In today’s briefing:
- 2023 High Conviction: Zomato – Home Delivering Laziness
- Bajaj Holdings (BJHI IN): Potential Index Inclusion Can Narrow Hold Co. Discount Further
- Five-Star Business IPO Trading – One of the Best Anchor Books but Worst Overall Demand
- Archean Chemical Industries IPO Trading – One of the Highest Subscriptions for the Year
- Edelweiss: At An Inflection Point
- RPSG Ventures: FMCG Business Is Scaling Up; VC Business Is Germinating to the Next-Level
2023 High Conviction: Zomato – Home Delivering Laziness
- Zomato is one of the largest food delivery platforms in India. It was listed in Jul 21 and after initially doubling, its shares are now trading below its IPO price.
- It has grown its food delivery GOV by 3.5x over FY19-22 and growth remains strong, while profitablity has been improving.
- Its recent venture into quick commerce should allow for better fleet utilisation and hence, better longer term growth and profitability.
Bajaj Holdings (BJHI IN): Potential Index Inclusion Can Narrow Hold Co. Discount Further
- Bajaj Holdings and Investment (BJHI IN) is expected to be included in the MSCI India Index at the November SAIR (Read more about the index inclusion here: https://skr.ma/xhbPx)
- Bajaj Holdings, a holding and investment company, with significant stakes in Bajaj Auto Ltd and Bajaj Finserv has historically traded at a steep discount to the market value of investments.
- Its Holdco discount has narrowed to around 53% and has the potential to narrow further with greater ownership and visibility post the likely index inclusion.
Five-Star Business IPO Trading – One of the Best Anchor Books but Worst Overall Demand
- Five Star Business Finance (0958461D IN) raised around US$190m in its India IPO.
- Five-Star Business is a non-banking financial company (NBFC-ND-SI) that provides secured business loans to micro-entrepreneurs and self-employed individuals.
- We have looked at various aspects of the deal in our previous note, in this note, we talk about the demand and trading dynamics.
Archean Chemical Industries IPO Trading – One of the Highest Subscriptions for the Year
- Archean Chemical Industries (0810406D IN) has raised about US$178m in its India IPO.
- Archean Chemical Industries (ACI) is a specialty marine chemical manufacturer in India focused on producing and exporting bromine, industrial salt, and sulphate of potash to customers around the world.
- We have looked at various aspects of the deal in our previous notes. In this note, we talk about the demand for the deal and the trading dynamics.
Edelweiss: At An Inflection Point
- Credit business has seen decent recovery with asset quality stabilization and down-sizing of the wholesale loan book. Retail book is growing via co-lending and other asset-light models.
- Asset Management business is scaling up well and is poised to benefit significantly from operating leverage, particularly in the Alternatives business as the carry fee kicks in from FY24.
- Insurance businesses continue to scale up well. Edelweiss is seeking strategic partners for both the insurance businesses to take advantage of the new IRDA regulations.
RPSG Ventures: FMCG Business Is Scaling Up; VC Business Is Germinating to the Next-Level
- Key highlight of RPSG Ventures’ (RPSGV) Q2FY23 results was the FMCG business which reported revenues of INR 125cr, suggesting an annualized run-rate of INR 500cr vs INR 430cr QoQ.
- RPSGV is doing all the right things to scale up its FMCG business. Its Sports venture also holds lot of promise.
- RPSGV’s Venture Capital (VC) Fund that focuses on investing in D2C startups made a lucrative exit in one of its investments which generated 7x MOIC in just 4 years.
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