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Waaree Energies files for IPO as unit’s shares soar 14 times in less than a year

by 5paisa Research Team 29/09/2021

Solar energy company Waaree Energies Ltd has filed its draft red herring prospectus with the Securities and Exchange Board of India to raise funds through an initial public offering (IPO).

The IPO comprises a fresh issuance of shares to raise Rs 1,350 crore and an offer for sale of 40.07 lakh shares by its promoters and other shareholders, according to the DRHP.

Waaree Energies is the majority owner of Mumbai-listed Waaree Renewable Technologies Ltd, with a 54.28% stake. The IPO filing comes at a time when Waaree Renewable’s shares have cooled off a tad after soaring this year.

Shares of Waaree Renewable, a penny stock, touched a one-year high of Rs 199.85 earlier this month but are now trading around Rs 170 apiece on the BSE. This is still a gain of 14 times from a one-year low of Rs 11.90 per share in November last year. The unit is currently valued around Rs 356 crore.

The offer for sale includes a sale of 13.15 lakh shares each by chairman Hitesh Chimanlal Doshi, director Virenkumar Chimanlal Doshi and Mahavir Thermoequip Pvt Ltd. Among other selling shareholders, Samir Surendra Shah will divest 40,000 equity shares while Nilesh Gandhi and Drasta Gandhi will jointly offload 22,500 equity shares.

The company plans to use Rs 910.3 crore out of the money to be raised from the fresh issue to set up a solar cell manufacturing facility with a capacity of 2 gigawatt a year and Rs 141.2 crore for a solar photovoltaic module manufacturing facility with a capacity of 1 GW a year in Gujarat.

Waaree Energies may also consider raising Rs 270 crore via a pre-IPO placement. If it does so, it will reduce the size of the fresh issue accordingly.

Waaree Energies’ business

It is one of the major players in the solar energy industry in India focused on PV module manufacturing, with an aggregate installed capacity of 2 GW as of March 31, 2021. Citing a CRISIL report, it said it had a market share of 24% out of total enlisted capacity for solar PV module manufacturing in India as of August 31, 2021.

The company makes PV modules using both multi-crystalline and monocrystalline cell technology. It currently operates three manufacturing facilities comprising four factories in India. These are located at Surat, Tumb and Nandigram in Gujarat. It is also setting up another manufacturing facility in Gujarat, where it is implementing its capacity expansion plans for PV modules as well as setting up of facilities for backward integration into solar cell manufacturing.

The addition of 3 GW PV module manufacturing capacity to its existing 2 GW capacity is likely to be operational by the end of 2021-22. The 4 GW solar cell manufacturing capacity is likely to be operational by the end of 2022-23.

The company provides EPC services, project development, rooftop solutions and solar water pumps. It has a presence in more than 350 locations nationally and 68 countries internationally.

Some of its key clients in the domestic utility and enterprise segment include ReNew Power, ACME, Hero Solar, Mahindra Susten, Essel Infra, AMP Energy, Sukhbir Agro Energy, Solarworld Energy and Rays Power Infra.

Waaree Energies’ financials

The company reported revenue from operations of Rs 1,952.78 crore for the year 2020-21. This was a tad lower than the revenue of Rs 1,995.78 crore in the previous year, but above Rs 1,591 crore for 2018-19.

Its EBITDA rose to Rs 125.4 crore for 2020-21 from Rs 117.8 crore the year before but fell when compared to the 2018-19 figure of Rs 165.35 crore.

Its net profit followed a similar trajectory. Net profit increased to Rs 48.19 crore for 2020-21 from Rs 39.02 crore for 2019-20 but dropped from Rs 82.3 crore for 2018-19.

Similarly, profit margins shrank, too. The EBITDA margin almost halved from 10.25% in 2018-19 to 5.83% in 2019-20, before inching up to 6.29% in 2020-21. The net profit margin narrowed from 5.11% in 2018-19 to 1.93% in 2019-20, before climbing up to 2.42% in 2020-21.

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What is Retirement Planning?

Retirement Planning
by 5paisa Research Team 29/09/2021

 What is Retirement Planning? 

 
Retirement Planning is one area of planning that deserves a closer look, and hence everyone should be looking at effective ways to plan well to enjoy the sunset years of life. 
Presently, financial planning has become one of the essential aspects of an individual’s life as it helps in achieving long term as well as short term goals.  

Financial planning provides direction and meaning to your financial decisions. It allows you to understand how each financial decision you make affects other areas of life. By viewing each financial decision as part of a whole, you can consider the short term as well as long term effects on your life goals. A financial plan includes four components such as insurance planning, retirement planning, investment planning and lastly tax planning. One of the important components is retirement planning which is ignored by the majority of people.  

Retirement planning is extremely critical because the quality of life for a large part of later years depends on the kind of retirement planning undertaken.  

Now the question arises, what is retirement planning? The answer to this question is, retirement planning is the process of undertaking a financial plan to afford one’s sunset years of life. This means the process of saving and building up a corpus that is invested in various asset classes that will result in income and earnings for the individual over some time. This income and earnings you will earn during retirement will take care of the fall in receipts as one ceases to work and earn on a full-time basis after retirement.  

