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Carlyle Fund to Sell Further Holdings in SBI Cards

Carlyle Fund to Sell Stake in SBI Cards
by 5paisa Research Team 20/09/2021

Carlyle Fund plans to sell the third tranche of SBI Cards stock. In the latest round of block sale, which will be managed by BOFA Securities and Citigroup Capital Markets, Carlyle will sell 3.4% stake in SBI Cards equivalent to 3.2 crore shares of the company in the price range of Rs.1,021 to Rs.1,072.30. This price band had resulted in the stock falling sharply over the last two days on excess supply concerns in the market.

There is an interesting chronology of how the Carlyle stake in SBI Cards has evolved over the years, which is captured in the table below.

 

Time Period

Stake in SBI Cards (%)

Buy/Sell of Stake (%)

Residual Stake (%)

December 2017

0.00%

+26% (from GE Capital)

26.00%

March 2020

26.00%

-10.11% (sold in OFS)

15.89%

March 2021

15.89%

-4.25% (block trade)

11.64%

June 2021

11.64%

-5.10% (block trade)

6.54%

September 2021

6.54%

-3.40% (block trade)

3.14%


The September 2021 block trade is expected to happen as of the time of writing. If you look at the stock price of SBI Cards, the stock price today is at around the same level as it was at the time of the IPO in March 2020. Hence, post IPO, the stock did not make much money for Carlyle.

However, the actual cost of acquisition was much lower at just Rs.2,000 crore for 26% stake in 2017. On that investment, Carlyle is making a 7-bagger, which is phenomenal returns for the PE fund.

Let us return to the latest proposed sale of 3.40% stake by Carlyle. At the lower price band of Rs.1,021, the sale will fetch Carlyle Rs.3,267 crore while at the upper band of Rs.1,072.30, the block deal will fetch Carlyle Rs.3,431 crore. SBI Cards had halved during the pandemic on fears of rising bad assets, but the price has recouped back to IPO levels.

However, investors are concerned with the spike in gross NPAs from 1.35% to 3.91% in the Jun-21 quarter. Carlyle, must anyways be laughing all the way to the bank.

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DHFL Lenders to get payments this week

DHFL Lenders to get payments this week
by 5paisa Research Team 20/09/2021

Dewan Housing Finance Ltd, the first NBFC to be referred to NCLT by the RBI under a special provision, is expected to complete its resolution process in Sep-21. The process was likely to be completed in the first week of September but was held up for various technical reasons.

DHFL’s biggest lender, SBI, has already signed the transaction document while the other financial creditors like Union Bank, Bank of Baroda, Canara Bank and Bank of Baroda are also expected to sign the transaction document this week. Under the NCLT regulations, the resolution deal becomes effective only after 90% of the financial creditors endorse the transaction document.

Under the terms of the resolution, Piramal Capital will pay a total consideration of Rs.37,250 crore against total admitted claims of Rs.87,082 crore. That implies about 42.7% recovery for the banks or you can also call it a 57.3% haircut. Out of this sum, Rs.12,700 crore will be the upfront cash payment and an additional Rs.3,000 crore is the interest income earned by DHFL during the CIRP process, which is also being paid out.

Also Read :- Will DHFL Shares Be Delisted After Being Acquired by the Piramal Group?

In addition, the financial creditors will get Rs.19,550 crore by way of non-convertible debentures. These NCDs will mature after 10 years in 2031 but there will be a call back facility after 5 years under the terms of the resolution plan. This will be the second largest pay-out to lenders after the Rs.42,000 crore that Arcelor Mittal and Nippon Steel paid for Essar Steel owned by the Ruia brothers; Ravi Ruia and Shashi Ruia.

The NHB dues of Rs.2,300 crore are currently under dispute over preferential payment. However, the COC agreed to set aside the NHB claim of Rs.2,300 crore to expedite the process and complete it in this month. The acquisition will be funded by Piramal, partly through debt and partly through internal resources. Barclays will arrange a loan of Rs.4,500 crore while Standard Chartered has arranged a loan of Rs.9,000 crore for the deal.

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BTST Trading Tips for Today: 21st September, 2021

BTST Trading Tips for Today: 21st September, 2021
by 5paisa Research Team 21/09/2021

5paisa analysts bring the best intraday ideas, short-term ideas and long-term ideas for you. In the morning we provide best momentum stocks to buy today, while in the last trading hour we provide buy today sell tomorrow (BTST) ideas.

BTST Trading Ideas for Today

1. MINDTREE SEP FUT

- Current Market Price: Rs.4,305

- Stop Loss: Rs.4,270

- Target: Rs.4,370

 

2. BAJFINANCE SEP FUT

- Current Market Price: Rs.7,762

- Stop Loss: Rs.7,730

- Target: Rs.7,835

 

3. ITC

- Current Market Price: Rs.241

- Stop Loss: Rs.237

- Target: Rs.250

 

4. BALAMINES

- Current Market Price: Rs.4,663

- Stop Loss: Rs.4,600

- Target: Rs.4,758

 

5. JSWSTEEL

- Current Market Price: Rs.666

- Stop Loss: Rs.659

- Target: Rs.679

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Paras Defence & Space Technologies IPO Subscription Day-1

Paras Defence IPO subscription Day 1
IPO
by 5paisa Research Team 21/09/2021

The Rs.170.78 crore IPO of Paras Defence & Space Technologies, consisting of a fresh issue of Rs.140.60 crore and an offer for sale or OFS of Rs.30.18 crore, was heavily oversubscribed on Day-1 itself. As per the combined bid details put out by the BSE, Paras Defence & Space Technologies IPO was subscribed 16.57X overall, with bulk of the demand coming from the retail segment followed by HNI segment. The issue closes on 23rd September.

