India

• Mankind Pharma (MP) is looking to raise up to 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 earlier notes. In this note, we talk about the implied valuations.

• Mankind Pharma (6596876Z IN), a pharmaceutical company, is seeking to raise up to Rs43.3 billion (US$527 million) at Rs1,026-1,080 per share. The public offer runs from 25-27 April.
• We previously discussed the IPO in Mankind Pharma IPO: The Bull Case and Mankind Pharma IPO: The Bear Case. 
• The 9MFY23 (nine months to December) disclosure showcases a slowdown in growth, market share losses, margin pressure and declining RoCE. We are cautious about the IPO. 

• Indegene Limited (1864095D IN) is looking to raise about US$400m in its upcoming India IPO.
• Indegene is a “digital-first” commercialisation firm with an exclusive focus on the global life sciences industry.
• Its solutions aim to enable biopharmaceutical, emerging biotech and medical devices companies to develop, launch and drive sales for their products in a more efficient manner. 

• Mankind Pharma (6596876Z IN) IPO will open for public subscription on April 24 and close on April 27. The shares are expected to be listed on May 9.  
• The company has set IPO price band of INR1,026 –1,080 per share, valuing the company at INR433 billion at the top of the price band.
• The IPO price band implies P/E of 30.9x at the lower band and 32.6x at the upper band. This is pricier than other India focused pharmaceutical companies.

• Mankind Pharma  (MP) is now looking to raise around US$500m 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 earlier notes. In this note, we talk about the updates from its recently filed RHP.

• Max Healthcare Institute (MAXHEALT IN) reported improved occupancies, revenues, EBITDA and other operating and financial parameters in Q3FY23 versus year-ago period.   
• The company recorded highest-ever EBITDA – both in terms of absolute value and margins, EBITDA per bed, ARPOB, and ROCE for the third consecutive quarter in FY23.
• During the last three-year, Max had revenue and EBITDA CAGR of 12% and 59%, respectively. Consensus expects the company to report double-digit revenue and EPS growth through FY25.

• Fundamentally strong company with track record of high profitability and efficient operations. 
• Installed power generation capacity will more than double to ~5,500 MW by FY24 and another 4-5x by FY30. 
• Potential for DPS to improve from a trailing 1.70 INR to INR 2.50 by FY24, implying an attractive dividend yield of 7.5%. 

• The review period for the MSCI May QCIR starts on Monday. The most changes inclusions by far are expected to be in China.
• There will be an ad hoc change for the S&P/ASX 100 Index, S&P/ASX 200 (AS51 INDEX) and KOSDAQ 150 Index (KOSDQ150 INDEX) at the close on 18 April.
• After a period of sustained outflows, there were some inflows to the IShares Core MSCI Asia Ex Japan ETF (3010 HK) during the week.

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. Softbank Group
2. Central China Real Estate
3. Sino-Ocean Group
4. Seazen (Formerly Future Land)
5. Vedanta Resources

and more…

• Every quarter, Indian companies report their “Shareholding Pattern” for all to see. They show holdings by category type, and holders over 1%. 
• The big news in Q1 in AdaniLand was the failed FPO, thwarted by the Hindenburg Research report, and the Adani Promoter sale of stakes in 4 companies to GQG Partners. 
• The details in the change of the shareholder structure are, however, interesting.

• Tata Technologies (TATATECH IN)  (TT) is looking to raise around US$600m in its upcoming India IPO.
• 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. 
• In this note we talk about the not-so-positive aspects of the deal.

• 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.
• A couple of these names could become intra-review additions if the HDFC Limited (HDFC IN) – HDFC Bank (HDFCB IN) Merger closes prior to the September 2023 Rebalance.
• Apart from that, there could be five ADDs/DELs for the NIFTY 100 index which by definition will also be added/deleted from the NIFTY Next 50 index.

• TCS reported weaker than expected growth and margins. YoY growth in constant currency (CC) terms came in at just 10.7%. Operating Margin (OPM) came in at 24.1% vs 25% expected.
• North America in particular has seen some demand slowdown, largely due to deferment of discretionary projects and delayed decision making. Europe is improving as energy crisis is receding.
• Looking forward, Europe, in particular UK, is likely to lead the growth. North America may also come back as the banking crisis there seems to have been contained.

