Issue Snapshot: Issue Open: May 11 May 13, 2022 Price Band: Rs. 462 487 (A discount of Rs.25 for all eligible employee) *Issue Size: Rs 5235.0 cr (Fresh issue 4000 cr + offer for sale of 1235 cr) Reservation for: QIB atleast 75% eq sh Non Institutional upto 15% eq sh ((including 1/3rd for applications between Rs.2 lakhs to Rs.10 lakhs)) Retail upto 10% eq sh Employee Reservation: aggregating upto Rs. 20 Cr Face Value: Rs 1 Book value: Rs 93.19 (Dec 31, 2021) Bid size: - 30 equity shares and in multiples thereof 100% Book built Issue Delhivery Limited - IPO Note
Issue Snapshot: Issue Open: May 10 May 12, 2022 Price Band: Rs. 595 630 (A discount of Rs.59 for all eligible employee) *Issue Size: Rs 538.6 cr (Entirely offer for sale of 8,549,340 eq sh) Reservation for: QIB Upto 50% eq sh Non Institutional atleast 15% eq sh ((including 1/3rd for applications between Rs.2 lakhs to Rs.10 lakhs)) Retail atleast 35% eq sh Employee Reservation: aggregating upto Rs. 6.5 Cr Face Value: Rs 5 Book value: Rs 51.95 (Dec 31, 2021) Bid size: - 23 equity shares and in multiples thereof 100% Book built Issue Prudent Corporate Advisory Services Limited - IPO Note
UTCEM noted that they have been able to take price hikes in April to pass on the fuel cost spike and if cement and fuel prices were to hold at current levels, its Q1FY23 margin would remain flattish QoQ. It expects to benefit from its low-cost fuel inventory. The company's capacity expansion plans (across grey and white) are on track and would incur ~INR40-50bn Capex towards these. It is also aggressively expanding its green power capacities with a target of ~34% share by the end of 2024E (~20% in Q4FY22). We maintain our estimates for FY23/24E. We maintain BUY on UltraTech (UTCEM), with an unchanged target price of INR 7,960/share (16x Mar-24E consolidated EBITDA). We continue to like the company for its healthy margin outlook and balance sheet management. UTCEM's consolidated EBITDA/APAT in Q4FY22 fell 17/19% YoY (despite 10% revenue growth), owing to weak demand (till mid-Feb), which muted cost pass-through amid rising energy costs. While unitary EBITDA recovered 6% QoQ (on op-lev gains), energy inflation pulled it down by 17% YoY to INR 1,110/MT. The company expects to sustain this margin in Q1FY23 on account of its low-cost fuel inventory and healthy cost pass-through.
Issue Snapshot: Issue Open: May 04 May 09, 2022 Price Band: Rs. 902 949 (A discount of Rs.45 for all eligible employee and retail category) (Discount of Rs.60 for all eligible LIC Policyholders) *Issue Size: Rs 21008 cr (Entirely offer for sale of 221,374,920 eq sh) Reservation for: QIB Upto 98,828,089 eq sh Non Institutional atleast 29,648,427 eq sh Retail atleast 69,179,663 eq sh Employee Reservation: Upto 1,581,249 eq sh Policyholder Reservation:Upto 22,137,492 eq sh Face Value: Rs 10 Book value: Rs 13.01 (Dec 31, 2021) Indian Embedded value Rs.539,686 cr Bid size: - 15 equity shares and in multiples thereof 100% Book built Issue Life Insurance Corporation of India - IPO Note
With a total incentive outlay of ~USD 35 bn during the life of all 15 announced PLI schemes, we estimate total incremental sales to be in the range of USD 470-500 bn, attracting a total investment of ~USD 62 bn and directly generating ~3.1 mn jobs. While India's nominal GDP increase of ~49% in the last five years is an encouraging development, it is worth highlighting that this growth has come at the expense of growing reliance on Chinese imports. India's imports from China have grown from USD 61bn in FY17 to USD 93bn in FY22, accounting for 16% of overall imports on average over this period. Currently, the key goods imported from China are mainly electronic goods, mechanical appliances, and chemicals. In the wake of pandemic-led global supply chain disruptions, India has realised the importance of reducing its dependence on China and creating a self-sustaining manufacturing ecosystem. The Production Linked Incentive (PLI) is the government's flagship fiscal response to the country's rising import dependence, which aims to boost the country's manufacturing sector from 15-17% of the total GDP at present to a target of 25%.
While these new age companies presently account for only 3% of total revenue, given targeted white spaces their share could reach 8-10% in the next few years, which can potentially slice off 100-200bps of growth for incumbents. For new age brands with critical scale in terms of income levels, ease of distribution, and funding, a flywheel effect is in motion. While the majority of these individual brands will likely not scale beyond a certain point, a long tail of brands will emerge. In comparison to other sectors, the FMCG sector has historically been more resilient to external challenges, leading to strong earnings (12.5% CAGR) and valuation rerating (2x) in the last two decades. Earnings traction was steady, driven by (1) share gains from regional/small players, (2) distribution expansion (particularly in rural areas), (3) consistent success with brand extensions, (4) high brand recall to drive premiumisation, and (5) outsourcing to help deploy funds to increase competitiveness. Top-tier mainstream companies have had a smooth ride, boosting investor confidence in earnings visibility. However, in the evolving competitive landscape, we remain sceptical about sustaining these drivers/assumptions. D2C/New age consumer brands are far more disruptive/ agile than traditional/regional competition. Established incumbents are no longer protected by entry barriers (distribution and brand), resulting in a level playing field and category fragmentation - a structural trend.
