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Windlas Biotech IPO Subscription Day-2

Windlas Biotech IPO Subscription Day-2
05/08/2021

The Rs.401.54 crore IPO of Windlas Biotech, consisting of Rs.165 crore fresh issue and Rs.236.54 crore OFS, had been fully subscribed on Day-1 itself. As per the combined bid details put out by the BSE, Windlas Biotech IPO was subscribed 7.06X overall, with bulk of the demand coming from the retail segment followed by HNI segment. 

As of close of 05 August, out of the 61.36 lakh shares on offer in the IPO, Windlas Biotech saw applications for 429.22 lakh shares. This implies an overall subscription of 7.06X. The granular break-up of subscriptions were tilted in favour of retail investors but HNI and QIB bids typically come in on the last day.

 

Windlas Biotech IPO Subscription Status

Category Subscription Status
Qualified Institutional (QIB) 0.04 Times
Non-Institutional (NII) 1.12 Times
Retail Individual 13.52 Times
Total 7.06 Times

 

QIB Portion

The QIB subscription remained marginal at the end of Day-2. On 03 August, Windlas Biotech did an anchor placement of Rs.120.46 crore to 22 QIB investors including Macquarie, Optimix, Invesco, Kubera, Elara, Avendus etc. The QIB portion (net of anchor allocation) has a quota of 17.24 lakh shares of which it has got bids for just 0.70 lakh shares, implying a subscription ratio of 0.04X for QIBs at the end of Day-2.

HNI Portion

The HNI portion got subscribed 1.12X (getting applications for 14.70 lakh shares against the quota of 13.24 lakh shares). Bulk of the funded applications and corporate applications, come in on the last day. 

Retail Individuals

The retail portion is subscribed 13.52X at the end of Day-2, showing strong retail appetite. For retail investors; out of the 30.89 lakh shares on offer, valid bids were received for 413.82 lakh shares, of which bids for 319.12 lakh shares were at the cut-off price. The IPO is priced in the band of (Rs.448-Rs.460) and will close for subscription on 06 August.

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Exxaro Tiles IPO Subscription Day-2

Exxaro Tiles IPO Subscription Day-2
05/08/2021

The Rs.161.09 crore IPO of Exxaro Tiles, consisting of Rs.134.23 crore fresh issue and Rs26.86 crore OFS, had been fully subscribed at the end of Day-1 itself; thanks to strong response from retail investors. As per the combined bid details put out by the BSE at the end of Day-2 of the issue, Exxaro Tiles IPO was subscribed 10.40X overall, with bulk of the demand coming from the retail segment. The issue still has 1 more day to go.

As of close of 05 Aug, out of the 114.51 lakh shares on offer in the IPO, Exxaro Tiles saw applications for 1,178.81 lakh shares. This implies an overall subscription of 10.40X. The granular break-up of subscriptions were tilted in favour of retail investors but QIB and HNI bids typically come in on the last day
 

 

Exxaro Tiles IPO Subscription Status

Category

Subscription Status
Qualified Institutional (QIB) 1.66Times
Non-Institutional (NII) 0.97 Times
Retail Individual 21.29 Times
Employee 1.56 Times
Total 10.40  Times

 

QIB Portion

The QIB portion got more than full subscription of its quota at the end of Day-2. On 03 Aug, Exxaro Tiles did an anchor placement worth Rs.26.86 crore. QIB portion, net of anchor allocation, was subscribed 1.66X (getting applications for 21.66 lakh shares against the available quota of 13.16 lakh shares) at the end of Day-2.

HNI Portion

The HNI portion got subscribed 0.97X (getting applications for 42.80 lakh shares against the quota of 46.04 lakh shares). Funded applications and corporate applications, normally come in on the last day and the picture tends to change quite dramatically by then. 

Retail Individuals

The retail portion is already subscribed 21.29X at the end of Day-2, showing strong retail appetite. Out of the 52.62 lakh shares on offer, valid bids were received for 1,110.17 lakh shares, of which bids for 879.27 lakh shares were at the cut-off price. The IPO is priced in the band of (Rs.118-Rs.120) and will close for subscription on Friday, 06 August.
 

