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Wellness Forever Medicare IPO- Pharmacy chain files for Rs.1600 crore IPO

by 5paisa Research Team 17/11/2021

The Adar Poonawalla backed pharmacy giant- Wellness Forever Medicare, filed a Draft Red Herring Prospectus with SEBI on October 1, 2021. The company plans to raise between Rs.1,500-Rs.1,600 crore. This IPO comprises of a fresh issue worth Rs.400 crore and an offer for sale of up to 16,044,709 equity shares. This Mumbai based pharmacy chain is the second pharmacy chain to file for an IPO after MedPlus, based in Hyderabad, filed its DRHP in August. The book running lead managers to this issue are IIFL Securities Ltd, Ambit Private Ltd, DAM Capital Advisors Ltd and HDFC Bank Limited.

Wellness Forever Medicare was founded in 2008 by three veterans in the pharmaceutical industry- Ashraf Biran, Gulshan Bakhtiani and Mohan Chavan. The company has 236 stores across 23 cities in Maharashtra, Karnataka and Goa. They have a registered customer base of 6.7 million customers as of June 31, 2021. They aim to increase their market penetration in the Tier 2 and Tier 3 cities and also actively participate in the e-commerce segment which has an estimated growth CAGR of 45%.

As a part of the OFS, Ashraf Biran and Gulshan Bakhtiani are offloading around 7,20,000 equity shares each, Mohan Chavan is offloading approximately 1,20,000 equity shares and an approximate 144.85 lakh shares are being offloaded by the other shareholders.

The Indian pharmacy retail sector has been growing at a very healthy rate because of the increase in healthcare expenditure and consumer base. India’s pharmaceutical industry is the third largest in the world by volume and 14th largest by value. The market value of the Indian pharmaceutical market is Rs.150,000 crore in FY20.

Pharmacy chains have 8.5% of the total pharmacy retail market in India in FY 2021.

The company plans on utilizing the proceeds from the issue for-

  • Rs. 70.20 crore as funding to set up new outlets

  • Rs.100 crore to be set aside for repayment or prepayment of debt

  • Rs.121.90 crore to fund working capital expenses

Wellness Forever Medicare’s revenue rose by 7% from Rs.863.25 crore in FY20 to Rs.924.02 crore in FY21. EBITDA decreased from Rs.879.16 million in FY20 to Rs.761.76 million in FY21. The EBITDA margin fell from 10.18% to 8.24% in the same period. Losses increased from Rs.53.21 million in FY20 to Rs.348.47 million in FY21. The total borrowings as per the balance sheet stand at Rs.1,023 million in FY21.

The company opened 31, 35 and 50 stores in FY19, FY20 and FY21 respectively. Out of these, 115 stores are operational as of June 30,2021. An approximate Rs.456.54 million is estimated as the cost of all the stores opened by the company in the last three fiscal years. Wellness Forever Medicare has a goal of opening 180 stores by FY24.

Strengths:

1. The company has a high inventory turnover which reduces the holding cost which in turn increases the working capital efficiency

2. Customer loyalty programs and great customer service

3. Due to vertical integration and economies of scale, they have a high gross margin

4. Discounts for customers which make the store more attractive to more people

5. E-commerce presence that provides auto refills, discounts and a wide range of products

Weaknesses:

1. They have a very limited presence, concentrated mainly in Maharashtra

2. E-commerce segment lacks in profitability to date

3. The company has difficulty in catering to the Tier 2 cities due to higher turnaround time

Opportunities:

1. The modern pharmacy retail is expected to have a growth CAGR of 25% in next 5 years, growing significantly faster than many other segments

2. The brick and mortar stores have a certain edge over e-pharmacy in adopting an omni-channel approach because they have already established network of stores which can supply the localities and act as a place to stock more inventory

Threats:

1. As the company is not very technologically advanced, there is always a chance that mismanagement of the inventory could occur which would in turn lead to a low fulfillment rate

2. High amount of competition from established e-pharmacy companies

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These low-priced stocks were locked in the upper circuit on Wednesday

These low-priced stocks were locked in the upper circuit on Wednesday.
by 5paisa Research Team 17/11/2021

Nifty Smallcap 100 index is trading at 11,260 levels, up by almost 0.50% from yesterday’s closing.

