India

• Companies in India have disclosed their shareholding pattern as of end-December in January. There are companies with significant float changes from end-September and/or end-December.
• 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.
• There are 15 stocks that could have passive inflows from global trackers while 9 could see passive outflows in February.

• Concord Biotech Ltd (658823Z IN) listed in India on 18th Aug 23 after raising US$188m. The IPO had been a 100% secondary selldown with Helix Investment selling its entire stake.
• Concord Biotech (Concord) is an India-based biopharma firm, which develops and manufactures fermentation-based active pharmaceutical ingredients (APIs).
• Coming up for six-month lockup expiry on 7th Feb 24 are the firm’s pre-IPO shareholders, along with a portion of its promoters’ stake.

• Apeejay Surrendra Park Hotel (PARK IN) (ASPH) plans to raise up to US$111m via selling a mix of primary and secondary shares in its India IPO.
• ASPH ranks as the eighth largest in India in terms of chain affiliated hotel rooms inventory as of Sep 2023, as per Horwath HTL Report.
• In this note, we talk about the past performance and our thoughts on valuations.

• Bharti Hexacom (6597372Z IN) is looking to raise up to US$1bn in its upcoming India IPO. The bookrunners are SBI Capital, Axis Capital, BOB Capital, ICICI Securities and IIFL Securities.
• Bharti Hexacom (BH) is a communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services to customers in the Rajasthan and the North East telecommunication circles in India.
• It offers its services under the brand ‘Airtel’. BH relies on a robust network infrastructure with a mix of owned and leased assets.

• Prime Minister Modi unveils the Pradhanmantri Suryoday Yojana, a groundbreaking initiative aiming to install rooftop solar panels on one crore households, aligning with India’s renewable energy targets.
• The Suryodaya Yojana addresses challenges in the rooftop solar landscape, focusing on household installations, affordability, income generation, and energy self-reliance.
• Despite challenges in implementation, the scheme, led by REC, holds the potential to significantly boost rooftop solar capacity, supporting India’s commitment to cleaner energy and a sustainable future.

• With the review period complete, Shriram Finance (SHFL IN) should replace UPL Ltd (UPLL IN) in the NIFTY Index (NIFTY INDEX) at the March rebalance.
• We have Trent Ltd (TRENT IN) marginally ahead of Bharat Electronics (BHE IN) as lower probability replacements for Bharat Petroleum Corp (BPCL IN) in the index.
• The impact on the stocks will be large in terms of delivery volume to trade, but the stocks have moved a lot over the last few months.

• India’s beauty and personal care market is expected to hit US$30 billion by 2027. While the segment as a whole is thriving, beauty ecommerce penetration in Tier 2 and Tier 3 cities suffers from long delivery periods as well as issues with product authenticity and quality.
• BuyEazzy, a beauty ecommerce platform, aims to solve this by leveraging the trust between neighborhood store owners and consumers.
• The startup has raised over US$4.2 million in a series A round led by Info Edge Ventures, with participation from existing investors Incubate Fund Asia and M Venture Partners.

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 Ports & Special Economic Zone

• Due to the ongoing earnings season, for the next couple of weeks, we will temporarily deviate from our regular format and instead focus on reported earnings.
• This edition focuses on earnings commentary from Financials highlighting the commentary on costs, growth, and elections. 
• Earnings review includes AU Small Finance Bank Limited (AUBANK IN), Home First Finance (HOMEFIRS IN), IIFL Holdings (IIFL IN), Shriram Finance (SHFL IN). 

• Ecuador’s crisis, driven by violence and narco-gang threats, impacts the global seafood supply chain, especially the lucrative shrimp exports sector.
• Resilient amid challenges, India holds its position as the second-largest global shrimp producer, balancing opportunities and persistent challenges in logistics and competition.
• Investors urged caution in the Indian seafood boom, yet potential opportunities arise from Ecuador’s supply disruptions, with reduced import duty enhancing India’s competitiveness.

