Glenmark Life Sciences IPO to open for subscription on 27 July

Glennmark life science IPO
IPO
20/07/2021

If you have been tracking pharma industry in the past, you would have heard of this popular product called APIs. The active pharma ingredients (APIs) are the specialized raw inputs that go into manufacture of medicines. One of India’s leading players in APIs, Glenmark Life Sciences, is coming out with its much awaited IPO, which opens on 27 July. Glenmark Life Sciences will raise Rs.1,060 crore via fresh issue and will also offer 63 lakh shares of the promoter (Glenmark Pharma) via offer for sale or OFS.

 

Read More : Pharma Industry Updates

 
Understanding the China story in APIs


Over the last 20 years it was generally accepted that any medicine manufactured anywhere in the world has a China component at some point. That was the extent of domination that China built in APIs. Things changed in the last 2 years. Firstly, the Chinese government put severe environmental restrictions on chemicals and bulk drug companies. This impelled many global pharma names to look at India as an alternative source of APIs. Secondly, the pandemic resulted in severe supply chain constraints for API flows from China forcing most pharma companies to diversify their API sources. Lastly, with China’s role in the spread of Coronavirus becoming controversial, many pharma companies globally have consciously opted to reduce their dependence on China for APIs. These 3 factors immensely benefited the Indian API manufacturers.

What exactly is the Glenmark Life Sciences IPO story?

Needless to say, this is the API arm of Glenmark Pharma being hived off, so you have a strong legacy already. Glenmark Life Sciences is already one of the largest API manufacturers in specialized areas like cardiovascular diseases, central nervous system diseases, pain management, gastro-intestinal disorders and anti-infectives. Glenmark Life is also a key player in the Contract Development and Manufacturing Operations (CDMO) space, where again India has a huge global space to occupy. With 4 manufacturing facilities and an annual installed capacity of 726 KL, Glenmark Life Sciences will use the IPO funds for capital expenditure and deepening its relationships and imprint in the export market.

 

Glenmark Life Sciences IPO opens on 27 July and closes on 29 July. It is scheduled to list on the stock exchanges on 06 August.

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Suggested To Read - To get more details like IPO Issues Size, IPO Open/Close Dates read Glenmark IPO Information Note

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How are stocks settled after a trading holiday

Stock settlement on trading holiday

We normally tend to use the words trading holiday and clearing holiday in the stock markets interchangeably. These are two different things altogether. The trading holiday is the day on which there is no trading permitted. That means you cannot use your trading account to place trades, either offline or online. No buy or sell orders in the stock market are allowed on trading holidays. Obviously, when there is no trading, there is no question of clearing and settlement of trades, hence there would also be no clearing of trades on such days.


However, there are a number of days on which there is trading in the stock market but then clearing is not available due to a bank holiday as stipulated by the RBI. In such cases, the clearing of trades get bunched together, as we will see in detail later in this article. But, let us first understand trading and clearing holidays from a practical perspective.

 
Trading and clearing holidays for calendar year 2021


The table below captures the NSE list of market holidays with the dates, description and the nature of the holiday.

 

Date

Day

Description

Holiday Status

26 Jan 2021

Tuesday

Republic Day

Trading Cum Clearing Holiday

19 Feb 2021

Friday

Chhatrapati Shivaji Maharaj Jayanti

Only Clearing Holiday

11 Mar 2021

Thursday

Mahashivratri

Trading Cum Clearing Holiday

29 Mar 2021

Monday

Holi

Trading Cum Clearing Holiday

01 Apr 2021

Thursday

Annual Bank Closing

Only Clearing Holiday

02 Apr 2021

Friday

Good Friday

Trading Cum Clearing Holiday

13 Apr 2021

Tuesday

Gudi Padwa

Only Clearing Holiday

13 Apr 2021

Tuesday

Gudi Padwa

Only Clearing Holiday

14 Apr 2021

Wednesday

Dr. Babasaheb Ambedkar Jayanti

Trading Cum Clearing Holiday

21 Apr 2021

Wednesday

Ram Navami

Trading Cum Clearing Holiday

13 May 2021

Thursday

Id-Ul-Fitr (Ramzan ID)