Indian headline equity indices are continuing yesterday’s correction streak.

At 2:37 pm on Wednesday, Nifty 50 and Sensex are down by 0.24% and 0.20% respectively. Similarly, Bank Nifty is down by 170 points i.e. 0.45%. Nifty Smallcap 100 index is trading at 11,260 levels, up by almost 0.50% from yesterday’s closing. Birlasoft, Lux Industries, Tanla Platforms and Trident are among the small-cap top gainers.

Following is the list of low-priced stocks that were locked in the upper circuit on Wednesday. Keep a close eye on these counters for the upcoming sessions.

Sr No  

Stock  

LTP  

Price Change (%)  

Trident  

43.05 

3i Infotech  

81.05 

4.99 

Tata Tele  

76.25 

4.96 

Sintex PlasticsTechnology  

11 

4.76 

Megasoft  

27.65 

4.93 

Goldstone Technology  

55.15 

4.95 

SPML Infra  

14.05 

4.85 

Indowind Energy  

15 

4.9 

Shah Alloys  

32.8 

4.96 

10 

Cinevista Ltd  

19.05 

4.96 

Saboo Sodium Chloro Limited has announced that it has received an unsolicited acquisition LOI (letter-of-intent) for a 100% sale of Samskara Resort and Spa. The relevant LOI is dated 8 November 2021 and is from a 30-year-old prominent Swiss RE investment firm. Negotiations are taking place in Jaipur. A sale decision, if reached, will value Samskara Resort and Spa in the range of Rs 100-150 crore. The figure will be inclusive of debt and associated trademarks and intellectual property.

The Saboo Group traces its roots back to the late 1940s when it pioneered the manufacturing of emery stones and flour mills for the first time in India. Today the Saboo group of industries is dominating the field of emery stones, flour mills and grinding machines in the entire Indian market. Apart from these products, the group is also actively involved in the manufacturing and exports of abrasives and minerals, food products i.e. salt, spices etc., solar energy, guar gum and the hospitality Industry. The Saboo group of companies is situated in the state of Rajasthan and have offices at Nawa city and Jaipur.

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These penny stocks were locked in the upper circuit on Wednesday

These penny stocks were locked in the upper circuit on Wednesday
by 5paisa Research Team 17/11/2021

Amid a volatile trading session, Indian equity markets are trading in the red territory. Auto stocks and selective smallcap stocks are outperforming the markets.

Following is the list of penny stocks that were locked in the upper circuit on Wednesday. Keep a close eye on these counters for the upcoming sessions.

Sr No   

Stock   

LTP   

Price Change (%)   

1  

Orient Green Power   

6.7  

4.69  

2  

Sintex Industries   

9.7  

4.86  

3  

FCS Software   

1.8  

2.86  

4  

Prakash Steel   

3.8  

4.11  

5  

SITI Networks   

2.3  

4.55  

6  

Mercator   

1.3  

4  

7  

Ankit Metal Power   

7.6  

4.83  

8  

JIK Industries   

0.85  

6.25  

9  

Sadbhav Media   

4.25  

4.94  

10  

CLC Industries   

1.7  

3.03  

Capital Trust Limited (Capital Trust), a digitally enabled non-banking finance company (NBFC), which specializes in providing income-generating micro business loans in tier 3-5 regions, announced its financial results for the quarter ended 30 September 2021.
 

The consolidated financial highlights are as follows:

  • Average collection efficiency for Q2 FY22 was 88% for the company and 96% for digital loans sourced post-first lockdown.