Key features of retirement planning:  

  • Set objectives for the time of retirement.  

  • Identify the amount of funds required during retirement when your regular income will get ceased.  

  • Reserve funds for specific purposes. 

  • Make sure that funds reserved are targeted at specific areas of investment.  

  • The ultimate goal is that the invested funds should achieve the initial objectives.  

  • Monitoring of plan at regular intervals.  

  • Modify or alter the plan if conditions require it and it is off track. 

 

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Sahajanand joins the queue of medtech companies eyeing IPO in India

by 5paisa Research Team 29/09/2021

Sahajanand Medical Technologies Ltd, which designs, develops, manufactures and markets vascular devices globally, has filed its documents with the capital markets regulator to float its initial public offering.

Mumbai-headquartered Sahajanand joins Healthium MedTech (formerly Sutures India), which had previously filed a draft red herring prospectus with SEBI for an IPO.

The two companies are prominent players in the medical devices and consumables space and would look to add more diversity in the subsectors for investors looking to bet on healthcare companies.

Notably, both the companies already count private equity investors, who are looking to sell part of their stakes through the respective IPOs.

Sahajanand, which claims a strong market share in the drug eluting stent market in India, is looking at an IPO of about Rs 1,500 crore. Of this, Rs 410 crore will go into the company through a fresh issue of shares and the rest will go to the selling shareholders including two private equity firms.

The company intends to use the money it raises in the IPO to retire debt (Rs 255 crore) and another Rs 40 crore for working capital needs.

Sahajanand Medical's business

The company was founded by Dhirajlal Kotadia in 2001. It claims it has grown from around a fifth of the total to grab close to one-third of the market share in terms of volumes for stents in India.

Citing a report by Frost & Sullivan, the company said it is among the top five companies in terms of market share by sales volume of drug eluting stent in Germany, Netherlands, Italy and Poland as of March 31.

It has a direct and distributor sales presence in more than 69 countries, including direct presence in countries such as Germany, Poland, Spain, France, the UK and Brazil.

Currently, it offers products that are used in interventional cardiology, structural heart therapy and peripheral intervention. Interventional cardiology products include devices used for the treatment of blockages in heart vessels (coronary artery disease), such as coronary stents and catheters.

Structural heart therapy devices such as transcatheter aortic valve implants are used to treat abnormalities in the tissues, walls, and valves of the heart. Peripheral intervention devices such as renal stents are used for treatment of blockages in the blood vessels other than those of the heart.

Sahajanand Medical's financials

The company’s revenue rose from Rs 326 crore in 2018-19 to Rs 588.5 crore for 2020-21. However, its margins have come under pressure. Its operating profit has slid in the recent past due to a rise in legal and professional expenses, sales and marketing expenditure, and finance costs.

Exceptional items such as provisions for GST input tax credit and costs related to a phishing attack pushed the company into the red. It posted a net loss of Rs 86 crore for 2020-21 as against a net profit of Rs 13.6 crore and Rs 33 crore for the previous two years.

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Rs 1 lakh invested in these stocks is worth up to Rs 52.2 lakh in just one year!

Multi-bagger Stocks
by 5paisa Research Team 29/09/2021

Ever wondered about achieving a return of 3,000% in just one year in the Indian stock market. Let us take a look at three stocks that have gained more than 3,000% returns in a matter of one year. Read on to know more.   

TTI Enterprise Limited   

TTI Enterprise Limited is a non-banking financial company. TTI Enterprises Limited invests in shares and securities and provides short term and long term financing. The stock gave a return of 5,225% from its 52 week low in just a year. Rs 1 lakh invested in this company would have fetched an investor Rs 52.2 lakh approximately at its current price.   

Ushdev International Ltd    

Ushdev International Limited, a part of the Ushdev Group, was formed on May 14, 1994. From being a commission agent, it has become a power generating and trading company and is listed on the BSE since incorporation. Rs 1 lakh invested in this company a year ago would have fetched an investor Rs 37 lakh approximately at its current price thereby gaining 3,639%.   

Bombay Wire Ropes Ltd   

Bombay Wire Ropes Limited was incorporated in 1961. It was one of the largest manufacturers of wire ropes in India as well as a leading speciality steel manufacturer in India. With a history of more than 50 years, it has manufacturing facilities located in Thane, Mumbai. Rs 1 lakh invested in the company a year ago would have fetched an investor Rs 31 lakh approximately at their current prices 

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Superstar stocks for tomorrow!

superstar stocks for tomorrow!
by 5paisa Research Team 29/09/2021

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 of the time 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 selected are 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 tomorrow!

National Aluminium Company:Metal stocks are back in reckoning on the bourses on Wednesday and among them, the top-performing stock is National Aluminium.The stock is trading with gains of over 5% and importantly the stock had witnessed an open=low scenario, thereafter it has been trending higher. The volume for the days has already surpassed its previous trading session volume. In addition to this, the stock has witnessed good demand from the bulls in the last half an hour of trade as price rise is accompanied by the huge spurt in the volume. The RSI on the hourly time frame has entered into bullish territory, while on the daily time frame it has surpassed its prior swing high. The stock can probably touch levels of Rs 100 on the upside. Given the highly volatile nature of the Metal stocks, one can maintain a stop loss of Rs 92.

