IPO Review

R R Kabel Limited is one of the leading companies in the Indian consumer electrical industry (comprising wires and cables and fast- moving electrical goods (“FMEG”)), with an operating history of over 20 years in India. They sell products across two broad segments - (i) wires and cables including house wires, industrial wires, power cables, and special cables; and (ii) FMEG including fans, lighting, switches, and appliances.

OBJECTS OF THE ISSUE

• Repayment or prepayment of borrowings availed by the company from banks and financial institutions.
• General corporate purposes.

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Tribhuvanprasad Rameshwarlal Kabra

Executive Chairman of the Company. He has completed his secondary level school education from Hindi High School, Mumbai. He has extensive experience in the electrical industry. Previously, he was associated with Shramik Winding Wires Private Limited as a director. He was appointed to RR Kabel’s Board of Directors with effect from May 13, 1997.

Shreegopal Rameshwarlal Kabra

Managing Director of the Company. He has extensive experience in the electrical industry. Previously, he was associated with the International Copper Association as the chairman of wire and cable product council and the Indian Electrical and Electronics Manufacturers’ Association as the president.

Mahendrakumar Rameshwarlal Kabra

Joint Managing Director of the Company. He has extensive experience in the electrical industry. Previously, he was associated with MEW Electricals Limited as a director. He was appointed to the Board of Directors with effect from February 6, 1995.

Rajesh Babu Jain

Chief Financial Officer of the Company. He joined the Company on July 1, 2000 and is responsible for heading the financial functions of the Company including leading various initiatives in the organization of business excellence and operational efficiency of the Company.

Dinesh Aggarwal

Chief Executive Officer of the Company. He joined the Company on December 16, 2022 and is responsible for handling the domestic business administration of the Company.

Himanshu Navinchandra Parmar

Company Secretary and Compliance Officer of the Company. He joined the Company on June 1, 2013 and is responsible for secretarial and legal functions of the Company. Previously, he has worked with MEW Electricals Limited.

Company Profile

• The company manufactures, markets, and sells wires and cables under the RR Kabel brand, and a variety of consumer electrical products, including fans and lights under the ‘RR’ and ‘Luminous Fans and Lights brands.
• RR Kabel was the first company in India to introduce low smoke zero halogens (“LS0H”) insulation technology in their wires and cables products and to introduce unilay core technology products. They have actively diversified and expanded their product portfolio in adjacent areas such as FMEG, both organically and inorganically.
• They have a dedicated team of 60 employees focused on research and development, of which 22 employees exclusively work on research and development involving FMEG products.
• The Company owns and operates two integrated manufacturing facilities which are located at Waghodia, Gujarat, the Waghodia Facility, and Silvassa, Dadra and Nagar Haveli and Daman and Diu (“Silvassa Facility”) in India,

COMPETITIVE STRENGTHS

• Scaled B2C business in the large and growing wire and cables industry. A diverse suite of products with global certifications and accreditations. Extensive domestic and global distribution network.
• Well-recognized consumer brands.
• Technologically advanced and integrated precision manufacturing facilities Well-positioned for growth in the FMEG segment.
• Experienced and committed professional management team.

KEY STRATEGIES

• Expand distribution and establish a leadership position for the wires and cables segment in India. Enhance the geographical footprint of their wires and cables segment.
• Capitalize on the market opportunity in the wires and cables segment. Enhance productivity and operational efficiencies.

KEY CONCERNS

• Increases or fluctuations in raw material prices may have a material adverse effect on the business. Distribution to the overseas market is dependent on a few distributors and significant changes to their business arrangements with these distributors may impact the business.
• The availability of counterfeit products could have an adverse effect on the business and its competitive position.
• They are subject to warranty claims, which may increase in the future and have a material adverse effect on the financial condition.
• The Company faces risks related to foreign currency fluctuations. The company faces significant competitive pressures in the business.

COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2023)

FINANCIALS (RESTATED CONSOLIDATED)

OUTLOOK & VALUATION

RR Kabel is a well-established player with strong brand recall and quality products. The company has a diverse product portfolio and an extensive domestic and global distribution network, and it is working on strategies for further enhancement as well. Other than the wire and cable industries, they are also well-positioned for growth in the FMEG segment.

Financial performance has been mixed, where there is growth in revenue and net worth but pressure on its margins with declining profits. The issue size is around 1964 crore, but most of its portion belongs to the offer for sale. Finally, the IPO is coming at a P/E valuation of around 60.5x, which is looking high-priced.

Due to the high valuation and current market sentiments, we will avoid this IPO for listing benefits. However, it could be a good pick for the long term, and investors may consider it during any post-listing correction.

Ratnaveer Precision Engineering Limited is a stainless steel (“SS”) product manufacturer focused on producing finished sheets, washers, solar roofing hooks, pipes, and tubes. Their products find application across various industries and their products are used in both commercial and residential sectors and are sold within India and overseas.

OBJECTS OF THE ISSUE

• Funding working capital requirements of the company.
• General corporate purposes.

Vijay Ramanlal Sanghavi

Chairman, Managing Director and Chief Financial Officer of the Company. He has been associated with the Company since its incorporation. He has over two decades of experience in ferrous and nonferrous metal industries.

Babulal Sohanlal Chaplot

Whole time Director of the Company. He has over four decades of experience and has worked in different sectors such as metals, agriculture, automobile etc. He has been associated with the Company since past fifteen years and has been acting as a Director on the Board since 2011. He oversees production as well as commercial functions.

Prerana Rajeshbhai Trivedi

Company Secretary & Compliance Officer of the Company. She is an associate member of the Institute of Company Secretaries of India. She has over 5 years of experience in secretarial and compliance field.

Nanubhai Panchal

Chief Operating Officer of the Company. He has been associated with the Company since 2011. He holds Diploma degree in Mechanical Engineering. He has over 50 years of experience in terms of consultant as well as employee of the various Company.

COMPANY PROFILE

• Ratnaveer precision engineering limited operates out of four manufacturing units, out of which two (Unit-I and Unit-II) are located at GIDC, Savli, Vadodara, Gujarat, one (Unit-III) is located at Waghodia, Vadodara, Gujarat and the other one (Unit-IV) is located at GIDC, Vatva, Ahmedabad, Gujarat..
• They manufacture SS finishing sheets, SS washers and SS solar mounting hooks at their Unit I and SS pipes and tubes at their Unit II. Unit III and Unit IV are dedicated for the backward integration process. They intend to expand their portfolio of SS washers by adding circlips into the product line. They currently offer over 2500 SKUs of SS washers to their customers including inner ring washers, spring washers, nord lock washers, retaining rings, internal tooth washers and external tooth washers of different sizes and specifications.
• The Company has undertaken R&D activity for developing circlips, has developed the required tools, and identified prospective customers.

COMPETITIVE STRENGTHS

• Synergistic Business Model focused on Backward Integration. Consistent financial performance.
• Wide product portfolio and multiple designs. R&D set up for new product development. Customer Diversification.
• Synergy of young and experienced management team with a committed employee base. Effective quality control checks.

KEY STRATEGIES

• Diverse, longstanding, and growing global customer base.
• Continue to add to the product portfolio by introducing new designs.
• Technology integration and plant automation for cost efficiency and improved productivity.

KEY CONCERNS

• Pricing in the steel industry is subject to market demand, volatility, and economic conditions. Fluctuations in steel prices may have a material adverse impact on their business.
• They are dependent on a few customers for a major part of their revenues.
• Their business requires a significant amount of working capital primarily as a considerable amount of time passes between the purchase of raw materials and the collection of receivables post-sales to customers.
• This business is a high-volume low-margin business.
• They operate in a highly competitive and fragmented industry with low barriers to entry. The Company has a high debt to equity ratio.

COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2023)

FINANCIALS (RESTATED CONSOLIDATED)

OUTLOOK & VALUATION

Ratnaveer Precision Engineering Limited is a manufacturer of stainless steel products with a wide range of products and multiple designs. The company has a backward-integrated business model, which gives it control over the supply chain, and a research and development (R&D) setup for new product development. It has also reported strong financial performance in the last three years.

However, the steel industry is subject to market volatility and economic conditions. Additionally, it is a highly competitive industry. The major concern for investors here is the high debt-to-equity ratio and low-margin business. However, the IPO is coming at a fair price-to-earnings (P/E) valuation of 13.49x.

Thus, after considering all the factors, we suggest applying for this IPO for listing gain.

DISCLAIMER:

The information contained herein are strictly confidential and are meant solely for the information of the recipient and shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written permission of Swastika Investmart Ltd. (“SIL”). The contents of this document are for information purpose only. This document is not an investment advice and must not alone be taken as the basis for an investment decision. Before taking any decision to invest, the recipient of this document must read carefully the Red Herring Prospectus (“RHP”) issued to know the details of IPO and various risks and uncertainties associated with the investment in the IPO of the Company. All recipients of this document must before acting on the given information/details, make their own investigation and apply independent judgment based on their specific investment objectives and financial position. They can also seek appropriate professional advice from their own legal and tax consultants, advisors, etc. to understand the risks and investment considerations arising from such investment. The investor should possess appropriate resources to analyze such investment and the suitability of such investment to such investor’s particular circumstances before making any decisions on the investment. The Investor shall be solely responsible for any action taken based on this document. SIL shall not be liable for any direct or indirect losses arising from the use of the information contained in this document and accept no responsibility for statements made otherwise issued or any other source of information received by the investor and the investor would be doing so at his/her/its own risk. The information contained in this document should not be construed as forecast or promise or guarantee or assurance of any kind. The investors are not being offered any assurance or guaranteed or fixed returns on their investments. The users of this document must bear in mind that past performances if any, are not indicative of future results. The actual returns on investment may be materially different than the past. Investments in Securities market products and instruments including in the IPO of the Company are highly risky and they are generally not an appropriate avenue for someone with limited resources/ limited investment and low risk tolerance. Such Investments are subject to market risks including, without limitation, price, volatility and liquidity and capital risks. Therefore, the users of this document must carefully consider all the information given in the RHP including the risks factors before making any investment in the Equity Shares of the Company.

Swastika Investmart Ltd or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither Swastika Investmart Ltd nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. Swastika Investment Ltd may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the Subject Company or third party in connection with the Research Report.

CORPORATE & ADMINISTRATIVE OFFICE - 48, Jaora Compound, M.Y.H. Road, Indore - 452 001 | Phone 0731 - 6644000

Compliance Officer: Ms. Sheetal Duraphe Email: compliance@swastika.co.inPhone: (0731) 6644 241

Swastika Investmart Limited, SEBI Reg. No. : NSE/BSE/MSEI: INZ000192732 Merchant Banking: INM000012102 Investment Adviser: INA000009843 MCX/NCDEX: INZ000072532 CDSL/NSDL: IN-DP-115-2015 RBI Reg. No.: B-03-00174 IRDA Reg. No.: 713.

Rishabh Instruments Limited is a global energy efficiency solution company focused on electrical automation, metering and measurement, precision engineered products, et al. with diverse applications across industries including power, automotive and industrial sectors. The company supply a wide range of electrical measurement and process optimization equipment, and is engaged in designing, developing and manufacturing, and sale of devices significantly under their own brand across several sectors.

OBJECTS OF THE ISSUE

• Financing the cost towards the expansion of Nashik Manufacturing Facility I.
• General corporate purposes.

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KEY MANAGERIAL PERSONNEL

Narendra Joharimal Goliya

Chairman and Managing Director of the Company. He is the founder and Promoter of the Company. He has been associated with the Company since its incorporation and accordingly has over four decades of experience in the manufacturing and electrical industry.

