IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

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.

Event-Driven

<ul>
<li>In response to an <a href="https://www.afr.com/street-talk/bain-capital-checks-out-eml-payments-bankers-chase-other-buyers-20220412-p5acvc" target="_blank" rel="noopener">AFR article</a>, <a href="https://www.smartkarma.com/entities/eml-payments-limited" target="_blank" data-smartkarma-citation="entities:3232:1" rel="noopener">EML Payments Limited (EML AU)</a> confirmed takeover interest from Bain Capital. However, discussions have ceased. The shares closed 10.5% higher at A$2.94. </li>
<li>The bombed-out share prices of payment companies have supported recent M&amp;A activity such as <a href="https://www.smartkarma.com/entities/afterpay-holdings-ltd" target="_blank" data-smartkarma-citation="entities:24047:1" rel="noopener">Afterpay Holdings (AFY AU)</a>/<a href="https://www.smartkarma.com/entities/square-inc" target="_blank" data-smartkarma-citation="entities:23755:1" rel="noopener">Square Inc (SQ US)</a> and <a href="https://www.smartkarma.com/entities/sezzle-inc" target="_blank" data-smartkarma-citation="entities:30969:1" rel="noopener">Sezzle Inc (SZL AU)</a>/<a href="https://www.smartkarma.com/entities/zip-co-ltd-3708706d-4978-4e29-acbc-d9702b971da9" target="_blank" data-smartkarma-citation="entities:29126:1" rel="noopener">Zip Co Ltd (Z1P AU)</a>.</li>
<li>Despite today’s pop, the shares are still 50% down over the last 12 months. EML’s market positioning and expected stronger 2HFY22 should continue to fuel takeover interest.</li>
</ul>


In response to an AFR article, EML Payments Limited (EML AU) confirmed takeover interest from Bain Capital. However, discussions have ceased. The shares closed 10.5% higher at A$2.94. 
The bombed-out share prices of payment companies have supported recent M&amp;A activity such as Afterpay Holdings (AFY AU)/Square Inc (SQ US) and Sezzle Inc (SZL AU)/Zip Co Ltd (Z1P AU).
Despite today’s pop, the shares are still 50% down over the last 12 months. EML’s market positioning and expected stronger 2HFY22 should continue to fuel takeover interest.


EML Payments Flirtation with Bain Likely Not the Last

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>
<a href="https://www.smartkarma.com/entities/homeco-daily-needs-reit" target="_blank" data-smartkarma-citation="entities:33526:1" rel="noopener">HomeCo Daily Needs REIT (HDN AU)</a> will replace <a href="https://www.smartkarma.com/entities/cimic-group-ltd" target="_blank" data-smartkarma-citation="entities:20030:1" rel="noopener">CIMIC Group Ltd (CIM AU)</a> in the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> at the close of trading on 11 April.</li>
<li>The change has come earlier than expected as Hochtief hold nearly 90% of CIMIC. Positioning on HDN could be light- the stock could rally over the next couple of days.</li>
<li>There could be another ad hoc change prior to the June rebalance and then there will be more changes at the regular rebalance in June.</li>
</ul>



HomeCo Daily Needs REIT (HDN AU) will replace CIMIC Group Ltd (CIM AU) in the S&amp;P/ASX 200 (AS51 INDEX) at the close of trading on 11 April.
The change has come earlier than expected as Hochtief hold nearly 90% of CIMIC. Positioning on HDN could be light- the stock could rally over the next couple of days.
There could be another ad hoc change prior to the June rebalance and then there will be more changes at the regular rebalance in June.


ASX200 Index Rebalance: HomeCo Daily Needs REIT (HDN) Replaces CIMIC; More Changes in May & June

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>The S&amp;P/ASX Index family is a widely-tracked group of indices and sub-indices which represent the performance of ASX-listed companies. </li>
<li>In June 2022, Index rebalance events will take place for the S&amp;P/ASX capitalization-weighted indices including ASX 200, ASX 100, ASX 50, and ASX 20.</li>
<li>In this insight, we take a look at the leading candidates who could become Adds/Deletes during the June 2022 Rebalance and other potential irregular changes.</li>
</ul>


The S&amp;P/ASX Index family is a widely-tracked group of indices and sub-indices which represent the performance of ASX-listed companies. 
In June 2022, Index rebalance events will take place for the S&amp;P/ASX capitalization-weighted indices including ASX 200, ASX 100, ASX 50, and ASX 20.
In this insight, we take a look at the leading candidates who could become Adds/Deletes during the June 2022 Rebalance and other potential irregular changes.


