In today’s briefing:
- Kotak Mahindra Bank (KMB IN): Foreign Room Increases; FTSE Inclusion in Sep Possible
- India Channel Insight #33 | Shopee, Flipkart, Meesho, Swiggy
- S&P BSE Indices (SENSEX Family): Quiddity Leaderboard for June 2022 Rebalance (Final)
- Life Insurance Corp of India (LIC) IPO: Lower Issue Size & Valuation; Index Inclusion Timeline
- Life Insurance Corporation of India Pre-IPO – India’s Largest IPO Will Not Get Any Passive Support
- ICICI Bank: Pulling Further into the Lead; Happy Trade-Offs Ahead
- Tata Communications: Revenue Growth Disappoints Again
- Aditya Birla Capital – Management Change: New CEO to Take Charge Come June
- Tatva Chintan Pharma Chem – Strong Pipeline of High-Value New Products
- Morning Views Asia: Azure Power Global Ltd
Kotak Mahindra Bank (KMB IN): Foreign Room Increases; FTSE Inclusion in Sep Possible
- Kotak Mahindra Bank (KMB IN) is not a part of the FTSE All-World Index since the foreign room was less 20% over the last couple of years.
- Foreign room is 19.8% as of end March and small foreign selling is needed for Kotak Mahindra Bank to be added to the FTSE All-World Index at the September SAIR.
- If added to the FTSE All-World Index, passive trackers will need to buy 38.2m shares (US$861m; 11.1 days ADV; 22 days delivery volume) of Kotak Mahindra Bank (KMB IN).
India Channel Insight #33 | Shopee, Flipkart, Meesho, Swiggy
- This insight focuses on private unicorns backed by Sea Ltd (SE US) , Walmart (WMT US) , Softbank Group (9984 JP) & Prosus NV (PROSY US)
- Growth would require new and even larger investments across the Internet Sector.
- Reliance and Tata’s retail plans are likely to challenge even giants like Amazon and Flipkart.
S&P BSE Indices (SENSEX Family): Quiddity Leaderboard for June 2022 Rebalance (Final)
- The S&P BSE family of indices represents the performance of stocks listed on the Bombay Stock Exchange (BSE) across various sizes, themes, industries, and strategies.
- This series will mainly focus on the following indices of the S&P BSE family: S&P BSE 500, S&P BSE 200, S&P BSE 100, and S&P BSE SENSEX.
- In this insight, we take a look at the leading candidates who could become Adds/Deletes during the June 2022 Semi-annual Rebalance.
Life Insurance Corp of India (LIC) IPO: Lower Issue Size & Valuation; Index Inclusion Timeline
- Life Insurance Corp of India (LIC) (1248Z IN) filed its Red Herring Prospectus (RHP) with SEBI yesterday to raise between US$2.61bn and US$2.74bn selling 221.375m shares (3.5% of the company).
- The stake sale will value Life Insurance Corp of India (LIC) (1248Z IN) at between US$74.4bn-78.3bn. This is 1.1x the Embedded Value and sharply lower than initial indications.
- Fast Entry inclusion to the MSCI India index will be a close call, while inclusion to the FTSE All-World Index, NIFTY Index and SENSEX INDEX will take much longer.
Life Insurance Corporation of India Pre-IPO – India’s Largest IPO Will Not Get Any Passive Support
- Government of India (GoI) is looking to raise around US$2.7bn via selling a 3.5% stake in Life Insurance Corporation of India (LIC) in its upcoming India IPO.
- This is less than half of its initial plans in terms of fundraising target and comes at less than half of its initial valuation target.
- In this note, we will talk about the likely final deal terms and the likelihood of fast entry in the various indices.
ICICI Bank: Pulling Further into the Lead; Happy Trade-Offs Ahead
- ICICI Bank: ICICI Bank (ICICIBC) delivered yet another strong quarter, with superior all-round balance sheet metrics (growth and asset quality), reflecting in +59% YoY growth in net profit
- The bank continued to gain traction on both sides of the balance sheet, with average CASA clocking 45% and YoY loan growth at 17%
- Net slippages were negative, resulting in negligible credit costs (adjusted for contingent provisions), as the stressed pool (restructured portfolio at 1%, BB & below portfolio at 1.3%) declined 40bps sequentially
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Tata Communications: Revenue Growth Disappoints Again
- Tata Communications’ (TCom) Q4FY22 data business net revenue grew only 5% YoY (+0.7% QoQ) which is below expectations.
- This should be partially weak from orderbook of Q3; while orderbook funnel has sequentially improved, management commentary does indicate gradual recovery in revenue growth.
- TCom revenue growth faced headwinds from fewer feet on the street, delay in decision making and under-performance of usage-based services.
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Aditya Birla Capital – Management Change: New CEO to Take Charge Come June
- Countercyclical diversified conglomerate evolution – ABCL has, over the past decade under Mr. Srinivasan’s leadership, seeded, nurtured and evolved as a countercyclical diversified conglomerate.
- Ms. Mulye too would focus on accelerating ABCL’s unique business proposition flowing from group synergies.
- Outlook for NBFC/HFC business: For ABCL’s NBFC business, we believe strong focus in retail and SME (scaling it up to 65%)
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Tatva Chintan Pharma Chem – Strong Pipeline of High-Value New Products
- Tatva Chintan’s Q4FY22 revenue declined 9.3% YoY and was 11% below our estimates on higher dip in SDA revenue.
- However, gross margin expansion of 280bps QoQ, despite inferior revenue mix, was a positive surprise.
- It anticipates SDA revival only in H2FY23, and has guided for flattish revenue for FY23.
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Morning Views Asia: Azure Power Global Ltd
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.
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