India

• Implied Volatilities (IVs) stabilized over the week after falling dramatically since the 04-June-2024 India General Election results.
• No tactical changes required while IVs are stable & “High & Down” Vol-state is maintained.
• Vol Curve continues to be in Contango. Lack of significant event risk should keep term structure locked in its current orientation. 

• Allied Blenders & Distillers (9844250Z IN) is looking to raise about US$180m in its upcoming India IPO.
• ABD is the largest Indian-owned Indian-made foreign liquor (IMFL) company and the third largest IMFL company in India, in terms of annual sales volumes between FY14 and FY22.
• In our previous notes, we talked about various aspects of the company. In this note, we talk about its RHP updates and our thoughts on valuation.

• Edelweiss reported a strong Q4FY24 led by robust performance across businesses. The asset management business continues to be the lead performer. Insurance businesses are also growing at an industry-leading pace.
• Most notably, the credit business seems to be gaining momentum now, led by co-lending. MSME co-lending disbursements tripled while housing finance (HFC) co-lending disbursements doubled in FY24. 
• To unlock value and reduce debt at the corporate level, Edelweiss is planning a minority stake sale in the Alternative Asset Management business.

• Muthoot Microfin (MUTHOOTM IN) raised around US$115m in its Indian IPO, after pricing the deal at the top end of its IPO range at INR291/share.
• Muthoot Microfin is a microfinance institution providing micro-loans to women customers with a focus on the rural regions of India.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• India’s passenger vehicle industry is shifting towards alternative fuels and facing intense competition, amidst changing customer preferences.
• Despite a growing vehicle market, Hyundai Motor India (HMIL) faces a tough battle to defend its market share given changing industry dynamics.
• With more competitors in the fray, including its parent group company Kia and EV leader BYD, Hyundai Motor India is in for a challenging ride.

• Bajaj Housing Finance (BHF IN) is looking to raise around US$830m in its upcoming India IPO.
• BHF is a non-deposit taking housing finance company engaged in mortgage lending since FY18. Its mortgage products include home loans, loans against property, lease rental discounting and developer financing.
• In this note, we talk about the not-so-positive aspects of the deal.

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.

• Bajaj Housing Finance (BHF IN) is looking to raise around US$830m in its upcoming India IPO. 
• BHF is a non-deposit taking housing finance company engaged in mortgage lending since FY18. Its mortgage products include home loans, loans against property, lease rental discounting and developer financing.
• In this note, we talk about the positive aspects of the deal.

• In FY24, Morepen Laboratories (MORE IN) achieved revenue, EBITDA, and PAT growth of 20%, 101% and 150%, YoY, respectively, driven by medical devices and API businesses.
• Business has stabilized in FY24 and Morepen is seeing fresh buying of medical devices. With expanding capacity, glucometer and BP monitor are expected to maintain ~30% growth momentum.
• Morepen aims to expand API product portfolio and geographic reach, while maintaining global leadership positioning in six key widely used API products.

• Archean Chemical Industries (ACI IN) is largest producer of Bromine and largest exporter of Bromine from India.
• The company is doing brownfield and greenfield capex in Bromine derivatives which are Margin accretive.
• Archean Chemical Industries (ACI IN)  is confident about 30% volume growth in FY25.

• India Shelter Finance (0570670D IN) listed in India on 20th Dec 2023 after raising US$144m. The pre-IPO investors had trimmed a portion of their stakes in the IPO
• India Shelter Finance (ISF) is a retail-focused HFC targeting the self-employed customer with a focus on first time home loan takers in the low and middle income group.
• Coming up for six-month lockup expiry on 18th Jun 2024 are the firm’s pre-IPO shareholders and a portion of the promoters’ stakes.

• Hyundai Motor India’s proposed IPO is an offer for sale by its parent, Hyundai Motor Company, Korea, and reported to raise USD3 billion, potentially making it India’s largest IPO ever.  
• Hyundai Motor India’s sales growth has been driven by strong domestic and export sales, both in volume and unit realisation.
• With SUVs now making up 62% of Hyundai Motor India’s domestic volumes, up from 45% in FY2021, the shift towards premium models has boosted profit margins.

• IVs move lower at an accelerated pace driven by holiday shortened week & risk-seeking sentiment.  
• Vol-Regime has switched to “High & Down” state, projecting an elongated period of falling IV levels. 
• Nifty50 Smile & Skew dynamics continue to compress. Vol term structure has moved from Backwardation to Contango in conjunction with falling IVs

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.

• Bharti Airtel
• China Vanke
• Nickel Industries

• It is important for investors to not get swayed by popular narratives and instead look at the data and historical patterns to make informed decisions. 
• While a large short position by FIIs may seem concerning, it could actually signal a potential opportunity for positive returns in the Nifty 50 index. 
• By understanding the reasons behind this contrarian move and the historical trends, investors can navigate bet when FII’s short positions are high.

• Forensic Forsight will be a bi-monthly report covering Indian companies having corporate governance issues guiding investors on strengthening their ESG investment framework
• The issue covers SEBI warning against ICICI Bank for manipulation in delisting process of its key subsidiary.
• The report also covers how a EV company disguises shareholders while an Indian renewable energy company is under scrutiny owing to Independent Director Resignation

• Aegis Logistics (AGIS IN) is significantly expanding its LPG and liquid logistics infrastructure across India with rising demand.
• Currently, Aegis has a 15.5% market share in LPG imports in India which they plan to take to 25% in the next few years.
• Surpassed INR 1,000 crores in normalized EBITDA for FY ’24, planned capex of 4500 Crores by FY27.

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.

• Alam Sutera Realty
• China Hongqiao
• Lippo Karawaci
• Tata Motors ADR

• Reliance Industries (RIL IN) is developing a new integrated industrial area in Navi Mumbai, part of a global economic hub.
• This project, supported by a 43-year land lease and strategic partnerships, aims to attract global companies, fostering innovation and economic growth in the Fourth Industrial Revolution.
• Reliance’s initiative will significantly boost Navi Mumbai’s attractiveness as an investment destination, driving regional economic growth and employment opportunities.

• NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.
• In this insight, we take a look at the names leading the race to become ADDs/DELs during the September 2024 index rebal event.
• Since my last insight, we have observed a couple of important changes to candidate rankings and that has resulted in some changes to our index change expectations.

• With a substantial part of the review period complete, there could potentially be 7 changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in September.
• Estimated one-way turnover is 17.7% resulting in a one-way trade of INR 47.2bn (US$566m). 8 stocks will have over 1x ADV to trade from passive trackers.
• There are a bunch of stocks that are potential migrations between Mid Cap and Large Cap segments in the AMFI Classification system and there will be flows from active managers.