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

<ul>
<li>Paytm (PAYTM IN) raised around US$2.5bn via selling a mix of primary and secondary shares in its India IPO.</li>
<li>The company is backed by <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a>, <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and counts <a href="https://www.smartkarma.com/entities/berkshire-hathaway-inc-cl-a" target="_blank" data-smartkarma-citation="entities:1044:1" rel="noopener">Berkshire Hathaway Inc Cl A (BRK/A US)</a> among its investors.</li>
<li>In this note, we will talk about the subscription levels and the trading dynamics.</li>
</ul>


Paytm (PAYTM IN) raised around US$2.5bn via selling a mix of primary and secondary shares in its India IPO.
The company is backed by Ant Financial Services Group (6688 HK), Softbank Group (9984 JP) and counts Berkshire Hathaway Inc Cl A (BRK/A US) among its investors.
In this note, we will talk about the subscription levels and the trading dynamics.


Paytm IPO Trading - Largest IPO with Lowest Coverage, Skipped by Domestics

Healthium Medtech / Equity Capital Markets

Healthium Medtech (HM) is looking to raise up to US$500m in its upcoming India IPO. Healthium Medtech is a global medtech company that manufactures products used in surgical, post-surgical and chronic care. It operates in three key markets namely, India, UK and the Rest of the World and currently has eight manufacturing facilities, seven in India and one in China. The firm has a diverse suite of offerings with over 52,000 SKUs and as of Mar 21, one in five surgeries conducted globally had used a Healthium Medtech product, as per Frost &amp; Sullivan (F&amp;S).While the company started off by manufacturing surgical consumables, it has since then expanded into other segments, mostly via acquisitions. Now the company primarily sells products pertaining to surgical consumables, urology and arthroscopy. HM revenue has been growing steadily over the past few years, while its margins have been expanding, resulting in bottom-line growth comfortably outpacing sales growth. In addition, HM has undertaken three acquisitions in FY22 which will increase its earnings by 40-50%. Although, the company hasn’t been very forthcoming with data and it didn’t pay a whole lot for the companies that it recently acquired.We have covered the company background in our earlier note, <a href="https://www.smartkarma.com/insights/healthium-medtech-pre-ipo-tearsheet" target="_blank" rel="noopener">Healthium Medtech Pre-IPO Tearsheet.</a>

Healthium Medtech (HM) is looking to raise up to US$500m in its upcoming India IPO. Healthium Medtech is a global medtech company that manufactures products used in surgical, post-surgical and chronic care. It operates in three key markets namely, India, UK and the Rest of the World and currently has eight manufacturing facilities, seven in India and one in China. The firm has a diverse suite of offerings with over 52,000 SKUs and as of Mar 21, one in five surgeries conducted globally had used a Healthium Medtech product, as per Frost &amp; Sullivan (F&amp;S).While the company started off by manufacturing surgical consumables, it has since then expanded into other segments, mostly via acquisitions. Now the company primarily sells products pertaining to surgical consumables, urology and arthroscopy. HM revenue has been growing steadily over the past few years, while its margins have been expanding, resulting in bottom-line growth comfortably outpacing sales growth. In addition, HM has undertaken three acquisitions in FY22 which will increase its earnings by 40-50%. Although, the company hasn’t been very forthcoming with data and it didn’t pay a whole lot for the companies that it recently acquired.We have covered the company background in our earlier note, Healthium Medtech Pre-IPO Tearsheet.