As of close of 21 September, out of the 71.41 lakh shares on offer in the IPO, Paras Defence & Space Technologies saw bids for 1,182.92 lakh shares. This implies an overall subscription of 16.57X. The granular break-up of subscriptions were tilted in favour of retail investors but HNI investors were surprisingly robust on the first day of the IPO. QIB bids will typically come in only on the last day of the IPO.

 

Paras Defence & Space Technologies IPO Subscription Day-1

 

Category

Subscription Status

Qualified Institutional Buyers (QIB)

0.01 Times

Non Institutional Investors (NII)

3.77 Times

Retail Individuals

31.36 Times

Employees

N.A.

Overall

16.57 times


QIB Portion

The QIB subscription was subscribed just 0.01 times at the end of Day-1. On 20 September, Paras Defence & Space Technologies did an anchor placement of 29.275 lakh shares at the upper end of the price band of Rs.175, raising Rs.51.23 crore. The list of QIB investors including a number of marquee names like Ashoka India Equity, Abakkus Emerging Opportunities Fund, Saint Capital, Nippon India Fund and HDFC Mutual Fund. 

The QIB portion (net of anchor allocation) has a quota of 20.18 lakh shares of which it has got bids for just 0.24 lakh shares, implying a subscription ratio of just 0.01X for QIBs at the end of Day-1. QIB bids typically get bunched on the last day, but anchor response does show good interest.

HNI Portion

The HNI portion got subscribed 3.77X (getting applications for 57.94 lakh shares against the quota of 15.37 lakh shares). This is a surprisingly robust response on Day-1 and could be due to the small size of the IPO. Bulk of the funded applications and corporate applications, come in on the last day, so the actual picture should only get better.

Retail Individuals

The retail portion was subscribed a whopping 31.36X at the end of Day-1, showing strong retail appetite. For retail investors; out of the 35.86 lakh shares on offer, valid bids were received for 1,124.74 lakh shares, which included bids for 848.87 lakh shares at the cut-off price. The IPO is priced in the band of (Rs.165-Rs175) and will close for subscription on 23rd September.

Also Read:-

Paras Defence IPO - 7 things to know

Upcoming IPOs in 2021

Upcoming IPOs in September 2021

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Goldman Sachs bets on India becoming 5th largest by market cap

Goldman Sachs bets on India becoming 5th largest by market cap
by 5paisa Research Team 21/09/2021

One of the world’s most formidable investment banks, Goldman Sachs, is bullish on India. In fact, Goldman sees India in the same sweet spot of growth and value explosion as China a decade ago. As Goldman Sachs highlighted, China created immense wealth for those who believed in the China story and India would be no different. It also predicts that Digital IPOs would lead the way.

Let us look at some numbers. If the BSE market cap at $3.50 trillion looks lofty, Goldman Sachs has loftier predictions. They expect India’s market cap to grow from $3.50 trillion to $5 trillion in the next 3 years. That is a phenomenal 43% appreciation over 3 years. Goldman Sachs expects that by 2024, India would be the fifth largest in the world by market cap after the US, China, Japan and UK. 

The big story, according to Goldman is that this capital appreciation will be driven by digital IPOs. Nearly $400 billion of market cap accretion will come from digital IPOs. The successful IPO of Zomato opened the floodgates for a stream of big ticket digital IPOs including Paytm, Ola, Policybazaar and Nykaa; all of which are expected in the current fiscal year.

The big digital push in India has come from 80 crore internet users and 50 crore smart phones who spurred the digital economy backed by solid bandwidth. The pandemic also pushed scores of sectors online. According to Goldman, Zomato IPO proved that Indian retail investors and QIBs have a strong appetite for long-gestation digital stories.

One of the big stock market trends that Goldman foresees is the shift in the composition of the Nifty with many more digital plays included in the index. Today, the Nifty is dominated by banks, financials, oil, IT and automobiles. That could shift largely in favour of digital plays. Goldman also projects India’s share of global market capitalization to increase 90 bps to 3.7% by 2024, although GDP share may go up by just 40 bps.

Also Read:

1. Paytm IPO Update

2. 8 Interesting facts about Paytm

3. Zomato IPO – Fun Facts and the Serious Truth

Next Article

BTST Trading Tips for Today: 22nd September, 2021

BTST Trading Tips for Today: 22nd September, 2021
by 5paisa Research Team 21/09/2021

5paisa analysts bring the best intraday ideas, short-term ideas and long-term ideas for you. In the morning we provide best momentum stocks to buy today, while in the last trading hour we provide buy today sell tomorrow (BTST) ideas.
 

BTST Trading Ideas for Today

1. BTST : NATIONALUM SEP FUT

- Current Market Price: Rs.91.1

- Stop Loss: Rs.89.9

- Target: Rs.94.5

 

2. BTST : VINATIORGA

- Current Market Price: Rs.1,894

- Stop Loss: Rs.1,876

- Target: Rs.1960

 

3. STBT : JUBLFOOD SEP FUT

- Current Market Price: Rs.4,126

- Stop Loss: Rs.4,145

- Target 1: Rs.4,085

- Target 2 : Rs.4,050

 

4. STBT : PIDILITIND SEP FUT

- Current Market Price: Rs.2,423

- Stop Loss: Rs.2,441

- Target: Rs.2,382

 

5. BTST : BALKRISIND SEP FUT

- Current Market Price: Rs.2,685

- Stop Loss: Rs.2,670

- Target 1 : Rs.2,718

- Target 2 : Rs.2,740