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Krsnaa Diagnostics IPO Subscription Day-2

Krsnaa Diagnostics IPO Subscription Day-2
05/08/2021

The Rs.1,213.33 crore IPO of Krsnaa Diagnostics, consisting of Rs.400 crore fresh issue and Rs.813.33 crore OFS, had been fully subscribed on Day-1 itself. As per the combined bid details put out by the BSE, Krsnaa Diagnostics IPO was subscribed 5.42X overall at the end of Day-2 of the issue, with bulk of the demand coming from retail segment.

As of close of 05 August, out of the 71.12 lakh shares on offer in the IPO, Krsnaa Diagnostics saw applications for 380.34 lakh shares. This implies an overall subscription of 5.42X. The granular break-up of subscriptions were tilted heavily in favour of retail investors.

 

Krsnaa Diagnostics IPO Subscription Status

Category

Subscription Status
Qualified Institutional (QIB) 0.50 Times
Non-Institutional (NII) 4.76 Times
Retail Individual 22.09 Times
Employee 0.52 Times
Total 5.42  Times

 

QIB Portion

The QIB portion remained tepid at the end of Day-2. On 03 Aug, Krsnaa Diagnostics did an anchor placement of Rs.537 crore to QIB investors like Kuber, Volrado, HSBC, SocGen, Elara, Nomura etc. QIB portion is just subscribed 0.50X (getting applications for 18.82 lakh shares against the net quota of 37.53 lakh shares), at the end of the Day-2. Normally bulk of the QIB applications come in on the last day.

HNI Portion

The HNI portion saw good subscription at 4.76X (getting applications for 88.33 lakh shares against the quota of 18.76 lakh shares). This number could see a sharp increase once the funded and corporate applications come in on the last day.

Retail Individuals

The retail portion is already subscribed 22.09 times at the end of Day-2, showing strong retail appetite. Among retail investors; out of the 12.51 lakh shares on offer, valid bids were received for 271.98 lakh shares, of which bids for 219.85 lakh shares were at the cut-off price. The IPO is priced in the band of (Rs.933-Rs.954) and will close for subscription on Friday, 06 August. Krsnaa has limited retail quota to 10% while institutions have 75% allocation.

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Devyani International IPO Subscription Day-2

Devyani International IPO Subscription Day-2
05/08/2021

The Rs.1,838 crore IPO of Devyani International, consisting of Rs.440 crore fresh issue and Rs.1,398 crore OFS, built on the response from retail investors on Day-2. As per the combined bid details put out by the BSE, Devyani International IPO was subscribed 6.73X overall, with bulk of the demand coming from the retail segment followed by HNI segment. The issue closes for subscription on Friday, 06 August.

As of close of 05 August, out of the 1,125.70 lakh shares on offer, Devyani International saw bids for 7,440.74 lakh shares. This implies an overall subscription of 6.73X. The granular break-up of subscriptions were tilted in favour of retail investors and, to an extent, HNIs too.
 

Devyani International IPO Subscription Status

Category

Subscription Status
Qualified Institutional (QIB) 1.32 Times
Non-Institutional (NII) 6.68 Times
Retail Individual 23.16 Times
Employee 3.12 Times
Total 6.73  Times

 

QIB Portion

The QIB portion saw 1.32X subscription with demand for 805.28 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, MAS, Kuwait Investment Authority etc. 

HNI Portion

The HNI portion got subscribed 6.68X (getting applications for 1,945.36 lakh shares against the quota of 305.51 lakh shares). Funded applications and corporate applications, come in on last day, but it promises to be a solid subscription at the end of Day-3. 

Retail Individuals

The retail portion got subscribed 23.16X times at the end of Day-2, showing strong retail appetite. Among retail investors; out of the 203.67 lakh shares on offer, valid bids were received for 4,673.03 lakh shares, of which bids for 3,672.96 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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Berger Paints and Hindalco Ltd – Quarterly Results

Berger Paints
09/08/2021

Berger Paints reported 93.23% growth in sales revenues for the Jun-21 quarter at Rs.1,799 crore. Net profits for the Jun-21 quarter was up 9-fold at Rs.141 crore. While COVID 2.0 has had an impact on sequential sales, the YoY growth is extremely strong. Berger’s traction comes from its focus on the decorative paints segment with emphasis on total home solutions, which promises a higher wallet share of the customer.

