India

• KFin Technologies (1804170D IN) is looking to raise around US$180m in its India IPO.
• KFin Technology (KFin) is a technology driven financial services platform providing comprehensive services and solutions to the capital markets ecosystem.
• In this note, we will look at its RHP updates, peer comparison, earnings assumptions, and share our thoughts on valuation.

• Government of India (GoI) aims to raise up to US$360m via selling its 5% stake in Indian Railway Catering and Tourism (IRCTC IN).
• This is not the first selldown by GoI and won’t be the last either. However, the stock now looks more expensive than ever.
• In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

• In Q2FY23, Zydus Lifesciences Ltd (ZYDUSLIF IN) recorded 16% y/y and 10% q/q growth in the U.S. formulation business, mainly driven by new launches including gRevlimid.
• India formulation business continued to progress well, with market share gain in key therapies including cardiovascular, gynecology, respiratory, and gastro intestinal on a y/y basis.
• Zydus remains confident to achieve 20% plus EBITDA margin for the current fiscal, backed by growth visibility across key businesses, coupled with various cost optimization initiatives.

• PayTM, which IPOed 13 months ago at Rs2150/share and now trades 75% lower “intimated” the possibility of a buyback on the 8th, and shares jumped 7.2% on the 9th. 
• The Board approved the INR 8.5bn buyback at max price INR 810/share late last night. The shares fell slightly today. Now we move to a postal ballot.
• The buy-back rules crate interesting parameters and these buy-back terms provide interesting opportunities. 

• Adani Enterprises (ADE IN)  is looking to raise INR200bn (US$2.4bn) via a further public offering. The company has obtained board approval and is now awaiting shareholder approval.
• It is the flagship company of the Adani Group. The group’s listed entities’ stock performance over the past few years has made the founder one of the richest persons globally.
• However, the stock is expensive and has had some issues in the past. In this note, we take an early look at the possible placement and its impact.

• Sula Vineyards (1332009D IN) has currently come up with its IPO. The ~INR 9.6 bn IPO comprises offer for sale and has a price band of INR 340-357 per share.
• The company is a market leader with a market share crossing 50% in a relatively nascent INR 13.45 bn domestic 100% grape wine market.
• Key forensic takeaways that one should consider is high litigation liabilities, emphasis on related party transactions, irrational dividends and absurd trend of line items.

• Company holds pole position in corn starch processing in India with ~ 25% market share; but accounts for a significant share of industry’s profit pool. 
• Further expanded capacity by 40% (1200tpd) just last week and another 25% expansion is planned for Q4FY24E, the 60%+ capacity expansion will drive volume led growth forward.
• Cost pressures (commodity, energy) to abate in FY24E. Formidable player, capital efficient business, cost leadership, net cash stature, low valuations(<10x PER, <1x EV/Sales), favors investment.

• KFin Technologies (1804170D IN) is looking to raise around US$300m in its India IPO.
• KFin Technology (KFin) is a technology driven financial services platform providing comprehensive services and solutions to the capital markets ecosystem.
• Under its offering, it primarily serves asset managers and corporate issuers domestically, while providing investor solutions for mutual funds and private retirement schemes in other regions.

• Sula Vineyards is looking to raise around US$117m in its upcoming India IPO.
• Sula Vineyards (SV) distributes wines under a bouquet of brands. In addition to its flagship brand “Sula,” popular brands include “RASA,” “Dindori”, “The source,” “Satori”, “Madera” & “Dia”. 
• We have looked at various aspects of the deal in our previous notes. In this note, we will talk about recent updates and valuations.

• Dish TV India (DITV IN) has been under the limelight for quite a while. ever since the legal tussle with shareholders.
• The last six months have seen several events happening at the corporate governance level; the trials of churn in board and the required shareholders approvals has troubled the company.
• Even though there have been monumental changes in the board such as resignation of Mr.Goel, the battle with the shareholders is still far from the finale.