Dineshkumar Musalekar

Group CEO. He has been associated with Lumel since January 16, 2014. He holds a bachelor’s degree of engineering (electronics and communication) from the Karnatak University Dharwad and a master’s degree in human resources development management from Somaiya Institute of Management Studies and Research, University of Mumbai.

Nitinkumar Sudhir Deshpande

Head – Marketing, Business Development and Profit Centre Head of the Company. He has been associated with the Company since July 8, 2018. He holds a bachelor’s degree of engineering (electrical engineering) from the University of Mumbai. He was previously associated with ABB Limited, Siemens Limited and Schneider Electric India Pvt Limited.

Vishal Prabhakar Kulkarni

Chief Financial Officer of the Company.He has been associated with the Company since July 21, 2014. He holds a master’s degree in commerce from the University of Pune. He is an associate member of the Institute of Company Secretaries of India. He was previously associated with Techno Force (I) Pvt Ltd. and ThyssenKrupp Electrical Steel India Private Limited.

Ajinkya Joglekar

Company Secretary and Compliance Officer of the Company. He has been associated with the Company since August 8, 2022. He holds a bachelor’s degree in commerce from the Rashtrasant Tukadaji Maharaj Nagpur University. He is an associate member of the ICSI. He was previously associated with Galactico Corporate Services Limited.

COMPANY PROFILE

• Rishabh Instruments provides comprehensive solutions to their customers looking for cost-effective ways to measure, control, record, analyse and optimise energy and processes through their array of products.
• They also provide complete aluminium high pressure die casting solutions for customers requiring close tolerance fabrication, machining and finishing of precision components.
• Rishabh Instruments has 4 segments: (a) electrical automation devices; (b) metering, control, and protection devices; (c) portable test and measuring instruments; and (d) solar string inverters.
• The Company manufactures all the products in-house from their five manufacturing facilities – two in India, two in Poland and one in China.
• They primarily follow a business-to-business model which is purchase order based for all their segments except portable test and measuring instruments which is also sold on a merchant basis.
• The Company have an extensive network of 175 authorized distributors/stockists across 81 districts in India with direct sales conducted through eight sales and marketing offices.

COMPETITIVE STRENGTHS

• Ability to drive technology and innovation through advanced research and development. Global engineering solution provider operating in large addressable markets.
• Vertically integrated operations, backed by strong manufacturing capabilities. Diversified product portfolio & wide customer base.
• Track record of successful integration of acquired businesses or entities across geographies Well-established and recognised brand
• Committed Promoters, Board and management team.

KEY STRATEGIES

• Enhance product innovation, engineering and design competence while focussing on higher value addition .
• Expanding geographical footprint.
• Continue to pursue their strategy for inorganic growth.
• Target new customers and expand existing customer accounts . Explore opportunities to tap emerging products and services segments. Promote product localization.

KEY CONCERNS

• Failure to manage component and material purchasing and shortages in the supply of their major production inputs could adversely affect the operation.
• The Company faces risks associated with their international sales and multi-location operations in various geographies. Foreign exchange fluctuations related risk is also there.
• They export their products to various countries, on account of which they may be subject to significant import duties or restrictions.
• Most of Their customers do not commit to long term contracts.
• Dependence on their own Subsidiaries exposes them to significant operational and financial risk. Shortages in the supply of semiconductors have had, and may continue to have, a adverse effect on business.

COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2023)

As mentioned in Company's RHP, there are no comparable listed companies in India or globally that engage in a business similar to that of Rishabh Instruments Limited. Accordingly, it is not possible to provide an industry comparison in relation to this Company

FINANCIALS (RESTATED CONSOLIDATED)

OUTLOOK & VALUATION

Rishabh Instruments is a multinational company offering energy efficiency solutions. The company has a diverse product portfolio and a vertically integrated operation. The company is operating globally in a large, addressable market. Their brands ‘Rishabh’, ‘Lumel’, Sifam, and ‘Tinsley’ are well recognised in multiple countries. The financial position of the company is currently not very attractive, but it is stable.

However, multi-location operations and global sales raise concerns related to international exposure. Secondly, any kind of shortage in their production inputs, like semiconductors, could also impact their business. The IPO is coming at a P/E valuation of 34.34x. Though the company does not have any listed peers to compare, its valuation is looking high in general. We will recommend this IPO only for high-risk investors.

DISCLAIMER:

The information contained herein are strictly confidential and are meant solely for the information of the recipient and shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written permission of Swastika Investmart Ltd. (“SIL”). The contents of this document are for information purpose only. This document is not an investment advice and must not alone be taken as the basis for an investment decision. Before taking any decision to invest, the recipient of this document must read carefully the Red Herring Prospectus (“RHP”) issued to know the details of IPO and various risks and uncertainties associated with the investment in the IPO of the Company. All recipients of this document must before acting on the given information/details, make their own investigation and apply independent judgment based on their specific investment objectives and financial position. They can also seek appropriate professional advice from their own legal and tax consultants, advisors, etc. to understand the risks and investment considerations arising from such investment. The investor should possess appropriate resources to analyze such investment and the suitability of such investment to such investor’s particular circumstances before making any decisions on the investment. The Investor shall be solely responsible for any action taken based on this document. SIL shall not be liable for any direct or indirect losses arising from the use of the information contained in this document and accept no responsibility for statements made otherwise issued or any other source of information received by the investor and the investor would be doing so at his/her/its own risk. The information contained in this document should not be construed as forecast or promise or guarantee or assurance of any kind. The investors are not being offered any assurance or guaranteed or fixed returns on their investments. The users of this document must bear in mind that past performances if any, are not indicative of future results. The actual returns on investment may be materially different than the past. Investments in Securities market products and instruments including in the IPO of the Company are highly risky and they are generally not an appropriate avenue for someone with limited resources/ limited investment and low risk tolerance. Such Investments are subject to market risks including, without limitation, price, volatility and liquidity and capital risks. Therefore, the users of this document must carefully consider all the information given in the RHP including the risks factors before making any investment in the Equity Shares of the Company.

Swastika Investmart Ltd or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither Swastika Investmart Ltd nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. Swastika Investment Ltd may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the Subject Company or third party in connection with the Research Report.

CORPORATE & ADMINISTRATIVE OFFICE - 48, Jaora Compound, M.Y.H. Road, Indore - 452 001 | Phone 0731 - 6644000

Compliance Officer: Ms. Sheetal Duraphe Email: compliance@swastika.co.inPhone: (0731) 6644 241

Swastika Investmart Limited, SEBI Reg. No. : NSE/BSE/MSEI: INZ000192732 Merchant Banking: INM000012102 Investment Adviser: INA000009843 MCX/NCDEX: INZ000072532 CDSL/NSDL: IN-DP-115-2015 RBI Reg. No.: B-03-00174 IRDA Reg. No.: 713.

Concord Biotech Limited is an India-based biopharma company and one of the leading global developers and manufacturers of select fermentation-based APIs across immunosuppressants and oncology in terms of market share, based on volume in 2022, supplying to over 70 countries including regulated markets, such as the United States, Europe and Japan, and India. The Company manufacture (i) bio- pharmaceutical APIs through fermentation and semi-synthetic processes, across the therapeutic areas of immunosuppressants, oncology and anti-infectives; and (ii) formulations, which are used in the therapeutic areas of immunosuppressants, nephrology drugs and anti-infective drugs for critical care.

• In 2016, they launched their formulation business in India as well as emerging markets, including Nepal, Mexico, Indonesia, Thailand, Ecuador, Kenya, Singapore and Paraguay, and have further expanded to the United
• As of March 31, 2023, they had 23 API products. The Company had filed 128 Drug Master Files (“DMFs”) across several countries for their APIs, including 20, 65 and four, respectively, in the United States, Europe and Japan, as of June 30,
• They are amongst the few companies globally that have successfully and sustainably established and scaled up fermentation-based API manufacturing capabilities.
• As of March 31, 2023, the Company had three manufacturing facilities in the state of Gujarat, India, comprising API manufacturing facilities in Dholka and Limbasi and a formulation manufacturing facility in Valthera, which were commercialized in 2000, 2021 and 2016,
• They have established two DSIR-approved R&D units with 148 members as of March 31, 2023, including members having doctoral qualifications.

• Concord Biotech had over 200 customers in over 70 countries as of March 31, 2023, for their APIs and

KEY MANAGERIAL PERSONNEL

• Sudhir Vaid is one of the Promoters of the Company and the Chairman and Managing director of the Company Previously, he was associated with Ranbaxy Laboratories Limited, Lupin Chemicals Limited and as a part of M/s. Sudman Consultants acted as a consultant for companies such as Plus Chemicals S.A., Lek Pharmaceuticals & Chemicals Co. and Biocon India Limited.
• Ankur Vaid is one of the Promoters of the Company and the Joint Managing Director and the Chief Executive Officer of the company. He has been associated with the Company since 2009 and has more than 15 years of experience in the pharmaceutical industry.
• Lalit Sethi is the Chief Finance Officer of the company. He joined the Company on March 14, 2022. He is a chartered accountant and was previously associated with companies such as Tilaknagar Industries Limited, High Polymer Labs Limited, Dabur India Limited, British Health Products (India) Limited, East India Hotels Limited and American Express Bank Limited.
• Prakash Sajnani is the Company Secretary and Compliance Officer, and Assistant Vice President(Finance) of the Company. He has been associated with the Company since February 15, 2006. He has been associated with the Company for more than 18 years as a General Manager.

COMPETITIVE STRENGTHS

• Established presence across the complex fermentation value chain.
• Global leadership in immunosuppressant APIs along with a wide spectrum of complex fermentation-based APIs across multiple therapeutic areas.
• Scaled manufacturing facilities with a consistent regulatory compliance track record and supported by strong R&D capabilities.
• Diversified global customer base with long-standing relationships with key customers.
• Experienced Promoters, management team supported by marquee investor.
• Financial track record of rapid growth and consistent profitability

KEY STRATEGIES

• Continue to increase its API market share and further develop its portfolio.
• Increase the presence of their existing formulations and expand into new formulations.
• Improve cost management and operational efficiencies.

KEY CONCERNS

• Dependence on a limited number of customers for a substantial portion of its revenues.
• They have significant working capital requirements. If they experience insufficient cash flows to fund their working capital requirements, there may be an adverse effect on the business.
• Their international operations expose them to complex management, legal, tax and economic risks, which could adversely affect their business.
• They operate in a highly-regulated industry and various aspects of their operations are subject to extensive laws and regulations in India and internationally.
• The pharmaceutical industry in which they operate is highly competitive

COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2023)

FINANCIALS (RESTATED CONSOLIDATED)

‍OUTLOOK & VALUATION

Concord Biotech is a leading fermentation-based API company with a strong track record. The company has a diversified global customer base, strong R&D capabilities, and scaled manufacturing facilities. However, its international operations expose it to complex management, legal, tax, and economic risks. Additionally, the industry has been facing margin pressure in recent quarters. It is also worth noting that this IPO is purely an OFS, meaning that the company will not receive any proceeds from the offering. While the valuations may not appear overly attractive, this IPO could still deliver a moderate return, thus investors may apply for listing gain.

Disclaimer: The content provided above is for informational and educational purposes only. It does not constitute or imply a recommendation to engage in any securities transactions or investment strategies. We do not provide personalized advice or determine suitability for individuals' financial needs. Please conduct your own analysis and consider your personal circumstances before making any investment decisions.

