Daily Brief ECM: Suzlon Energy QIP - Well Flagged Deal and Will Allay Any near Term Debt Concerns and more

In today’s briefing:

Suzlon Energy QIP – Well Flagged Deal and Will Allay Any near Term Debt Concerns
Recruit 1Q: Earnings Further Slow Down; New Pricing Model Seems to Impact HR Tech Further
TVS Supply Chain Solutions IPO- Forensic Analysis

Suzlon Energy QIP – Well Flagged Deal and Will Allay Any near Term Debt Concerns

Suzlon Energy (SUEL IN) is looking to raise INR20bn (US$240m) from its QIP, with proceeds used to pay down debt.
The firm has struggled with a debt issue in the past, most recently undertaking a rights issue in 2022 to raise INR12bn (US$150m).
With the proceeds from this deal, the firm should enter into net cash territory.

Recruit Holdings (6098 JP) reported 1QFY03/2024 results yesterday. Revenue and OP increased 0.9% and 1.9% YoY to ¥850.8bn (vs consensus ¥818.7bn) and ¥121.6bn (vs consensus ¥109.9bn) respectively.
1QFY03/24 revenues of ¥850.8bn and adjusted EBITDA of ¥165.9bn were higher than the company guided revenues and adj. EBITDA of ¥800-830bn and ¥140-160bn respectively.
HR Tech segment’s revenues declined 9.1% and Recruit has shifted to a new pricing model for HR Tech which we think would further impact the segment’s earnings.

TVS Supply Chain Solutions (1915741D IN) is one of the leading Indian supply chain solution companies in India with an approximate market share of 7%.
Around 70% of the operations come from outside India, however the foreign subsidiaries are not doing pretty well. Moreover, the profits that were only posted in F23 look unsustainable.
Other concerns which are not to be overlooked, relate to impairment of assets, levered balance sheet, pricey acquisitions, disposal of fixed assets, high remuneration to promoter, etc.

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