In today’s briefing:
- IndusInd Bank (IIB IN): Passive Buying Coming Up as Foreign Room Crosses Key Threshold
- India – Free Float Changes to Drive Passive Inflows
- Hudco Oct 23 OFS – Momentum Has Been Strong, and Appears to Be Well Flagged
- Triveni Turbine Ltd- Forensic Analysis
- ICICI Prudential Life: 2Q24 Result Update: The Search for Salvation (Continues..)
IndusInd Bank (IIB IN): Passive Buying Coming Up as Foreign Room Crosses Key Threshold
- Foreign investors sold ~5.7m shares of Indusind Bank (IIB IN) from July to September. That selling has pushed foreign room above the key 15% threshold.
- With foreign room crossing 15%, passive trackers will need to buy a chunk of Indusind Bank (IIB IN) stock at the end of November.
- There will be positioning on Indusind Bank (IIB IN) though it appears some of that was taken off in the last couple of days.
India – Free Float Changes to Drive Passive Inflows
- Over the last few weeks, companies in India have been disclosing their shareholding pattern as of end-September. There are a few companies with significant float changes from end-March and/or end-June.
- The changes in free float could be reflected in domestic and global indices over the next couple of months resulting in action from passive trackers.
- We find 9 stocks where there could be inflows with passive trackers needing to buy over 1 day of ADV on most stocks.
Hudco Oct 23 OFS – Momentum Has Been Strong, and Appears to Be Well Flagged
- The Government of India (GoI) is looking to raise up to US$130m from trimming its stake in Housing and Urban Development Corporation Limited (HUDCO IN).
- The base deal includes a 3.5% stake sale, with an option to double it up to 7%. The selldown is targeted at meeting SEBI’s minimum public float requirements of 25%.
- At 7.5 days of three month ADV, the deal isn’t a very large one for the firm to digest.
Triveni Turbine Ltd- Forensic Analysis
- Triveni Turbine (TRIV IN) is one of the leading players in manufacturing of steam turbines, which in turn has uses across various energy intensive industries.
- The company has recovered well from covid, has a robust order book in conjuction with healthy financial position. Balance sheet is debt-free, high cash and lean WC cycle.
- The only possible risk that comes to the balance sheet would be of potential statutory disputes. The contingent liabilities remain under-stated.
ICICI Prudential Life: 2Q24 Result Update: The Search for Salvation (Continues..)
- ICICI Prudential Life Insurance (IPRU IN) reported its 2Q24 earnings results yesterday, with flat sales and decreasing margins
- The lack of support from ICICI Bank, its parent, has been the main concern, with ICICI Pru consistently losing market share to other private peers due to below-par growth.
- We value ICICI Pru at ~1.4x FY25e P/EV, implying a -15% downside to current price, reflecting the bleak outlook in terms of growth and margins in the medium-term.
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