Pyramid Technoplast Limited is an industrial packaging company engaged in the business of manufacturing polymer based molded products (Polymer Drums) mainly used by chemical, agrochemical, speciality chemical and pharmaceutical companies for their packaging requirements. They are one of the leading manufacturers of rigid Intermediate Bulk Containers (IBC) in India manufacturing 1,000 litre capacity IBC. They also manufacture MS Drums made of mild steel (MS) used in the packaging and transport of chemicals, agrochemicals and speciality chemicals.

OBJECTS OF THE ISSUE

• Prepayment or repayment of certain outstanding borrowings.
• Funding working capital requirements of the company.
• General corporate purposes.

KEY MANAGERIAL PERSONNEL

1. Bijaykumar Agarwal

Managing Director & Chairman of the Company. He has been associated with the Company since 2002. He has over three decades of experience in packaging industry. He looks after various functions in the Company such as finance, raw material procurement, customer servicing, and business development.

2. Jaiprakash Agarwal

Whole-time Director & Chief Financial Officer of the Company. He has been associated with the Company since June 2003. He has over 19 years of experience in the packaging industry. He looks after various functions in the Company such as manufacturing, finance, accounts, sales & marketing and business development.

3. Madhu Agarwal

Whole-time Director of the Company. She holds a bachelor’s degree of commerce from the Calcutta University. She has been associated with the Company since May 2006. She has over sixteen (16) years of experience in human resource compliance and administration.

4. Chandrakant Joge

e Company Secretary and Compliance Officer of the Company. He looks after the overall corporate governance and secretarial matters of the Company. He has an experience of more than seven years.

COMPANY PROFILE

• The Company use blow molding technology to manufacture Polymer Drums and IBCs. Injection molding technology is used for manufacturing caps, closures, bungs, lids, handles, lugs, etc. for in-house use. Their products are marketed and sold under the brand name “Pyramid”.
• The company started commercial production in the year 1998 in Unit I. Presently, they have six strategically situated manufacturing units out of which four (4) are in Bharuch, GIDC, Gujarat and two (2) are situated at Silvassa, UT of Dadra and Nagar Haveli. The seventh (7) manufacturing unit is under construction at the Bharuch, GIDC, Gujarat adjacent to the existing six units.
• The total installed capacity of their Polymer Drum manufacturing units is 20,612 MTPA. The total installed capacity of their IBC manufacturing unit is 12,820 MTPA and the total installed capacity of MS Drums unit is 6,200 MTPA.

COMPETITIVE STRENGTHS

• Diverse customer base. Comprehensive product portfolio.
• Strategic location of their manufacturing units.
• Quality Standard Certifications & Quality Tests.
• Experienced Promoters and senior management team.

KEY STRATEGIES

• Continued focus on Intermediate Bulk Containers (IBC) by expanding their existing facilities.
• Continued focus on Polymer Drums and Mild Steel (MS) drums.
• Explore organic growth opportunities to increase capacity and business.
• Exploit industry opportunities arising out of the current geo-political situation and government policies.

KEY CONCERNS

• Unsecured loans of ₹ 205.39 lakhs taken by the Company from lenders can be recalled at any time. Polymer including polypropylene and polyethylene is the primary raw material consumed by the Company. Polymer is a derivative of crude oil and any substantial increase in price of crude oil or decrease in the supply of polymer could materially adversely affect the Company’s business.
• Their Business has substantial working capital requirements. They require significant amount of working capital for purchasing key raw materials which they procured from domestic and international suppliers.
• The company has experienced negative net cash flow from operating activities in the past . The company face competition from various domestic manufacturers and traders.
• Any ban on polymer based packaging by the Government of India may affect the business.

COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2023)

FINANCIALS (RESTATED CONSOLIDATED)

OUTLOOK & VALUATION

Pyramid Technoplast is a well-established player in the plastic packaging industry with a proven track record of financial performance. The company has a strong brand presence and a wide customer base, and it is also expanding its operations. It has strategic locations for its manufacturing units. However, the company faces some risks, such as competition from new entrants, fluctuations in the price of raw materials, and changes in government policies. Additionally, the company has experienced negative cash flow in the past. Nevertheless, the IPO is fairly priced at a P/E of around 16.24x. Thus, after considering all these factors, high-risk investors may apply for this IPO.

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DISCLAIMER:

The information contained herein are strictly confidential and are meant solely for the information of the recipient and shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written permission of Swastika Investmart Ltd. (“SIL”). The contents of this document are for information purpose only. This document is not an investment advice and must not alone be taken as the basis for an investment decision. Before taking any decision to invest, the recipient of this document must read carefully the Red Herring Prospectus (“RHP”) issued to know the details of IPO and various risks and uncertainties associated with the investment in the IPO of the Company. All recipients of this document must before acting on the given information/details, make their own investigation and apply independent judgment based on their specific investment objectives and financial position. They can also seek appropriate professional advice from their own legal and tax consultants, advisors, etc. to understand the risks and investment considerations arising from such investment. The investor should possess appropriate resources to analyze such investment and the suitability of such investment to such investor’s particular circumstances before making any decisions on the investment. The Investor shall be solely responsible for any action taken based on this document. SIL shall not be liable for any direct or indirect losses arising from the use of the information contained in this document and accept no responsibility for statements made otherwise issued or any other source of information received by the investor and the investor would be doing so at his/her/its own risk. The information contained in this document should not be construed as forecast or promise or guarantee or assurance of any kind. The investors are not being offered any assurance or guaranteed or fixed returns on their investments. The users of this document must bear in mind that past performances if any, are not indicative of future results. The actual returns on investment may be materially different than the past. Investments in Securities market products and instruments including in the IPO of the Company are highly risky and they are generally not an appropriate avenue for someone with limited resources/ limited investment and low risk tolerance. Such Investments are subject to market risks including, without limitation, price, volatility and liquidity and capital risks. Therefore, the users of this document must carefully consider all the information given in the RHP including the risks factors before making any investment in the Equity Shares of the Company.Swastika Investmart Ltd or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither Swastika Investmart Ltd nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. Swastika Investment Ltd may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the Subject Company or third party in connection with the Research Report.CORPORATE & ADMINISTRATIVE OFFICE - 48, Jaora Compound, M.Y.H. Road, Indore - 452 001 | Phone 0731 - 6644000Compliance Officer: Ms. Sheetal Duraphe Email: compliance@swastika.co.inPhone: (0731) 6644 241Swastika Investmart Limited, SEBI Reg. No. : NSE/BSE/MSEI: INZ000192732 Merchant Banking: INM000012102 Investment Adviser: INA000009843 MCX/NCDEX: INZ000072532 CDSL/NSDL: IN-DP-115-2015 RBI Reg. No.: B-03-00174 IRDA Reg. No.: 713.

SBFC Finance Limited is a non-deposit taking non-banking finance company (“NBFC-ND-SI”) offering Secured MSME Loans and Loans against Gold, with a majority of its borrowers being entrepreneurs, small business owners, self-employed individuals, salaried and working-class individuals.

• Among MSME-focused NBFCs in India, SBFC has one of the highest assets under management (“AUM”) growth, at a CAGR of 44% in the period from Fiscal 2019 to Fiscal 2023.
• The company has a diversified pan-India presence, with an extensive network in its target customer segment. As of March 31, 2023, it has an expansive footprint in 120 cities, spanning 16 Indian states and two union territories, with 152 branches.

• The Company’s complete portfolio of loans has in-house origination and benefits from its risk management framework. Leveraging its significant operational experience, it has set up stringent credit quality checks and customised operating procedures that exist at each stage for comprehensive risk management.
• The company primarily focus on small enterprise borrowers, whose monthly income is up to ₹ 0.15 million, with a demonstrable track record of servicing loans such as gold loans, loans for two-wheeler vehicles and have a CIBIL score above 700 at the time of origination.
• SBFC source customers directly through its sales team of 1,911 employees as of March 31, 2023, and has adopted a direct sourcing model through branch-led local marketing efforts, repeat customers or through walk-ins, which has helped it to maintain contact with customers and establish strong relationships with them.
• The company has also created an onground collections infrastructure that is extensive, to ensure that it maintain a high asset quality.

KEY MANAGERIAL PERSONNEL    

1. Neeraj Swaroop is an Independent Director and Chairperson of the Board. He has been associated with the Company since November 21, 2017. Prior to joining this Company, he was associated with Pond’s (India) Limited, Bank of America, HDFC Bank Limited, Standard Chartered Bank and Singapore Exchange Limited
2. Aseem Dhru is the Managing Director and Chief Executive Officer of the Company. He has over 25 years of experience in the banking industry and has been associated with the Company since September 28, 2017.
3. Narayan Barasia, is the Chief Financial Officer of the Company. In his current role, he is responsible for financial management, accounts, tax, treasury, secretarial and legal matters. He has more than two decades of experience.
4. Jay Mistry, is the Company Secretary and Compliance Officer of the Company. In his current role, he is responsible for secretarial and regulatory compliance of the Company. He has more than five years of experience in securities and corporate laws, and corporate compliances.
5. Mahesh Dayani, is chief business officer of the company. He has over 22 years of experience across wholesale and retail banking.
6. Saiprashant Menon is the chief collection officer of the company.He has more than 21 years of experience in collections.

COMPETITIVE STRENGTHS

• Diversified pan-India presence with an extensive network to cater the target customer segment.
• 100% in-house sourcing, leading to favourable business outcomes.
• Comprehensive credit assessment, underwriting and risk management framework.
• Extensive on-ground collections infrastructure leading to maintenance of asset quality.
• Healthy liability franchise with low cost of funds.
• Consistent financial performance backed by profitable growth
• Experienced, cycle-tested and professional management team

KEY STRATEGIES

• Leverage pan-India network to deepen its penetration in the target customer segment.
• Expand its product portfolio through offering affordable housing finance.
• Diversify its source of borrowings and improve operating leverage.

KEY CONCERNS

• It require substantial capital for its business and any disruption in its sources of capital could have an adverse effect on the business.
• Their business is particularly vulnerable to interest rate risk, and volatility in interest rates for both lending and treasury operations, could have an adverse effect on it.
• Inability to compete effectively in an increasingly competitive industry may adversely affect its net interest margins, income and market share.
• Any downgrade in its credit ratings could increase borrowing costs.
• Risk arising from collateral for its portfolio.

COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2023)

FINANCIALS (RESTATED CONSOLIDATED)

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‍OUTLOOK & VALUATION:

SBFC is a well-established company with consistent financial performance and a stable asset quality; it is showing growing AUM and a decline in its NPAs. It has a diversified presence across India, and its access to diversified funding sources is a key contributor to its growth. However, there are a few risks as well. SBFC is dependent on a few key customers. Secondly, The company is also exposed to fluctuations in the price of securities it takes as collateral for loans. Additionally, an increase in interest rates could pose a challenge for the company. Nevertheless, the Issue looks fairly priced, and after considering all these factors, we believe that investors may consider to apply for this IPO.

Disclaimer: The content provided above is for informational and educational purposes only. It does not constitute or imply a recommendation to engage in any securities transactions or investment strategies. We do not provide personalized advice or determine suitability for individuals' financial needs. Please conduct your own analysis and consider your personal circumstances before making any investment decisions.

About the Company

Archean Chemical Industries Limited, a renowned specialty marine chemical manufacturer produces and exports Bromine, industrial salt, and sulfate of potash as the main products. In Fiscal 2021, the firm was the leading exporter of industrial salt and bromine, and both products were among the products that have the lowest manufacturing costs in the world.

