Chemplast Sanmar rallies smartly post tepid IPO

Chemplast Sanmar rallies smartly post tepid IPO

Chemplast Sanmar IPO, part of the Sanmar group of Tamil Nadu, had recently closed its mega Rs.3,850 crore IPO in the month of August. The response had been tepid at just about 2.17 times subscription and the stock had dipped to a discount to the issue price post listing. 

However, in the last two weeks since listing, the stock has recouped 21% from the lows and is currently 13.7% above the issue price of Rs.541. On 02 September, the stock had closed at Rs.615, after touching a high of Rs.621. From the recent lows of Rs.510, this represents a 20.6% bounce in the stock price. What exactly has triggered this sharp rally in Chemplast?

There were two key reasons for the rally. Firstly, as committed in the IPO filing, the company has used up the proceeds of the fresh issue to repay non-convertible debentures of Rs.1,238 crore. The fresh issue proceeds of Rs.1,300 crore was almost entirely used up as committed as on 31-Aug. This largely benefits the company’s solvency ratios.

Secondly, this NCD was backed by the promoter holdings in the shares of Chemplast Sanmar and the shares of Chemplast Cuddalore Vinyls. With the NCD being fully repaid, these shares have been released from pledge on 31 August and currently there is not a single share of the promoters that is under pledge. Pledged shares tend to make traders jittery and the combination of pledge release and loan repayment boosted the stock price.

There is also a more fundamental pitch favouring the company. It is India’s largest manufacturer of specialty paste PVC resin, which finds extensive applications in the Agro-chemical and pharmaceutical sectors. 

In addition, Chemplast has a diversified product portfolio including chlor-alkali, caustic soda and chlorine, making it a de-risked chemical play. The loan repayment and pledge release has allowed markets to focus on the core strengths in the product portfolio of Chemplast Sanmar.

 

Also Read: 

Upcoming IPOs in 2021

IPOs in September

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Ami Organics IPO Allotment - How to Check the IPO Allotment Status

Ami Organics IPO Allotment
IPO
05/09/2021

The Rs.570 crore IPO of Ami Organics, consisting of Rs.200 crore fresh issue and Rs370 crore OFS, was subscribed 64.54X overall at the close of bidding on 03 September. The basis of allotment will be finalized on 08 August. If you have applied for the IPO, you can check your allotment status online. 

You can either check your allotment status on the BSE website or the IPO registrar, Link Intime. Here are the steps.

Checking the allotment status of Ami Organics on BSE website

Visit the BSE link for the IPO allotment by clicking on the link below https://www.bseindia.com/investors/appli_check.aspx 

Once you reach the page, here are the steps to follow.

•    Under Issue Type – Select Equity Option
•    Under Issue Name – Select Ami Organics from the drop down box
•    Enter the Application Number exactly as in the acknowledge slip
•    Enter the PAN (10-digit alphanumeric) number
•    Once this is done, you need to click on the Captcha to verity that you are not a robot
•    Finally click on the Search Button

The allotment status will be displayed on the screen in front of you informing about the number of shares of Ami Organics allotted to you.

Checking the allotment status of Ami Organics on Link Intime (Registrar to IPO)

Visit the Link Intime registrar website for IPO status by clicking on the link below:
https://linkintime.co.in/MIPO/Ipoallotment.html

This dropdown will only show the active IPOs, so once the allotment status is finalized, you can select Ami Organics from the drop down box.

•    There are 3 options. You can either access the allotment status based on PAN, Application Number or DPID-Client ID combination.

•    Select the appropriate option you want to use and enter the details (PAN / Application Number / DPID-Client ID)

•    Finally, click on the Search button

The IPO status with number of shares of Ami Organics allotted will be displayed on the screen.

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Best Defensive Stocks That Gave Outstanding Returns

by 5paisa Research Team 05/09/2021

One narrative you heard in the last few days is that defensive stocks have done very well. What exactly are defensive stocks? There are no hard and fast classification, but defensive stock have 3 characteristics. Firstly, demand for their products is perennial in nature. Seasonal products and services are out. Secondly, defensives are not subject to cycles like metals and cement stocks. Lastly, defensive stocks generally enjoy high levels of ROE and possibly higher P/E too. 