• Infosys Ltd (INFO IN) (Infosys Ltd Sp Adr (INFY US)) on 5-6 December announced an on-market buyback of more than US$1.1bn. 
• The company has done buybacks before, and it is worthwhile looking at the details.
• The buy-back looks small, and may be impactful near-term in near-space. 

• After a 50 bp hike three times a row, RBI softened and increased the repo rate by 35 basis points to 6.25%.
• Consequently, the standing deposit facility (SDF) rate stands adjusted to 6%, and the marginal standing facility (MSF) rate and the Bank Rate to 6.50%
• The basic facts on the ground have not changed much since the last policy in September-end: global headwinds, inflationary pressures arising from both exogenous and endogenous sources, and adverse terms of trade balanced against an economy exhibiting nascent growth with all the growth engines – industrial, agricultural and service sectors – in early stages of combustion.

• Abrdn PLC (ABDN LN) is looking to sell its entire 10.21% stake in HDFC Asset Management (HDFCAMC IN) following which it will no longer be a sponsor of HDFC MF.
• Depending on who the stake is sold to, there could be an immediate increase in the investability weight in the FTSE All-World Index.
• More importantly, the increased free float will result in an increase in the FIF for the MSCI Standard Index and index inclusion could take place in February.

In the next webinar, we welcome Smartkarma Insight Provider Gauri Anand , who will be sharing with us her Top indian Equity Picks and the investment philosophy behind each of her picks. Have any burning questions about companies like Indian Energy Exchange (IEX IN), VA Tech Wabag (VATW IN), or UPL Ltd (UPLL IN)? Get them answered in the live Q&A that will conclude the session.

The webinar will be hosted on Wednesday, 21 December 2022, 17:00 SGT/HKT.

Gauri Anand is a mid-small cap specialist based in India. With a focus on equities, Gauri combs top down and bottom up approaches to identify themes and value stocks at its inflexion point. Sector agnostic with a value oriented – Inflexion approach, Gauri dives into bottom Up ideas with a biased towards Sustainability and ESG. 

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.

• In Dec 2021, Star Health (STARHEAL IN) (SHAI), the largest private health and retail health insurance company in India, raised around US$851m in its India IPO.
• SHAI insured 20.5m people in FY21. SHAI primarily offers retail health insurance which accounted for 87.9% of its FY21 GWP. Individual agents accounted for 97% of its FY21 GWP.
• In this note, we will talk about the upcoming lockup expiry.

• Balrampur Chini Mills (BRCM IN) is one of the major integrated sugar manufacturing companies in India. Besides sugar, the company also engages in the business of ethanol and power generation.
• Balrampur has managed to turnaround its free cash flows and earnings quality. Additionally, it has also stabilized working capital on the back of declining debt. 
• While there are not many red flags, care must be given to inventory reconciliation with bank statement.

• BLS International Services (BLSIN IN) is engaged in business of providing outsourcing and administrative task of Visa, Passport and Consular services to various Diplomatic Missions across the world.
• BLS is troubled with several forensic discomforts. One should take into account the discomforts on the subsidiaries end and other linked entities like DSS Gulf Realtors.
• Other forensic setbacks include alarming bad debts, misstatement of operating cash flows and several grey areas pertaining to disclosure norms followed by the company.

The Asia HY Trade Book for November 2022 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.

• Lava International (9263793Z IN)  is one of the leading end-to-end focused mobile handset and mobile handset Solutions Company based in India, with operations in a number of countries.
• Major business risk arises from external environment, as Lava is one of the prominent leaders in feature phone segment, where the market is dying. 
• Key forensic takeaways pertain to ECL provisioning and some absurd trend in line items. There are several discomforts on the governance end as well which must not be ignored.

• Mahindra & Mahindra (MM IN) ‘s production data provides more questions than answers.
• The drop in production for Thar and XUV 700 in October in spite of the high order backlog is surprising. 
• Considering the industry outlook and the existing sales and production for these two models, we believe this demand forecast may not materialise