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Sapphire Foods India IPO - Subscription Day 1

Sapphire Foods India IPO - Subscription Day 1
by 5paisa Research Team 09/11/2021

The Rs.2,073 crore IPO of Sapphire Foods India, consisting entirely of an offer for sale (OFS) of Rs.2,073 crore, saw subdued response on Day-1 of the IPO. As per the combined bid details put out by the BSE at the close of Day-1, Sapphire Foods India IPO was subscribed 0.49X overall, with reasonable demand coming only from the retail segment. The issue closes on 11th November.

As of close of 09th November, out of the 96.63 lakh shares on offer in the IPO, Sapphire Foods India saw bids for 47.11 lakh shares. This implies an overall subscription of 0.49X. The granular break-up of subscriptions was dominated by the retail investors. QIB bids and NII bids are expected to gather momentum on the last day, as is the general trend in the IPO market.
 

Sapphire Foods India IPO Subscription Day-1
 

Category

Subscription Status

Qualified Institutional Buyers (QIB)

0.02 Times

Non Institutional Investors (NII)

0.05 Times

Retail Individuals

2.56 Times

Employees

N.A.

Overall

0.49 times

 

QIB Portion

The QIB portion of the Sapphire Foods IPO was subscribed just 0.02 times at the end of Day-1. On 08th November, Sapphire Foods India did an anchor placement of 79,06,473 shares at the upper end of the price band of Rs.1,180 to 53 anchor investors raising Rs.932.96 crore.

The list of QIB investors included a number of marquee global names like Government of Singapore, MAS, Fidelity, ADIA, Crestwood Capital, HSBC Global, Lion Global, Carmignac Ontario Teacher’s Pension Fund etc. Domestic anchor investors included ICICI Pru Life, Sundaram Mutual Fund, Bajaj Allianz, HDFC MF, Kotak MF among others.

The QIB portion (net of anchor allocation as explained above) has a quota of 52.71 lakh shares of which it has got bids for 0.83 lakh shares, implying a subscription ratio of 0.02X for QIBs at the close of Day-1. QIB bids typically get bunched on the last day but the heavy demand for the anchor placement forebodes well for the Sapphire IPO subscription overall.

HNI / NII Portion

The HNI portion got subscribed 0.05X (getting applications for 1.29 lakh shares against the quota of 26.35 lakh shares). This is a tepid response on Day-1 but this segment normally sees the maximum response bunched on the last day. That is because, bulk of the funded applications and corporate applications, come in on the last day of the IPO. 

Retail Individuals

The retail portion was subscribed an impressive 2.56X at the end of Day-1, showing strong retail appetite. However, it must be noted that retail allocation is just 10% in this IPO. For retail investors; out of the 17.57 lakh shares on offer, valid bids were received for 44.99 lakh shares, which included bids for 36.05 lakh shares at the cut-off price.

The IPO is priced in the band of (Rs.1,120-Rs.1,180) and will close for subscription on 11th November 2021.

Also Read:-

Upcoming IPOs in 2021

Upcoming IPOs in November 2021

Sapphire Foods India IPO - 7 Things to Know

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Paytm IPO - Subscription Day 2

Paytm IPO - Subscription Day 2
by 5paisa Research Team 09/11/2021

The Rs.18,300 crore IPO of One97 Communications (Paytm), consisting of a fresh issue of Rs.8,300 crore and an offer for sale (OFS) of Rs.10,000 crore, saw tepid response on Day-1 of the IPO and the trend remained subdued on Day-2 also. As per the combined bid details put out by the BSE at the close of Day-2, One97 Communications (Paytm) IPO was subscribed 0.48X overall, with reasonable demand coming only from the retail segment. The issue closes on 10th November.

As of close of 09th November, out of the 483.89 lakh shares on offer in the IPO, One97 Communications (Paytm) saw bids for 234.64 lakh shares. This implies an overall subscription of 0.48X. The granular break-up of subscriptions was dominated by the retail investors. QIB bids and NII bids are expected to gather momentum on the last day, as is the general trend in the IPO market.
 

One97 Communications (Paytm) IPO Subscription Day-2
 

Category

Subscription Status

Qualified Institutional Buyers (QIB)

0.46 Times

Non Institutional Investors (NII)

0.05 Times

Retail Individuals

1.23 Times

Employees

N.A.

Overall

0.48 times

 

QIB Portion

The QIB portion of the IPO was subscribed 0.46 times at the end of Day-2. On 03rd November, One97 Communications (Paytm) did an anchor placement of 383.02 lakh shares at the upper end of the price band of Rs.2,150 to 122 anchor investors raising Rs.8,235 crore.

The list of QIB investors included a number of marquee names like Blackrock, GIC Singapore, Canadian Pension Fund, Alkeon Capital, Abu Dhabi Investment Authority (ADIA), Fidelity, Aberdeen, UBS, Aditya Birla Sun Life Mutual Fund; among others.