 

Rs in Crore

Jun-21

Jun-20

YOY

Mar-21

QOQ

Total Income (Rs cr)

₹ 1,798.49

₹ 930.76

93.23%

₹ 2,026.09

-11.23%

Net Profit (Rs cr)

₹ 140.59

₹ 15.42

811.74%

₹ 208.59

-32.60%

Diluted EPS (Rs)

₹ 1.45

₹ 0.16

 

₹ 2.15

 

Net Margins

7.82%

1.66%

 

10.30%

 

 

For the Jun-21 quarter, Berger saw sharp expansion in EBITDA with the standalone EBITDA expanding 94.5% and consolidated EBITDA expanding 159%. Higher sales ensured economies of scale and better absorption of fixed costs overheads, boosting profits. EBITDA margins were 13.3% on a consolidated basis with net margins at 7.28% in the Jun-21 quarter.

Hindalco Ltd reported 63.58% growth in sales for the Jun-21 quarter at Rs.41,358 crore. The onset of COVID 2.0 had an impact on sequential growth, but it was still positive. Net profit for the Jun-21 quarter-turned around to a record level of Rs.2,787 crore against losses of Rs-709 crore in the Jun-20 quarter. Among the verticals, Novelis grew 54% YoY, domestic aluminium showed growth of 41% while copper grew 134%. Novelis total shipments were up 26% at 973KT while Aluminium India output grew 137% at 82KT. EBITDA per ton for Novelis spurted from $327 to $570 on YoY basis.
 

Rs in Crore

Jun-21

Jun-20

YOY

Mar-21

QOQ

Total Income (Rs cr)

₹ 41,358

₹ 25,283

63.58%

₹ 40,507

2.10%

Net Profit (Rs cr)

₹ 2,787

₹ -709

N.A.

₹ 1,928

44.55%

Diluted EPS (Rs)

₹ 12.51

₹ -3.19

 

₹ 8.66

 

Net Margins

6.74%

-2.80%

 

4.76%

 

 

Hindalco EBITDA was up 188% YoY at Rs.6,790 crore, another all-time record. While the Novelis EBITDA was up 119% at $555 million, the India business reported 121% growth in EBITDA at Rs.2,513 crore. Domestic aluminium EBITDA margins stood at 37.50%. The net margins for Jun-21 quarter at 6.74% was also supported by deleveraging which improved the Net debt to EBITDA ratio from 3.83X to 2.36X.

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Nuvoco Vistas - IPO Research Note

Nuvoco
09/08/2021

Nuvoco Vistas, the cement company promoted by Karsanbhai Patel of Nirma fame, has a pedigree of 22 years in the cement business. It began by acquiring the cement businesses of Tata Steel, L&T and Raymond and recently added cement plants of Lafarge India and Emami to emerge as the fifth largest cement company in India. With an installed capacity of 22.32 MTPA, Nuvoco ranks after Ultratech, Lafarge Holcim, Shree Cements and Dalmia Cements in terms of installed cement capacity. 

However, Nuvoco is the largest cement company in the East and has 17% of the total capacity in the East and 5% capacity in the North. It ranks among the top-4 ready mix concrete manufacturers in India. Its 11 cement plants are distributed, 8 in the East and 3 in the North while it has 49 RMX plants across India. Nuvoco has seen its installed capacity double in the last 5 years. 