Archean Chemical Industries IPO

The specialty chemical manufacturer Archean Chemical Industries' initial public offering (IPO) is set to open on November 9 and end on November 11. The IPO's price range was set at Rs. 386 to Rs. 407 per share. In addition to an offer for the sale of 657 crores by the promoters and current shareholders, Archean Chemical Industries intends to raise 805 crore through a fresh issue of shares through the IPO.

According to the firm, 75 percent of the issue is set aside for qualified institutional investors, 15 percent is allocated to non-institutional investors, and the remaining 10 percent is allocated to retail investors.

Purpose of the IPO

The objective of the Offer for Sale (OFS) is to enable the selling shareholders to sell up to 1,61,50,000 equity shares, with the selling shareholders receiving the net proceeds.

• The company would use the net proceeds from the new issuance to redeem or redeem earlier, in full or in part, the NCDs it has issued totaling up to Rs 644 crore.
• Corporate general objectives.

Archean Chemical IPO – Details

IPO Opening Date 09 November 2022 IPO Closing Date 11 November 2022 Issue Type Book Built Issue IPO Issue Size ₹1462.31 Crore Face Value ₹2 per equity share IPO Price₹386 – ₹407 Market Lot 36 Shares Min Order 36 Shares Listing At BSE NSERegisterLink Intime India Private Limited QIB Shares Offered 75% Retail Shares Offered 10% NII (HNI) Shares Offered 15%

Strengths of the Company

The company has a competitive advantage since the industry in which it works has substantial entry barriers.

In Fiscal 2021, the company was India's top exporter of industrial salt and bromine.

• The company has a skilled management team, promoters, financial investors, and stakeholders
• The company has built integrated manufacturing sites that have shown to be cost-effective for the company.

Risk and Concerns

• unfavorable government laws and regulations
• a delay in capacity growth
• failure in a bromine derivative venture
• client revenue concentration risk
• unfavorable sales-mix and sales realization
• Unfavorable changes in exchange rates and competition.

Financials in Brief

Its revenue increased by 36% and 78% during the course of FY20-22, while its EBITDA margin increased from 24.3% to 41.3%. The company recorded FY22 revenue of Rs11.3 billion, up 53% YoY, and FY22 EBITDA of Rs4.8 billion, up 78% YoY. In comparison to FY21's PAT of Rs666mn and FY20's net loss of Rs362mn, FY22's PAT was Rs1.9bn. From 92% in FY21 to 72% in FY22, ROE has decreased. The business reported 2QFY23 sales of Rs 4 billion, up 99% YoY, EBITDA of Rs 1.6 billion (margin of 40.2%), and PAT of Rs 844 million, up 4.5 times YoY. In FY22, the company's Net Debt/Equity ratio dropped from 11.4x in FY21 to 3x.

GMP, Listing & Allotment Date

Market observers report that the Grey Market Premium (GMP) for the Archean Chemicals IPO is now 70 per equity share. The shares will be allocated on November 16, 2022. On November 21, 2022, the Archean Chemical IPO is most likely to list on both NSE and BSE

Outlook & Valuation

In the calendar year 2021, the Indian chemicals industry was valued at US$178 billion, representing approximately 3- 4% of the value of the global chemicals industry, and with rapid industrialization, this market is expected to grow even more. Archean Chemical Industries Ltd. is a formidable player in the bromine, industrial salt, and sulphate potash industry. It has witnessed a significant improvement in its top-line and bottom-line performance in the last three years. Nevertheless, the high debt-to-equity ratio (3.25 based on March, FY 22 consolidated numbers), high product as well as key customer concentration, and restructuring of loans during FY 17-18 make us averse to the issue. Additionally, the 3 years of data is limited for concluding the sustainability of high growth and margins. In short, considering all the shortcomings, investors should consider this issue for listing gains only due to the company’s reasonable valuations and presence in the specialty chemical industry.

About the Company

Fusion Micro Finance Ltd (FMFL), founded in 1994, provides financial services to women entrepreneurs from economically and socially disadvantaged backgrounds. Its network and services have increased access to formal credit (loans) at low-interest rates, ultimately improving the lives of people in rural India. FMFL provides financial assistance as well as financial literacy classes.

FMFL operates on a joint liability group-lending concept, in which a small group of women (5-7 members) guarantees each other's loans. The firm has largely focused on strategic regional diversification with a rural emphasis, embracing technology for development, nurturing and developing staff, and risk management.

Fusion Micro Finance Limited IPO

IPO DateNov 2, 2022 to Nov 4, 2022Listing Date[.]Face Value₹10 per sharePrice₹350 to ₹368 per shareLot Size40 SharesIssue Size[.] shares of ₹10(aggregating up to ₹1,103.99 Cr)Fresh Issue[.] shares of ₹10(aggregating up to ₹600.00 Cr)Offer for Sale13,695,466 shares of ₹10(aggregating up to ₹[.] Cr)Issue TypeBook Built Issue IPOListing AtBSE, NSEQIB Shares OfferedNot more than 50% of the Net OfferNII (HNI) Shares OfferedNot less than 15% of the Net OfferRetail Shares OfferedNot less than 35% of the OfferCompany PromotersThe promoters of the Company, namely, Devesh Sachdev, Creation Investments Fusion, LLC, Creation Investments Fusion II, LLC and Honey Rose Investment Ltd

600 crore fresh equity shares will be issued in Fusion Microfinance IPO. Apart from these, an offer for sale (OFS) of 13,695,466 equity shares by promoters and existing shareholders is included. Devesh Sachdev, Mini Sachdev, Honey Rose Investment Ltd., Creation Investments Fusion, LLC, Oikocredit Ecumenical Development Co-operative Society U.A., and the Global Financial Inclusion Fund.

Objects of the Fusion Micro Finance Limited IPO

The issue comprises OFS and Fresh Issue. Net Proceeds from Fresh Issues will be used to Augment the capital base of the Company.

Fusion Micro Finance Limited IPO financials

• The company's revenue increased at a 16.92% CAGR from Rs.720 Cr in FY20 to Rs.1151 Cr in FY22.
• Profit after tax fell from Rs.69.61 Cr in FY20 to Rs.21.76 Cr in FY22, owing mostly to an increase in the impairment cost on financial assets.
• The operating margin fell to 4.7% in the previous fiscal year from 19.7% in FY20.
• As of June 30, 2022, the company's Gross GNPA was 3.67%, while its Net NPA was 1.35%.

Competitive Strengths

• Broad and Diversified Pan-India Presence.
• Proven execution skills with a strong rural focus.
• Access to Diversified Capital Sources and Effective Asset Liability Management
• Proven execution skills with a strong rural emphasis.
• Access to diverse financing sources and effective asset liability management
• Strong underwriting and risk management policies.
• A cutting-edge technological operating model.
• Stable and experienced management team backed by prominent investors.

Risk Factors

1) In the previous three years, company margins have been declining. Profits in FY20 were Rs 69.6 crores, compared to Rs 21.8 crores in FY22. Despite a rise in revenues, a decline in margins is a major issue.2) OFS receives Rs 504 crores from the total IPO proceeds, while the firm receives nothing.3) A Covid epidemic has previously harmed the industry. Such pandemics are unpredictable and may have an influence in the future.4) An increase in NPAs might have an impact on the firm.5) The microfinance business in India confronts specific risks owing to the borrowers it serves, which are not often connected with other types of lending.

Outlook & Valuation

The microfinance industry has recorded healthy growth in the past few years, with microfinance lenders emerging in good numbers. Fusion Micro Finance is one such company that is among the top 10 NBFCMFIs in India. It offers loans to women entrepreneurs. Its business runs on a joint liability group-lending model, wherein a small number of women form a group and guarantee one another’s loans. The company works with a strong focus on rural areas and has a well-diversified and extensive pan-India presence. The company also has access to diversified and recognized sources of capital and has a good financial track record. Although this company's margins are now in declining mode and it is facing risk due to the category of borrowers it serves, an increase in the level of NPAs could also be a concern for the company. Secondly, the company demands a price-book (P/B) multiple of 1.8 on a post-IPO basis, whereas its peers like credit access command a P/B of 3.3. Thus, considering all the factors, we recommend a Subscribe rating for this issue, but only for high-risk investors with a long-term view.

GMP

According to market watchers, the shares of Fusion Microfinance are trading at a premium (GMP) of ₹24 in the gray market today. The company's shares are expected to be listed on the stock exchanges BSE and NSE on Tuesday, November 15, 2022. The allotment of shares is expected on 10 November 2022. The company has said in its draft paper that it wants to use the capital received from this issue to increase its base.

About the Company

Global Health Limited is one of the major private multi-specialty tertiary care providers in India's North and East. Cardiology and cardiac science, neurosciences, oncology, digestive and hepatobiliary sciences, orthopedics, liver transplant, and kidney and urology are among the company's major specialties.

Global Health Limited now operates four hospitals under the "Medanta" name (Gurugram, Indore, Ranchi, and Lucknow). The Medanta Institutional Tissue Repository was created in 2017 to encourage biomarker and other tissue-based research.

Global Health IPO Details

IPO DateNov 3, 2022 to Nov 7, 2022Listing Date[.]Face Value₹2 per sharePrice₹319 to ₹336 per shareLot Size44 SharesIssue Size[.] shares of ₹2(aggregating up to ₹2,205.57 Cr)Fresh Issue[.] shares of ₹2(aggregating up to ₹500.00 Cr)Offer for Sale50,761,000 shares of ₹2(aggregating up to ₹1,705.57 Cr)Issue TypeBook Built Issue IPOListing AtBSE, NSEQIB Shares OfferedNot more than 50% of the OfferNII (HNI) Shares OfferedNot less than 15% of the OfferRetail Shares OfferedNot less than 35% of the OfferCompany PromotersDr. Naresh Trehan is the company promoter.

The IPO of Global Health Limited, a company that operates and manages hospitals under the Medanta brand, is scheduled to open for subscription on November 3. According to the Red Herring Prospectus (RHP), investors can invest in this IPO till November 7. According to merchant banking sources, the size of the IPO could be around Rs 2,200 crore. Under the IPO, fresh equity shares of Rs 500 crore will be issued. In addition, 5.08 crore equity shares will be sold by the promoters of the company under offer-for-sale (OFS).

As a part of the OFS, Anant Investments, private equity major Carlyle Group and Sunil Sachdeva (jointly with Suman Sachdeva) will sell the shares. At present, Anant Investments holds a 25.64 percent stake in Global Health and Sachdeva holds 13.41 percent in the company. The funds received under this IPO will be used for the repayment of loans and for general corporate purposes.

Objective

The net proceeds of the new issuance will be used to repay debt, finance capital expenditure, fund the future acquisition of subsidiary Bio needs India, fund working capital requirements, and for general corporate purposes.

Competitive Strengths

1. Global Health Limited is the country's major provider of tertiary and quaternary health care. They also have clinical skill in addressing crucial cases that is well-known.
2. Global Health Limited has world-class facilities with cutting-edge infrastructure, medical equipment, and technology based on the most recent breakthroughs.
3. India's leading tertiary and quaternary care provider, renowned for clinical skill, particularly in dealing with complex cases.
4. Concentrate on clinical research and academia.
5. Large-scale hospitals with world-class infrastructure, cutting-edge medical technology, and medical equipment.
6. Proven track record of excellent operational and financial success.
7. Concentrate on underserved areas with dense populations, as well as the presence in major or capital cities of big states (NCR, Lucknow and Patna).
8. Opportunities for expansion in current facilities and diversification into new services, such as digital health.
9. Skilled senior management with significant institutional shareholder backing.

