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Veeda Clinical Research files DRHP for Rs 831 crore IPO. Find out more

by 5paisa Research Team 30/09/2021

Veeda Clinical Research Ltd has filed a draft red herring prospectus (DRHP) with the capital markets regulator Securities and Exchange Board of India to launch an initial public offering (IPO).

The clinical research company’s IPO will consist of a fresh issue of shares worth up to Rs 331.60 crore and an offer for sale of Rs 500 crore by its promoters and investors.

The company’s promoter, Basil Pvt. Ltd, will sell shares worth Rs 141.93 crore. Other selling shareholders include Bondway Investment Inc., which is offloading shares worth Rs 259.77 crore, Arabelle Financial Services Ltd (Rs 90.19 crore) and private equity firm CX Partners.

The company intends to use the fresh capital to repay debt, fund its capex, finance acquisitions by its subsidiary Bioneeds, fund its working capital requirements and meet expenses towards general corporate purposes.

The IPO filing comes a few months after the Ahmedabad-based company raised about Rs 118 crore from PE firm Sabre Partners and several affluent individuals, including Pranab Mody of JB Chemicals, Nikhil Vora of Sixth Sense Ventures, Arjun Bhartia of Jubilant Group as well as Havells India’s family office.

Veeda Clinical’s business and financials

The company is one of the largest independent full-service clinical research organisations (CRO) in India in terms of revenue, according to a Frost & Sullivan report.

It offers a broad range of services across most aspects of the drug development and drug-launch value chain throughout global markets, including North America, Europe and Asia. The company specialises in the focused segment of Bio Availability/Bio Equivalence (BA/BE) studies.

The company has grown from a single facility in 2004 to four facilities today and has the capability to process 1 lakh samples per month.

As of March 2021, Veeda had conducted more than 3,500 trials and developed more than 1,000 bio-analytical methods across generics. It has also completed 85 global inspections with regulatory authorities such as the US Food and Drug Administration, the UK’s Medicines and Healthcare products Regulatory Agency, and the World Health Organization.

In 2020-21, it completed studies for 157 clients. Some of its prominent customers include Dr Reddy’s Labs, Mankind Pharma, Granules India and Novugen Pharma.

To support its capabilities and offer clinical services for novel drugs, Veeda acquired a 50.1% stake in Bengaluru-based Bioneeds India. It had acquired a minority stake in the company between March and July 2021.

The company’s consolidated revenue from operations stood at Rs 195.81 crore for the year ended March 2021. This is down from Rs 218.44 crore for 2018-19.

Its profit after tax for 2020-21 came in at Rs 62.97 crore, up from Rs 44.16 crore two years before.

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Tanla Platforms set to seal more partnerships as stock on upward trajectory

by 5paisa Research Team 30/09/2021

Tanla Platforms, a mid-cap technology company which enables businesses to communicate with their customers and stakeholders via cloud-based platforms, is going to announce two significant partnerships on its Wisely platform.

Wisely is a communication platform-as-a-service (CPaaS) that offers a digital marketplace for enterprises and suppliers. Tanla expects to launch Wisely globally in the first quarter of 2022.

Senior Tanla executives said at IIFL’s Invest India Virtual Conference that the company would leverage one of these partnerships to expand its footprint in conversational platforms and OTT (over the top) channels.

“Though we see some increase in competitive intensity in the Indian CPaaS space going forward, a favourable mix change towards the higher-margin platforms business should support overall margin in our view,” according to a note by IIFL Securities.

Outlook for Tanla Platforms

IIFL Securities has a ‘buy’ rating on the stock and forecasts 23% compound annual growth rate for earnings per share from 2020-21 through 2022-23. It also said that the stock looks attractive at a one-year forward price-to-earnings ratio of 22.4x.

The brokerage firm has a 12-month target price of Rs 1,121 a share on the company as against its current market price of around Rs 838 apiece. This means there is a potential upside of over 33%.