S&P/​​​ASX Indices: Quiddity Leaderboard for June 2022 Rebalance

Equity Capital Markets

<div><p><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>, formally known as One97 Communications, is India’s largest payments platform based on the number of consumers, number of merchants, number of transactions and revenue as of 31 March 2021, according to RedSeer. Paytm has an overall payments transaction volume market share of 40%, and wallet payments transaction market share of 65-70% in India as of FY21, according to RedSeer. </p></div><div><p>Paytm will launch its IPO on 8 November at an indicative price range of Rs2,080-2,150 per share. The IPO comprises a primary raise of Rs83,000 million ($1.1 billion) and a secondary raise up to Rs100,000 million ($1.3 billion). The total IPO proceeds of $2.4 billion are around 10% higher than its earlier target. The three-day share sale will conclude on 10 November.</p></div><div><p>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>, we stated as India’s largest payments platform, Paytm is well placed to benefit from this structural tailwind. While the COVID-19 pandemic was disruptive particularly to the non-payments business, Paytm should return to growth as the impact of the pandemic wanes and vaccination rates rise in India. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/paytm-ipo-bright-spot" target="_blank" data-smartkarma-citation="insights:59999" rel="noopener">Paytm IPO: Bright Spot</a>, we stated that the recent results show a strong return to growth, reducing loss margin and reinforce our view that Paytm has attractive fundamentals. Our valuation analysis suggests that the price range is reasonable.</p></div></div></div>

Paytm (PAYTM IN), formally known as One97 Communications, is India’s largest payments platform based on the number of consumers, number of merchants, number of transactions and revenue as of 31 March 2021, according to RedSeer. Paytm has an overall payments transaction volume market share of 40%, and wallet payments transaction market share of 65-70% in India as of FY21, according to RedSeer. Paytm will launch its IPO on 8 November at an indicative price range of Rs2,080-2,150 per share. The IPO comprises a primary raise of Rs83,000 million ($1.1 billion) and a secondary raise up to Rs100,000 million ($1.3 billion). The total IPO proceeds of $2.4 billion are around 10% higher than its earlier target. The three-day share sale will conclude on 10 November.In Paytm IPO Initiation: A Payments-Led Super-App, we stated as India’s largest payments platform, Paytm is well placed to benefit from this structural tailwind. While the COVID-19 pandemic was disruptive particularly to the non-payments business, Paytm should return to growth as the impact of the pandemic wanes and vaccination rates rise in India. In Paytm IPO: Bright Spot, we stated that the recent results show a strong return to growth, reducing loss margin and reinforce our view that Paytm has attractive fundamentals. Our valuation analysis suggests that the price range is reasonable.

<p><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>, formally known as One97 Communications, is India’s largest payments platform based on the number of consumers, number of merchants, number of transactions and revenue as of 31 March 2021, according to RedSeer. Paytm has an overall payments transaction volume market share of 40%, and wallet payments transaction market share of 65-70% in India as of FY21, according to RedSeer.Paytm’s shareholders include <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> (29.6% of outstanding shares), Softbank Vision Fund (18.3%), <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> (7.2%) and <a href="https://www.smartkarma.com/entities/berkshire-hathaway-inc-cl-b" target="_blank" data-smartkarma-citation="entities:8635:1" rel="noopener">Berkshire Hathaway Inc Cl B (BRK/B US)</a> (2.8%).  </p><p>Paytm will launch its IPO on 8 November at an indicative price range of Rs2,080-2,150 per share. The IPO comprises a primary raise of Rs83,000 million ($1.1 billion) and a secondary raise up to Rs100,000 million ($1.3 billion). The total IPO proceeds of $2.4 billion are around 10% higher than its earlier target. </p><p>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>, we stated as India’s largest payments platform, Paytm is well placed to benefit from this structural tailwind. The advent of UPI has increased competition (Google Pay, PhonePe, <a href="https://www.smartkarma.com/entities/one-mobikwik-systems-ltd" target="_blank" data-smartkarma-citation="entities:33952:1" rel="noopener">One Mobikwik Systems (1235487D IN)</a>) but Paytm is also leveraging its dominance in digital payments to build a synergistic ecosystem of complementary services, resulting in a strong claim for the “super-app” tag. While the COVID-19 pandemic was disruptive particularly to the non-payments business, Paytm should return to growth as the impact of the pandemic wanes and vaccination rates rise in India. </p><div class="content-highlight"><p>In this note, we look at the updated prospectus which outlines the 1QFY22 results (for the quarter ending June) and recent developments. Overall, the recent results show a strong return to growth, reducing loss margin and reinforce our view that Paytm has attractive fundamentals. We will discuss valuation in our next note.  </p></div>

