India

• Ipca Laboratories (IPCA IN) reported 12% YoY growth in domestic revenue to INR8.7B in Q1FY25. The company has delivered market beating growth in both acute and chronic segments.
• Standalone EBITDA margin expanded 312bps YoY to 22.3% (FY25 guidance: 21%). Margin improvement is driven by favorable product mix, lower input costs as well as lower manufacturing and other costs.
• Ipca is reducing FY25 revenue growth guidance to ~9.0% from 10.5–11.0% and raising FY25 consolidated EBITDA margin guidance by 0.5–1.0% to 18.5–19.0%.

• Post merger, HDFC Bank (“HDFCB”) has been under pressure in regards to sustaining its loan growth, which very much hinges on rapid deposit growth.
• While the deposit growth has been weak, it has been an industry-wide issue. Furthermore, at times, the period-end numbers can be misleading.
• Focusing on average numbers paints a better picture of growth. Looking at the averages, deposit growth has been strong at 4.6% QoQ, despite liquidity issues in the banking system.

• Ganesha Ecosphere (GNPL IN) is expanding from textiles to FMCG packaging with rPET granules, aiming for a 10-12% market share in the recycled PET market by 2029.
• The shift to high-margin rPET products and expansion into FMCG packaging aligns with regulatory trends and growing demand for sustainable materials.
• GEL’s strategic focus on high-value, sustainable products and robust market position suggests significant growth potential and improved profitability.

• Hero Motors Limited (2313904Z IN) is looking to raise about US$110m in its upcoming India IPO. The deal will be run by ICICI, DAM Cap and JM Fin.
• Hero Motors (HML) is an integrated powertrain systems provider offering comprehensive solutions for designing, prototyping, validating, developing, and delivering system-level transmission solutions for electric as well as nonelectric powertrains.
• According to CRISIL, it was among the first companies in India to capitalize on the global e-bike powertrain opportunity and have a distinct first mover advantage in this industry.

• Sona Blw Precision Forgings Lt (SONACOMS IN) is looking to raise INR24bn (US$286m) from its qualified institutional placement (QIP).
• The capital raising is well flagged having gone through rounds of board approvals, and having been well covered by various media outlets as well.
• In this note, we run the deal through our ECM framework and comment on deal dynamics.

• This Insight focuses on lenders operating in consumer finance, including MSME-focused NBFCs. 
• Companies in focus include Bajaj Finance Ltd (BAF IN), Poonawalla Fincorp (POONAWAL IN),SBFC Finance Limited (SBFC IN) & MAS Financial Services Ltd (MASFIN IN). 
• We also cover high yield lender Five Star Business Finance (FIVESTAR IN).  

Vedanta Resources (VRL) has launched a roadshow to market its USD 144A/RegS benchmark-sized notes (likely to be 5NC2 or mainly 5NC2, and/or 7NC3), with a potential total size of USD 1.5 bn. The proceeds will be used to refinance the USD 13.875% 2027 notes (USD 470 mn outstanding) and USD 13.875% 2028 notes (USD 1,008 mn outstanding). VRL has sent a conditional redemption notice to trustees of the 2027 notes and 2028 notes, assuming the proposed notes issuance is successful.​ VRL has concurrently launched a tender offer for the 2027 and 2028 notes. 

We expect the proposed 5NC2 notes to price at c. 10%, and the 7NC3 notes at c. 11%.

• Bajaj Housing Finance (BHF IN) is looking to raise around US$800m in its India IPO.
• BHF is a non-deposit taking housing finance company engaged in mortgage lending since FY18. Its mortgage products include home loans, loans against property, lease rental discounting and developer financing.
• In our previous notes, we looked at the company’s past performance. In this note, we will talk about valuations.

• Carraro India Limited (810618Z IN) is looking to raise about US$216m in its upcoming India IPO. The deal will be run by Axis, Nuvama and BNP Paribas.
• Carraro India Limited (CIL), is a technology driven integrated supplier that develops complex engineering products and solutions for its original equipment manufacturer (OEM) customers.
• CIL primarily manufactures axles and transmission systems for agricultural tractors and construction vehicles such as backhoe loaders, soil compactors, cranes, self-loading concrete mixers and small motor graders.

• Western Carriers (1489172D IN) is looking to raise about US$100m in its upcoming India IPO.
• Western Carriers (India) Limited (WCIL) was the largest private, multimodal, rail focused, 4PL asset-light logistics company in India in terms of container volumes in FY22, as per 1Lattice.
• In this note, we talk about the company’s historical performance.

• The GoI is looking to raise up to US$600m from selling its stake in General Insurance Corp Of India (GICRE IN).
• Earlier in Apr 2024, there were media reports indicating that the GoI planned to offload a 10% stake in the insurer over multiple tranches.
• In this note, we run the deal through our ECM framework and comment on deal dynamics.

• BrainBees Solutions (FIRSTCRY IN) reported marginal decline in 1QFY2025 revenues and GMV (India operations) versus previous quarter, though both were up 17% YoY; fell short of market expectations.
• Key operating metrics for India business too were soft with Average Order Value slipping both on a QoQ and YoY basis, impacting GMV growth and segment margins.
• With 0% promoter holding, nearly 30%-50% shares could possibly start trading post lock-in expiry and this could test the stock’s resilience. Softbank Group(9984 JP), the biggest stake holder, owns 19.99%.

• Following SEBI’s review of eligibility criteria for entry/exit of stocks in the derivatives segment, there could be 18 deletions/79 inclusions in the F&O segment over the next 6 months.  
• The new framework could lead to mechanical entry and exit of stocks in the F&O segment with minimal intervention from SEBI.
• The introduction of some large cap stocks in the F&O segment could lead to their inclusion in the NIFTY Index, SENSEX Index and other local indices.