• Ola Electric is looking to raise about US$1bn in its upcoming India IPO.
• Ola Electric Mobility is a vertically integrated pure EV player in India with manufacturing capabilities for EVs and EV components, including cells.
• In this note, we talk about the not-so-positive aspects of the deal.

• FirstCry (0172540D IN), India’s largest multi-channel retailing platform for mothers’, babies’ and kids’ products, has filed for a US$700 million IPO. 
• In Brainbees Solutions (FirstCry) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The bear case rests on the worrying trend of India’s KPIs, margin pressures, cash burn, and deteriorating balance sheet strength. 

• In Q3FY24, Cipla Ltd (CIPLA IN) recorded revenue of INR66B, up 14% YoY, and EBITDA margin of 24.2%, driven by double-digit growth across India, North America, and South Africa.
• North America business reported highest ever revenue of $230M. India revenue is up 12% YoY, supported by growth across branded prescription, trade generics, and consumer health.
• EBITDA margin for the full year is trending at a higher end of earlier guidance range of 23–24%. Peptide product launches in the U.S. should strengthen near-term growth prospect.

• Ola Electric is looking to raise about US$1bn in its upcoming India IPO. 
• Ola Electric Mobility is a vertically integrated pure EV player in India with manufacturing capabilities for EVs and EV components, including cells.
• In this note, we talk about the positive aspects of the deal.

• With the “Postcard” series, our objective is to bring to our readers on-ground insights based on interactions across key channels located in tier 2 and tier 3 locations.
• For this Postcard, we travel to the east to the city of Ranchi, located in the heart of Jharkhand. 
• Stocks in focus include Utkarsh Small Finance Bank (1639303D IN), Aditya Vision (AVL IN), Mahindra & Mahindra (MM IN), Vedant Fashions (MANYAVAR IN). 

• Yatra (YATRA IN) had its IPO recently and is the third largest OTA players in India (among key OTA players) in F23. 
• When it comes to the financials and forensics, there are several red alarms that catch our attention. 
• These include weak internal controls as highlighted by auditors, poor earnings quality, revenue recognition woes, high litigation liabilities off the books, etc. 

• IDFC First Bank Limited (IDFCBK IN)  management has provided long-term strategic guidance along with its 3Q24 results, which lays down a clear roadmap for the bank’s progress.
• The latest results are slightly below estimates but the medium-term factors for our thesis haven’t changed – viz. a strong franchise underscored by heavy retail footprint and incrementally improving unit-economics.
• We reiterate “Long-term Buy”, with 42% upside in near-term, as the bank continues to realize the benefits of its increasing scale on its earnings profile.

• Adani’s $600 million acquisition of Sanghi Cement in August 2023 marked its significant debut in the cement sector, following controversies around the group’s infrastructure ventures.
• The Master Supply Agreement with Ambuja & pricing structure, based on cost plus a 10% markup, has raised concerns about lower EBITDA realizations for Sanghi Cement, deviating from industry norms.
• Issues surrounding potential profit loss (Rs 357 crore) and investor skepticism echo previous instances, like the NDTV case, where minority shareholders experienced less favorable terms compared to the promoter. 

• Cello World Limited (CW IN) is a renowned company in the consumer products market. The company primarily operates in houseware, stationary and moulded furniture industry.
• The promoters recently undertook a major corp. restructuring post which several promoter entities were acquired by CWL. This has led to abnormally high ROCEs.
• Other forensic takeaways pertain to RPT, poor cash management, mysterious sale proceeds of PPE, subsidiaries audit, etc.

• FirstCry (0172540D IN), India’s largest multi-channel retailing platform for mothers’, babies’ and kids’ products, has filed for a US$700 million IPO. 
• The substantial shareholders are Softbank Group (9984 JP) Vision Fund (25.55% of shares), Mahindra & Mahindra (MM IN) (10.98%), Premji Invest (10.36%) and Supam Maheshwari – founder and CEO (5.95%).
• The bull case rests on growing addressable markets, strong market positioning, robust GMV growth and strong organic growth.   

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 Ports & Special Economic Zone

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.

• Greenko Energy Holdings

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.

• Anton Oilfield
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• Reliance Industries