While we are constructive on the long-term growth prospects of the LI sector, we believe major tectonic shifts will create near-term challenges, albeit preparing the industry for a cleaner insurance penetration. Contrary to expectations of relief in the Union Budget, life insurers are expected to be adversely impacted by the first-order and second-order changes proposed in the Finance Act'23. Conversation with industry experts suggest that the top four private life insurers are likely to witness 20-27% adverse impact on FY24E APE predominantly on account of the impending transition to the new tax regime. We flag high ceding charges in guaranteed NPAR savings as the next potential target as policymakers look to protect policyholder interest and improve life insurance (LI) penetration. While the demand for retail term protection remains subdued and the Apr-23 growth print was soft, we await evidence of medium-term growth momentum.
Issue Snapshot: Issue Open: May 09 May 11, 2023 Price Band: Rs. 95 100 Issue Size: 3200 cr (Fresh Issue of Rs. 1,400 cr and Offer for Sale of Rs. 1,800 cr) Reservation for: Institutional Investors: up to 75% of the net offer Non-Institutional: at least 25% of the net offer Face Value: NA Bid Size: 150 units and in multiples thereof 100% Book built Issue IPO Note -Nexus Select Trust REIT 09052023
Sector outlook and recommendations: We expect the margin to further recover in Q1FY24 onwards, driven by further fuel cost cool-off and rebound in cement prices. Looking at current fuel trends, we believe input cost will cool off by INR 100-150 per MT QoQ in Q1FY24. We trim our industry unitary EBITDA estimates for FY23/24/25E by INR 10-20 per MT each on sub-par cement price increases. We expect the margin to rebound by INR 170/40 per MT YoY in FY24/25E respectively to INR 1,000/1,040 per MT. Hence, we remain positive about the sector. We maintain our BUY ratings on UltraTech, ACC, Dalmia Bharat, Nuvoco Vistas, Birla Corp, JK Lakshmi, and Orient Cements. We maintain ADD ratings on Ambuja Cement, Ramco Cements, Star Cement, Sagar Cements and Deccan Cement. We maintain REDUCE ratings on Shree Cement, Heidelberg Cement and JK Cement. Our top picks are UltraTech Cement, Dalmia Bharat, and JK Lakshmi. We estimate our coverage universe of 15 companies to deliver strong 9/14% YoY/QoQ volume growth (four-year CAGR: 7%) in Q4FY23. We expect strong volume offtake by UltraTech Cement, Dalmia Bharat, Nuvoco Vistas, Birla Corp., JK Lakshmi and Star Cement QoQ. We expect volume decline QoQ by ACC and Ambuja (Himachal plant shutdown). We estimate average industry utilisation of ~86% vs 78/85% QoQ/YoY
Issue Snapshot: Issue Open: Mar 01 Mar 03, 2023 Price Band: Rs. 560 590 *Issue Size: 412.12 cr (Fresh Issue of Rs 180 cr + offer for sale of 3,934,243 eq sh) 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 Face Value: Rs 5 Book value: Rs 129.38 (September 30, 2022) Bid size: - 25 equity shares and in multiples thereof 100% Book built Issue IPO Note- Divgi Torqtransfer Systems Limited
Issue Snapshot: Issue Open: Dec 20 Dec 22, 2022 Price Band: Rs. 234 247 *Issue Size: 475.0 cr (Fresh Issue of Rs 175 cr + offer for sale of Rs 300 cr) 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 Face Value: Rs 5 Book value: Rs 78.39 (September 30, 2022) Bid size: - 60 equity shares and in multiples thereof 100% Book built Issue Elin Electronics Limited
Issue Snapshot: Issue Open: Dec 13 Dec 15, 2022 Price Band: Rs. 481 506 (Discount of Rs 48 for all eligible employees) *Issue Size: 552.0 cr (Fresh issue of Rs 150.0 cr + Offer for sale of Rs 402.0 cr) 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 Face Value: Rs 5 Book value: Rs 73.25 (June 30, 2022) Bid size: - 29 equity shares and in multiples thereof 100% Book built Issue IPO Note - Landmark Cars Limited