  • Net worth as of 30 September 2021 was at Rs 117.8 crore.

  • Finance cost during Q2 FY22 was Rs 15.55 crore which was increased by Rs 7.49 crore.

  • Total provisions outstanding for the year were Rs 57.09 crore; ECL provision was Rs 16.11 crore as compared to Q1FY22 and COVID related provision stood at Rs 40.98 crore.

  • Total operational branches as of 30 September 2021 stood at 315 covering 94 districts across 10 states. 

  • Strong liquidity position with Rs 115.22 crore in cash or bank balance, liquid investments and fixed deposit.

  • Business Correspondent Partnership ties ups with IDFC First Bank, MAS Financials, Dhanvarsha Finvest and OML P2P.

Merging best practices of fintech and traditional financing, Capital Trust Limited focuses on financial inclusion of the underserved in deep interiors of rural India using digital processes and state of the art technology. As of September 30, 2021, the company caters to over 1,09,000 customers across 94 districts through 315 branches in 10 states in North and East India. The company prides itself to be India`s first "Rural Doorstep-Fintech" company.

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Trending stocks: Keep a close eye on these small-cap stocks for 18 November 2021

Trending stocks: Keep a close eye on these small-cap stocks for 18 November 2021
by 5paisa Research Team 17/11/2021

Nifty Bank index further underperformed broader markets and fell by 265.55 points i.e. 0.69% to end at 38,041.5.

Frontline indices Nifty 50 and Sensex closed the session at 17,898.60 and 60,008 respectively, down by more than 0.50% each. Nifty Bank index further underperformed broader markets and fell by 265.55 points i.e. 0.69% to end at 38,041.5.

Keep a close eye on these trending small-cap stocks for Thursday, 18 November 2021:

NIIT Limited – Axis Bank – NIIT Digital Banking Academy, a joint initiative by Axis Bank (India’s third-largest private sector bank) and NIIT Institute of Finance, Banking and Insurance (NIIT IFBI), has launched its second programme for experienced IT professionals - “FinTech Engineering Programme”. It offers a great career as “FrontEnd and BackEnd Application Developers” with Freecharge, one of the leading digital platforms for financial services and a wholly-owned subsidiary of Axis Bank.

The course will include a common Foundation Module upon completion of which, candidates will undergo modules related to FrontEnd Developer or BackEnd Developer roles. The course will culminate with a project where candidates will apply and demonstrate the competencies that they have gained over the course. Overall, the programme will include exposure to live projects and extensive practice and mentoring to enable candidates to acquire the experience and confidence to perform in their roles.

Intellect Design Arena – Intellect Global Transaction Banking (iGTB), the transaction banking specialist from the company has ranked No.1 in the world for Transaction Banking by IBS Intelligence. It has also been announced today that Fifth Third Bank, National Association, has launched CBX, the first true contextual banking platform. This platform strengthens Fifth Third Bank's position as a digital leader and positions the needs of corporate customers at the forefront.

The platform allows Fifth Third Bank to harness CBX’s capabilities, providing a simplified and consolidated view of assets and liabilities across a portfolio of domestic and international accounts, whether locally held or cross-bank, and allows for cash and liquidity management, based on the scenario-based concentration of funds. Customers can optimize their working capital, in real-time, on a cloud-native, self-service platform.

52-week High Stocks - The following small-cap stocks have made fresh 52-week high today – Menon Bearings, Lux Industries, Birlasoft, Salzer Electronics, Pricol, PDS Multinational Fashions and KPIT Technologies. Keep a close eye on these counters on Thursday, 18 November 2021.

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Top swing trading ideas you should not miss!

Top swing trading ideas you should not miss!
by 5paisa Research Team 17/11/2021

Best Swing Trading ideas based on price and volume percentage surge. Asian Paints, Eid Parry, and Sharda Cropchem.