Trading Cum Clearing Holiday

26 May 2021

Wednesday

Buddha Pournima

Only Clearing Holiday

21 Jul 2021

Wednesday

Bakri Id

Trading Cum Clearing Holiday

16 Aug 2021

Monday

Parsi New Year

Only Clearing Holiday

19 Aug 2021

Thursday

Moharram

Trading Cum Clearing Holiday

10 Sep 2021

Friday

Ganesh Chaturthi

Trading Cum Clearing Holiday

15 Oct 2021

Friday

Dussehra

Trading Cum Clearing Holiday

19 Oct 2021

Tuesday

Id-E-Milad

Only Clearing Holiday

4 Nov 2021

Thursday

Diwali- Laxmi Pujan

Only Clearing Holiday

5 Nov 2021

Friday

Diwali-Balipratipada

Trading Cum Clearing Holiday

19 Nov 2021

Friday

Gurunanak Jayanti

Trading Cum Clearing Holiday

Data Source: NSE

 

Find the entire list of Stock Trading Holidays in 2021

 

The above is a comprehensive list of holidays published by the NSE but remember not all the above days are trading holidays. All the above days are clearing holidays when there will be no clearing done by the banks. We have marked the specific days in red colour in the last column where the particular day is a clearing holiday but not a trading holiday. For example, in the above 2021 list, 19 Feb and 01 April are clearing holidays but are not trading holidays. On these days, stock market trading goes on as usual. However, 05 November and 19 November 2022 are trading-cum-clearing holidays and on these days the stock market trading and bank clearing will be shut.


How is settlement managed when there are trading and clearing holidays?

We are all aware that the trade is not complete with executing the trade. The exchanges and clearing corporations along with the banks and Depositories perform the Clearing and Settlement function. For stock purchases, this entails calculating the Trading Member wise debits, collecting the debit amounts and ensuring that shares are credited to the respective demat accounts on T+2 day. For stock sales, it entails calculating the Trading Member wise credits, ensuring that clean demat delivery is given and the funds are credited to the respective bank accounts on T+2 day.


Now how would the above situation get impacted if there are trading / clearing holidays in between? Let us look at 2 situations.


1)    If there is an intervening trading holiday, then settlement gets postponed accordingly. For example, 21 July is a trading cum clearing holiday. All trades of 19 July will get settled on 22 July instead of 21 July. Similarly, all trades of 20 July will get cleared on 23 July instead of 22 July.

 

2)    What happens if it is only a clearing holiday. For example, 26 May, Buddha Purnima, was only a clearing holiday. In such cases, settlements would get bunched. So, the trades of 24 May and the trades of 25 May would get bunched and get settled on 27 May.


That is how your clearing and settlement of trades gets impacted by trading and clearing holidays.

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Find the entire list of NSE/BSE Holidays 2021, Commodity Market Holidays

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Nuvoco Vistas likely to be the next Big Ticket IPO to hit the market

Nuvoco Vistas IPO
IPO
22/07/2021

Nuvoco Vistas may not be a well-known name in market circles, but it is already a formidable name in cement circles. Now SEBI has approved the proposal of Nuvoco Vistas IPO, which is expected to be worth Rs.5,000 crore. This will consist of a fresh issue of Rs.1,500 crore and an offer for sale to its owner, Nirma Ltd, worth Rs.3,500 crore. Interestingly, Nirma, which is the holding company of Nuvoco Vistas, itself was a listed company on the stock exchanges till 2012, when it voluntarily opted to delist.

Nuvoco Vistas is the 5th largest cement manufacturer in India with most of its growth coming inorganically. For example, it started off by buying the cement business of Tata Steel in 1999 and followed it up by buying the cement business of Raymond in 2000 and the RMC business of L&T in 2008. In 2016, it bought the Indian cement business of Lafarge Holcim while in 2020 it topped up its cement capacity by acquiring the cement business of Emami Ltd. The product portfolio of Nuvoco Vistas consists of 3 verticals viz. cement, RMC and modern building products.

Nuvoco Vistas has a current capacity of 22.32 million TPA of cement, making it the fifth-largest player in India with over 50 products. Further expansions are underway at its plants in Jojobera and Bhabua. While the OFS will help Nirma to monetize its cement franchise partially, the fresh issue component will be used for expansion and for debt reduction. Cement companies have had a fabulous time on the bourses with rising volumes and stable to improving pricing. With the SEBI approval done and only the ROC filing left, the issue can be expected in the first half of August.
 

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Flexi Cap NFOs are the in-thing among mutual funds

Flexi Cap NFO
22/07/2021

NFOs or new fund offerings have been the mutual fund equivalent of equity IPOs. But, the big challenge was to have a unique theme to offer to customers. SEBI has restricted fund houses to launching just 1 fund per defined category, so the NFO scope was quite limited on the equity front. It is here that the flexi-cap space offers an opportunity for mutual funds to launch NFOs with a unique proposition to clients.