Risks

1. The firm's revenue is concentrated in the country's north and east, and any substantial change in geographic or economic conditions at these rates would have a direct impact on the company.
2. The firm is also vulnerable to the inherent risks of being in the healthcare industry, as well as any legal threats.
3. The company's total income, earnings per share ("EPS"), net asset value ("NAV"), return on net worth ("RoNW"), net profit margin, and return on capital employed ("RoCE") may be lower than those of some of the listed comparable industry peers, as may its price-to-earnings ("P/E") ratio, enterprise value ("EV") to EBITDA ratio, and market capitalization to total income ratio.
4. Its subsidiaries, MHPL and GHPPL, have suffered losses in the previous fiscal years.
5. Currently operates just five hospitals and six multispecialty clinics, which account for nearly all of its income. Inability to attract/retain physicians, nurses, and other healthcare personnel.

Global Health Financials

Over the fiscal years 2017-22, the Indian healthcare delivery industry is expected to develop at a 10-12% CAGR to a value of roughly Rs. 5 lakh crore. Furthermore, with strong sector macros such as lower hospital bed density in relation to population, lower expenditure on healthcare infrastructure as compared to developed and several developing countries, rising income levels & increasing affordability for healthcare services, and the government's Ayushman Bharat scheme, the healthcare delivery market is expected to grow at a 13-14% CAGR over FY22-26E to reach Rs. 8.3 lakh cr.

Outlook & Valuation

With long-term structural factors supporting growth, renewed impetus from PMJAY, and the government's focus shifting onto the healthcare sector, the healthcare delivery market is expected to grow at 13–15%. GHL is one of the largest private multi-specialty tertiary care providers operating in the North and East regions of India and operating under the most popular healthcare brand Medanta. It has generated strong revenue growth in the last 3 years, with a minor setback in FY21. Coming to the offer, the major proportion in this issue is the offer for sale, which could be a limiting factor in this issue. The promoter shareholding would come down to 33% post-IPO, which is another concern; nevertheless, the issuer has good patient volumes and cost efficiency, and its financial profile also shows an increasing trend. Finally, the issue is fairly priced at a P/E of 43 as compared to the average industry P/E of 51.93. Thus, we recommend a Subscribe rating for the long term.

GMP

According to IPO Watch, the grey market premium (GMP) for the Global Health IPO is now rs 25 per share. This suggests that the stock will most likely be offered at 361, a 7.44% premium to the IPO price.

Listing Date

The company's shares will be distributed to winning bidders on November 11, and refunds will be issued on November 14. Shares will be credited to the successful bidders' Demat accounts by 15 November, and the stock will begin trading on the stock markets on 16 November.

About the Company

Bikaji Foods International Limited is a leading fast-moving consumer goods ("FMCG") brand in India. The product range consists of six major categories: bhujia, namkeen, packaged sweets, papad, western snacks, and other snacks, which principally comprise gift packs (assortment), frozen food, mathri range, and cookies. They sold over 250 items under the Bikaji brand in the six months ending September 30, 2021. Shiv Ratan Agarwal, Deepak Agarwal, Shiv Ratan Agarwal (HUF), and Deepak Agarwal are the company's promoters (HUF). The category allocation for qualifying institutional buyers is 50.0%, 15.0% for non-individual investors or high net worth individuals, and 35.0% for retail investors.

Bikaji Foods International Limited IPO

Opening Date03, November 2022Closing Date07, November 2022Refund Initiation14, November 2022Listing Date16, November 2022Face Value₹1 per equity share IPO Price Band₹285 to ₹300 per equity share Minimum Order Quantity50 Shares Issue Size₹881.22 Cr

On Thursday, Bikaji Foods launched an initial public offering (IPO) to obtain funds up to Rs 881 crore. The IPO Bikaji is purely an offer for sale (OFS) by existing shareholders, which means the company would get no proceeds from the transaction. Fresh shares will not be issued in this.

For three trading days till November 7, Bikaji Foods shares will be available for bidding between 10 a.m. and 5 p.m. The IPO consists of an offer for sale (OFS) of approximately 2.94 crore equity shares by promoters and existing shareholders. Bikaji Foods raised 262.11 crores from 36 anchor investors ahead of its IPO on November 2.

Bikaji Foods said in a BSE filing that it has finalized the allocation of 87.37 lakh equity shares to anchor investors after consulting with merchant bankers. These shares were offered to anchor investors for $300 each.

Objective of the Issue

Receive the advantages of listing equity shares on stock exchanges.

Bikaji expects the listing to enhance company exposure and brand image while also offering a public market for equity shares in India.

Financials

Bikaji's revenue from operations grew 22.90% to Rs. 1610.96 crore for fiscal 2022 against Rs. 1310.75 crore for fiscal 2021, primarily due to increase in the sale of food products, and an increase in volume and realization of products, in particular, bhujia, Namkeen, papad, western snacks, and packaged sweets, while its net profits stood at Rs 76.03 crore in FY22. For the three months ending June 30, 2022, revenue from operations stood at Rs 419.16 crore and net profit was Rs 15.70 crore.

Strengths

• Bikaji is a well-known pan-India brand that focuses on a varied variety of quality goods, authentic ethnic Indian flavor, creative packaging, and smart pricing strategies that cover all important price points.
• The firm offers a diverse product range targeted at various consumer categories and marketplaces, with over 300 products now available.
• It has a large distribution network in India, with 6 depots, 38 super stockists, and 416 direct and 1,956 indirect distributors.
• BFIL has seven functioning production plants, including four in Bikaner (Rajasthan), one in Guwahati (Assam), one in Tumakuru (Karnataka), and one in Muzaffarpur (Bihar).
• Experienced and well-qualified promoters and senior management team with a proven track record of Consistent financial performance

Risks

• The Company will not receive any proceeds from the Offer
• Investment in unsecured debt instruments.
• Major reliance on revenue from the sale of its bhujia and family pack stock-keeping units.
• Inadequate or interrupted supply, as well as price fluctuations in raw materials and packaging materials, might have a negative impact on the business.
• Inability to sustain or grow the popularity of its "Bikaji" brand.

Outlook & Valuation

Due to shifting lifestyles, rising incomes, and urbanization, India's packaged food industry has experienced tremendous growth over the past five years. Currently, pan-Indian demand for regional snacks is booming. Bikaji is a popular brand in this segment and is among the top three Indian ethnic snack manufacturers in India with a pan-India presence. The company has a strong management team and a significant percentage of promoter holdings. It generated strong revenue growth in the last 3 years where revenue improved from Rs. 1082.9 crores in FY2020 to Rs. 1621.45 crores in FY2022. However, the company's margins are on the declining side and a P/E valuation of 95.2 looks expensive. Finally, this issue is a complete offer for sale, and thus we recommend a Subscribe rating, but only for high-risk investors.

Listing Dates

The company will finalize the IPO share allotment on November 11 and refunds will be credited to the bank accounts of unsuccessful investors by November 11. The IPO shares will be transferred to Demat accounts of eligible investors by November 14. Bikaji Foods will make its debut on the BSE and National Stock Exchange on November 16.

Baba Ramdev led consumer products maker Patanjali Group aims to list four of its companies

Over the next five years, the Patanjali Group intends to IPO 4 of its group companies. These four firms are Patanjali Ayurveda, Patanjali Medicine, Patanjali Lifestyle, and Patanjali Wellness.

The Objective of the IPO

The objective of launching is to strive to reach a market capitalization of over Rs 500,000 crore. The second objective would be to compete with international rivals like Unilever and P&G with locally made goods.

Patanjali, was co-founded in 2006 by renowned yoga teacher Baba Ramdev. Acharya Balkrishna, his business partner, has an estimated net worth of $2.1 billion, Millions of people watch Baba Ramdev's TV yoga broadcasts, which are well-known. The firm has made an effort to oust consumer behemoths Hindustan Unilever, Colgate Palmolive (India), and Procter & Gamble Hygiene and Health Care from market dominance in the natural sector.

Ruchi Soya Industries FPO

In 2019, Patanjali Ayurveda acquired Ruchi Soya through a resolution procedure for Rs 4,350 crore and rebranded the company as Patanjali Foods. Ruchi Soya raised Rs 4,300 crore through its follow-on public offer (FPO) to pay down its bank and long-term borrowings this business is already a stock market listed company.

The main activities of Ruchi Soya Industries Ltd. are the processing of oilseeds and the refinement of crude oil for consumption. Seed Extraction, Vanaspati, Oils, Food Products, Wind Power Generation, and Others are some of the company's operating segments. Under names including Ruchi Gold, Mahakosh, Sunrich, Nutrela, Ruchi Star, and Ruchi Sunlight, Ruchi Soya markets its goods. Nearly Rs 50,000 crores are its net worth.

IPOs: Patanjali Ayurved, Patanjali Wellness and Patanjali Medicine and Patanjali Lifestyle

Patanjali Ayurved, headed by Baba Ramdev, sold its food retail division to the group's Ruchi Soya Industries Ltd. last month for Rs. 690 crores. Following this, the promoters' stake was reduced to 80.82%, and the public ownership was at 19.18%. According to SEBI regulations, the business must reduce the founders' ownership in order to reach the required minimum public shareholding of 25%. Patanjali has about three years to reduce the promoters' share to 75%.

On Wednesday, the share of Patanjali Foods hit the upper circuit of 5%. The stock price has increased by 30% over the last month and by 40% over the last six months.

The IPO of Patanjali Ayurved may be the first IPO. As Patanjali Ayurved is an established firm and its product range, reach, customer base, profitability, and future projection, make it most favorable from the perspective of an IPO.

Patanjali Ayurveda sells Indian medicines including tablets to promote immunity, culinary ingredients, and personal care product.

The next in line would be Patanjali Medicine, which also owns Divya Pharmacy, followed by Patanjali Wellness, which manages hospital and outpatient clinic networks in India. The objective of launching this IPO is to operate 25,000 beds under Patanjali Wellness. It has around 50 such centers and has plans to make it to 100, including IPD and OPD, and then gradually expand on the franchise model.

The last would be Patanjali Lifestyle. Clothing, transportation, cattle feed, and several other newly emerging businesses are all part of Patanjali Lifestyle.

Patanjali Revenues

The current revenue for Patanjali is Rs. 40,000 crores.

From Rs 8,778.03 crore in FY21 to Rs 9,241.27 crore in FY22, the company's FMCG business revenue rose.

In FY22 compared to FY21, its Ayurveda business generated revenues of approximately Rs 1,273.92 crore.

From Rs 9,810 crore in FY21 to Rs 10,664 crore in FY22, the company's total revenue grew.

Compared to FY21, Patanjali's net profit was down to Rs 740.38 crore from Rs 745.03 crore.

The Future Plans

By becoming the largest FMCG firm in the nation Patanjali will significantly contribute to making India a worldwide economic giant. They are putting up an action plan to get Patanjali Foods' networth to Rs 500,000 crore.

At the national level, they are developing a new indigenous and upright (Sattvik) Multi-Level Marketing model for Natural Nutraceuticals that will benefit the general public's health and prosperity and give accurate information about nutritious food alternatives.

Last year in October, Oyo parent company Oravel Stays Ltd filed a draft red herring prospectus (DRHP) with SEBI to launch an Rs 8,430-crore IPO

The prospectus was approved in January of this year, and the IPO is slated to start soon.