Price and volume are two of the most prominent inputs used by traders across the world while swing trading. When used in isolation, they reveal very little but when used in conjunction, they help us to sort the wheat from the chaff. So, this swing trading system is based on the deadly combination of price and volume percentage surge, which helps us to discover high probability swing-trading candidates.

So, here is the list of stocks that fulfil the criteria of volume and price surge and as a result, they flash in our swing-trading system:

Asian Paints: The stock gained a healthy 2.5% on Wednesday as it looks to regain momentum after the recent slump. It closed just above the 50-DMA with an above-average volume. The stock formed a strong green candle on the chart with a bigger volume which was well above its 10-day and 30-day daily average volume. RSI is going strong at 57 showing strength. Considering its strong price action, Traders must include this stock in their watchlist for upcoming days. The stock looks attractive for swing trading.

Eid Parry: Eid Parry gained 2% on the trading session that ended Wednesday. It was trading firmly in green throughout the day but witnessed some correction in the last 15 minutes. It is currently trading above all its key moving average and RSI shows strength at 65. Today, above-average volume was recorded in the daily time frame. The stock looks technically strong, and with higher volumes, it can finally break its all-time high level of 533 in the coming days. Swing traders should closely watch this stock for quick profits. 

Sharda Cropchem: The stock rose 4.31% in Wednesday’s trading session. The stock has been underperforming for several weeks as it looks to gain momentum. It closed above key moving averages today showing a healthy sign of recovery. The stock has witnessed higher volumes today and we could possibly see a trend in the coming days. RSI is positioned at 59 and looks to gain momentum. This is an ideal candidate for swing trading and traders must include this stock in their watchlist for upcoming days.

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Rs 777 to Rs 2250: This multibagger stock gave a return of 190% return in the last one year. Do you own it?

Rs 777 to Rs 2250: This multibagger stock gave a return of 190% return in the last one year. Do you own it?
by 5paisa Research Team 17/11/2021

An amount of Rs 1 lakh invested in Ion Exchange in November 2020 would have become Rs 2.91 lakh in November 2021

With strong fundamentals, the stock of multibagger Ion Exchange rallied from Rs 777 in November 2020 to Rs 2,250 today, surging 2.91x times in the last one year. An amount of Rs 1 lakh invested in November 2020 would have become Rs 2.91 lakh in November 2021

Ion Exchange (India) is engaged in a wide range of solutions across the water cycle from pre-treatment to process water treatment, wastewater treatment, recycle, zero liquid discharge, sewage treatment, packaged drinking water, seawater desalination etc

Key Products /services 

ION Exchange has three major segments namely, Engineering, Consumer Products, and Chemicals.

Engineering segment (61% of revenues)

In this segment, the company provides pre-designed and pre-engineered products catering to small industries, the company also offers customized solutions to heavy industries.

Chemical segment (31% of revenues)

The company provides a wide range of resins, speciality chemicals and customized chemical treatment programs for water, non-water and speciality applications. This segment has the highest profitability and ROCE.

Competitive strength

1. Diversified Clientele base: The company caters to a wide range of Industries from the Textiles to Steel sector and its Marquee clients include The Tata group, Vedanta, Reliance, NTPC, Oberoi Hotels, Mitsubishi and many more

2. Enhancing Global Footprints: The company derives 38% of its revenue through exports. IEL has received an order from South Asia’s largest paper company for their unit in the Philippines and Indonesia, where the water plant will treat 23 million litres of wastewater. Apart from its strong presence in Asia, the company also exports its chemicals to USA, UK, Europe and Canada.

Double-digit growth

In the last five years from FY16 to FY21, revenue has grown at a CAGR of 11% from Rs 868 crore to Rs 1,450 crore and profit has grown at a CAGR of 57% from Rs 15 crore to Rs 144 crore which shows the steep growth of the company. The operating margin has been increasing from 7% in 2016 to 14% in 2021.

The unique business model and the growth story is so fascinating. Watch out for this company as an investment opportunity in future and ride the momentum.

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