The company's share price has oscillated between a low of Rs 267 and a high of Rs 1,030 during the past year. 

The company closed 2020-21 with revenue of Rs 2,341.5 crore and a net profit of Rs 356 crore. It is projected to expand its operating margins from 18.5% to over 21% by 2023-24.

According to IIFL, the company would more than double its revenue in four years from Rs 1,942.8 crore in 2019-20 with the EBITDA margin also rising more than two-fold in the same period.

What’s driving Tanla’s business?

Tanla recently expanded its bouquet of services by acquiring Karix, the market leader in the Indian CPaaS space, and Gamooga, a marketing automation company, in 2019-20. It also recently launched Trubloq, a blockchain-based solution to filter spam text messages. Trubloq processes 62% of India’s SMS traffic.

Karix is estimated to have around 30% market share in the business, around the same as its three nearest peers ACL Mobile, Gupshup and ValueFirst combined.

Tanla has been working on driving partnerships, and even though it is yet to give further details on the two upcoming partnerships, IIFL believes these could add an extra leg to growth.

Wisely has been witnessing significant traction in India and Microsoft was already announced as the go-to-market partner for Wisely at launch. A large consulting firm is working with Tanla on the Wisely strategy to serve global markets and the CPaaS offering is expected to be rolled out fully in the next six months.

Tanla sees its addressable market growing at over 20% with existing Indian CPaaS market growing by 15% annually and the entry of new-age companies in ad-tech, ed-tech, fintech and gaming topping it up with an additional 5%.

The multiple use-cases of Trubloq and the above opportunities in conversational platforms and OTT channels would further expand the addressable market. The international opportunity will be in addition to these.

Separately, Tanla is building a 92,000 sq ft Innovation and Experience Centre in Hyderabad that is also likely to be operational by March. The centre would develop and showcase technologies and platforms to customers and partners.

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Superstar stocks for October 01, 2021

Superstar stocks for October 01,2021
by 5paisa Research Team 30/09/2021

Looking for stocks that could deliver good returns till tomorrow, meet the superstar stocks for tomorrow which are selected based on a three-factor model.

Many times market participants see a stock opening with a gap-up and wish they should have bought this superstar stock a day before to take advantage of the gap-up move.To fulfil this wish, we have come out with a unique system, which would help us to get the list of candidates that can be probable superstar stocks for tomorrow.

The superstar stocks for tomorrow are selected based on a three-factor prudent model. The first important factor for this model is price, the second key factor is pattern, and last but not least is the combination of momentum with volume. If a stock passes all these filters it would flash in our system and as a result, it will help traders to spot the superstar stocks for tomorrow at the right time!

Here are the superstar stocks for October 01,2021.

Aditya Birla Fashion and Retail (ABFRL):The stock of ABFRL has hit a fresh 52-week high on Thursday and it has witnessed a breakout of horizontal trendline. Moreover, the breakout has been seen on the back of a huge spurt in the volume. The volume has already witnessed a threefold jump when compared to its previous trading session. The RSI on the daily time frame has marked a fresh 14-period high and it’s in bullish territory. Meanwhile, on the weekly and hourly time as well RSI is in bullish territory. Given the fact that the stock has witnessed breakout along with above-average volume, the stock can probably test levels of Rs 257-258 on the upside, while on the downside, support is seen around Rs 240.  

Dixon Technologies:The stock of Dixon Technologies is seen outperforming the benchmark indices as it has gained nearly 2%. The stock has seen a good spike in the volume in the last one hour of trade along with a price rise.The volumes for the day have already surpassed its previous day volume. The RSI has marked a fresh 14-period on the daily time frame and moreover, it is above the 60-mark and in a rising trajectory. On the weekly time frame as well, RSI is above 60 and on the hourly time frame as well it's above 60. The stock has the potential to test its previous high which is placed around levels of Rs 4735.On the downside, the level of Rs 4450 is likely to act as immediate support for the stock.