Paytm (PAYTM IN), formally known as One97 Communications, is India’s largest payments platform based on the number of consumers, number of merchants, number of transactions and revenue as of 31 March 2021, according to RedSeer. Paytm has an overall payments transaction volume market share of 40%, and wallet payments transaction market share of 65-70% in India as of FY21, according to RedSeer.Paytm’s shareholders include Ant Financial Services Group (6688 HK) (29.6% of outstanding shares), Softbank Vision Fund (18.3%), Alibaba Group (BABA US) (7.2%) and Berkshire Hathaway Inc Cl B (BRK/B US) (2.8%).  Paytm will launch its IPO on 8 November at an indicative price range of Rs2,080-2,150 per share. The IPO comprises a primary raise of Rs83,000 million ($1.1 billion) and a secondary raise up to Rs100,000 million ($1.3 billion). The total IPO proceeds of $2.4 billion are around 10% higher than its earlier target. In Paytm IPO Initiation: A Payments-Led Super-App, we stated as India’s largest payments platform, Paytm is well placed to benefit from this structural tailwind. The advent of UPI has increased competition (Google Pay, PhonePe, One Mobikwik Systems (1235487D IN)) but Paytm is also leveraging its dominance in digital payments to build a synergistic ecosystem of complementary services, resulting in a strong claim for the “super-app” tag. While the COVID-19 pandemic was disruptive particularly to the non-payments business, Paytm should return to growth as the impact of the pandemic wanes and vaccination rates rise in India. In this note, we look at the updated prospectus which outlines the 1QFY22 results (for the quarter ending June) and recent developments. Overall, the recent results show a strong return to growth, reducing loss margin and reinforce our view that Paytm has attractive fundamentals. We will discuss valuation in our next note.  

Australia

Tyro Payments provides transaction processes. The Company offers payment solutions such as bank account, loans, and security activities. Tyro Payments serves customers in Australia.

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Tyro Payments (TYR AU)

EML Payments Flirtation with Bain Likely Not the Last

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Arun George

ASX200 Index Rebalance: HomeCo Daily Needs REIT (HDN) Replaces CIMIC; More Changes in May & June

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S&P/ASX Indices: Quiddity Leaderboard for June 2022 Rebalance

A discussion on potential ADDs and DELETEs to the S&P ASX Indices between now and the completion of the June 2022 Regular Rebalance.

Janaghan Jeyakumar, CFA

Paytm IPO: Valuation Insights

Paytm will launch its IPO on 8 November to raise $2.4 billion. Our valuation analysis suggests that the price range is reasonable.

Arun George

Paytm IPO: Bright Spot

Paytm will launch its IPO on 8 November to raise $2.4 bn. The updated prospectus which outlines the 1QFY22 results and recent developments...

Arun George

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EML Payments Flirtation with Bain Likely Not the Last

EML confirmed takeover interest from Bain Capital but discussions have ceased. EML’s market positioning and expected stronger 2HFY22 should...

Arun George

ASX200 Index Rebalance: HomeCo Daily Needs REIT (HDN) Replaces CIMIC; More Changes in May & June

HDN AU will replace CIM AU in the ASX200 at the close on 11 April. LKE AU could replace CWN AU in May. Then there could be another 4 changes to the...

Brian Freitas

S&P/​​​ASX Indices: Quiddity Leaderboard for June 2022 Rebalance

A discussion on potential ADDs and DELETEs to the S&P ASX Indices between now and the completion of the June 2022 Regular Rebalance.

Janaghan Jeyakumar, CFA

Paytm IPO: Valuation Insights

Paytm will launch its IPO on 8 November to raise $2.4 billion. Our valuation analysis suggests that the price range is reasonable.

Arun George

Paytm IPO: Bright Spot

Paytm will launch its IPO on 8 November to raise $2.4 bn. The updated prospectus which outlines the 1QFY22 results and recent developments...

Arun George

S&P/ASX Indices: Quiddity Leaderboard for June 2022 Rebalance