The QIB portion (net of anchor allocation as explained above) has a quota of 263.94 lakh shares of which it has got bids for 120.08 lakh shares, implying a subscription ratio of 0.46X for QIBs at the close of Day-2. QIB bids typically get bunched on the last day but the heavy demand for the anchor placement forebodes well for the demand for Paytm IPO.

HNI / NII Portion

The HNI portion got subscribed 0.05X (getting applications for 6.38 lakh shares against the quota of 131.97 lakh shares). This is a tepid response on Day-2 but this segment normally sees the maximum response bunched on the last day. That is because, bulk of the funded applications and corporate applications, come in on the last day of the IPO.

Retail Individuals

The retail portion was subscribed a more reasonable 1.23X at the end of Day-2, showing strong retail appetite. However, it must be noted that retail allocation is just 10% in this IPO. For retail investors; out of the 87.98 lakh shares on offer, valid bids were received for 108.17 lakh shares, which included bids for 88.04 lakh shares at the cut-off price. The IPO is priced in the band of (Rs.2,080-Rs2,150) and will close for subscription on 10th November 2021.

Also Read:-

Upcoming IPOs in 2021

Upcoming IPOs in November 2021

PayTm IPO - 7 Things to Know About

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Moody’s Shifts 6 Stocks Out of “Fallen Angels” List

by 5paisa Research Team 09/11/2021

In the lexicon of Moody’s, one of the leading rating agencies in the world, Fallen Angels refers to companies that are financially vulnerable and are most at risk of a possible rating downgrade. In the aftermath of COVID-19 pandemic, the list of Fallen Angel companies in Moody’s Asia list had spiked considerably. As late as September 2021, there were 19 companies in the Asia Fallen Angels list. As of 31-Oct, that list stands reduced to 12.

What is interesting is that out of the 7 stocks that Moody’s dropped from the Fallen Angels list, 6 are Indian companies. That means, these 7 companies are no longer vulnerable to a rating downgrade. In the Indian context, this spate of 6 exits from the Fallen Angels list was triggered after Moody’s raised India’s rating outlook from negative to neutral. However, the rating remained at Baa3. This will be enable the companies to raise debt at lower cost.

The 6 Indian companies that exited the Moody’s Fallen Angels list included ONGC, Oil India, Indian Oil Corporation, Petronet LNG, Hindustan Petroleum and Ultratech Cement. Out of the six companies to exit the Fallen Angels list, five are from the PSU space while only Ultratech is a private sector company belonging to the Aditya Birla group.

According to Moody’s the progressive easing of pandemic restrictions, recovery in economic growth, improvement in the health of banks and corporates as well as sustained government support were seen as major positives. This, combined with the outlook upgrade, had reduced the vulnerability of Indian companies to extraneous factors. This had resulted in 6 out 7 companies exiting the Asia Fallen Angels list being Indian companies.

Check - Moody’s Upgrades the Outlook of 9 Banks from Negative to Stable

While the 6 Indian companies above were upgraded to “Baa3 Stable”, the only Indian company to remain in the Fallen Angels list (ex-Japan & Australia), is BPCL. Moody’s has cited uncertainty over its ownership structure in the light of the delayed privatization as a key reason. Since there was uncertainty surrounding capital structure, liquidity and management, Moody’s had retained BPCL as “Baa3 Negative”.

Potential fallen angels have to contend with higher cost of debt and hence refinancing becomes more expensive. One more risk is that these fallen angels could also crowd out the lower rated companies from the debt market. This could be negative for companies that are highly leveraged. This move is positive for Indian PSUs overall.

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Inspira Enterprises gets SEBI Approval for Rs.800 crore IPO

Inspira Enterprises gets SEBI Approval for Rs.800 crore IPO
by 5paisa Research Team 09/11/2021

Inspira Enterprises, an IT solutions provider, has got SEBI approval for its Rs.800 crore IPO. SEBI had given observations letter pertaining to the filing, which is equivalent to an approval. Inspira had filed the draft red herring prospectus (DRHP) with SEBI in August 2021, which has just been approved. The next steps are to file the RHP with the ROC and to finalize the details of the public issue.

The proposed IPO will comprise of a fresh issue of Rs.300 crore and an offer for sale of Rs.500 crore. The promoters of the company, the Prakash Jain Family Trust and the Manjula Jain Family Trust, will offload shares worth Rs.277.15 crore and Rs.91.77 crore respectively. In addition, Prakash Jain will also offload shares worth Rs.131.08 crore in his personal capacity taking the total size of the OFS to Rs.500 crore.

The Rs.300 crore fresh issue component will be a fresh infusion and will also dilute the equity. The funds will be used to repay debt, for working capital needs and also for general corporate purposes. The company is planning a pre-IPO placement of Rs.75 crore and if successful, then the company will reduce the size of the IPO proportionately.

Inspira Enterprises is a digital transformation company with a predominant focus on cybersecurity. With the big shift to digital and billions of transactions moving to the digital mode, the importance of cybersecurity has been underlined. A series of data breaches, both in India and abroad, have also highlighted the urgent need for corporates to beef up their cybersecurity defences.