Amber Enterprises:The stock has formed a strong bullish candle and it has seen its best gains for a single day for a long time. Interestingly, more than 50% of the volume for the day has been seen during the last one hour of trade. Overall, the volume for the day has already surpassed its previous day volume. The RSI is in the bullish territory on the hourly, daily and weekly time frame.The stock has the potential to test levels of Rs 3450 and immediate support for the stock is placed at Rs 3150

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Consistent wealth creation: A Saurabh Mukherjea mantra

Stocks can be bought despite the high price and high valuation if it is a master franchise, an explanation by Saurabh Mukherjea.
by 5paisa Research Team 30/09/2021

Stocks can be bought despite the high price and high valuation if it is a master franchise, an explanation by Saurabh Mukherjea.

Extremely bullish on a master franchise.

 

Saurabh’s view on the last decade of the Indian market has been this whole Diamonds in the Dust story. Just to put some numbers around it, over the last 10 years, the Indian stock market has created USD 1 trillion of wealth. That’s huge but 80 per cent of that one trillion has come from 16 stocks. Another way to think about it is that today we have reached a situation in India where 10 master franchises or 10 diamonds account for 90-95 per cent of the nation’s profit.

For instance, in IT services, giants like TCS can keep attrition down to a single digit whereas everybody else is struggling to keep attrition down even to 15 per cent. This story will play out in India wherein every sector, one or two franchises are taking away 90 per cent of the profits.

Strategy for a long-term double-digit return.

Suppose someone bought a champion compounder like Asian Paints at the year’s low, every year for the last 10 years. They would have compounded the return around 27-28 per cent, it is a great outcome. But practically speaking, someone did SIP, say on January 1 every year. If they did that every year for 10 years in a row, they would have made around 26 per cent, still a very good outcome. But, unfortunately, if they buy Asian Paints at the years’ high,10 years in a row, they will still compound at 19 per cent.

Therefore, the point here is, if one locks into a champion franchise where the underlying business compounds at 20-25 per cent, it does not matter whether one buys it at the years’ high or the year’s low. One will compound broadly at that 25 per cent. There are 15 to 20 such companies in the country and one should be locking into these master franchises. They will be the core, the key to wealth creation in India over the next decade.

Saurabh Mukherjea is the founder and CIO of Marcellus Investment Managers, where they offer three different investment strategies such as Consistent compounders PMS, Little Champs PMS, Kings of capital PMS.

He has more than 20 years of industry experience, where he was rated as the leading equity strategist from 2015 – 2017 by Asiamoney polls.He has authored several best-selling books to name a few,Coffee Can Investing (2018), The Victory Project (2020),and Diamonds in the Dust is the recent release (2021)

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Medanta owner Global Health set to go public, submits IPO papers

by 5paisa Research Team 30/09/2021

Global Health Ltd, the company founded by famous cardiac surgeon Naresh Trehan and owner of Medanta hospitals, has filed its draft documents to launch an initial public offering (IPO).

The company aims to raise Rs 500 crore by selling new shares in the IPO. The issue also includes an offer for sale by its co-founder Sunil Sachdeva and private equity investor Carlyle.

The total size of the offer for sale is 4.84 crore shares. Carlyle alone is selling 4.33 crore of these shares. Sachdeva plans to offload 51 lakh shares, according to the draft red herring prospectus that Medanta filed with SEBI.

The company intends to use Rs 375 crore out of the fresh issue to repay its loans. It will use the remaining amount for general corporate purposes.

Medanta will join a bunch of hospital chains on the bourses. These include Apollo Hospitals, India’s biggest hospital chain, as well as Fortis Healthcare, Max Healthcare, Narayana Hrudayalaya, KIMS Hospitals and Aster DM Healthcare.

