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Nykaa and Policybazaar file for IPO

Nykaa and Policybazaar file for IPO
IPO
03/08/2021

FSN Ecommerce Ventures Ltd (Nykaa), has filed draft red herring prospectus (DRHP) with SEBI for its proposed IPO. Better known in the market by its brand name Nykaa, the beauty aggregator platform is looking to raise funds through a combination of fresh issue and an offer for sale. 

Nykaa plans to raise Rs.525 crore through fresh issue of shares and will issue an additional 4.31 crore shares via OFS. The selling shareholders will include the promoters, Sanjay Nayyar Family Trust, as well as investors like TPG, Lighthouse, JM Financial, Sunil Kant Munjal and H S Banga. Overall size of the IPO is pegged at Rs.3,500 crore. The company is estimated to be seeking a valuation of close to $4 billion.

Nykaa offers online and offline aggregation platform for cosmetic and beauty solutions, including a host of marquee global brands. Nykaa has a total of 4.37 crore downloads across its various apps. In addition, it also has offline presence in the form of 73 stores spread across 38 Indian cities.

While Nykaa has a top line of over Rs.1,800 crore, it is still loss making. The success of the Zomato IPO has underlined the investor appetite even for loss-making digital IPOs. In its last fund raising about 18 months back, Nykaa was valued at $1.5 billion. Nykaa was promoted in 2012 by Falguni Nayyar, former head of investment banking at Kotak Mahindra Capital.

PB Fintech (Policybazaar.com) has filed its DRHP with SEBI for its proposed Rs.6,018 crore IPO. The IPO will comprise of a fresh issue of Rs.3,750 crore and an offer for sale of Rs.2,268 crore. Policybazaar.com boasts of marquee investors on its roster like Softbank, Temasek and Info Edge. Incidentally, Info Edge is also the largest shareholder in Zomato. The biggest selling shareholder in Policybazaar OFS will be the Softbank unit, SVF Python Fund.

Policybazaar is an insurance aggregator which allows potential customers to compare different insurance policies on a variety of parameters before deciding on which policy to buy. Policybazaar offers screening of insurance policies, comparison across originators and fulfilment or execution on the website itself. 

For FY21, Policybazaar had revenues of Rs.887 crore and net losses of Rs.153 crore. Net losses had nearly halved on yoy basis. Indian insurance industry is estimated to be worth $102 billion in terms of total premiums, so it is a huge market for Policybazaar.

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Birla group willing to exit stake in Vodafone Idea

VI aditya Birla
IPO
03/08/2021

In a letter to the Cabinet Secretary, Kumar Mangalam Birla has agreed to transfer his 27% stake in Vodafone Idea to the government as a final effort to save the company from a likely collapse. Both the principal shareholders of Vodafone Idea, the AV Birla group and Vodafone UK, have expressed their inability to infuse further capital into the company. The only way out is a government sponsored initiative to save the company.

Vodafone reported a net loss of Rs.7,023 crore in the latest quarter and has virtually eroded its net worth with the consistent losses reported. What the government would be really worried about is the Rs.180,000 crore of dues from Vodafone. This includes the debts owed to banks as well as Rs.58,000 crore of AGR charges and Spectrum dues to the Department of Telecommunications (DOT).  Apart from the loss to banks, there are also thousands of direct and indirect jobs that are at stake.

Last year, Vodafone UK and Birla Group had tried hard to find an investor to infuse Rs.25,000 crore into Vodafone through a mix of debt and equity. However, investors were unwilling to infuse funds into Vodafone Idea unless there was clarity on the AGR charges front. With most of the options closed, the Birla group is willing to transfer its stake to the government or a government sponsored institution which could save the company and thousands of jobs.

Vodafone had been badly hit by the price war in telecom that started with the entry of Reliance Jio in 2016, forcing it to merge with Idea Cellular. But the merger only compounded problems as Vodafone continued to steadily lose customers in the midst of tepid ARPUs.

