India

• InterGlobe Aviation Ltd (INDIGO IN)’s co-founder, Rakesh Gangwal and his wife, aim to raise up to US$450m through the bulk sale of 15.6m shares (4% of TSO).
• He had earlier stated his intention to pare down his stake after a long drawn battle with his co-founder Rahul Bhatia. He last sold in Sep 2022 and Feb 2023.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• SBFC Finance Limited (1547353D IN) raised around US$131m in its India IPO, after the deal was priced at INR57/share, the top end of its IPO price range.
• SBFC Finance is a systematically important, non-deposit taking non-banking finance company (NBFC-ND-SI), offering secured MSME Loans and Loans against Gold. 
• In this note, we will talk about the demand for the deal and other trading dynamics.

• Fedbank Financial Services (0702066D IN) is looking to raise about US$200m in its upcoming India IPO.
• Fedbank Financial Services (Fedbank) is a retail-focused non-banking finance company (NBFC) promoted by The Federal Bank Limited.
• As per CRISIL, the firm had the second lowest cost of borrowing across the MSMEs, gold loan and MSME & gold loan peer set in India in FY23. 

• IDFC First Bank is now at USD7bn market cap, and it will now be seen by more than before
• Net interest income rising from INR27.5bn to INR37.5bn is amongst best in India banking
• Credit metrics improving dramatically, but credit costs have yet to trail lower – to come

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
• China Jinmao Holdings
• Road King Infrastructure

• The review period for the September rebalance of the S&P/ASX family of indices ends on Friday. There will be a lot of changes across the family.
• Hang Seng Indices will announce the changes to the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index and the HSCI after market close on Friday.
• There were HUGE inflows to onshore China focused ETFs during the week with CSI 300 Index, CSI 500 Index and SSE50 Index ETFs taking in the largest amounts.

• Rainbow Children’s Hospital (RAINBOW IN) recorded 21% YoY revenue growth in Q1FY24 to INR2.9B, driven by increase in pediatric surgical cases and deliveries, and addition of new bed capacities.
• Lower occupancies in new hospitals and higher expenses impacted profitability. In Q1FY24, EBITDA margin declined 407 bps YoY to 30.5%, while net profit margin contracted 190 bps YoY to 14.4%.
• The company will add 270 beds in the current financial year. By FY27, RCML aims to increase its bed capacity by 56% to 2,585 from current bed capacity of 1,655.  

• Stylam Industries (SYIL IN) reported a good quarter on the profitability front, with PAT up 32.4% YoY but revenues down 4% YoY. 
• Exports showed degrowth temporarily by 11% YoY due to a slowdown in Europe and other key markets, but the company guided an improvement in subsequent quarters. 
• Trading at 20x/16x FY24e/25e, the stock is not a steal, but with a remarkable growth profile of 20-25% CAGR, we see tremendous potential as a multibagger for the company.

• Suzlon Energy (SUEL IN) is looking to raise INR20bn (US$240m) from its QIP, with proceeds used to pay down debt.
• The firm has struggled with a debt issue in the past, most recently undertaking a rights issue in 2022 to raise INR12bn (US$150m). 
• With the proceeds from this deal, the firm should enter into net cash territory.

• TVS Supply Chain Solutions (1915741D IN)  is one of the leading Indian supply chain solution companies in India with an approximate market share of 7%.  
• Around 70% of the operations come from outside India, however the foreign subsidiaries are not doing pretty well. Moreover, the profits that were only posted in F23 look unsustainable.
• Other concerns which are not to be overlooked, relate to impairment of assets, levered balance sheet, pricey acquisitions, disposal of fixed assets, high remuneration to promoter, etc.

• Power Finance, Astral, IDFC First Bank, Cummins India, HDFC Asset Management, Ashok Leyland, Polycab India and Supreme Industries have all run up over the recent past and have investor attention.
• The increase in market cap has put the stocks on active manager radars and could also result in the stocks being added to global indices in the near future.
• We take a look at the positioning on the stocks and recommend pair trades to reduce market risk while trying to capture alpha.