8 defensive stocks and how they performed:
 

Defensive Stock

CMP (03-Sep)

YTD Returns (%)

Nifty YTD

Aug-21 (%)

Nifty Aug-21

Hindustan Unilever

₹ 2,767

15.51%

23.90%

16.75%

8.69%

Avenue Supermarts

₹ 3,939

42.52%

23.90%

12.71%

8.69%

Dabur Ltd

₹ 641

20.04%

23.90%

3.46%

8.69%

TCS

₹ 3,842

34.21%

23.90%

19.54%

8.69%

Infosys Ltd

₹ 1,701

35.42%

23.90%

5.96%

8.69%

Wipro Ltd

₹ 655

69.61%

23.90%

9.16%

8.69%

Sun Pharma

₹ 789

33.27%

23.90%

2.60%

8.69%

Cipla Ltd

₹ 941

14.78%

23.90%

3.02%

8.69%

Data Source: NSE

1)    Hindustan Unilever: India’s largest FMCG company has seen robust demand post pandemic and managed to pass on input cost spikes to customers. HUL outperformed Nifty in Aug-21 but underperformed Nifty YTD.

2)    Avenue Supermarts: The owner of D-Mart brand saw retail sales and per store profits pick up sharply, despite COVID 2.0. Avenue Supermarts outperformed Nifty in Aug-21 and also YTD.

3)    Dabur Ltd: The stock has seen good traction from its Ayurvedic FMCG brands, especially health drinks and immunity builders. It has been a steady performer in 2021.

4)    TCS Ltd: The Tata software giant made the best of rising tech spend globally. While TCS does not give guidance, it saw operating margins steady. TCS outperformed Nifty in Aug-21 and also on YTD basis.

5)    Infosys Ltd: The stock has been consistently re-rated in the last one year as it closed in its OPM gap with TCS and gave robust guidance. Infosys outperformed Nifty on YTD basis but returns were lower than Nifty in Aug-21.

6)    Wipro Ltd: The new CEO, Thierry Delaporte, has brought in aggression and focus on high value clients. The impact is visible in the price. Wipro also outperformed Nifty in Aug-21 and also on YTD basis.

7)    Sun Pharma: The company has managed to integrate its Ranbaxy acquisition and exit its financial ventures. It also benefited from the pandemic demand. Sun Pharma outperformed Nifty on YTD basis, though not necessarily in Aug-21.

8)    Cipla Ltd: The Mumbai based pharma company has gained from COVID focus as also it recent inorganic focus on bio-similars. Cipla has been a solid performer in 2021.

With Nifty and Sensex at all-time highs, institutions and HNI clients are showing a clear preference for defensive picks.

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Reliance Crosses Rs.15 Trillion Market Capitalization

Reliance crosses Rs.15 trillion market capitalization
05/09/2021

On Friday, 03 September Reliance rallied 4.12% and achieved one more milestone. It became the first Indian company to cross Rs.15,00,000 crore market capitalization. At the current exchange rate, that translates into $205 billion. The Reliance stock has given 20% returns in calendar year 2021, almost at par with Nifty.

Over the last 5 years, the stock of Reliance has rallied nearly 5-fold as its market cap has expanded from $45 billion in Aug-2016 to $205 billion in September 2021. For almost 9 years between 2007 and 2016, the market cap of Reliance went nowhere as markets were unsure of how the company will profitably deploy the cash pile generated by the refining and petro-chem business.

Check: Reliance Industries (RIL) Share Price at 52 Week High

Over last 5 years, several triggers pushed Reliance stock higher. It made a big shift to digital and within 4 years of launch, Reliance Jio has over 41 crore subscribers and is the largest mobile company in India. More than the telecom numbers, it is the ownership of the digital ecosystem that impressed the markets.

Reliance Retail has emerged as India’s largest retailer. While Retail has become a big contributor to the top line of RIL, the digital business is contributing to RIL EBITDA in a significant way. To add to this slew of good news, RIL managed to place shares in its digital and retail ventures with marquee PE investors and strategic partners. Reliance also raised Rs.53,100 crore via rights. As promised in the 2019 AGM, RIL is a zero net debt company.

In the last few months, it is the O2C (oil to chemicals) business that is in the limelight. Apart from a likely sale of stake to Saudi Aramco, RIL is also planning a major green shift towards becoming a zero-carbon footprint company by 2030. Clearly, aggressive growth, debt reduction and cutting edge industry positioning helped RIL cross the Rs.15 trillion market cap mark.

Also Read: Reliance AGM

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Vijaya Diagnostic IPO Allotment - How to Check the Allotment Status?