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State Bank of India - Quarterly results 2021

State Bank
04/08/2021

State Bank of India reported 6% rise in consolidated revenues in the Jun-21 quarter at Rs.93,267 crore with a spike in treasury and insurance revenues while retail and wholesale banking were flat to positive. The bank reported record standalone net profits of Rs.6,504 crore with operating profits at Rs.18,975 crore. Consolidated PAT for the quarter stood at Rs7,380 crore. NII was up 3.74% while NIMs were slightly lower at 3.15% in the Jun-21 quarter.

 

Rs in Crore

Jun-21

Jun-20

YOY

Mar-21

QOQ

Total Income

₹ 93,267

₹ 87,984

6.00%

₹ 1,03,431

-9.83%

Net Profit

₹ 7,380

₹ 4,777

54.50%

₹ 6,126

20.48%

Diluted EPS

₹ 8.27

₹ 5.35

 

₹ 6.86

 

Net Margins

7.91%

5.43%

 

5.92%

 

Gross NPA Ratio

5.32%

5.44%

 

4.98%

 

Capital Adequacy

13.66%

13.40%

 

13.74%

 

 

In the Jun-21 quarter, deposits grew 8.8% while domestic credit grew by 5.64%. This included a 10.98% growth in home loans, now comprising 23% of SBI overall loan book. During the Jun-21 quarter, the slippage ratio stood higher at 2.47% but the profit got a big boost as the cost to income ratio fell by 261 bps to 51.89%. 

A major contributor to the net profits in the quarter was the 16.3% fall in loan loss provision at Rs.10,510 crore. Credit costs were actually lower by 77 bps to 0.79%, resulting in ROE getting a boost of 357 bps to 12.12%.

There was a 34 bps increase in gross NPAs at 5.32%, but on the positive side the return on assets or ROA at 0.57% is very stable and attractive. The provision coverage ratio was marginally lower at by 39 bps at 85.93%. However, capital adequacy at 13.66% could require continuous capital buffer infusion.

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Devyani International IPO Subscription Day-1

Devyani International IPO Subscription Day-1
IPO
04/08/2021

The Rs.1,838 crore Devyani International IPO, consisting of Rs.440 crore fresh issue and Rs.1,398 crore OFS, has gradually built on the response from retail investors on Day-1. As per the combined bid details put out by the BSE, Devyani International IPO was subscribed 2.69X overall, with bulk of the demand coming from the retail segment. The issue closes for subscription on Friday, 06 August.

As of the close of 04 August, out of the 1,125.70 lakh shares on offer, Devyani International saw applications for 3,022.98 lakh shares. This implies an overall subscription of 2.69X. The granular break-up of subscriptions was tilted in favour of retail investors but HNI and QIB portions did see some demand on Day-1. 

 

Devyani Internation IPO subscription Summary Day 1

 

Category

Subscription Status
Qualified Institutional (QIB) 0.77Times
Non-Institutional (NII) 0.77 Times
Retail Individual 11.37 Times
Employee 1.56 Times
Total 2.69  Times

 

QIB Portion

The QIB portion saw demand for 467.66 lakh shares against 611.02 shares available; net of anchor placement. On 03 August, Devyani International did anchor placement of Rs.824.87 crore to QIB investors like ADIA, Fidelity, Goldman Sachs, Government of Singapore, Monetary Authority of Singapore, Kuwait Investment Authority etc. QIB portion is subscribed 0.77X, but is likely to see action on the last day.

HNI Portion

The HNI portion also got subscribed 0.77X (getting applications for 234.88 lakh shares against the quota of 305.51 lakh shares). Funded applications and corporate applications, come in on last day. The real big story was the retail portion, which is already subscribed 11.35 times at the end of Day-1, showing strong retail appetite.

Retail Portion

Among retail investors; out of the 203.67 lakh shares on offer, valid bids were received for 2,311.84 lakh shares, of which bids for 1,826.54 lakh shares were at the cut-off price. The IPO is priced in the band of (Rs.86-Rs.90) and has allocated a quota of 10% for retail and 75% for QIBs.
 

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SBI Posts Record Profit in Q1 as Loan Loss Provisions Fall

SBI
04/08/2021

State Bank of India reported a record profit for the first quarter through June 2021, helped by a sharp drop in provisions to cover potential bad loans.

