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Government Allowed to Sell Residual Stake in Hindustan Zinc

Government Allowed to Sell Residual Stake in Hindustan Zinc
by 5paisa Research Team 22/11/2021

The Honourable Supreme Court has allowed the government of India to sell its residual stake in Hindustan Zinc Ltd. The government and DIPAM are yet to take a call on whether this stake sale would be in a single tranche or in multiple tranches.

They also need to take a call on whether the sale would be done through an offer for sale or via a private placement with a PE fund or a strategic investors. These modalities are yet to be worked out.

Currently, 64.92% of the equity stake of Hindustan Zinc is held by the promoter group i.e. Vedanta group, belonging to Anil Agarwal.

The government of India holds 29.54% in HZL while the balance 5.6% of Hindustan Zinc Ltd is held by the public shareholders including mutual funds and foreign portfolio investors. Now the government can sell its entire 29.54% stake in the company.

At the current market price of Rs.323, the market cap of Hindustan Zinc works out to Rs.136,000 crore. The government stake of 29.54% in Hindustan Zinc would be valued at around Rs.40,200 crore.

This would go a long way in boosting the government inflows for the year and help take them closer to the annual disinvestment target of Rs.175,000 crore. Even with LIC and BPCL divestments, HZL would be the much needed boost to divestments.

The stake in Hindustan Zinc was first sold by the government to Vedanta via competitive bidding. At that time 26% stake in the company was sold to Vedanta (formerly Sterlite). Subsequently, the acquirer made an open offer to the public for buying out 20% of HZL as per SEBI regulations.

Subsequently, in 2003, the acquirer also exercised its call option to acquire another 18.92% stake in Hindustan Zinc, taking its stake to 64.92%.

Hindustan Zinc reported robust numbers in the September 2021 quarter with revenues and profits at record levels. With the prices of most industrial metals rallying sharply in the London Metals Exchange, the government also sees an opportune moment to hive off its stake in HZL at a good price.

It will be like two birds with one stone as the government gets a good price and also boosts its divestment target.

Interestingly, the Supreme Court also asked the CBI to initiate an investigation into why the government had sold 26% stake in HZL in 2002 instead of 25%, as it had resulted in the government stake being diluted to below 50%. That is another story altogether.

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Reliance to call off stake sale deal with Saudi Aramco

Reliance to call off stake sale deal with Saudi Aramco
by 5paisa Research Team 22/11/2021

In a move that was not exactly surprising, Reliance Industries and Saudi Aramco, have mutually decided to rework and reassess their agreement . Under the 2019 original deal, Reliance was to sell 20% in its oil-to-chemicals business to Saudi Aramco for a consideration of $15 billion. That deal was to value the entire oil to chemicals business of Reliance Industries at $75 billion.

The deal ran into rough waters in 2020 after the COVID pandemic resulted in a sharp fall in crude oil prices (even dipping into negative in an extreme case). At that point, Aramco had sought a lower pricing for the deal but Reliance had been unwilling to negotiate on the pricing.

The deal remained in cold storage till the last AGM of RIL confirmed the appointment of Yasir Al Rumayyan of Aramco on the board of Reliance Industries.

What then has changed in the last couple of months? Broadly, there could be 2 reasons for the deal being called. Firstly, back in 2019, Reliance was in need of a huge mound of cash to become zero-net debt by 2021.

That was achieved by monetizing its stake in the digital and retail businesses as well as record rights issue of Rs.53,125 crore. Reliance had raised enough cash for its zero debt goal, even without monetizing its oil to chemicals stake.

The second reason is more important. In the last few months, Reliance has committed $10 billion to alternate green energy over 3 years which includes manufacturing photovoltaic cells, solar energy support systems and electrolysers for hydrogen.

Bernstein and other large global brokers have already valued the clean energy franchise at close to $70 billion. It hardly made sense to put a value on O2C business at this point of time.

Reliance is not alone as even the Adani group has committed huge funds for green energy. This is the emerging area of energy and is likely to command premium valuations. Reliance is clear that the current deal to sell 15% in the O2C business would tantamount to undervaluing the energy franchise of the company. 

From the perspective of Aramco, they are obviously having second thoughts about committing $15 billion into the fossil fuels business. They would rather pay more to get a stake in the new energy business.

The fact that Yasir Al Rumayyan will continue on the RIL board hints that the relationship may still be on; probably of a more morphed nature. For now RIL has withdrawn its NCLT application to hive off its O2C business into a separate entity.

