India

• Adani Group’s handling of U.S. FCPA investigation disclosures highlights significant lapses in transparency, including delayed and contradictory statements.
• Inconsistent disclosures and wrong disclosure about US investigations raising red flags for regulatory compliance and governance.
• Search warrants for Sagar Adani, Nephew of Gautam Adani issued in Mar-23, which is not disclosed in fundraising documents as well as Annual Report. 

• After a period of prolonged sell-off, the NIFTY Index last week found support around the 23263 level and bounced.
• Below we introduce a new “quantitative chart” tool called “QUANTCHARTS“: it displays in a compact format all the information you need to evaluate the probability of trend reversal.
• As you will see the NIFTY Index closed just below the 25% (Q1) probability target, so it has room to rise further in the coming weeks, the CC is supportive.

• In the US, existing home sales rose 3.4% m-o-m in October (2.9% e / -1.3% revised p) to an annualised 3.96 mn units.
• That said, existing home sales grew at the slowest pace since late 2010, amid rising mortgage costs.
• Separately, the Conference Board leading index fell 0.4% (-0.3% e / -0.3% revised p) to 99.5 in October 2024. 

• Narayana Hrudayalaya Ltd (NARH IN) is on an expansion spree and looks to add further 1500 beds in the next four years, to its 5683 operational beds as at FY24.
• As far as forensics are concerned, the company has shown improvement in its capital allocation, shown ramp up/turnaround in some hospitals; also impairments are done with in the past. 
• However, few concerns loom over PPE disposals and non-reconciliation with cash flows, treatment of reversal of provisions and high growth rate assumed in goodwill CGU.

• Gautam Adani and executives indicted in U.S. for bribery, fraud, and obstructing justice tied to renewable energy projects worth billions.
• Allegations spotlight governance risks, promoter-driven models, and transparency issues in Indian conglomerates, threatening investor trust in Adani Group and renewable energy sectors.
• Adani Group issued media statement saying that charges in indictment are baseless and denied.

• The US indictment of key executives is a material credit negative for the Adani Group, with the allegations being more serious than those from Hindenburg Research’s short-sell report in January 2023.
• In the near term, the US indictment is likely to constrain the group’s access to financing, particularly in the offshore market.
• We note that the Justice Department’s charges are directed at the individual executives, not at Adani Green Energy or other group entities.

• All India Consumer Products Distributors Federation (AICPDF) has again raised concerns about Mamaearth, claiming that distributors and retailers are stuck with around INR 300 crore worth of unsold products.
• The quantum inventory concern that distributors are raising is almost 5x of what Honasa has taken the hit.
• This could bring some serious repercussions on the company’s working capital and growth plans

• The US indictment of key executives is a material credit negative for the Adani Group, with the allegations being more serious than those from Hindenburg Research’s short-sell report in January 2023.
• In the near term, the US indictment is likely to constrain the group’s access to financing, particularly in the offshore market.
• We note that the Justice Department’s charges are directed at the individual executives, not at Adani Green Energy or other group entities.

• Adani Green Energy Limited (AGEL) is one of the world’s largest developers and operators of solar and wind power.
• The company’s assets are geographically diversified across India, with total locked-in capacity of 20.4 GW (of which 10.9 GW was operational as of June 2024).
• AGEL is listed on the Bombay Stock Exchange and National Stock Exchange of India. 

• There could be 17 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 30 December. Some changes from earlier following 45 new F&O stocks.
• If all changes are on expected lines, one-way turnover is estimated at 61.5% and that will result in a one-way trade of INR 63.4bn (US$752m).
• The potential inclusions to the index have outperformed the potential deletions since the start of June. This trend could continue for a couple of weeks till the changes are announced.

• The company is in the business of designing, construction, operation and maintenance of water and wastewater treatment plants and supply schemes with all related services.
• It has an order book worth Rs. 1906+ cr. as of June 30, 2024 and 750Cr+ of operation & maintenance order book in their hand.
• Company has in-house capability to build and design water plants which enhance the margins of the company vs its peers. 