• Eid Parry India (EID IN) A Murugappa Group Company setting stage for transformation from cyclical sugar business to more stable consumer and high margin business. 
• The company has diversified into the non-sweetener segment and is emphasizing an asset-light model to drive further expansion.
• Eid Parry India (EID IN) is also the holding company of Coromandel International (CRIN IN), which holds substantial intrinsic value.

• Following SEBI’s review of eligibility criteria for entry/exit of stocks in the derivatives segment, there could be 18 deletions/79 inclusions in the F&O segment over the next 6 months.
• The introduction of some stocks in the F&O segment could lead to their inclusion in the NIFTY, SENSEX, Nifty Bank and CNXIT indices and weight changes in the Nifty Next50.
• The inclusion of stocks in indices with a fixed number of constituents will result in deletion of some stocks from these indices. There should be methodology changes too.

• Apollo Hospitals Enterprise (APHS IN) reported strong Q1FY25 result, with 15% revenue growth and a massive 83% jump in net profit. EBITDA margin improved to 13.3% (Q1FY24: 13.0%).
• Sequential improvement is expected in Q2 and Q3. The company believes ARPOB growth will improve over the next few quarters with stronger growth in surgical volume and better case mix.
• The company believes enhanced volume growth, improvement in case and payer mix, and a focus on cost optimization will drive margin expansion by 100bps over the next 3–4 quarters.

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
• Xiaomi Corp

• Bajaj Housing Finance (BHF IN) is looking to list on the exchanges by selling INR 65.6bn of stock at a valuation rumoured to be between INR 560-590bn.
• The anchor allocations will be completed later this week, and the stock is expected to start trading on 16 September.
• Bajaj Housing Finance (BHF IN)‘s maximum float will be around 10% and that will limit inclusion to just one global index in the following 6 months. 

• Recovery in Risk-Premia was short-lived. Pressure from a lack of upcoming event-risk has driven short-dated IVs lower.
• Nifty50 at All-Time-Highs – PCR & Skew extend further towards puts. Implying active hedging of core long equity positions using OTM puts. 
• “High & Down” Vol-state persists. Expect a continued slide lower in IVs. Retain previous week’s tactical stance – allocations to Short Iron Condors & Skew Harvesting structures.   

• Premier Energies Limited (0377949D IN) raised around US$337m after pricing the deal at the top end of the range at INR450 / share.
• It also executes engineering, procurement, and construction (EPC) projects and provides follow-up operation and maintenance (O&M) services.
• We have looked at various aspects of the deal in our previous notes. In this note,  we talk about demand and trading dynamics. 

• Edelweiss Financial Services (“Edelweiss”) continues to scale up well its asset management and insurance businesses. The credit business has been also turning around led by the co-lending model.
• In particular, the asset management business has been growing rapidly. The alternatives asset management AUM grew 17% YoY, of which fee-paying AUM grew 32% YoY.
• With all its businesses now running independently, Edelweiss is focusing on unlocking value. It already demerged Nuvama and is now close to unlock value in its Alternative Asset management business.

• Shivam Autotech (SVAT IN) or (SATL) serves OEMs by manufacturing a range of auto components and accessories including transmission gears, transmission shafts, etc.  
• The company’s business performance over the last few years has looked grim with stagnant revenues, declining margins and ballooning losses. Balance sheet has only gotten more fragile.
• Auditor’s comments on material weakness on internal controls, increasing receivables, balance sheet ALM mismatch are few red herrings to look out for.

• Premier Energies made SALE before Offer For Sale – A mini OFS just before IPO to close investors who helped company in its journey till IPO.
• The stake sale amounting to INR 800+ crores raises the concern over governance and disclosure norms
• Such a unique case where the promoter used the loophole might face actions from SEBI.

• Elgi Equipments (ELEQ IN) headquartered in Tamil Nadu, India manufactures a range of air compressors and automotive equipments and sells across domestic and international geographies.
• Overall, balance sheet looks strong with consistent FCF generation, upward sloping ROCEs and low risk of solvency
• But one needs to be cautious about the performance of subsidiaries, especially the Belgium and US arms, and goodwill assessment, whistle blower trends, etc.

• This Insight focuses on lenders operating in the affordable housing space.
• Companies in focus are Aavas Financiers Ltd (AAVAS IN);  Home First Finance (HOMEFIRS IN) & Aptus Value Housing Finance India (APTUS IN). 
• Recent IPOs of Aadhar Housing Finance Ltd (1218027D IN) & India Shelter Finance (0570670D IN)  are also covered. 

• Smartworks Coworking Spaces Ltd (1742134D IN) is looking to raise about US$120m in its upcoming India IPO. The deal will be run by Kotak, JM Fin, IIFL and Bob Caps.
• Smartworks Coworking Spaces Limited (SCSL) is an office experience and managed campus platform. 
• It focuses on leasing entire/ large, bare shell properties in prime locations from landlords and transforms them into fully serviced, aesthetically pleasing and tech-enabled campuses with daily-life and aspirational amenities.

• In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 indices in the December 2024 index rebal event.
• We see four expected ADDs/DELs for BSE 100 and six expected ADDs/DELs for BSE 200.
• The BSE 100 handling rules for names without futures and options (F&O) sometimes punish companies that have enjoyed good share price rallies and Zomato could fall into such a trap.

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.

• MGM China Holdings
• New World Development
• Nickel Industries
• Tata Steel Thailand