Nuvoco Vistas IPO Details

 

Key IPO Details

Particulars

Key IPO Dates

Particulars

Nature of issue

Book Building

Issue Opens on

09-Aug-2021

Face value of share

Rs.10 per share

Issue Closes on

11-Aug-2021

IPO Price Band

Rs.560 - Rs.570

Basis of Allotment date

17-Aug-2021

Market Lot

26 shares

Refund Initiation date

18-Aug-2021

Retail Investment limit

13 Lots (338 shares)

Credit to Demat

20-Aug-2021

Retail limit - Value

Rs.192,660

IPO Listing date

23-Aug-2021

Fresh Issue Size

Rs.1,500 crore

Pre issue promoter stake

95.24%

Offer for Sale Size

Rs.3,500 crore

Post issue promoters

71.03%

Total IPO Size

Rs.5,000 crore

Indicative valuation

Rs.20,360 crore

Listing on

BSE, NSE

HNI Quota

15%

QIB Quota

50%

Retail Quota

35%

Data Source: IPO Filings

Some of the advantages in the business model of Nuvoco Vistas are as under.
•    It is the largest cement producer in the fast-growing East India market
•    Most cement plants are located in close proximity to key markets
•    Wide distribution network of over 16,000 dealers pan India
•    Excluding the COVID months, Nuvoco had capacity utilization of above 90%
•    Its cement enjoys EBITDA/tonne of Rs.966 with a net debt/EBITDA ratio of 4.50

A quick look at the financials of Nuvoco Vistas

Over the last 3 years, Nuvoco Vistas has shown steady revenues while the EBITDA is up more than 50% over last 2 years, improving EBITDA margins by 619 bps. 
 

 

Particulars

Fiscal 2020-21

Fiscal 2019-20

Fiscal 2018-19

Net Worth

Rs.6,959.45 cr

Rs.5,414.95 cr

Rs.5,126.94 cr

Revenues

Rs.7,488.84 cr

Rs.6,793.24 cr

Rs.7,052.13 cr

EBITDA

Rs.1,494.35 cr

Rs.1,333.85 cr

Rs.971.44 cr

Net Profit / loss

Rs.(25.92) cr

Rs.249.26 cr

Rs.(26.49) cr

ROCE

4.21%

7.66%

4.30%

Data Source: Company RHP

We have considered ROCE instead of ROE as Nuvoco Vistas has made losses in FY21 and FY19. Revenues have been more or less static over the last 3 years, but the impact of increased capacities should show up in the post-COVID scenario. Also, the book value at over Rs.230 acts as a buffer for the value of the stock.

Out of the Rs.1,500 crore raised by way of fresh issue, Rs,1,350 crore will be used for pre-payment of loans and other borrowings. With net debt at Rs.6,730 crore, this debt repayment will help the company reduce leverage and also improve the net debt/EBITDA ratio and ROCE.

Investment Perspective for Nuvoco Vistas

While the company made profits in FY20, it has made small net losses in FY21 and FY19. However, if you look at Nuvoco Vistas as a macro play on cement demand, especially in East India, then the story looks a lot more compelling.

a)    The overall capacity utilization of 77.6% for cement and 83.3% for clinker is almost back to pre-COVID levels. This should facilitate better absorption of fixed costs and higher profits going ahead.

b)    Apart from being best positioned to serve markets in the East and the North, Nuvoco plants in Chhattisgarh and Rajasthan allows the company to easily serve the markets of Uttar Pradesh, Madhya Pradesh and Maharashtra.

c)    The company is gradually moving from cement manufacturing to building solutions. This is evident from their diverse product mix consisting of chemicals, adhesives, wall putty, dry plaster, cover blocks and dry concrete. This also de-risks their portfolio.

d)    Since 1999, when it took over the cement operations of Tata Steel, Nuvoco has a track record of completing and integrating cement acquisitions seamlessly into its model. That is key to future inorganic growth plans.

e)    The ready-mix-concrete business contributes Rs.1,088 crore to the top line which puts Nuvoco in the same league as leaders like Ultratech, ACC and India Cements. 

The issue price values Nuvoco at 50X FY20 earnings. That places the valuation even higher than Shree and Ultratech, the two leaders in India. However, that may not be very representative since the model of Nuvoco is still work-in-progress. Also, the gains of premium products will be evident in the coming years. Investors can look at Nuvoco IPO for its East India domination and as a macro play in infrastructure in India.

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