Delivery Revenue Was Probably up 16x, and</a></li>
<li><a href="https://www.smartkarma.com/insights/zomato-pre-ipo-peer-comparison-listed-and-domestic" target="_blank" rel="noopener">Zomato Pre-IPO - Peer Comparison - Listed and Domestic</a></li>
<li><a href="https://www.smartkarma.com/insights/zomato-ipo-strong-4q21-has-a-very-long-runway" target="_blank" rel="noopener">Zomato IPO - Strong 4Q21, Has a Very Long Runway</a></li>
</ul></div><div><p>In this note, we will talk about the updates and the trading dynamics.</p></div>

Zomato (ZOM IN) raised US$1.3bn in its India IPO, making it the the largest listing in India from the technology sector.We have covered various aspects of the deal in our earlier notes  
Zomato Pre-IPO - Filings Lack Narrative, a Little Bit of History Helps, 
Zomato Pre-IPO - Food Delivery Revenue Was Probably up 16x, and
Zomato Pre-IPO - Peer Comparison - Listed and Domestic
Zomato IPO - Strong 4Q21, Has a Very Long Runway
In this note, we will talk about the updates and the trading dynamics.

Zomato IPO Trading - Ample Demand for Unique Exposure

<div><p><a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOM IN)</a> is a leading food delivery platform in India. Zomato has two core business-to-customer (B2C) offerings which are Food delivery and Dining-out. It also has a business-to-business (B2B) offering called Hyperpure and Zomato Pro, the customer loyalty program which encompasses both food delivery and dining-out. </p></div><div><p>Zomato will launch its IPO on 14 July at an IPO price range of Rs72-76 per share. The IPO will raise up to Rs93.75 billion ($1.3 billion) with a primary/secondary split of 96%/4%. The selling shareholder is <a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a>. </p></div><div>
<p>In <a href="https://www.smartkarma.com/insights/zomato-ipo-initiation-emerging-appetites" target="_blank" data-smartkarma-citation="insights:54141" rel="noopener">Zomato IPO Initiation: Emerging Appetites</a>, we stated that that the food delivery market in India is effectively a duopoly between Zomato and Swiggy. Zomato claims to be larger but the key differentiator will be execution to drive growth with positive unit economics. On this front, Zomato has demonstrated a commendable track record. In <a href="https://www.smartkarma.com/insights/zomato-ipo-results-point-to-a-favourable-trajectory" target="_blank" data-smartkarma-citation="insights:54220" rel="noopener">Zomato IPO: Results Point to a Favourable Trajectory</a>, we noted that the FY21 results support our view that Zomato has attractive fundamentals. </p>
<div class="content-highlight"><p>Our relative valuation suggests that Zomato is overvalued at the IPO price range for its forecasted growth. Our base-case DCF valuation is Rs62.84 per share, which is 15% below the mid-point of the IPO price range. Consequently, while we like the fundamentals, we think that the IPO price range is unattractive and are inclined to remain on the sidelines. </p></div>
</div>

Zomato (ZOM IN) is a leading food delivery platform in India. Zomato has two core business-to-customer (B2C) offerings which are Food delivery and Dining-out. It also has a business-to-business (B2B) offering called Hyperpure and Zomato Pro, the customer loyalty program which encompasses both food delivery and dining-out. Zomato will launch its IPO on 14 July at an IPO price range of Rs72-76 per share. The IPO will raise up to Rs93.75 billion ($1.3 billion) with a primary/secondary split of 96%/4%. The selling shareholder is Info Edge India (INFOE IN). 
In Zomato IPO Initiation: Emerging Appetites, we stated that that the food delivery market in India is effectively a duopoly between Zomato and Swiggy. Zomato claims to be larger but the key differentiator will be execution to drive growth with positive unit economics. On this front, Zomato has demonstrated a commendable track record. In Zomato IPO: Results Point to a Favourable Trajectory, we noted that the FY21 results support our view that Zomato has attractive fundamentals. 
Our relative valuation suggests that Zomato is overvalued at the IPO price range for its forecasted growth. Our base-case DCF valuation is Rs62.84 per share, which is 15% below the mid-point of the IPO price range. Consequently, while we like the fundamentals, we think that the IPO price range is unattractive and are inclined to remain on the sidelines. 


India

Info Edge (India) Limited operates an online job posting website. The website offers services for recruiters, job seekers, and employers. The Company also operates  an online matrimonial website for prospective brides, grooms, and relatives.

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Info Edge India (INFOE IN)

PB Fintech (Policybazaar) IPO Initiation: Insurance Policy

PB Fintech (operates Policybazaar and Paisabazaar platforms) is looking to raise Rs60.2 billion ($809 million) through an IPO in India. Overall, we...

Arun George

Cartrade Tech IPO - Too Expensive for Our Taste

CarTrade Tech aims to raise around US$400m in its India IPO, via a 100% secondary selldown. The company is backed by Warburg Pincus and Temasek.

Sumeet Singh

CarTrade Tech Pre-IPO - Acquisition Adjusted Growth Remains Low

CarTrade Tech aims to raise around US$300m in its India IPO. The company is backed by Warburg and Temasek, and claims to be the most popular auto...

Sumeet Singh

Zomato IPO Trading - Ample Demand for Unique Exposure

Zomato (ZOM IN) raised US$1.3bn in its India IPO, making it the the largest listing in India from the technology sector.

Sumeet Singh

Zomato IPO: Valuation Insights

Our DCF valuation is Rs62.84 per share, 15% below the mid-point of the IPO price range. While we like the fundamentals, the IPO price range is...

Arun George

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