The big splash was made by the ICICI Prudential Flexi-Cap Fund NFO, which collected an incredible Rs.10,200 crore through the NFO. This is the highest amount that has ever been collected in any single NFO in India. Flexi Cap are a more flexible version of the Multi-Cap funds where there are not restrictions on how the fund managers allocate the fund between large-cap, mid-cap and small-cap stocks.

After the success of the ICICI Prudential Flexi Cap NFO, others like Nippon MF and ITI MF are also lining up similar NFOs. In fact, Nippon MF Flexi Cap NFO will open for subscription on 26 July and will remain open till the end of August. What really must have impressed other funds to follow suit is not just the amount collected by Pru ICICI Flexi Cap NFO, but the fact that 400,000 investors applied for the NFO, showing strong retail appetite.

Flexi Cap funds currently have an AUM of Rs.176,000 crore, next only to large cap funds in the equity category. Flexi Cap funds have given 51.6% returns in the last 1 year, 14.5% in the last 3 years and 14.2% in the last 5 years. For investors, flexi-cap funds are emerging as a proxy for participating in alpha generation via mid-caps and small-cap stocks.

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Asian Paints profit spurts, but margin pressures visible

Asian Paints Q1 results
22/07/2021

It was a quarter of stellar profit growth for Asian Paints and the stock price impact was immediate. On 20 July, the stock shot up 7% to cross the covered Rs.3 trillion market cap level. That makes Asian Paints the twelfth most valuable company in the Indian market and a veritable FMCG player. However, there was also the story of margins being pressured by a sustained rise in input costs. We will come back to the margin pressures later, but first, let us look at the financial performance for the Jun-21 quarter.

Asian Paints reported 91% YoY growth in revenues at Rs.5,585 crore but COVID 2.0 pressures ensured that sequential sales revenues were lower by 16%. The top-line growth was driven by a 106% growth in the decorative paints segment in volume terms and 95% in value terms. Other segments like industrial paints and new products like adhesives, wood finish, waterproofing also showed good traction. Net profits for the Jun-21 quarter were up 160% at Rs 569cr, although profits fell 33% on a sequential basis.

Read : Paint Sector Stocks

Despite the ostensibly good results, the gross margins for the quarter fell by 500 bps to 39.6% sequentially. Against the 15% spike in input costs, only 3% could be passed on as price hikes. The input pressure was apparent as exports to Asia and Africa witnessed pre-tax losses for Jun-21 quarter. The big challenge remains the spike in material costs amidst a competitive market. Cost controls helped mitigate the input cost spike to some extent, but that will saturate.

Net margins of Asian Paints for the Jun-21 quarter came in at 10.88%. This is better than the 7.47% NPM in the Jun-20 quarter but lower than the 12.81% NPM recorded in the sequential Mar-21 quarter.
 

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Rolex Rings IPO: An Indirect Automobile Play

Rolex Rings IPO
IPO
22/07/2021

The auto ancillary industry in India has been largely centered around NCR, Tamil Nadu and Maharashtra, which is obviously due to their proximity to auto manufacturing hubs. Rolex Rings manufactures hot-rolled forged and machine bearing rings and other auto components for the auto industry. Rolex Rings supplies to automotive and industrial consumers. Apart from auto companies, Rolex Rings also counts marquee names like Timken, SRF and Schaeffler among bearing manufacturing clients.

A quick look at the financials indicates that the company has been consistently profit-making, although revenues and profits came under pressure on account of COVID. For the six month ending Sep-20, the company reported net revenues of Rs.225 crore and net profits of Rs.25.3 crore giving a net margin of 11.25%. Net margins had fallen in previous years and only in the Sep-20 half year the net margins have got back to the 2018 levels.

The Rolex Rings IPO opens on 28 July and closes on 30 July and the book built issue will be a mix of fresh issue and offer for sale. The company is raising Rs.70 crore of fresh funds and will issue 65 lakh shares as offer for sale to existing owners. The funds raised via fresh issue will be used for working capital purposes and for general corporate purposes.

Read: Important Facts of Rolex Rings

Equirus Capital, IDBI Capital markets and JM Financial are the lead manages to the issue. In terms of IPO performance of lead managers in 2021, Equirus has managed 3 issues with all 3 getting positive listing. IDBI Capital has managed 1 issue with positive listing. JM has managed 9 issues in 2021 with 7 getting positive listing.