• Blackbuck (1355652D IN)  raised about US$130m in its India IPO.
• Zinka Logistics (Blackbuck) is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators transacting on its platform in FY24, as per Redseer.
• We have looked at the company’s past performance and valuations in our earlier notes. In this note, we talk about the trading dynamics.

• EFCI Ltd (EFCIL IN) is one of few companies in the Flex Space Operator Business present in the entire value chain providing an unbeatable edge in Cost competitiveness.
• Management target is to double revenue in FY25 capitalising on sector tailwinds driving exponential growth in all business verticals.
• Completed Backward Integration through manufacturing furniture which will help increase margins as furniture comprise  40-50% of total fitout cost.

• The NIFTY Index (NIFTY INDEX) and the NSE Nifty Bank Index (NSEBANK INDEX EQUITY) reached all-time highs on 26 September 2024 but have since declined.
• Most stocks in the Bank Index have fallen below their 200 and 50 day moving average,. Volatilities have gone up, but trade cheap when compared to historical levels.
• Opportunities present themselves either in stocks that stayed resilient during the downturn (Federal Bank (FB IN)),or fell and gained in implied volatility. A long-short strategy might also be considered.

• Oswal Pumps (1019841D IN)  (OPL), established in 2003, specializes in the manufacturing of solar-powered and conventional pumps, electric motors, and related components for agricultural, residential, and industrial applications.
• The company has established itself as a leading player in the solar pump market, benefiting from government initiatives such as the PM Kusum scheme
• OPL aims to use its IPO proceeds to fund its expansion plans, including increasing manufacturing capacity and diversifying its product offerings.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Adani Green Energy, Yankuang Energy
• In the US, treasuries edged higher yesterday, with yields declining 2-4 bps across the curve on possible dip buying and despite a large slate of corporate bond issuances.
• The yield on the 2Y UST fell 3 bps to 4.28%, while the 10Y declined 3 bps to 4.41%. Equities rebounded from last week’s losses, with the S&P 500 and Nasdaq up 0.4% and 0.6%, respectively.

• NTPC Green Energy Ltd (2214556D IN) is looking to raise around US$1.2bn in its upcoming India IPO.
• NTPC Green Energy Limited (NGEL) is a renewable energy public sector enterprise and a wholly owned subsidiary of NTPC Limited, a Maharatna central public sector enterprise (PSU).
• In an earlier note, we looked at the firm’s past performance. In this note, we look at its RHP updates, undertake a peer comparison and discuss our thoughts on valuation.

• Mamaearth’s journey to the stock market has been marred by allegations of channel stuffing, inventory mismanagement, and inconsistent communication from management. 
• The company’s struggles in Q2 FY25 have raised concerns about their financial health and transparency. 
• The forensic analysis is a deeper look into the allegations, redflags and bigger problems that require investor’s attention

• IVs steady in spite of significant drop in Indices. Nifty50 Monthly IVs flat at 12.7% & BankNifty Monthly IVs mildly higher to 14.9%. 
• Paring back of Skew-harvesting recommended. RR levels look overly compressed against backdrop of index weakness
• Multiple market holidays pushed short-dated IVs lower. Vol term structure moved deeper into Contango,  Weekly vs. Monthly vol-differential now at -1.9 vols.

• Consortium appeals to farmers not to sell below INR 200/kg
• Supply to market expected to fall by 30% in coming days
• Compound rubber imports go up by 47.5% YoY until Sept

• Swiggy (1255298D IN) debuts with an 8% premium, raising Rs. 11,328 crore in IPO for Dark store expansion, brand promotion, tech & inorganic growth.
• Swiggy lags behind Zomato across metrics, while Zomato diversifies with high-growth ticketing and “Going Out” segments.
• With both segments is on the edge of becoming Contribution and EBITDA positive, one need to look the results of upcoming quarters of swiggy carefully.

• Prakash Industries (PKI IN) Bhaskarpara Coal Mine is now received all the government approvals ensuring stable, self-supplied coal for steel production as well as open market sale.
• This development reduces raw material costs, boosts EBITDA potential, and strengthens PIL’s valuation amid past corporate governance concerns.
• PIL has manageable debt and with rising EBITDA, the company is available at a very attractive valuation compared to its peers.