OYO submitted its DRHP with SEBI in October of last year and has now requested permission to file its financial accounts for FY22.

About OYO

OYO is an online marketplace for travelers to locate hotels and other places to stay. Ritesh Agarwal founded OYO in 2013 to aggregate and standardize services given by budget hotels and hostels across India. OYO Hotels and Homes manages India's largest hotel network.

About the IPO

The intial public offering includes a fresh issuance of shares worth Rs 7,000 crore and an offer-for-sale (OFS) by existing shareholders for Rs 1,430 crore. The business also stated that it will explore offering shares worth up to Rs 1,400 crore in a pre-IPO placement.

According to the sources, SoftBank, which owns 48% of OYO, will decrease its interest in the business, and its share sale would likely account for the majority of the OFS. A1 Holdings Inc (Grab) and China Lodging are two other investors that are expected to sell their IPO stakes.

The issue's global coordinators and book running lead managers are Kotak Mahindra Capital Company, JP Morgan India Private Ltd, Citigroup Global Markets India Private Ltd, ICICI Securities, Nomura Financial Advisory and Securities, and JM Financial Ltd.

OYO is aiming to cut the amount of its IPO from $1.2 billion to $800 million.

Negative market sentiment, pandemic challenges, and investor withdrawal have prompted the business to seek a lower valuation of $7 billion to $8 billion.

Objective

The offer consists of a new issue and an OFS totaling 84,300 million. The proceeds from the IPO will be utilized to reduce the company's debt and for other corporate reasons.

The fresh issue component of 70,000 million rupees would be used for repayment/prepayment of certain debt availed by their subsidiaries, 29,000 million rupees would be used for funding their organic and inorganic growth initiatives, and the remainder of the fresh issue would be used for general corporate purposes. The OFS is $14,300 million, with the proceeds going straight to the selling stockholders.

Strong Growth Momentum

OYO reported a 47% increase in monthly gross book value per hotel in Q1 FY23 compared to the previous fiscal quarter.

In Q1 FY23, OYO recorded revenue from operations of Rs 1,459.3 crore.

The company's Adjusted Gross Profit Margin has steadily increased from 33.2% in FY21 to 40.1% in FY22 and 41.3% in Q1 FY23.

Adjusted profits before interest, taxes, depreciation, and amortization (EBITDA) for the first quarter were 72.66 million Indian rupees (IPO).

Oyo recorded a loss of 18.9 billion rupees ($237 million) for the fiscal year ending March 2022, substantially lowering the previous year's loss of 33.83 billion rupees in 2021

The addendum filed by OYO shows that in the first quarter of FY23, i.e. April, May, and June, the company's sales increased and losses have come down. Gross booking value (GBV) was 24.87 billion rupees in the June quarter and 81 billion rupees in fiscal 2022, up 22% from the previous year.

OYO's revenue from operations in the first quarter stood at Rs 1,459.3 crore. The firm has registered a growth of 47% in gross booking value per hotel in Q1FY23. It stood at Rs 3.25 lakh, which was Rs 2.21 lakh in FY22.

Revenue from customer contracts grew 21% to 47.8 billion rupees for the fiscal year ending March 2022

OYO claimed that its general and administrative expenses have come down by 44.4% in FY22. In FY22, it became 515.4 crores, which was Rs 927 crores in FY21. Employee expenses also declined by 26.5% to Rs 1,117.2 crore from Rs 1,520.4 crore in FY21. Oyo said its 'storefronts' stood at 1.68 lakh at the end of Q1FY23, from around 1.57 lakh at the end of FY21.

Conclusion

Last year, the hotel-booking start-up Oravel Stays announced that it has sustained net losses every year since its inception and that its capacity to attain profitability may be delayed because of the economic consequences of the epidemic.

But now SEBI may consider the IPO document of OYO Hotels after the submission of financials for the second quarter. Considering this speed, OYO Hotels can launch its IPO by the fourth quarter of FY23. OYO submitted its DRHP with SEBI in October of last year and has now requested authorization to file the financial accounts for FY22.

Negative market sentiment, pandemic headwinds, and investor withdrawal have caused the business to seek a lower valuation of $7 billion to $8 billion. Book your IPO today!

Venus Pipes & Tubes Limited (“Venus Pipes”) was incorporated on February 17, 2005. Venus Pipes is a pipes and tubes manufacturer with the sole focus on manufacturing welded and seamless pipes in a single metal category, i.e., stainless steel.

• The company manufactures stainless steel tubular products in 2 broad categories: (i) seamless tubes/pipes; and (ii) welded tubes/pipes.
• Under their brand name “Venus”, they supply their Products for applications in diverse sectors including Chemicals, Engineering; Fertilizers; Pharmaceuticals, Power, Food Processing; Paper; and Oil and Gas.
• Venus Pipes has one manufacturing plant which has separate seamless and welded divisions with the latest product-specific equipment and machinery. As of February 28, 2022, their Manufacturing Facility has a total installed capacity of 10,800 MTPA. They are proposing to expand their existing manufacturing capacity for welded pipes/tubes and seamless pipe/tubes.
• As of February 28, 2022, they have exported their products to 20 countries including Brazil, the UK, Israel and countries in the European Union, etc.

Outlook & Valuation

The company has grown well in the last three financial years due to improvements in the commodity cycles and high steel prices. The company’s current capacity utilization is above 90% and the company expects to more than double its capacity using the SME IPO proceeds. Further, they also plan to set up a piercing line for manufacturing hollow pipes with the capacity of 800 MT per month, as their backward integration strategy.

With the piercing plant, they will be able to produce hollow pipes from the SS round bar. Their products are largely used in industries like pharmaceuticals, food processing, etc. The GoI has announced Production Linked Incentive (“PLI”) schemes for boosting the domestic manufacturing in certain sectors, which shall have a consequent positive impact on their order book.

And schemes like Make in India, and Atmanirbhar Bharat that focus on indigenous manufacturing augur well for the company. China export rebate cessation and BIS norms provide industry tailwinds. The company has priced the issue at a P/E of 21.03 based on annualized numbers for FY22 which is slightly above its industry median P/E. Further, the commoditized & cyclical nature of the business and small issue size makes this issue suitable for aggressive investors only with a long term view.

KEY MANAGERIAL PERSONNEL

• Jayantiram Motiram Choudhary is the Chairman, Non-Executive Director and one of the Promoters of the company. He has been associated with the company since its incorporation. He has over 10 years of experience in the steel industry and over 4 years of experience as a director of Accuracy Shipping Ltd.
• Arun Axaykumar Kothari is the Promoter, Managing Director and CFO of the company. He has been associated with the company since September 14, 2021. He looks after and manages the entire accounting and financial operations of the company and is responsible for setting processes, systems and procedures in place to control and streamline the financial and commercial transactions of the Company.
• Pavan Kumar Jain is the Company Secretary and compliance officer. He has also been associated with the company since August 18, 2020. He has around 3 years of experience in finance, accounting and secretarial work.
• Kumar Shishir C Sinha is the president (marketing) of the company. He has been associated with the company since March 01, 2021. He has over 30 years of experience in stainless steel pipes and tubes.
• Kunal Bubna is the president (finance and accounts) of the company. He has been associated with the company since July 01, 2021. He has over 14 years of experience in accounting and secretarial work.
• Bharat Kumar Prajapati is the production head of the company. He has been associated with the company since September 02, 2020. He has over 20 years of experience in the pipe industry.
• Om Prakash Mishra is the vice-president (operations) of the company. He has been associated with the company since December 13, 2021. He has over 23 years of experience in the manufacturing industry.

COMPETITIVE STRENGTHS

• International Accreditations and product approvals
• Specialized production of Stainless Steel Pipes and Tubes
• Multi-fold demand of the Products
• Customer Diversification
• A key beneficiary of CAPEX in the chemical and engineering sector
• Venus supplies high-quality pipes for industrial use (B2B) and does not cater to the lower-end market of domestic furniture, retail, etc.

KEY STRATEGIES

• Increasing existing capacity
• Backward integration and cost optimization to improve margins
• Tap new geographies to increase export
• Continue to improve operating efficiencies through technology enhancements

KEY CONCERNS

• The issue size is too small.
• Valuation is on the higher side.
• Cyclical and commoditized industry
• Highly competitive industry.

COMPARISON WITH LISTED INDUSTRY PEERS (AS OF 31ST MARCH 2021)

Name of the CompanyEPS (Basic)NAVP/ETotal Income (Cr)RoNW (%)Venus Pipes & Tubes Ltd18.0430.4828.01312.059.18%Jindal Saw Ltd10.02218.399.6910,872.04.69%Ratnamani Metal & Tubes Ltd59.07425.3541.512,341.513.9%

FINANCIALS (RESTATED CONSOLIDATED)

Particulars (Rs. In Millions)FY 2021FY 2020FY 2019Equity Share Capital8.738.738.73Other Equity31.207.543.44Net Worth39.9316.2812.17Revenue from Operations309.33177.81118.75EBITDA34.7811.648.29Profit Before Tax30.956.494.95Net Profit for the year23.634.133.75

DISCLAIMER:

The information contained herein is strictly confidential and is meant solely for the information of the recipient and shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written permission of Swastika Investmart Ltd. (“SIL”).

The contents of this document are for information purposes only. This document is not investment advice and must not alone be taken as the basis for an investment decision. Before taking any decision to invest, the recipient of this document must read carefully the Red Herring Prospectus (“RHP”) issued to know the details of IPO and various risks and uncertainties associated with the investment in the IPO of the Company.

All recipients of this document must before acting on the given information/details, make their own investigation and apply independent judgment based on their specific investment objectives and financial position. They can also seek appropriate professional advice from their own legal and tax consultants, advisors, etc. to understand the risks and investment considerations arising from such investment.

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The users of this document must bear in mind that past performance if any, are not indicative of future results. The actual returns on investment may be materially different from the past. Investments in Securities market products and instruments included in the IPO of the Company are highly risky and they are generally not an appropriate avenue for someone with limited resources/ limited investment and low-risk tolerance.

Such investments are subject to market risks including, without limitation, price, volatility and liquidity and capital risks. Therefore, the users of this document must carefully consider all the information given in the RHP including the risk factors before making any investment in the Equity Shares of the Company.

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About Delhivery Limited IPO

• Delhivery Limited (“Delhivery”) was incorporated on June 22, 2011. Delhivery is the largest and fastest-growing fully-integrated logistics services player in India by revenue as of Fiscal 2021.
• Delhivery provided supply chain solutions to a diverse base of 23,113 Active Customers such as e-commerce marketplaces, direct-to-consumer e-tailers and enterprises and SMEs across several verticals.
• Their in-house logistics technology stack is built to meet the dynamic needs of modern supply chains. They have over 80 applications through which they provide various services.
• Delhivery collects, structures, stores and processes vast amounts of transaction and environmental data to guide real-time operational decision making.
• Delhivery operated 21 fully and semi-automated sortation centres and 82 gateways across India (excluding Spoton) as of December 31, 2021.
• They had a Rated Automated Sort Capacity of 3.70 million shipments per day as of December 31, 2021.
• Delhivery operates a pan-India network and provides its services in 17,488 postal index number (“PIN”) codes, as of December 31, 2021.

Outlook & Valuation

The company has a good track record of execution built on its proprietary technology and has scaled up significantly since its incorporation in 2011 to emerge as the largest fully-integrated logistics player in the country.

