India

• Vedant Fashions (MANYAVAR IN)‘ Promoter is looking to raise US$239m via trimming a 7% stake in the firm. 
• The selldown here is to meet the minimum public shareholding requirement of 25% set by SEBI.
• The deal would be a large one to process with the base deal alone representing 187 days of the firm’s three month ADV.

• Nexus Select Trust (NST IN) raised around US$391m in its India IPO. The market value of its assets stood at INR234bn (US$2.9bn), of which INR211bn (US$2.6bn) was from its retail assets.
• NST is a REIT with a portfolio of 17 Grade A urban consumption centers. It is backed by Blackstone.
• We have looked at various aspects of the deal in our previous note, in this note, we talk about the demand and trading dynamics.

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.

• Vedanta Resources

• In this insight, we take a look at the names leading the race to become ADDs/DELs for the NIFTY 50 and NIFTY 100 indices in the September 2023 rebalance.
• The HDFC Limited (HDFC IN) – HDFC Bank (HDFCB IN) merger could complete earlier than previously expected, triggering intra-review index replacements.
• Separately, I have presented some interesting new trading ideas involving some of the index change candidates, and I discuss the status of pre-existing trade ideas.

• Edelweiss’ stock was down over -5% yesterday. The reason for downfall seems to be a media article which states that three large brokers are being investigated for money laundering activities.
• We think Edelweiss is not one of them as the article mentions that these brokers are being investigated since their involvement in the NSEL scam, where Edelweiss had no involvement.
• In fact, Edelweiss was among the few brokers that had come out unscathed in the NSEL scam, as it detected early on that there was some wrongdoing happening at NSEL.

• IN Q4FY23, Cipla Ltd (CIPLA IN) reported highest ever US business revenue of $204M, up 27% YoY and 5% QoQ, driven by expansion in market share of key launches.
• Lead peptide asset Lanreotide injection, launched in Q4FY22, is consistently gaining market share. The product currently has market share of 17%, up from 14.1% in Q3FY23 and 9.6% in Q2FY23.
• Ex-COVID, India business revenue increased 16% YoY, driven by chronic branded prescription portfolio. FY23 marks the second consecutive year of market beating growth of Cipla’s chronic portfolio.

• Five Star Business Finance (FIVESTAR IN) raised around US$190m in its India IPO in Nov 2022.
• Five-Star Business is a non-banking financial company (NBFC-ND-SI) that provides secured business loans to micro-entrepreneurs and self-employed individuals.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

In our view, Tata Motors’ Q4 and FY 2022-23 results were stronger than expected, with all business segments performing well. Most importantly, JLR improved strongly on the back of the easing semiconductor shortage situation. It is encouraging to see a solid and consistent improvement from the company throughout the year, from a very weak Q1 to a robust Q4. Earnings and cash flows were better than expected. We view positively the company’s efforts to rebrand itself into the sub-brands of Range Rover, Defender and Discovery. We note that Range Rover is viewed positively in the luxury space in emerging markets.

Vedanta Ltd has released disappointing Q4/22-23 results. Revenue fell 4.75% y-o-y while reported EBITDA decreased 30%, mainly due to lower prices of metals and minerals, along with higher costs. Production was weak. However, leverage ratios are acceptable, with Pro-forma Gross Debt/EBITDA and Net Debt/EBITDA of 3.5x and 2.9x, respectively, in April 2023.

Production guidance is essentially flattish, with no significant growth projected in the key segments that contribute the most to EBITDA, namely zinc, oil & gas and aluminium. Refinancing risk over the next one year remains the key risk.

• Dr. Reddy’s Laboratories (DRRD IN) announced mixed Q4FY23 result, with revenue beating consensus and net profit missing expectations. Both revenue and net profit grew YoY but declined sequentially.
• North America grew 27% YoY (but declined 17% QoQ) to INR25.3B, driven by new product launches, growing market share in certain existing products, and favorable Fx movement.
• Revenue from India business increased 32% YoY and 14% QoQ to INR12.8B, driven by favorable price variance, new product launches including acquired/in-licensed products, and non-core brand divestments.

• Our 2023 outlook remains unchanged as we continue to expect broad-based consolidation with $93 capping upside on MSCI ACWI (ACWI-US), while important downside targets are $86, $84, and $75-77.
• We still recommend tactical overweight to defensives including gold miners and MSCI ACWI Staples, Health Care, and Utilities, given ACWI-US remains near the top of our expected 2023 trading range.
• We are now starting to see broad-based improvement, particularly in Japan and India, but also in Taiwan and South Korea. Most of today’s buy recommendations are cyclicals in these countries.

• Late Wednesday, the boards of Adani Enterprises, Adani Green Energy, and Adani Transmission announced they would meet Saturday to consider fund-raising proposals.
• They will consider issuance of equity shares or other eligible securities through a private placement, a qualified institutions placement, or a preferential issue, among other methods.
• Earnings just out were generally good/up. They still need/want to raise equity. SEBI is still conducting its investigation but hints are there’s trouble. A set of private placements looks likelier.

• Tata Technologies (TATATECH IN) , a subsidiary of Tata Motors, offers turnkey product engineering and digital transformation solutions to global OEMs and operates across automobiles, heavy industrials and aerospace sectors.
• The company has filed for an IPO in India to raise around US$600m through an offer for sale of its shares by existing shareholders including Tata Motors.
• Though the company’s revenues and margins have seen improvement over the last 2-3 years, we have highlighted a few concerns which investors should wary about.

• The HDFC Bank (HDFCB IN) / HDFC Limited (HDFC IN) merger will result in capping and funding changes on the Nifty Bank Index (NSEBANK INDEX) constituents.
• We estimate one-way turnover of around 8.4% resulting in a one-way trade of INR 21,865m (US$266m) at the time of merger implementation.
• The impact in terms of ADV is less than 1x on all stocks, but the impact in terms of delivery volume is higher than 1x on a few stocks.

• Vedant Fashions (MANYAVAR IN) , (VFL) had recently debuted on the bourse in 2022. 
• The company has grown to be one of the largest brands in the wedding/celebration apparel industry, boasting a network of 595 stores and 300+ franchises as of March 2022.
• When it comes to the forensics, there are slight grey areas observed with respect to the accounting complications. The insight also highlights key governance takeaways.

• Bikaji Foods (BIKAJI IN), an ethnic snacks company, raised approximately US$107m in its India IPO. The stock was listed on 16th Nov 2022, its six-month lockup will expire soon.
• Bikaji was the third largest ethnic snacks company in India and the second fastest growing company in the Indian organized snacks market in FY22, as per Frost & Sullivan (F&S).
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• Mankind Pharma  raised around US$527m in its upcoming India IPO.
• MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
• We have looked at various aspects of the deal in our previous note, in this note, we talk about the demand and trading dynamics.

• Global Health (Medanta) (MEDANTA IN) raised around US$268m in its India IPO. The stock was listed on 16th Nov 2022, its six-month lockup will expire on 11th May 2023.
• Global Health (GH) is a hospital network that operates under the Medanta brand. The firm currently has five hospitals in operation and one more planned for development.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments – Mankind Pharma (6596876Z IN), Nexus Select Trust (NST IN), Tata Technologies (TATATECH IN), ADICON Holdings Limited (ADI HK), Horizon Construction Development (1887128D HK) IPOs.
• Event-Driven developments – Aag Energy Holdings (2686 HK), Golden Energy & Resources (GER SP), Lian Beng (LBG SP), Penguin International (PBS SP), Estia Health (EHE AU),  Liontown Resources (LTR AU).