Brief IPOs & Placements: Chalet Hotels Post-IPO – First-Day Traded Volume Pales in Comparison to past Indian IPOs and more

In this briefing:

1. Chalet Hotels Post-IPO – First-Day Traded Volume Pales in Comparison to past Indian IPOs
2. Pinduoduo (拼多多) Placement – Not a Good Sign

1. Chalet Hotels Post-IPO – First-Day Traded Volume Pales in Comparison to past Indian IPOs

Chalet Hotels Limited (CHALET IN) raised US$239m at INR280 per share, the top-end of its IPO price range. We have previously covered the IPO in Chalet Hotels IPO Review – Backed up into a Corner.

In this insight, we will update on the deal dynamics, implied valuation, and include a valuation sensitivity table.

2. Pinduoduo (拼多多) Placement – Not a Good Sign

Pinduoduo (PDD US) is looking to raise about US$1.5bn in its follow-up offering. The placement is a mix of primary and secondary selldown.

The deal scores poorly on our framework due to its large deal size and expensive valuation relative to peers. We find that the timing of the placement to be peculiar and the large overhang post-offering is a worry. Banyan’s selldown in this placement suggested that principal shareholders may progressively look to exit their stakes contrary to our previous assumption and their shares will add pressure to the share price in the near-term.