India

• The promoters of Patanjali Foods (PATANJAL IN) are looking to increase the firm’s public shareholding to the minimum required 25% imposed by SEBI.
• We had discussed about this in their effective re-listing FPO last year, and the deal has been well covered by media sources as well, thus it is very well flagged.
• While it would be a large one to digest, representing at least 62.1 days of the firm’s three month ADV, the deal will lift the remaining overhang on the stock.

• Home First Finance (HOMEFIRS IN) lends to a customer segment exposed to high income volatility.
• Soft bounces are used by customers to manage their cash flow, with bounce charge collection done on a best-effort basis, management attitude towards financial discipline warrants attention. 
• While there may not be any immediate asset quality issues, caution is warranted. 

• Zydus Lifesciences Ltd (ZYDUSLIF IN) reported total revenue of INR43.6B, up by 20% YoY and 6% QoQ, in Q3FY23. Key markets, India and the U.S. continued to deliver robust performance.
• U.S. business is on track to register QoQ growth in near-term, with the launches of new products. Zydus plans to launch 2–3 transdermal products in U.S. in FY24.
• For its India business, the company aims to outperform the industry growth sustainably in the medium to long term. Lipaglyn is expected to be among top 25 products of India.

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. Evergrande
2. Vedanta Resources
3. Sino-Ocean Group
4. Lippo Karawaci
5. Japfa Comfeed Indonesia

and more…

• On 17 February, NSE Indices announced the results of the March index review for the Nifty Next 50 Index (NIFTYJR INDEX). There are 5 adds and 5 deletes. 
• Last evening, NSE Indices announced a change in the index methodology where the cumulative weight of non-F&O stocks in the index will be capped at 10% (down from 15% earlier).
• This changes the flows at the March rebalance that will be implemented at the close of trading on 29 March.

• The Government of India (GoI) aims to raise around US$372m (INR30.7bn) via an offer for sale of Hindustan Aeronautics Ltd (HNAL IN) stock. 
• The floor price of INR2,450 / share is set at approximately 6.7% to Wednesday’s (22nd Mar 2023) last close. The deal represents 10.5 days of ADV. 
• In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

• This week it was reported that the release of Azure Power’s audited financial statements for FY2022 has been delayed again as appointed auditors Ernst & Young Mauritius have expressed an unwillingness to sign them off.
• An external agency is said to be investigating the whistle-blower allegations and the auditors are said to be uncomfortable with signing off the statements.
• Separately, the company recently released unaudited financials for two restricted groups – Azure Power Energy Limited and its restricted group entities, and Azure Power Solar Energy Private Limited and its restricted group entities.

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.

• AAC Technologies Holdings
• Evergrande
• First Pacific Co
• Vedanta Resources

• PNB Housing Finance Ltd (PNBHOUSI IN) (PHBHF) aims to raise up to US$300m via a rights issue in order to boost its capital base.
• PNBHF is the housing finance arm of Punjab National Bank and is partly owned by Carlyle, with investments from General Atlantic as well.
• In this note, we will talk about the rights issue and other deal dynamics.

• The Government of India is looking to sell up to 3.5% of Hindustan Aeronautics Ltd (HNAL) to meet the minimum public shareholding and will raise US$350m at the floor price.
• Hindustan Aeronautics Ltd (HNAL IN) is a potential inclusion to the MSCI India Index at the May QCIR and there will be buyers at the placement.
• Hindustan Aeronautics Ltd (HNAL IN) trades cheaper than its peers and there could be a move higher over the next few weeks.

• Nearly halfway through the review period, we see 10 stocks moving from MidCap to LargeCap and vice versa, and 9 stocks moving from SmallCap to MidCap and vice versa.
• Financials are poised to be the biggest gainers in the reshuffle with 6 stocks moving from MidCap to LargeCap and 5 stocks moving from SmallCap to MidCap.
• Over the last 6 months, stocks expected to migrate upward have outperformed stocks that are expected to migrate downward., though there has been a downward drift this year.

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.

• Sino-Ocean Service
• Vedanta Resources

• Survival Technologies (1279515D IN) is looking to raise around US$121m in its upcoming India IPO. 
• Survival Technologies (ST) is a contract research and manufacturing services (CRAMS) focused speciality chemical manufacturer in India. 
• ST has seen its profitability grow and margins expand during the track record period. However, the company seems to have had a number of run-ins with the authorities.

• RPSG Ventures Limited (RPSGVENT IN) [“RPSGV”] continues to scale up its FMCG business. Q3FY23 FMCG revenues saw a YoY growth of 23%. QoQ, there was some de-growth due to seasonality.
• Excluding one-off other income, Firstsource Solutions (FSOL IN) reported weak Q3FY23 earnings led by sluggish growth and weak margins.
• RPSGV remains a deep-value holding company that is trading at a discount of >85%. As its FMCG and Sports businesses scale up, the stock has potential to re-rate significantly.

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. China Jinmao Holdings
2. Lifestyle International Holdings
3. Geely Auto
4. First Pacific Co
5. Tata Motors Ltd

and more…

The Asia HY Trade Book for March 2023 includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds across Asia (ex-Japan) HY and crossover credits.

• Blue Jet Healthcare Ltd (BJHC IN)  is looking to raise about US$300m in its upcoming India IPO.
• Blue Jet Healthcare (BJH) is a specialty pharmaceutical and healthcare ingredient and intermediate company, offering niche products targeted toward innovator pharmaceutical companies and multinational generic pharmaceutical companies. 
• In this note, we look at the company’s past performance.

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

• Indusind Bank (IIB IN) ‘s shares saw a sharp fall of 7% on Monday.
• The fact that RBI shortened the tenure of MD & CEO to two years baffled the market. 
• Shortening of tenures by the RBI have been seen earlier also for BFSIs. The move does not explicitly indicate any fundamental deficiency, hence investors should not be too worried.

• Tata Technologies (TATATECH IN) is looking to raise about US$600m in its upcoming India IPO. The deal will be run by Bank of America, Citigroup and JM Financial.  
• Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs) and their tier 1 suppliers. 
• It has deep domain expertise in the automotive industry and serves clients in adjacent industries, such as aerospace, transportation and construction heavy machinery (TCHM), according to the company. 

• Mahindra & Mahindra (MM IN) is facing challenges in the highly competitive SUV segment in India.
• Model-Wise data indicates declining sales volumes for some of its models such as Scorpio, XUV300, and XUV700.
• The strategy of focusing on the higher end of the SUV market may lead to confusion and loss of market share. 

• Snowman Logistics (SNLL IN)  is principally engaged in the business of providing integrated cold chain solution to users in India.
• The company is in capex phase as it looks to increase the pallet capacity. 
• Forensic concerns include inability to deliver cash flows after the last capex cycle, alongside governance issues such as directorial pay, churn in board, etc.