The nation’s biggest lender said standalone net profit jumped 55% to Rs 6,504 crore for the April-June period from Rs 4,189.34 crore a year earlier.

Net interest income—the difference between interest earned and paid—rose3.74% to Rs 27,638 crore even though the net interest margin for its domestic business shrank a little to 3.15% from 3.24% a year earlier.

The bank’s provisions to cover for potential non-performing assets (NPAs) slumped47% to Rs 5,030 crore from Rs 9,420 crore in the corresponding period of the last financial year.

 

Other key details:


1. Operating profit for Q1 grew 5.06% from a year earlier to Rs 18,975 crore.

2. Total deposits increased 8.8% year-on-year but gross advances grew at a slower pace of 5.8%.

3. Retail personal loans recorded the fastest growth, of 16.5%, while corporate loans fell 2.33%.

4. The bank’s capital adequacy ratio improved by 26 basis points to 13.66%.

5. Asset quality slightly improved as gross NPA ratio was at 5.32% from 5.44% a year earlier.

 

Management Commentary: 


SBI said its digital strategy is on track as it opened 38% of retail asset accounts and 72% of savings accounts through its Yono app in the first quarter.

The bank recorded strong growth in personal retail loans, driven by home loans, credit and gold loans. It added the growth in corporate loans will revive in line with recovery in the investment cycle in the broader economy.

The state-run lender also said it has well provided for its stressed book with its provision coverage ratio at 85.93% as of June 30, 2021.

It acknowledged that the Covid-19 pandemic across the globe has resulted in a decline in economic activities and that the situation remains uncertain.It said that major challenges for the bank could be from extended working capital cycles, fluctuating cash flow trends and probable inability of the borrowers to repay their loans timely.

However, the bank is proactively providing against the challenges of likely stress on its assets, SBI said.

 

Also Read: State Bank of India - Quarterly results 2021

 

 

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Titan Ekes Out a Profit in Q1 but Local Lockdowns Hurt

04/08/2021

Titan Company Ltd swung to a consolidated net profit for the first quarter through June 2021from a steep loss a year earlier when a nationwide lockdown to control the Covid-19 pandemic forced it to keep its stores closed.

The Tata Group company posted a consolidated net profit attributed to shareholders of Rs 20 crore for the April-June quarter, compared with a net loss of Rs 291 crore for the corresponding period of 2020.

However, the first-quarter profit was down 96.5% from Rs 564 crore in the preceding three-month period due to localised lockdowns that state governments imposed to tackle the pandemic’s devastating second wave.

The maker of Tanishq jewellery and Fastrack watches recorded revenue of Rs 3,473 crore in the first quarter. This is up from Rs 2,020 crore a year earlier but less than half the revenue it generated in the January-March period.

 

Other key details:


1. Jewellery division recorded revenue of Rs 2,467 crore for Q1 versus Rs 1,182 crore a year earlier.

2. Jewellery division clocked earnings before interest and tax of Rs 207 crore for Q1 versus a loss of Rs 54 crore.

3. The watches and wearables business recorded sales of Rs 292 crore as against Rs 75 crore earlier.

4. Eyewear business generated Rs 67 crore in Q1, compared with Rs 30 crore in the same period last year.

5. Titan added 13 stores in Q1 and now operates 1,922 outlets across 297 towns.

 

Management Commentary: 


The company said higher revenue in the first quarter of the current fiscal year was due mainly to the base effect of zero sales in April last year, when India was under a strict lockdown.

It also said its jewellery division, which accounts for more than four-fifths of its revenue, is gaining good traction in new customers and its mix in total buyers has reached the pre-pandemic levels.

Titan managing director CK Venkataraman said the company started the quarter with strong business momentum but the second wave of the pandemic severely disrupted it.

“The learnings and experience of the past year helped us navigate this quarter’s turbulence much more efficiently. As the lockdowns started getting relaxed in different parts of the country in June, and with the rising vaccination level, we saw demand coming back steadily,” he said.