India

• Tata Technologies (TATATECH IN), the largest India-based ER&D (engineering research and development) service provider, is seeking to raise up to US$600 million, according to press reports.
• In Tata Technologies IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The key elements of the bear case rest on below-peer revenue growth, high contract assets, growth reliant on VinFast, mid-tier profitability, and high attrition rates.   

• Go Air Limited (GO IN)‘s resistance to put its operational woes aside, has come to an end as the company has filed for insolvency.
• In our previous IPO insight, Go Air IPO- In Search Of Smooth Landing we had highlighted several issues that were haunting the company, including the Pratt and Whitney trouble.
• Now that the company has filed for insolvency, the search of smooth landing extends to the shareholders and the lenders.

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. Vedanta Resources
2. Azure Power Global Ltd
3. Pakuwon Jati
4. Japfa Comfeed Indonesia
5. China Jinmao Holdings

and more…

• Nexus Select Trust (NST IN), a consumption centre REIT, is seeking to raise up to Rs32 billion (US$392 million). The offer opens from 9-11 May. 
• We previously discussed the IPO in Nexus Select Trust IPO: The Investment Case. NST is sponsored by Blackstone Group (BX US). 
• Our valuation analysis suggests that the IPO price range is attractive. Therefore, we would participate in this IPO. 

• Reliance on ecommerce has intensified within the past few years, but the pandemic, geopolitical tensions and government restrictions have disrupted the global supply chain.

• Over the course of a decade, companies are expected to see losses equal to nearly half of what they make in a year.

• US- and India-based Pando is looking to solve this issue and has raised funding to help it do so.

• The use of electric vehicles (EVs) is on the rise in various parts of the world, including India.

• In recent years, companies have been racing to accelerate the adoption of the electrified tech in the country.

• BluSmart Mobility, for instance, provides a ride-hailing service with 3,500 EVs operating in Delhi and Bengaluru. The company is also developing an EV charging hub infrastructure.

• Coldspace, an Indonesian integrated cold chain solutions provider, today announced the completion of a US$3.8 million seed funding round
• With this funding, Coldspace plans to expand its service capacity, including greater capacity for cold storage, reefer trucks, fulfilment, and geographic expansions
• The company offers businesses and consumers cold storage facilities and reefer trucks through its own inventory as well as a third-party aggregated marketplace of cold chain partners empowered through the company’s tech stack.

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

• Nexus Select Trust (NST IN) is looking to raise around US$391m in its upcoming India IPO.
• NST is a REIT with a portfolio of 17 Grade A urban consumption centers. It is backed by Blackstone.
• In our earlier notes, we have looked at the company’s past performance. In this note, we talk about implied valuations in the IPO price range.

• Tata Technologies (TATATECH IN), the largest India-based ER&D service provider, is seeking to raise up to US$600 million, according to press reports.
• Tata Technologies ranked first among India service providers and third globally among rated service providers for automotive ER&D services, according to Zinnov.
• The key elements of the bull case rest on its automotive leadership positioning, solid performance of the core business, high repeat rates, rising margin and cash generation. 

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.

• Adaro Energy
• Azure Power Global Ltd
• ENN Natural Gas
• Vedanta Resources

• Halfway through the review period, we see 5 potential changes for the Nifty Next 50 Index (NIFTYJR INDEX)/ Nifty 100 Index (NSE100 INDEX) at the September rebalance.
• All the potential adds are expected to migrate from MidCap to LargeCap at the AMFI June reclassification, while we expect two of the potential deletes to move the other way.
• Of the potential deletes, one is a high probability deletion from the MSCI India Index at the May QCIR while there is another that is a lower probability deletion.

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.

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.

• China Vanke
• HPCL-Mittal Energy Ltd
• MGM China Holdings
• Pakuwon Jati

• The review period for the price cutoff for the MSCI May Quarterly Comprehensive Index Review (QCIR) ended 28 April. MSCI should select a day from week one.
• The most changes are expected in China and there are a couple of stocks that could trigger the Extreme Price Increase thresholds.
• Some stocks appear on the list of potential changes on certain days during the review period and their addition/deletion will depend on the day that MSCI chooses for computation.

• Nexus Select Trust (NST IN), a consumption centre REIT, is seeking to raise up to Rs32 billion (US$391 million). The offer opens from 9-11 May. 
• NST, sponsored by Blackstone Group (BX US), owns India’s most extensive portfolio of consumption centres and will be the first publicly listed consumption centre REIT in India.
• The key elements of the investment case rest on strong portfolio performance, high occupancy rates, favourable lease contracts, rental reversion potential and low tenant concentration risk.

• Radico Khaitan (RDCK IN) had succeeded in getting de-leveraged to a strong extent,  as mentioned in our previous insight, Radico Khaitan Limited: On the Path of Getting Debt Free 
• The company has entered into the new capex phase and has accumulated some debt, the annual report F22 also highlights few irregularities on the forensic side.
• These include complex structure for land purchase, receivables provisioning, deviation between RoU and lease assets, etc. 

• Voltas Ltd (VOLT IN) has experienced a decline in revenue due to a slowdown in demand, increased competition, and higher commodity prices. 
• The Voltas Beko brand has been a ray of hope for the company, with strong growth in demand and market share.
• While there may be an upside in volumes as capex kicks in,  but better to be on the sidelines until there is a change in the structure of the industry.

• Bajaj Auto Ltd (BJAUT IN) is optimistic about the future of their exports and expects a recovery in exports as a critical catalyst for the stock over the near term.
• The company’s EV endeavors in both 2-wheelers and 3-wheelers are expected to surprise on the upside, which can deliver upside than what is currently factored in.
• The stock also trades at undemanding valuations (16x FY25 consensus estimates), offering adequate comfort with an optionality of EV and Exports.

• Torrent Pharmaceuticals (TRP IN) continues to report double-digit revenue growth from India business. Leadership positioning in chronic therapeutic areas underpinned by Curatio acquisition is driving the domestic business.
• The company expects the India business to continue its growth momentum, backed by new launch, top brand performance, increase in field force productivity, and continued performance of Curatio portfolio.
• The U.S. business also witnessed revival in FY23 after a downturn in FY22, which should provide impetus to the company’s bottom line to a great extent.

• Strong demand for Eicher Motors (EIM IN) ‘s Royal Enfield bikes with returning customers.
• The model “Hunter” is expanding the market and attracting a new set of customers.
• Royal Enfield entering a new growth phase with new launches and customer service focus.

• Foreign shareholding has dropped in HDFC Limited and increased in HDFC Bank – the net effect is an increase in foreign room to just north of 18%.
• The merger is expected to complete in Q2/Q3 when there will be buying from MSCI trackers. There will be adhoc inclusions to the NIFTY, Nifty Next 50 and SENSEX indices.
• HDFC Limited (HDFC IN) trades 1.39% below the merger ratio with HDFC Bank (HDFCB IN) and also at a lower price to book.

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
• Tata Motors ADR
• Xiaomi Corp

• Mankind Pharma (6596876Z IN) is looking to raise up to US$526m in its IPO by selling 40.06m shares at a price range of INR 1026 to INR 1080 per share.
• The company has allocated 12.02m shares to anchor investors at INR 1080/share. That list includes marquee names and the lock-up reduces near-term float.
• The IPO opens on 25 April and will close on 27 April. Shares are expected to start trading on 9 May and there are no near-term index inclusions expected.