Healthium Medtech Pre-IPO - Steady Earnings, Creating a Niche

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<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>, India’s largest digital ecosystem for consumers and merchants has opened its book-building which will run from 08th November to the 10th of November. Paytm plans to raise INR183bn (approx. US$2.4bn) through the issuance of a mix of new shares (approx. INR83bn) and existing shares (INR00bn) at an indicative price range of INR2,080-2,150 per share. At the above price range, Paytm will have a market capitalisation of INR1,351.1-1,396.6bn and a post-money enterprise value of INR1,254.1-1,296.8bn.<table class="table table-striped"><tbody>
<tr>
<td style="width: 192.0pt;">Paytm IPO Details</td>
<td style="width: 137.0pt;">@ INR2,080 </td>
<td style="width: 87.0pt;">@ INR2,150</td>
</tr>
<tr>
<td style="width: 192.0pt;">Shares Outstanding Pre-IPO (m)</td>
<td style="width: 137.0pt;">                                            609.7</td>
<td style="width: 87.0pt;">                       609.7</td>
</tr>
<tr>
<td style="width: 192.0pt;">Offer Shares/New Shares Issued (m)</td>
<td style="width: 137.0pt;">                                              39.9</td>
<td style="width: 87.0pt;">                         38.6</td>
</tr>
<tr>
<td style="width: 192.0pt;">Total Shares Outstanding post-IPO (m)</td>
<td style="width: 137.0pt;">                                            649.6</td>
<td style="width: 87.0pt;">                       648.3</td>
</tr>
<tr>
<td style="width: 192.0pt;">Market Cap (INRm)</td>
<td style="width: 137.0pt;">                                1,351,111.5</td>
<td style="width: 87.0pt;">           1,393,788.4</td>
</tr>
<tr>
<td style="width: 192.0pt;">Post-Money Enterprise Value (INRm)</td>
<td style="width: 137.0pt;">                                1,254,116.5</td>
<td style="width: 87.0pt;">           1,296,793.4</td>
</tr>
</tbody></table>Source: Company disclosures (offer shares calculated by dividing new share issue of INR83bn by the IPO price, Enterprise value after adjusting for net debt and net IPO proceeds (we have assumed underwriting and other costs to be about 7.25% of gross proceeds) and cash and debt as of June 2021)The company has already raised INR82.3bn from anchor investors (about 45.0% of the total offer) ahead of its IPO at a price of INR2,150 per share, and according to the company, its cornerstone investment was oversubscribed by more than 10x. These anchor investors include BlackRock, Vanguard, CPPIB, BirlaMF and GIC.Paytm plans to use the net proceeds from the IPO on growing and strengthening its Paytm ecosystem, investing on new business initiatives, acquisitions and strategic partnerships and for other general corporate purposes.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/240/442/original/image_54411635561636403842771.png?1636403843" class="editor-image img-responsive" data-smartkarma-image-id="240442"></figure>Source: Company disclosures

Paytm (PAYTM IN), India’s largest digital ecosystem for consumers and merchants has opened its book-building which will run from 08th November to the 10th of November. Paytm plans to raise INR183bn (approx. US$2.4bn) through the issuance of a mix of new shares (approx. INR83bn) and existing shares (INR00bn) at an indicative price range of INR2,080-2,150 per share. At the above price range, Paytm will have a market capitalisation of INR1,351.1-1,396.6bn and a post-money enterprise value of INR1,254.1-1,296.8bn.

Paytm IPO Details
@ INR2,080 
@ INR2,150


Shares Outstanding Pre-IPO (m)
                                            609.7
                       609.7


Offer Shares/New Shares Issued (m)
                                              39.9
                         38.6


Total Shares Outstanding post-IPO (m)
                                            649.6
                       648.3


Market Cap (INRm)
                                1,351,111.5
           1,393,788.4


Post-Money Enterprise Value (INRm)
                                1,254,116.5
           1,296,793.4

Source: Company disclosures (offer shares calculated by dividing new share issue of INR83bn by the IPO price, Enterprise value after adjusting for net debt and net IPO proceeds (we have assumed underwriting and other costs to be about 7.25% of gross proceeds) and cash and debt as of June 2021)The company has already raised INR82.3bn from anchor investors (about 45.0% of the total offer) ahead of its IPO at a price of INR2,150 per share, and according to the company, its cornerstone investment was oversubscribed by more than 10x. These anchor investors include BlackRock, Vanguard, CPPIB, BirlaMF and GIC.Paytm plans to use the net proceeds from the IPO on growing and strengthening its Paytm ecosystem, investing on new business initiatives, acquisitions and strategic partnerships and for other general corporate purposes.Source: Company disclosures

Paytm IPO: More Expensive than Global Payment Giants and SOTP Suggests More Than 40% Discount

Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

These are our initial thoughts – we will write more about the quarter later – but we wanted to get our initial thoughts on the buyback out.This was a terrible print for <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a>  which posted record investment losses for Vision Fund despite some fancy footwork on valuations in the private portfolio. That seems to make the announcement of a ¥1,000bn share buyback less surprising. No doubt it will attract interest as the shares trade near 52-week lows and at the high-end of the holding company discount range but there are some caveats that may temper enthusiasm whilst the longer-term risk is that the buyback is tied to completion of the Nvidia/ARM deal, which still faces regulatory scrutiny.