• KPIT reported a strong Q1FY24 with 7.1% constant-currency (CC) revenue growth and EBIDTA growth of 13.3% QoQ. EBITDA margin expanded by 90bp QoQ to end at 20%.
• KPIT is upbeat about the demand environment. OEMs are continuing to spend heavily on new technologies. KPIT itself is investing significantly in R&D, especially Generative AI.
• Deal wins was healthy at $190mm vs typical run-rate of $150mm+. The pipeline is also healthy across practices.

• TVS Supply Chain Solutions (1915741D IN) is looking to raise up to US$110m in its India IPO, after downsizing from an earlier float of up to US$500m.
• TVS SCS is an Indian supply chain logistics solution provider which also has global capabilities and network across the value chain with cross deployment abilities, according to RedSeer. 
• In our previous note, we looked at the company’s past performance. In this note, we talk about RHP updates, undertake a peer comparison and provide our thoughts on valuation.

• In Aug 2022, Zomato completed the acquisition of Blinkit’s outstanding shares via issuing its own shares. These issued shares will come up for lockup release on 10th Aug 2023.
• Zomato is one of two leading food delivery app operators in India. Its acquisition of Blinkit marked its foray into the instant grocery segment.
• In this note, we will talk about the lock-up dynamics and recent updates.

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
• Softbank Group

• Sun Pharmaceutical Industries (SUNP IN) reported 11% YoY revenue growth to INR118B in Q1FY24, mainly driven by the U.S. business. EBITDA margin expanded 109bps to 27.9%.
• Net profit declined 2% YoY to INR20B due to certain one-off charges amounting to INR3B. Excluding the exceptional items, adjusted net profit grew 14% YoY to INR23B.
• With 26 marketed products globally, Sun Pharma is betting big on specialty products. Specialty pipeline includes 5 molecules undergoing clinical trials. Specialty R&D accounts for 35% of total R&D spends.

• Triumph-Bajaj midsize bike melds the expertise of Triumph Motorcycles and Bajaj Auto Ltd (BJAUT IN)  for top-tier quality, targeting the midsize market with dual-brand prowess.
• Triumph-Bajaj sparks fervour with strong inquiries and bookings in tier-two and tier-one locations, though supply constraints present challenges.
• Triumph stands out targeting the 30+ age group seeking premium leisure riding, employing exclusive dealerships and unique pricing to enhance ownership experience.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Samvardhana Motherson’s (SM) ESG as “Adequate”, in line with its “Adequate” Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Weak”.
• The score is based on the ESG reporting of parent Motherson Group (encompassing ultimate parents Samvardhana Motherson International Limited and Motherson Sumi Systems Limited), which reports ESG on a consolidated level without providing meaningful details at the SM level.

• Concord Biotech Ltd (658823Z IN) is looking to raise around US$188m in its India IPO.
• Concord Biotech (Concord) is an India-based biopharma firm, which develops and manufactures fermentation-based active pharmaceutical ingredients (APIs).
• In this note, we will undertake a peer comparison, and share our thoughts on valuation.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Country Garden Holdings Co
2. Vedanta Resources
3. China Jinmao Holdings
4. Geely Auto
5. First Pacific Co

and more…

• Investors such as Peak XV’s Surge, Blume Ventures, and Mathew Cyriac, former head of Blackstone India, have backed the US$7.3 million round of India-based Ethereal Machines.
• Based in Bangalore, Ethereal Machines uses proprietary Computer Numerical Control machines, such as drills and mills, to produce precision engineering components for aerospace, automobile, and healthcare use.
• The company said that its offerings reduce costs by 30% and production lead times by 40%.

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.

• The NIFTY Index has been falling for 2 weeks and is reaching mildly OVERSOLD territory. If this was a retracement during the main rally, it may be time to BUY.
• The Market Reversal Matrix’s shows a bullish pattern, the time+price combined probability of success for LONG trades from current prices, after 2 weeks down, is >66%.
• Price area to go LONG: 19400 to 18792, you can go LONG this week and also next week, if down (CC=-3).

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.

• Country Garden Holdings Co
• MGM China Holdings
• Vedanta Resources