Inspira offers cybersecurity and digital transformation services to clients across various industry verticals as well as various geographies. In the realm of digital transformation and cybersecurity, Inspira offers the complete suite of services including consultation, architecture, solution design, implementation, monitoring and managed services.

Inspira has appointed Axis Capital, JM Financial, Nomura Financial Advisory, SBI Capital Markets and Yes Securities as the book running lead managers to the issue. While the date of the issue is yet to be finalized, the normal time taken for the issue to open after the SEBI approval varies between 15 days to 30 days.

Also Read:-

Upcoming IPOs in 2021

Upcoming IPOs in November 2021

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T+1 settlement to go live on stock exchanges from 25-Feb

T+1 settlement to go live on stock exchanges from 25-Feb
by 5paisa Research Team 09/11/2021

It is now official. The shift from T+2 settlement to T+1 settlement will happen, albeit with a delay and some changes. Here are key highlights of the shift to T+1.

A) Like in the earlier version announced by SEBI, inclusion in the T+1 settlement cycle would continue to be voluntary. SEBI will only define the criterial for eligible companies for T+1 and the onus will entirely be on the companies to decided whether they want to join the T+1 cycle or remain in the T+2 cycle.

B) The start date has been tweaked from Jan-22 to end of Feb-22. The first batch of stock inclusions for the T+1 cycle will be done on 25-February, the day after the F&O expiry. The target is to complete the total migration of stocks and make them eligible for T+1 by the end of calendar year 2022.

C) The methodology has been modified to focus on the smaller companies first. On 25-Feb, the 100 companies with the lowest market cap among all listed companies will be shifted to the T+1 cycle eligible list.

Each month, the day after the F&O expiry, another 500 companies with progressively higher market cap will be shifted to the T+1 eligible list. This will continue till the end of 2022, by which time all companies will shift.

D) SEBI has asked both the principal stock exchanges, BSE and NSE, to coordinate the launch. Even in cases of companies listed on both exchanges, the market cap ranking will be done based on the trading in the stock exchange which displays higher volumes.

The T+1 cycle will continue parallel with T+2 cycle and cross margining and cross cycle adjustments will not be permitted.

E)  In all the above rankings, the average daily market cap in October 2021 will be taken as the benchmark. For companies that are listed after October 2021 or in the case of listed IPOs, the immediate month volumes in the market will be considered.

Globally, the US is planning to entirely move to the T+1 cycle from its current T+2 cycle over 2 years. In Asia, most of the key markets like Hong Kong, Singapore, Korea and Australia are on T+2. Taiwan had attempted to shift to T+1 but had eventually reverted to the T+2 system. The T+2 system will be safer for retail investors with shorter capital lock-in.

One objection of FPIs is that forex exposures need to be hedged on their net open positions and hence differing time zones could be a constraint. However, when T+1 is being handled for F&O, there is no reason it cannot be handled for stocks too.

Also Read:- 

SEBI Announces Optional T+1 Settlement

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Mahindra and Mahindra Scouts for Investors for its EV Business

by 5paisa Research Team 10/11/2021

The stock of Mahindra & Mahindra is not known to shows spikes in volatility and has been a steady performer over time. However, in the last 3 months, the stock of M&M is up 18.04%. The latest quarter results were good and in the October auto sales numbers, Tata Motors and M&M were the only 2 large players to show positive growth in dispatch volumes.

What really triggered off a spate of interest in M&M is some key announcements in its latest AGM and the layout of a 5 year plan for the company. Among the two major steps, the first is to substantially expand its farm machinery franchise up to the level of its tractors business while the second is to look for ways to monetize its EV business at a later date.

A quick word on the farm machinery business of M&M first. Mahindra plans to grow its farm machinery business 10-fold by 2027 to touch revenues of Rs.5,000 crore. The idea is to bring the same traction in farm machinery as in tractors.

M&M currently has a 40% share in tractors and just 10% in farm  machinery. One of its commitments in the latest AGM is to expand the farm machinery share also to 40%. Globally, share of farm machinery is twice that of tractors.

Now for the more important electrical vehicles space. M&M plans to invest close to Rs.3,000 crore by the end of fiscal year 2024. The idea is to once again regain leadership in EVs, which it has since ceded to the Tatas, despite M&M pioneering EVs in India.

The bigger game will be on valuations and M&M will look to monetize its EV property at some point in the future, but first it will have to create the right ecosystem to generate value.

Tata Motors had recently raised $1 billion from global marquee investors including TPG, which valued the EV business of Tata Motors alone at $9.1 billion. Even players like TVS Motors, Ashok Leyland and Bajaj are heavily investing into green vehicles, while in the case of Tata Motors the rollout has already started quite aggressively.

Even in the global markets, it is EVs that drive valuations. For example, Elon Musk’s Tesla has given returns of 1,600% in the last 2 years and has a market cap that is more than the entire global auto industry combined. M&M believes that a strong EV franchise can also be accretive for group valuations.

Also Read:-

Best EV Stocks to Buy

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