In today’s briefing:
- Ola Electric IPO: Offering Details & Index Inclusion
- NIFTY100 Low Volatility 30 Index Rebalance Preview: Four Changes in September
- Nazara Technologies- Face off with Heavy Liability
- EQD / NSE Vol Update / Vols Focus on India-Specific News & Ignore Upcoming Global Macro Events
- Ola Electric: India’s First EV IPO – Key Facts, Financials & Valuation
- Dr. Reddy’s Laboratories (DRRD IN): US and India Drive Q1FY25 Result; Announces 1:5 Stock Split
Ola Electric IPO: Offering Details & Index Inclusion
- The Ola Electric (1700674D IN) IPO will see the company and existing shareholders sell 808.6m shares at a price range of INR72-76/share, valuing the company between US$3.79bn-US$4bn.
- Ola Electric (1700674D IN) will have a float of around 10% at the time of listing and that will increase to around 20% after the lock-up on anchor investors ends.
- Ola Electric (1700674D IN) could be added to global indices in February and March 2025, but inclusion in local indices with meaningful tracking assets will take longer.
NIFTY100 Low Volatility 30 Index Rebalance Preview: Four Changes in September
- The review period for the Nifty 100 Low Volatility 30 Index ends in August. The changes will be announced mid-September and implemented at the close on 27 September.
- Four potential constituent changes, volatility changes and capping changes will result in one-way turnover of 16% resulting in a one-way trade of INR 6.71bn (US$80m).
- Three of the four potential deletions are due to a change in the index universe and there will be selling from other passive trackers too.
Nazara Technologies- Face off with Heavy Liability
- Shares of Nazara Technologies (NAZARA IN) were rattled last week after the company had received show cause notice from the GST Department on 16th July.
- The GST liability pertained to two of its subsidiaries and summed up to INR 11.2 bn, which represents under 50% of consolidated net-worth.
- However because the GST for the industry is a delicate and debatable matter, the actual impact on the financials cannot be ascertained now, but company faces a high legal risk.
EQD / NSE Vol Update / Vols Focus on India-Specific News & Ignore Upcoming Global Macro Events
- Implied Volatilities (IVs) sold off dramatically post Budget Event – in spite of weaker underlying indices. Larger break of trading ranges likely needed to stall the slide in IVs.
- Wait-And-See approach to tactical decisions justified. Vol-Regime avoids a switch from “High & Down” state. Protracted grind lower in IVs projected.
- Vol Surface Smile has compressed alongside lower IVs. Skew remains unaffected by change in IV levels. Vol Term-structure has flattened.
Ola Electric: India’s First EV IPO – Key Facts, Financials & Valuation
- Ola Electric (1700674D IN) , India’s leading electric 2-wheeler backed by Softbank Group ‘s Vision Fund, will launch its USD 735 million IPO on Friday, August 2.
- The IPO pricing suggests a post-money equity valuation of around USD 4 billion, significantly lower than its earlier funding levels.
- Government incentives for EVs are being revised, with the current scheme valid only until the end of September, creating uncertainty that has possibly impacted valuations.
Dr. Reddy’s Laboratories (DRRD IN): US and India Drive Q1FY25 Result; Announces 1:5 Stock Split
- Dr. Reddy’s Laboratories (DRRD IN) had a good start to FY25, with a record high quarterly revenue of INR77B in Q1FY25, beating estimates.
- Increase in base business volume in the U.S. and revenue from Sanofi’s vaccine portfolio in India drove the revenue growth. Higher opex and effective tax rate impacted bottom line.
- The company will split its shares in the ratio of 1:5. This will be first time in last 20 years the company will be splitting its stocks.
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