Also Read:-

Saudi Aramco gets closer to picking up a stake in Reliance O2C

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MedPlus Health Services IPO - 7 Things to Know

MedPlus Health Services IPO - 7 Things to Know
by 5paisa Research Team 23/11/2021

MedPlus Health Services, which had filed DRHP with SEBI for its proposed Rs.1,639 crore IPO, has got SEBI observations. In the IPO parlance, SEBI observations is tantamount to an IPO approval. Here are some key points to note about the IPO.
 

Seven things to know about MedPlus Health Services IPO


1) The Rs.1,639 crore IPO of MedPlus Health Services will comprise of a fresh issue of Rs.600 crore and an offer for sale by existing shareholders to the tune of Rs.1,039 crore.

With the DRHP approved, the company will undertake to address any specific changes suggested by SEBI and then go ahead with its RHP filing with the ROC.

2) Out of the OFS component, two early shareholders will be the major sellers. PI Opportunities Funds will sell shares worth Rs.500 crore in the OFS while Lone Furrow Investments will sell shares worth Rs.450 crore.

The balance of Rs.89 crore will be raised by smaller shareholders including the promoter shareholders.

3) MedPlus Health Services is into pharmacy retail and health support services and this business is largely working capital intensive.

Hence the fresh issue component of the IPO will be used for working capital purposes. The company will also use part of the fresh funds to fund its subsidiary, Optival.

4) MedPlus Health Services is based out of Hyderabad and one of the largest pharmacy retailers in the region. It was promoted by first generation entrepreneur, G Madhukar Reddy.

Its products include, apart from medicines, vitamins, medical products, test kits, FMCG products as well as baby care products, detergents and sanitizers.

5) The MedPlus franchise extends across the states of Tamil Nadu, Andhra Pradesh, Telangana, West Bengal, Odisha, Karnataka and Maharashtra.

Its stores network has expanded from 48 stores in 2006 to 2,000 stores currently. It is ranked India’s second largest pharmacy network.

6) The company adopts an omnichannel strategy in that it offers online selling as well as brick-and-mortar selling services through a centralized mechanism.

It also features a whole array of FMCG brands at its various outlets while the retailing is done under its MedPlus brand.

7) The MedPlus Health Services IPO will be lead managed by Axis Capital, Credit Suisse Securities, Nomura Financial Advisory and Edelweiss Financial, who will act as the book running lead managers to the issue. 

The company has just completed 15 years in the pharmacy retail business.

Also Read:-

Upcoming IPOs in 2021

Upcoming IPOs in November 2021

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Puranik Builders IPO - 7 Things to Know

Puranik Builders IPO - 7 Things to Know
by 5paisa Research Team 23/11/2021

Puranik Builders, which had filed its DRHP with SEBI in September this year, has got approval for its proposed IPO. Incidentally, this is the third attempt made by the company to tap the IPO market. Here is a gist of the Puranik Builders IPO.
 

Seven interesting facts to know about Puranik Builders IPO


1) This is not the first time that Puranik Builders is filing for its IPO. It had earlier filed for its proposed IPO in 2018 but had shelved the IPO plans.

Subsequently, Puranik Builders had again filed for IPO in late 2019, but due to the stress created by COVID, it had to abandon its IPO plans. This is the third IPO attempt by Puranik Builders.

2) The IPO will comprise of Rs.510 crore of fresh issue and the company will also offer 945,000 shares under the offer for sale.

The two promoters, Ravindra Puranik and Gopal Puranik, will offer 472,500 shares each in the OFS. The total size of the IPO will depend on the pricing of the IPO.

3) The fresh issue proceeds of Rs.510 crore will be used to reduce the debt of the company and also for general working capital and other corporate purposes.

The company has a high degree of leverage which is impacting its solvency ratios and hence debt reduction would be value accretive for Puranik Builders.

4) The company basically develops and sells mid-range projects in the Mumbai Metropolitan Region (MMR) and the Pune Metropolitan Region (PMR).

Puranik Builders has been active in the real estate business in the MMR and PMR region for the last 31 years. Its focus remains on affordable residential housing.

5) For FY21, the company sales fell from Rs.730 crore to Rs.513 crore while the profits fell from Rs.51 crore to Rs.36 crore.

This fall was largely attributed to the cessation of construction activity for several months due to the pandemic as well as higher stress on the disposable income of people.

6) However, Puranik Builders hopes to build on the traction that realty companies are seeing in the last few quarters in terms of a spike in bookings. Some of the major projects underway include Puraniks Tokyo Bay, Puranik Hometown, Puraniks City Reserva, Puranik Rumah Bali, Puranik Capitol, Puranik Elito Grand Central etc.

7) Elara Capital and Yes Securities will be the book running lead managers for Puranik Builders. Puranik Builders will also consider a Rs.150 crore pre-IPO placement of shares via private placement with select institutions, in which case the size of the IPO would be reduced proportionately.