Vijaya Diagnostic Centre IPO Allotment
IPO
05/09/2021

The Rs.1,895 crore IPO of Vijaya Diagnostic Centre, consisting entirely of an offer for sale (OFS), was subscribed 4.54X overall at the close of bidding on 03 September. The basis of allotment will be finalized on 08 September. If you have applied for the IPO, you can check your allotment status online. 

You can either check your allotment status on the BSE website or the IPO registrar, KFINTECH Private Limited (formerly Karvy Computershare). Here are the steps.

Checking the allotment status of Vijaya Diagnostic Centre on BSE website

Visit the BSE link for the IPO allotment by clicking on the link below https://www.bseindia.com/investors/appli_check.aspx

Once you reach the page, here are the steps to follow.
•    Under Issue Type – Select Equity Option
•    Under Issue Name – Select Vijaya Diagnostic Centre from the drop down box
•    Enter the Application Number exactly as in the acknowledge slip
•    Enter the PAN (10-digit alphanumeric) number
•    Once this is done, you need to click on the Captcha to verity that you are not a robot
•    Finally click on the Search Button


The allotment status will be displayed on the screen in front of you informing about the number of shares of Vijaya Diagnostic Centre IPO allotted to you.

Checking the allotment status of Vijaya Diagnostic Centre on KFINTECH (Registrar to IPO)

Visit the KFINTECH registrar website for IPO status by clicking on the link below:
https://rti.kfintech.com/ipostatus/

Once you click on Recent IPOs, the dropdown will only show the active IPOs, so once the allotment status is finalized, you can select Vijaya Diagnostic Centre from the drop down box.


•    There are 3 options. You can either Query the allotment status based on PAN, Application Number or DPID-Client ID combination.

•    To Query by PAN, check the appropriate box and follow these steps.
o    Enter the 10-digit PAN number
o    Enter the 6-digit Captcha Code
o    Click on Submit button
o    Allotment status gets displayed on screen

•    To Query by Application Number, check the appropriate box and follow these steps.
o    Select Application Type (ASBA or Non-ASBA)
o    Enter the Application Number as it is
o    Enter the 6-digit Captcha Code
o    Click on Submit button
o    Allotment Status gets displayed on screen

•    To Query by DP-ID, check the appropriate box and follow these steps.
o    Select the depository (NSDL / CDSL)
o    Enter the DP-ID
o    Enter the Client-ID
o    Enter the 6-digit Captcha Code
o    Click on Submit button
o    Allotment Status gets displayed on screen
 

Also Read: 

Upcoming IPOs in 2021

IPOs in September

7 Interesting Facts to Know About Vijaya Diagnostics IPO

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JSPL to Separate Power Business to Worldone for Rs.7,401 crore

JSPL to Separate Power Business to Worldone for Rs.7,401 crore
05/09/2021

On 03-Sep, shareholders of Jindal Steel & Power (JSPL), approved the proposal to sell 96.42% stake in Jindal Power Limited to Worldone. It must be noted that Worldone is a promoter group company of the Jindal family. The special resolution was passed by shareholders of JSPL with 97.12% votes supporting the resolution.

The consideration of Rs.7,401 crore will entail two parts. It will entail a cash pay-out of Rs.3,015 crore to JSPL. In addition, Worldone will also assume Rs.4,386 crore worth of liabilities and obligations of JSPL which are in the form of intercorporate deposits (ICD) and capital advances given by Jindal Power to JSPL. However, the final outcome was not smooth sailing all along.

The original meeting to seek shareholder approval was set in May-21. However, that meeting was cancelled after proxy advisors strongly objected to the low pay-out. Subsequently, Worldone sweetened its offer and agreed to pay a cash component plus assumption of liabilities of JSPL. However, there are still objections on the arms-length issue since the buyer of JPL, Worldone, is a Jindal group company. 

Notwithstanding the objections, the resolution has got a decisive vote of 97.12% of shareholding and the deal is now likely to be executed. There are some distinct benefits for JSPL from this sale. Firstly, the deal will eliminate Rs.6,566 crore of debt in the books of JSPL attributable to the Jindal power business. Secondly, it allows JSPL to focus on its core steel business, which is seeing strong demand at present. 

Above all, this sale will help JSPL to reduce its carbon footprint, something all metal companies are trying to do. This move also gives JSPL a more favourable positioning in terms of its ESG (Environmental, Social, Governance) metrics and is expected to be valuation accretive.