Godfrey Phillips India:The stock of Godfrey Philips has hit a fresh 52-week high on Wednesday and witnessed a breakout of a flat base pattern. The flat-base pattern is 14-weeks long and it has a depth of nearly 13%. Moreover, the flat-base pattern breakout is accompanied by a huge spurt in volume and already surpassed its 20-days average volume. What’s more profound is that majority of the volume in the stock has been seen in the last one hour of the trading session, which signifies buyers’ enthusiasm for the stock. The RSI is in the bullish territory on the hourly, daily and weekly time frame. The stock has the potential to touch levels of Rs 1180 followed by Rs 1220, while immediate support is placed at Rs 1110.

 IRB Infrastructure Developers:The stock has witnessed a breakout of the cup and handle like pattern which is accompanied by above-average volume. The RSI is in the bullish territory on the hourly, daily and weekly time frame. In addition to this on the daily time frame, the RSI has surpassed its prior swing high. The stock has the potential to test levels of Rs 195 followed by Rs 200 and immediate support for the stock is placed at Rs 180

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Varun Beverages back in growth mode, stock still has upside left after doubling

by 5paisa Research Team 29/09/2021

Varun Beverages Ltd (VBL), PepsiCo Inc.’s exclusive bottler in India, will soon be looking to expand its operations into relatively under-penetrated markets and integrate its southern and western territories in the country. 

The company is also looking to expand its international operations and build distribution channels for other Pepsi brands, according to a report by IIFL Securities Ltd.

Citing senior VBL executives, IIFL Securities said the Jaipuria family-owned bottling company is looking to scale up operations in states like Bihar and Jharkhand.

“Per-capita consumption in under-penetrated territories such as Bihar and Jharkhand is one-third of the national average and has significant potential to grow via market-development efforts,” the report said. 

VBL is also looking beyond Pepsi and build its distribution channels for other brands including Tropicana juices and more recently launched ones like Mountain Dew Ice and Sting. 

Interestingly, VBL’s bid to focus more on Tropicana comes even as PepsiCo is reportedly looking to sell the brand along with other juice brands for $3.3 billion to a joint venture majority owned by private equity firm PAI Partners.

Varun Beverages eyes foreign shores

Apart from looking for growth prospects within India, VBL is also looking to raise PepsiCo’s market share across countries as diverse as Nepal and Zimbabwe, where the beverage company already controls 45% and 55% of the market, respectively. VBL is also looking to expand its presence in Morocco. 

“In Morocco, Pepsi’s mkt share is about 14% and the company has been constrained by the non-compete agreement for water as well as the foreign language (French and Arabic) barrier. However, it now has the rights for water and would focus on expanding market share,” the report said. 

VBL executives also say that it could look at expanding to more English-speaking countries across Asia and Africa, provided there is little political and currency volatility risks.

Higher capex

As the bottler eyes expansion across India and other regions, VBL executives say the company’s capital expenditure for the year 2022 will be higher than depreciation. 

A significant proportion of this rise will come on account of VBL looking to add a new bottling plant in Bihar as well as invest in PET capacities. 

The company will also have to significantly ramp up its investment towards backward integration, as it looks to combine its southern and western operations. 

VBL is one of PepsiCo’s biggest franchisees outside of the US. The company was set up in 1995. It currently operates across 27 Indian states and several countries including Nepal, Sri Lanka, Morocco, Zambia and Zimbabwe, where, like India, it is PepsiCo’s exclusive bottler.  

VBL gets 74.2% of its business from India, 13.3% comes from Zambia and Zimbabwe, and 5% each from Morocco and Nepal. Sri Lanka generates just over 2% of the company’s revenue. 

While carbonated beverages make up for a lion’s share of the company’s business, 21% of its revenue comes from packaged water and 6% from non-carbonated beverages.

Outlook for Varun Beverages

The Covid-19 pandemic dampened the company’s performance in the past two years, but its management is now confident of volumes bouncing back as the situation normalises.

Indeed, the company’s revenue fell 9.5% in calendar year 2020 to Rs 6,450 crore from Rs 7,129.6 crore the year before. Its EBITDA margin shrank to 18.6% in 2020 from 20.3% in 2019 while profit after tax dropped to Rs 329 crore from Rs 469 crore. But the company is back on the growth path, IIFL Securities said.

According to the IIFL report, Varun Beverages is likely to record a 60% jump in profit after tax to Rs 634 crore in 2021 and a 55% increase next year. The EBITDA margin is expected to expand to 19.3% this year and to 21.1% next year.

IIFL retains a “buy” call on the Varun Beverages stock, with a target price of Rs 1,050 apiece over the next one year. That’s a 13% upside on the company’s current market price. The shares have already more than doubled over the past year.