Also Read:-

Upcoming IPOs in 2021

Upcoming IPOs in November 2021

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Tracxn Technologies IPO - 7 Things to Know

Tracxn Technologies IPO - 7 Things to Know
by 5paisa Research Team 23/11/2021

Tracxn Technologies, which had filed DRHP with SEBI for its proposed IPO in mid-Aug 2021 has got SEBI approval for its IPO. Here is what you need to know.
 

Seven thing to know about the Tracxn Technologies IPO


1) The Tracxn Technologies IPO will entirely be an offer for sale. The OFS will comprise of 3,86,72,208 shares offered by the promoters and early investors in the company.

Since there is no fresh issue component, there will be no fresh funds coming and no change in the capital size, except for some change in ownership.

2) Out of the OFS of nearly 3.87 crore shares, Elevation Capital will offer 1.09 crore shares, Accel India will offer 40.2 lakh shares and SCI Investments will offer 21.81 lakh shares.

In addition, the 2 Flipkart founders, Binny Bansal and Sachin Bansal, will offer 12.63 lakh shares each. Promoters Neha Singh and Abhishek Goyal will sell 76.62 lakh shares each.

3) Tracxn Technologies is among the leading providers of market intelligence pertaining to private unlisted companies and start-ups.

It operates on the Software as a Service (SaaS) model. With its large mined start-up and unlisted company database, it has a subscription based revenue model for its regular flows.

4) Tracxn Technologies has the largest coverage on emerging technology sectors like artificial intelligence, machine learning, robotics, virtual reality, blockchain, alternate energy etc.

Its subscribers include institutional investors, investment bankers, fund managers, venture capitalists and PE funds looking for good deep value opportunities.

5) The company is headquartered in Bengaluru and was founded in 2015 by two former venture capitalists at Sequoia and Accel, Neha Singh and Abhishek Goyal.

The idea was to fill the huge gap between people with investable surplus and entrepreneurs with good and bright ideas. 

6) Tracxn Technologies currently tracks more than 14 lakh private companies and start-ups with its proprietary model being used to bucket the model into a particular slot after which the due diligence on the company can commence.

Tracxn has over 855 subscribers spread across 50 countries; largely VCs, PE players and large corporates.

7) IIFL Securities will be the sole book running lead manager (BRLM) to the IPO. Now that the regulator has approved the IPO, the next steps would be file the RHP with the registrar of companies (ROC) and proceed with the issue.

The purpose of the IPO is to get the shares listed on the stock exchange and make the equity capital available as a future currency.

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Upcoming IPOs in 2021

Upcoming IPOs in November 2021

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Go Fashion IPO Allotment - How to Check Allotment Status?

Go Fashion IPO Allotment - How to Check Allotment Status?
by 5paisa Research Team 23/11/2021

The Rs.1,013.61 crore IPO of Go Fashion (India), consisting of a fresh issue of Rs.125 crore and an offer for sale (OFS) of Rs.888.61 crore, was subscribed 135.46X overall at the close of bidding on 22nd November. The basis of allotment will be finalized on 25th November.

If you have applied for the Go Fashion (India) 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 Go Fashion (India) 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:

A) Under Issue Type – Select Equity Option
B) Under Issue Name – Select Go Fashion (India) from the drop down box
C) Enter the Application Number exactly as in the acknowledge slip
D) Enter the PAN (10-digit alphanumeric) number
E) Once this is done, you need to click on the Captcha to verity that you are not a robot
F) 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 Go Fashion (India) IPO allotted to you.

Check - Go Fashion IPO - Subscription Day 3

Checking the allotment status of Go Fashion (India) 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 Go Fashion (India) from the drop down box.

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

A) To Query by PAN, check the appropriate box and follow these steps:

a) Enter the 10-digit PAN number
b) Enter the 6-digit Captcha Code
c) Click on Submit button
d) Allotment status gets displayed on screen

B) To Query by Application Number, check the appropriate box and follow these steps:

a)  Select Application Type (ASBA or Non-ASBA)
b) Enter the Application Number as it is
c) Enter the 6-digit Captcha Code
d) Click on Submit button
e) Allotment Status gets displayed on screen

C) To Query by DP-ID, check the appropriate box and follow these steps:

a) Select the depository (NSDL / CDSL)
b) Enter the DP-ID
c) Enter the Client-ID
d) Enter the 6-digit Captcha Code
e) Click on Submit button
f) Allotment Status gets displayed on screen

Also Read:-

Upcoming IPOs in 2021

Upcoming IPOs in November 2021

Grey Market Premium of Go Fashion India Ltd

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