These are our initial thoughts – we will write more about the quarter later – but we wanted to get our initial thoughts on the buyback out.This was a terrible print for Softbank Group (9984 JP)  which posted record investment losses for Vision Fund despite some fancy footwork on valuations in the private portfolio. That seems to make the announcement of a ¥1,000bn share buyback less surprising. No doubt it will attract interest as the shares trade near 52-week lows and at the high-end of the holding company discount range but there are some caveats that may temper enthusiasm whilst the longer-term risk is that the buyback is tied to completion of the Nvidia/ARM deal, which still faces regulatory scrutiny.   

Softbank Group Q2 21 Results Reaction: Softbank May Intend to Use ARM Proceeds for Buyback

Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

In this "Beyond 280", we present details of our conversation with a Paytm Channel that works closely at Paytm. Our conversations revolve around the merchant offerings and Super App. 
<h3>About Beyond 280</h3>
Anecdotal, primary conversations along with constant innovation in product delivery are part of our core research process.  While there is no denying the value provided by 280 Character conversations on Twitter is immense and challenging, the ability to capture lengthier and broader conversations often has its own merits and hence we introduce "Beyond 280". The objective of "Beyond 280" is to capture our channel conversations in as much detail as possible along with opening up our research architecture to enable our readers to draw their own conclusions if they require.

In this "Beyond 280", we present details of our conversation with a Paytm Channel that works closely at Paytm. Our conversations revolve around the merchant offerings and Super App. 
About Beyond 280
Anecdotal, primary conversations along with constant innovation in product delivery are part of our core research process.  While there is no denying the value provided by 280 Character conversations on Twitter is immense and challenging, the ability to capture lengthier and broader conversations often has its own merits and hence we introduce "Beyond 280". The objective of "Beyond 280" is to capture our channel conversations in as much detail as possible along with opening up our research architecture to enable our readers to draw their own conclusions if they require.  

Beyond 280 | Patym (PAYTM IN)  - Conversation on Evolving Merchant Offerings and Super App

India

One 97 Communications Limited provides payment solutions. The Company provides online services such as hotel booking, top ups, data processing, games, mobile content, and bill payments. One 97 Communications Limited serves customers worldwide.

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Paytm (PAYTM IN)

Paytm IPO Trading - Largest IPO with Lowest Coverage, Skipped by Domestics

Paytm (PAYTM IN) raised around US$2.5bn via selling a mix of primary and secondary shares in its India IPO. In this note, we will talk about the...

Sumeet Singh

Healthium Medtech Pre-IPO - Steady Earnings, Creating a Niche

Healthium Medtech is looking to raise up to US$500m in its upcoming India IPO. Healthium Medtech is a medtech company that manufactures products...

Sumeet Singh

Paytm IPO: More Expensive than Global Payment Giants and SOTP Suggests More Than 40% Discount

With not so conservative assumptions, our SOTP valuation suggests that Paytm's shares are significantly overvalued at the IPO price range. At the...

Shifara Samsudeen, ACMA, CGMA

Softbank Group Q2 21 Results Reaction: Softbank May Intend to Use ARM Proceeds for Buyback

Softbank's share buyback may have as much to do with delays to Nvidia/ARM regulatory approval as record losses for Vision Fund in Q2. We look at...

Kirk Boodry

Beyond 280 | Patym (PAYTM IN) - Conversation on Evolving Merchant Offerings and Super App

In this "Beyond 280", we present details of our conversation with a Paytm Channel that works closely at Paytm. Our conversation revolve around the...

Pranav Bhavsar

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