The runway of opportunity also appears good given India’s long-term growth prospects and the crucial role logistics plays when it comes to commerce. Another point to note is that, in India, the share of organized players is much lower compared to developed countries.

It reported revenue from operations of ₹4,811 crores for the nine months ended December 21. Annualizing this implies a very strong FY19-22 revenue CAGR of around 57 per cent.

However, the high growth of the company is due to the acquisitions made, organic growth has been slower in comparison to overall growth. The company does not have a past track record of profitability given its focus on growth.

While it has reached near break-even on an adjusted EBITDA basis for nine-month FY22 (adjusted EBITDA margin of negative 0.72%), the profitability at net profit levels is yet to be seen and depends on a lot of variables in the future. Investors need to note that the logistics business is a low-margin business and the scale of operation determines the profitability due to operating leverage.

Nevertheless, the current market environment is not conducive to aggressive risk-taking when it comes to unprofitable companies.

The issue is priced at a Price to Sales ratio of 5.4 (based on annualized revenues of 9 months ending December 2021). We suggest investors enter the company post listing after analyzing how the business evolves in terms of revenue growth and profitability. Thus, we recommend “Avoid” the issue.

KEY MANAGERIAL PERSONNEL

• Sahil Barua is the Managing Director and Chief Executive Officer of the company. He has previously been associated with Bain & Company India Pvt. Ltd. as a Consultant.
• Sandeep Kumar Barasia is the Executive Director and Chief Business Officer of the company. He was previously associated with Bain & Company India Pvt. Ltd. as a Vice-President (Partner).
• Kapil Bharati is the Executive Director and Chief Technology Officer of the company. He has previously served as Founder and Chief Technology Officer at Athena Information Solutions Pvt. Ltd. and as Senior Manager of Technology at Sapient and Publicis Sapient.
• Ajith Pai Mangalore is the Chief Operating Officer of the company. He has been associated with the company since April 6, 2013.
• Amit Agarwal is the Chief Financial Officer of the company. He has been associated with the company since August 4, 2012.
• Pooja Gupta is the Chief People Officer of the company. She has been associated with the company since April 1, 2021.
• Sunil Kumar Bansal is the Vice President - of Corporate Affairs, Company Secretary and Compliance Officer of the company. He has been associated with the company since August 23, 2021.

COMPETITIVE STRENGTHS

• Rapid growth, extensive scale and improvement in unit economics
• The proprietary logistics operating system
• Vast data intelligence capabilities
• The integrated portfolio of logistics services
• Strong relationships with a diverse customer base
• Extensive ecosystem of partners, enabling an asset-light business model and extended reach

KEY STRATEGIES

• Expand investments in infrastructure and network
• Continue to build scale in existing business lines
• Deepen the customer relationships
• Enhance the technology (software and hardware) capabilities
• Expand into high-growth international markets similar to India

KEY CONCERNS

• The company is not yet profitable.
• The issue is overvalued compared to its peers.
• The high growth is due to acquisitions, thus organic growth remains slower.
• The overall industry is highly competitive

COMPARISON WITH LISTED INDUSTRY PEERS (AS OF 31ST MARCH 2021)

Name of the CompanyEPS (Basic)NAVP/ETotal Income (Cr)RoNW (%)Delhivery(8.05)54.79*●+38,382.91(14.66)Peer GroupBlue Dart Express Ltd42.91249.48150.3732,923.6017.08TCI Express Ltd26.15112.8966.888,516.4023.12Mahindra Logistics Ltd4.1679.65119.3932,811.905.05

FINANCIALS (RESTATED CONSOLIDATED)

Particulars (Rs. In Millions)FY 2021FY 2020FY 2019Equity Share Capital16.339.759.58Other Equity27,997.6531,302.5933,481.53Net Worth28,367.9731,704.0633,882.83Revenue from Operations36,465.2727,805.7516,538.97EBITDA(1,370.71)(1,720.47)(1,003.79)Loss Before Tax(4,157.43)(2,688.02)(17,833.04)Net Loss for the year(4,155.37)(2,679.61)(17,837.63)

About LIC

Life Insurance Corporation of India (“LIC”) was established on September 1, 1956, under the LIC Act by merging and nationalizing 245 private life insurance companies in India. LIC has been providing life insurance in India for more than 65 years and is the largest life insurer in India, with a 61.6% market share in terms of premiums (or GWP), a 61.4% market share in terms of New Business Premium (or NBP), a 71.8% market share in terms of a number of individual policies issued, an 88.8% market share in terms of a number of group policies issued for Fiscal 2021, as well as by the number of individual agents, which comprised 55% of all individual agents in India as at December 31, 2021.

• LIC is ranked 5th globally by life insurance GWP (comparing the LIC’s life insurance premium for Fiscal 2021 to the global peers’ life insurance premium for 2020) and 10th globally in terms of total assets (comparing the LIC’s assets as of March 31, 2021, with other life insurers’ assets as at December 31, 2020).
• LIC is the largest asset manager in India as of December 31, 2021, with AUM of ₹40.1 trillion, on a standalone basis which is 1.1 times the entire Indian mutual fund industry’s AUM.
• The company’s product focus is more on PAR Products
• The primary distribution channel for an individual business is the agency, which accounted for 96.2% of NBP for individual products as of Dec ’21.
• The favourable demographic tailwinds support India’s growth story, combined with under penetration in life insurance. GWP for life insurers is forecasted to grow at 14-15% CAGR in FY21-26 to reach Rs. 12.4 lakh crore.

Issue Offer

Issue Opens on May 4, 2022Issue Close on May 9, 2022Total IPO size (cr)19,517- 20,557Fresh issue(cr)-Offer For Sale (cr)20,557Price Band (INR)902 - 949Market Lot15 shares Face Value (INR)10 Retail Allocation 35% Listing On May 17, 2022

Issue Break-up (%)

QIB Portion50NIB Portion15Retail Portion35

Shareholding (No. of Shares)

Pre Issue6,324,997,701Post Issue6,324,997,701

Indicative Timetable

Finalisation of Basis of Allotment May 12, 2022Refunds/Unblocking ASBA Fund May 13, 2022Credit of equity shares to DP A/c May 16, 2022Trading commences May 17, 2022

Objects of the Issue

• To carry out an offer for
• To achieve the benefits of listing

Outlook and Valuation

LIC's embedded value, which is a measure of the consolidated shareholder's value in an insurance company, is around Rs 5.4 lakh crores as of September 30, 2021. So, at a valuation of ~Rs. 6 lakh crores, the issue is priced at a Price to Embedded Value of ~1.1,  which is at a discount compared to its listed Indian as well as global peers. LIC is synonymous with insurance in India and enjoys a huge competitive advantage in terms of brand value, a huge network of agents and behemoth scale.

However, there are concerns with the company like losing market share to private players, lower profitability & revenue growth compared to private players, lower VNB margins and short term persistency ratios, but the valuation at Price to Embedded Value of 1.1 discounts the above concerns.

The company plans to focus on protection products, non-par products, and linked products to improve its VNB margins in the future. The issue has an Rs. 60 discount for policyholders and an Rs. 45 discount for employees and retailers.

Nevertheless, investors must be aware that the business of insurance is long term in nature; therefore we recommend this issue for the long term only.

KEY MANAGERIAL PERSONNEL

• Raj Kumar is the Managing Director of LIC. He joined LIC in the year 1984 and has experience in the insurance sector. He has also served as the CEO of LIC Mutual Fund Asset Management Ltd and was also the zonal manager, Bhopal, executive director (estate and office services), Mumbai, amongst others, of LIC. He was also the senior divisional manager of the Gorakhpur and Jaipur divisions of LIC.
• Siddhartha Mohant, Ipe Mini, and Bishnu Charan Patnaik are the other three managing directors.
• Pramod Ranjan Mishra is the Executive Director (investment operations) and Chief Investment Officer of LIC. Previously, he has held various other positions in LIC and has also held the position of CEO, LIC (Nepal) Ltd.)
• Muraleedharan Purushothaman is the Executive Director – of marketing/ product development and chief marketing office of LIC. He joined LIC on November 1, 1985. He has also held several other positions in LIC and was also the CEO of Life Insurance Corporation (Nepal) Ltd.
• Sunil Agrawal is the Chief Financial Officer of LIC. He joined LIC on February 21, 2022.
• Tablesh Pandey is the Executive Director (investment – risk management and research)/ chief risk officer/ actuarial core group central office) of LIC. He joined LIC on February 22, 1988.
• Pawan Agrawal is the Company Secretary and Compliance Officer of LIC. He joined LIC on April 16, 2021.

COMPETITIVE STRENGTHS

• 5th largest life insurer globally by GWP and the largest player in the fast-growing and underpenetrated Indian life insurance sector.
• A behemoth, having a huge scale leading to one of the lowest operating expense to income ratios in the Industry.
• Great brand value and product recall.
• The largest network of agents.
• One of the largest distribution networks and geographical reach.
• Largest asset manager in India with an established track record of financial performance and profitable growth.

KEY STRATEGIES

• Increasing market share of bancassurance channel by tying up with more bank partners and improving their productivity by providing them with digital solutions for on-boarding customers for their products.
• Increasing up-selling and cross-selling to individual customers and beneficiaries of group products to cover their varied financial needs.
• Improving the share of non-participating products by increasing the focus on sales of Ulip, protection products, pension/annuity products and health insurance.
• Increasing direct sales of their individual products on their website by increasing marketing of their corporation’s website and adding more products that are available for purchase on their website.

KEY CONCERNS

• The government will still be the major shareholder and key manager, thus any future government intervention or adverse action might be detrimental to shareholders.
• Insurance is a complex business for novice investors to understand.
• There are concerns with the company like losing market share to private players, lower profitability & revenue growth compared to private players, lower VNB margins, and short-term persistency ratios.
• High dependency on agency network, increasing its commission costs.

COMPARISON WITH LISTED INDUSTRY PEERS (AS OF 31ST MARCH 2021)

Name of the Company EPS (Basic)EV Rs. BNP/EV Total Income (Cr)RoNW (%) Life Insurance Corporation of India 4.705, 396.81.1405, 85045.65% Peer Group SBI Life Insurance Co.14.55302.03.7750,25014.00%HDFC Life Insurance Co.6.74295.43.9638,58015.75%ICICI Prudential Life Insurance Co.6.66302.02.4935,73010.48%

FINANCIALS (RESTATED CONSOLIDATED)

Particulars (Rs. In Millions)FY 2021FY 2020FY 2019Equity Share Capital100.00100.00100.00Other Equity6,705.47891.66798.44Net Worth6,514.64854.65815.33Premium Earned405,398.50382,475.52339,971.63Income from Investments285,520.42242,836.31225,043.54EBITDA2,980.352,718.522,642.37Net Profit for the year2,974.142,710.482,627.38

LIC IPO Updates

Swastika comes with the fresh information of Life Insurance Corporation of India's initial public offering (IPO) which will hit the market next month. Here, we will discuss the latest LIC IPO Updates including issue, closing, allotment date and more.

The IPO comprises over 31.6 crore shares or five per cent of the government's stake in the insurance behemoth.

India is all set to launch the country's largest-ever public offering, as the state-run Life Insurance Corporation of India (LIC) filed a Draft Red Herring Prospectus (DRHP) with the SEBI for selling a five per cent stake by the government.

Employees and policyholders of the insurance giant would get a discount over the floor price.