• Infosys reported a weak Q4FY23 with QoQ CC (Constant Currency) growth down by -3.2%. OPM (Operating Margin) contracted QoQ by -50bp to 21%, and was weaker than 21.5%+ expected. 
• Led by macro concerns, demand outlook remains cautious with FY24 growth guided to be 4-7% YoY in CC terms.
• The bottom end of the FY24 OPM guidance has been lowered to 20% vs 21% achieved in FY23. Overall OPM guidance for FY24 is 20-22%.

• Indegene Limited (1864095D IN), a healthtech firm focused on life sciences commercialization is looking to raise INR32B through an IPO, comprises of fresh issue and an offer for sale.  
• The IPO funds will be used to repay debt, fund capex, pay for one of the company’s past acquisitions, and pursue any future inorganic growth.
• Amid a large and growing underpenetrated addressable market, Indegene is poised for long-term profitable growth by leveraging on its marquee clientele, long-standing client relationship, and comprehensive offering.  

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.

• Meituan
• Nickel Industries Ltd
• Vedanta Resources

• Tata Technologies (TATATECH IN) (TT) is looking to raise around US$600m in its upcoming India IPO.
• 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. 
• In this note we talk about the positive aspects of the deal.

• In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, 200, and 500 Indices in the June 2023 Rebalance.
• There are only few more days left in the reference period used for the constituent selection process for the June 2023 Rebalance.
• Currently, I see 6 ADDs/DELs for the BSE 100 index and 4 ADDs/DELs for the BSE 200 index.

• HPL Electric & Power (HPLE IN) is one of the key players in domestic electric meters market and domestic on-load, change-over switches market. The company also manufactures LED products.
• Forensic overview of the company indicates poor capital allocation in the past, along with cash generation issues.
• One must also keep a note of the inherent credit risk, as well as some interesting line items such as software and designs, on the balance sheet.

• Mankind Pharma (6596876Z IN), a pharmaceutical company, is seeking to raise up to Rs45 billion (US$550 million) in April, according to press reports.
• In Mankind Pharma 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 worrying recent developments, FCF burn, rise in inventory days and a steady decline in RoCE.   

• Mankind Pharma (6596876Z IN), a pharmaceutical company, is seeking to raise up to Rs45 billion (US$550 million) in April, according to press reports.
• Mankind Pharma is India’s fourth-largest pharmaceutical company in terms of domestic sales and second-largest in terms of sales volume in FY22, according to IQVIA.
• The key elements of the bull case rest on a track record of growing brands and market share,  accelerating growth rates, and profitability with margins in a relatively tight range.

• Kotak Mahindra Bank (KMB IN) was added to the MSCI India Index at the November 2020 SAIR. However, a LIF of 0.5 was applied due to the low foreign room.
• The latest shareholding pattern as of end-March shows a foreign room higher than 25%. That should result in a removal of the LIF at the May QCIR.
• The increase in foreign room is a result of FPIs selling the stock despite the inclusion of Kotak Mahindra Bank (KMB IN) in a global index in March.

• Phonepe Pvt Ltd (1732974D IN) ‘s new app, “Pincode”, is based on the ONDC platform and offers hyperlocal e-commerce.
• ONDC-Enabled Pincode could disrupt Zomato (ZOMATO IN) food delivery and grocery businesses.
• Loyal restaurants may choose to offer discounts via ONDC, putting pressure on Zomato (ZOMATO IN)  and Swiggy (1255298D IN) to compete bringing back cash burn and discounting. 

• The Adani names are seeing new news and commentary. SEBI is probing offshore deals for rules violations, SEBI filed an interim report Sunday with the Court, Cements are refinancing US$4bn.
• GQG’s Jain was interviewed by Bloomberg TV in NY saying he sees his Adani basket being a “multi-bagger in five years.” 
• Assuming growth and margins equivalent to peer max rates, all profits reinvested, and 100% gain in stock price in 5yrs, NP CAGR=33%, 2028 EV/EBITDA average of four names is 29.4x.