This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
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1. Ola Electric IPO: The Investment Case
- Ola Electric (1700674D IN), the largest Indian player in electric two-wheel vehicles (E2W), will launch a US$660 million IPO at a lower US$4.5 billion valuation (vs. the previous US$7-8bn target).
- We previously discussed the IPO in Ola Electric IPO: The Bull Case and Ola Electric IPO: The Bear Case. In this note, we examine the latest updates in the RHP.
- The investment case rests on rising market share in a growing market, rapid growth aided by product diversification, path to profitability supported by lower losses and declining cash burn.
2. Fortescue Placement – Discount Appears Attractive, but Momentum Has Been Very Weak
- An undisclosed shareholder is looking to raise US$1.25bn (A$1.91bn) from selling some stake in Fortescue Metals (FMG AU).
- The deal is a large one to digest at 13 days of the stock’s three month ADV. The selling shareholder will be locked up for 45 days.
- In this note, we run the deal through our ECM framework and comment on deal dynamics.
3. Ola Electric IPO – RHP Updates – Growing Faster than Expected, Driven by GoI Policy
- Ola Electric is now looking to raise about US$730m in its upcoming India IPO.
- Ola Electric Mobility is a vertically integrated pure EV player in India with manufacturing capabilities for EVs and EV components, including cells.
- In our previous notes, we looked at the company’s performance, undertook a peer comparison and talked about valuations. In this note, we look at the updates from its recent filings.
4. ECM Weekly (29th July 2024) – ASICS, Kokusai, Amer, Hyundai, Timee, Sanil, Akum, Bloks, Ola Electric
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, the coming week will see Sanil Electric (062040 KS) list, while Akums Drugs and Pharmaceuticals books will open and Ola Electric too might be launched.
- On the placement front, the past week was relatively quiet after a few hectic weeks.
5. 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.
6. Ola Electric IPO – Thoughts on Valuation
- Ola Electric is now looking to raise about US$730m in its India IPO.
- Ola Electric Mobility is a vertically integrated pure EV player in India with manufacturing capabilities for EVs and EV components, including cells.
- In our previous notes, we looked at the company’s past performance. In this note, we will talk about valuations.
7. Ola Electric IPO: Valuation Insights
- Ola Electric (1700674D IN), the largest Indian player in electric two-wheel vehicles (E2W), is seeking to raise up to US$734 million.
- We previously discussed the IPO in Ola Electric IPO: The Bull Case, Ola Electric IPO: The Bear Case and Ola Electric IPO: The Investment Case.
- Our valuation analysis suggests that the IPO price range of Rs72-76 per share is attractive. Therefore, we would participate in the IPO.
8. Sanil Electric IPO Trading – Strong Institutional Demand, Highest Subscription Rate This Year
- Sanil Electric (062040 KS) raised around US$193m in its Korea IPO, after pricing the deal above the top end of the range at KRW35,000/share.
- Sanil Electric is a specialized company that manufactures and sells reactors, transformers, railway vehicle parts, and switchboards. As an industrial transformer manufacturer, the company mainly manufactures power and distribution transformers.
- In this note, we will talk about the demand for the deal and other trading dynamics.
9. WeRide Pre-IPO – The Positives – Large Monetisation Opportunity on the Horizon
- WeRide Corp (WER CH) is looking to raise around US$300m in its upcoming US IPO.
- WeRide provides autonomous driving products and services from L2 to L4 of driving automation.
- In this note, we will talk about the positive aspects of the deal.
10. WeRide Pre-IPO – The Negatives – Losses Have Widened, Still in the Early Stages of Commercialization
- WeRide Corp (WER CH) is looking to raise around US$300m in its upcoming US IPO.
- WeRide provides autonomous driving products and services from L2 to L4 of driving automation.
- In this note, we will talk about the not so positive aspects of the deal.