Medanta’s operations

The company was founded by Dr. Trehan, a world-renowned cardiovascular and cardiothoracic surgeon. He has been awarded the prestigious Padma Bhushan and the Padma Shri, the third- and fourth-highest civilian awards in India.

The company is one of the largest private multi-speciality tertiary care providers in the North and East regions of India. Its main specialties are cardiology and cardiac science, neurosciences, oncology, digestive and hepatobiliary sciences, orthopaedics, liver transplant, and kidney and urology.

Under the ‘Medanta’ brand, it has a network of four hospitals currently in operation (Gurugram, Indore, Ranchi and Lucknow), a hospital which is under construction with an operational outpatient facility (Patna), and one hospital (Noida) planned for development. It also operates five multi-speciality clinics in Gurugram, Delhi, Darbhanga and Patna.

As of March 31, it provided healthcare services in over 30 medical specialties and engaged over 1,100 doctors. Its operational hospitals have 2,176 installed beds.

The company opened its flagship Gurugram hospital in November 2009. This hospital had 1,391 installed beds as of March 31. It started the Indore hospital in 2014, the Ranchi centre the following year and one in Lucknow in 2019.

The Patna hospital is expected to become fully operational during the current fiscal year with a target of 300 installed beds. The planned hospital in Noida is intended to start operations during 2024-25 with an installed capacity of 300 beds.

Medanta’s financials

The company generated income from healthcare services of Rs 1,436.83 crore, Rs 1,480.57 crore and Rs 1,417.84 crore, respectively, for the financial years 2018-19, 2019-20 and 2020-21.

Its earnings before interest, tax, depreciation and amortisation (EBITDA) also remained steady at Rs 217.9 crore, Rs 230.4 crore and Rs 222.85 crore, respectively, for 2018-19, 2019-20 and 2020-21.

Medanta said effects of a weaker economy on hospitals and restrictions imposed due to the coronavirus pandemic led to lower patient volumes, deferred surgeries, decline in elective surgeries and higher operational costs.

However, the company took various measures to minimise the impact of Covid-19 on its financial condition. This ensured that it did not experience a significant decline in its financial performance in 2020-21.

Moreover, its income from healthcare services increased from Rs 366.4 crore in the three months ended March 31, 2020 to Rs 467.35 crore in the three months ended March 31, 2021.

In addition, its EBITDA increased from Rs 40.57 crore in the three months ended March 31, 2020 to Rs 118.26 crore in the three months ended March 31, 2021.

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These stocks are likely to be in focus on October 1

Stocks In Focus
by 5paisa Research Team 30/09/2021

The benchmark indices slipped in red for the third consecutive session amid the F&O expiry. Sensex plunged 286.91 points or 0.48% and Nifty dipped by 93.10 points or 0.53%. A mixed trend was witnessed on the sectoral front whereas, in the broader markets, the small-cap and mid-cap indices ended in green.

Following stocks are likely to be in focus on Friday:

TVS Motor Company - The company announced that the TVS HLX series crossed the sales milestone of 2 million units globally. In 2019, the series hit a sales milestone of 1 million globally and 

doubled the same in two years. TVS HLX series, launched in 2013, has stayed true to the brand's promise of being a sturdy product that is highly reliable across rugged terrains. 

Tata Steel - On Thursday, TS Global Holdings (TSGH) Singapore which is a 100% indirect subsidiary of Tata Steel Limited, executed definitive agreements with TopTip Holding Pte Ltd, a Singapore based steel and iron ore trading company, to divest its 100% equity stake in NatSteel Holdings Pte Ltd for an equity value of Rs 1,275 crore. 

Tata Consultancy Services -The company informed that it has been selected by The Multi Commodity Exchange India Ltd (MCX), India’s largest commodity exchange, as the technology solution provider for its growth and transformation journey. The company will provide support to MCX to build a new technology core, transforming its trading as well as post-trade functions and further strengthen its leadership position in the commodity derivatives market in India