• Blackbuck (1355652D IN) is looking to raise about US$130m in its India IPO.
• Zinka Logistics (Blackbuck) is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators transacting on its platform in FY24, as per Redseer.
• Previously, we talked about the company’s historical performance. In this note, we share our quick thoughts on peer comparison and valuation.

• NTPC Green Energy Ltd (2214556D IN) is looking to raise INR 100bn (US$1.19bn) in its IPO. That will value the company at INR 910bn (US$10.8bn) at the top end. 
• The anchor allocations will be completed early next week, and the stock is expected to start trading on 27 November.
• The stock will not get Fast Entry to global indices with the earliest inclusion scheduled for June 2025. So, limited passive buying in the medium-term.

• The National Stock Exchange (NSEIN IN) has announced a list of 45 stocks that will be added to the Futures & Options (F&O) segment of the market from 29 November.
• There will be changes to the NIFTY Index, NSE Nifty Next 50 Index, S&P BSE SENSEX Index and the CNXIT Index over the next couple of rebalances.
• There are some interesting situations out there, including a change to the universe for the NSE Nifty Next 50 Index (NIFTYJR INDEX) that could lead to more changes. 

• Blackbuck (1355652D IN) is looking to raise around US$130m in its India IPO.
• Zinka Logistics (Blackbuck) is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators transacting on its platform in FY24, as per Redseer.
• In this note, we talk about the company’s historical performance.

• Niva Bupa Health Insurance (1226871D IN) raised around US$260m in its India IPO.
• Niva Bupa Health Insurance (Niva Bupa) is a health insurance firm. Its portfolio consists of health (including retail and group), personal accident, and travel insurance.
• We have looked at the company’s past performance and valuations in our earlier notes. In this note, we talk about the trading dynamics.

• Go Digit General Insurance raised US$315m in its India IPO in May 2024, via selling a mix of primary and secondary shares. Its IPO lockup is set to expire soon.
• Go Digit General Insurance is a digital full stack insurance company, offering motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products.
• In this note, we will talk about the lockup dynamics and possible placement.

• Afcons Infrastructure Limited (6595396Z IN) is looking to raise around US$650m in its India IPO.
• Afcons Infrastructure Limited (Afcons) is the flagship infrastructure engineering and construction company of the Shapoorji Pallonji group.
• In a previous note, we looked at the firm’s past performance. In this note, we look at the updates since, and discuss valuation.

• Companies in India have disclosed their shareholding pattern as of end-September in October. There are companies with significant float changes from end-March and/or end-June.
• The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
• Depending on the date that the shareholding was published, there could be 11 stocks with passive inflows from global trackers while 6 could see passive outflows in November.

• Zomato (ZOMATO IN) ‘s proposed USD 1 billion fundraise highlights several potential risks for Quick Commerce players, including Swiggy (1255298D IN) .
• Beyond heightened competition, majority foreign-owned Quick Commerce businesses including Swiggy could face regulatory hurdles if classified as multi-brand retail, limiting their foreign ownership.
• Investors may fear about Swiggy’s regulatory risks and profitability struggles in this competitive landscape, which could dampen investor enthusiasm and IPO valuation.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Adani Green Energy

• There could be 16 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 30 December.
• If all changes are on expected lines, one-way turnover is estimated at 55.6% and that will result in a one-way trade of INR 62bn (US$736m).
• Since June, the potential adds to the index have outperformed the index and the potential deletes by a big margin. Momentum could keep the outperformance going till implementation date.

• Ajax Engineering Limited (0896529D IN) is looking to raise about US$100m through its upcoming IPO in India. The lead bookrunners for the deal are ICICI , CITI, JM, Nuvama, SBI 
• Ajax Engineering Limited (AEL) is one of the leading concrete equipment manufacturers with a comprehensive range of concrete equipment, services and solutions across the concrete application value chain. 
• It is one of the top three global SLCM manufacturers, holding about 75% market share in India. In FY24, SLCMs contributed to 12% of India’s concrete production.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Adani Green Energy
• CIFI Holdings
• Medco Energi