For this, it is mandatory that the policy should have been issued on or before February 13, 2022. Investors must link PAN to the policy by February 28, 2022

About LIC IPO Latest Information February 2022

LIC IPO Price Band Coming soon LIC IPO Date Coming soon Fresh issue NIL Offer For Sale 316,249,885 shares Total IPO size 316,249,885 shares Face Value INR 10 per share Minimum bid (lot size) Coming soon Retail Allocation 35% Listing On NSE, BSE

How many Shares in LIC IPO are Reserved for HNIs and Retail Investors?

The investors' portion for QIB is 50%, NII is 15%, and Retail is 35%.

Of which, 50 percent will go to retail investors, 15 percent to non-institutional investors (NII) and 35 percent to qualified institutional buyers (QIB).

Recent Updates For LIC Policyholders

If a policyholder does not update PAN details by February 28, 2022, they will not be eligible for availing the reserved shares of LIC's IPO.

A policyholder shall ensure that their PAN details are updated in the policy records of LIC at the earliest.

How to Apply for a LIC IPO?

To get the benefit of a discount on the price of LIC IPO. LIC policyholders Should link your Pan Card with Policy; the following are the steps to link your Pan.

How to Update PAN details on the LIC Website

1. Visit the official LIC website https://licindia.in/ Or Link your policy with PAN directly https://linkpan.licindia.in/UIDSeedingWebApp/
2. Select the 'Online PAN Registration' option from the home page.
3. Tap the 'Proceed' button on the Online PAN Registration page.
4. Provide your correct email address, PAN, mobile number, and LIC policy number.
5. Enter the Captcha code in the box.
6. Click on 'Get OTP'
7. Once you've received the OTP, input the OTP digits into the space provided for it on the port.
8. LIC Versus Indian Peers

Life Insurance Corporation of India (LIC) continues to be the market leader, with a 66% share in the overall life insurance market, followed by HDFC

Life Insurance at 9.8%, ICICI Prudential Life Insurance at 8.4%, Aditya Birla Sun Life Insurance at 5.4% and SBI Life Insurance at 4.2%.

"It is not surprising that LIC has maintained its leadership position amid the Covid-induced crisis," said Madan Sabnavis, chief economist at CARE Ratings Ltd., "due to its vast network across India and strong brand recall among customers."

Indian Govt plans to tap around 180 investors in mega roadshows of LIC

For the roadshows of Life Insurance Corporation of India's (LIC's) listing, the government will approach large investors who have not yet anchored any initial public offering (IPO) and those who focus only on large public offerings, officials in the know said.

In an effort to connect with more than 180 investors, government officials have started virtual roadshows.

The roadshows are part of the government's preparations for the biggest-ever public listing in India.

The government wants to make sure that there is a good spread among anchor investors and it is not just limited to a few big names.

The Government of India is approaching new investors as well.

Conclusion

LIC IPO is going to be the biggest IPO in India.

Incorporated in 2002, Vedant Fashions Limited caters to the Indian wedding and celebration wear market with a diverse portfolio of brands. The company offers a one-stop destination with a wide spectrum of product offerings for every celebratory occasion to its customers.

The company's brands include (i) Manyavar, (ii) Mohey, (iii) Mebaz, (iv) Manthan, and (v) Twamev. The company operates its business through franchise-owned exclusive brand outlets (EBOs), with the remaining by multi-brand outlets (MBOs), large format stores (LFSs), and online platforms, including its website (www.manyavar.com) and mobile application.

• Vedant Fashions was the largest in India in the men's Indian wedding and celebration wear segment in terms of revenue, OPBDIT, and profit after tax for the Financial Year 2020. According to CRISIL, its ‘Manyavar’ brand is a category leader in the branded Indian wedding and celebration wear market with a pan-India presence, as of Financial Year 2020.
• As of September 30, 2021, the company had a retail footprint of 1.2 Mn sq. ft covering 535 EBOs (including 55 shop-in-shops) spanning 212 cities and towns in India, and 11 EBOs overseas across the United States, Canada, and the UAE.
• Company have focused on spreading India’s vibrant culture, traditions and heritage through its aspiration yet value for money brands at a diverse range of price points. It offers a one-stop destination with a wide spectrum of product offerings for every celebratory occasion.
• The company's distributors are in 28 states and 8 union territories throughout India, catering to over 1.6 million retail outlets. As of September 30, 2021, the company had 88 depots in India, with an aggregate storage space of approx. 1.8 million square feet across the country.

Outlook & Valuation

The company has mixed set of financials over the few years where the revenue grew in FY20 and fell back from Rs. 9,47.97 cr to Rs 625 cr in FY21. Similarly, profit also declined from Rs. 236.6 cr in the year FY20 to Rs. 132.9 cr in the FY21 which can be attributed due to the pandemic. However, the company's performance returned to normal in the first 6 months of FY22. Vedant Fashions is among the top companies in the Indian wedding and celebration wear segment. The company's financials suffered a setback, which could be due to COVID 19. The issue is valued at P/E 161(x) to its FY21 EPS of Rs. 5.36 and P/BV of 24.42(x) on NAV of 35.45 that seems to be overpriced also the issue is purely OFS based. Thus we assign an "AVOID" rating to the IPO.

KEY MANAGERIAL PERSONNEL

• Ravi Modi is the Chairman and Managing Director of the Company. He has been associated with the Company since its inception. He has more than two decades of experience in the garment industry. He oversees the design and marketing functions of the Company
• Shilpi Modi is the Whole-time Director of our Company. She has been associated with the Company since its inception. She has more than two decades of experience in the garment industry.
• Rahul Murarka, is the Chief Financial Officer of the Company.. He has over 16 years of experience in finance, accounting, audits, taxation and regulatory compliances.
• Navin Pareek is the Company Secretary and Compliance Officer of the Company. He has over 10 years of experience in legal, compliance, finance, direct taxation and secretarial functions.
• Amar Sethia, is the Chief Product Officer of the Company. He is engaged in product designing and in developing the product vision, strategy, analytics and metrics.
• Vedant Modi is the Chief Marketing Officer of the Company. He joined our Company on June 24, 2021. He holds a bachelor’s degree in science from University College London where his main field of study was information management for business.
• Kanchan Banerjee, is the Chief Human Resources Officer of the Company. She has over 10 years’ experience in the human resources industry.

COMPETITIVE STRENGTHS

• Market leader in the Indian wedding and celebration wear market.
• Large and growing Indian wedding and celebration wear market.
• Omni-channel network of seamlessly integrated business.
• Technology-based strong supply chain and inventory systems
• Differentiated business model combining the strengths of retailing with branded consumer play
• The experienced and professional leadership team

KEY STRATEGIES

• Expansion of footprint within and outside India.
• Scaling up its emerging brands through increased up-selling and cross-selling initiatives
• Enhancement of brand appeal through targeted marketing initiatives.

KEY CONCERNS

• IPO proceeds is purely an offer for sale and company will not get benefit from such proceeds
• Dependency on third parties for some production and activities.
• Highly dependent on the on organization of weddings, festivals and other such occasions and may be affected by seasonal variations.
• Exposure to supply chain and regional risk due to geographical location of its factory and warehouse.
• Growth and profitability depend on the level of consumer confidence and spending in India and the overseas.

COMPARISON WITH LISTED INDUSTRY PEERS(AS ON 31STMARCH 2021)

There are no listed companies in India that engage in a business similar to that of the Company’s business. Accordingly, it is not possible to provide an industry comparison in relation to the Company.

FINANCIALS (RESTATED CONSOLIDATED)

Particulars (Rs. In Millions) FY 2021 FY 2020 FY 2019 Equity Share Capital247.87250.46250.46Other Equity10,666.2310,409.688,577.24 Net Worth 10,914.1010,660.148,827.70 Borrowings--0.02 Revenue from Operations 5,648.169,155.498,007.42 EBITDA 2,817.053,987.653,379.54Profit Before Tax1,819.173,118.412,709.38 Net Profit for the year 1,329.032, 366.371,764.27

DISCLAIMER:

The information contained herein are strictly confidential and are meant solely for the information of the recipient and shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written permission of Swastika Investmart Ltd. (SIL).

The contents of this document are for information purpose only. This document is not an investment advice and must not alone be taken as the basis for an investment decision. Before taking any decision to invest, the recipient of this document must read carefully the Red Herring Prospectus (‚RHP‛) issued to know the details of IPO and various risks and uncertainties associated with the investment in the IPO of the Company.

All recipients of this document must before acting on the given information/details, make their own investigation and apply independent judgment based on their specific investment objectives and financial position. They can also seek appropriate professional advice from their own legal and tax consultants, advisors, etc. to understand the risks and investment considerations arising from such investment. The investor should possess appropriate resources to analyze such investment and the suitability of such investment to such investor’s particular circumstances before making any decisions on the investment. The Investor shall be solely responsible for any action taken based on this document. SIL shall not be liable for any direct or indirect losses arising from the use of the information contained in this document and accept no responsibility for statements made otherwise issued or any other source of information received by the investor and the investor would be doing so at his/her/its own risk. The information contained in this document should not be construed as forecast or promise or guarantee or assurance of any kind. The investors are not being offered any assurance or guaranteed or fixed returns on their investments. The users of this document must bear in mind that past performances if any, are not indicative of future results. The actual returns on investment may be materially different than the past. Investments in Securities market products and instruments including in the IPO of the Company are highly risky and they are generally not an appropriate avenue for someone with limited resources/ limited investment and low risk tolerance. Such Investments are subject to market risks including, without limitation, price, volatility and liquidity and capital risks. Therefore, the users of this document must carefully consider all the information given in the RHP including the risks factors before making any investment in the Equity Shares of the Company.

Swastika Investmart Ltd or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither Swastika Investmart Ltd nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. Swastika Investment Ltd may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the Subject Company or third party in connection with the Research Report.

CORPORATE & ADMINISTRATIVE OFFICE - 48, Jaora Compound, M.Y.H. Road, Indore - 452 001 | Phone 0731 - 6644000

Compliance Officer: Ms. Sheetal Duraphe Email: compliance@swastika.co.inPhone: (0731) 6644 241

Swastika Investmart Limited, SEBI Reg. No. : NSE/BSE/MSEI: INZ000192732 Merchant Banking: INM000012102 Investment Adviser: INA000009843 MCX/NCDEX: INZ000072532 CDSL/NSDL: IN-DP-115-2015 RBI Reg. No.: B-03-00174 IRDA Reg. No.: 713.

Incorporated in 1999, Adani Wilmar limited a joint venture between Adani Group and the Wilmar Group.

Adani Wilmar is an FMCG food company offering most of the essential kitchen commodities for Indian consumers, including edible oil, wheat flour, rice, pulses, and Sugar.

The Company also offers a diverse range of industry essentials, including oleochemicals, castor oil and its derivatives, and de-oiled cakes. The company's products are offered under a diverse range of brands across a broad price spectrum and cater to different customer groups.

The company's product portfolio is categorized into (i) edible oil, (ii) packaged food and FMCG, and (iii) industry essentials.

• "Fortune", the company's flagship brand, is the largest selling edible oil brand in India. Recently the company has included products such as edible oil products, rice bran health oil, fortified foods, ready-to-cook soya chunks, khichdi, etc. in its offerings.
• It is among the top 5 fastest growing packaged food companies in India, based on the growth in revenues during the last five years.
• The company has strong raw material sourcing capabilities and was India's largest importer of crude edible oil as of March 31, 2021. which provided it with bargaining power to source better quality raw materials on favorable commercial terms.
• The company operates 22 plants located across 10 states in India, comprising 10 crushing units and 19 refineries. The company's refinery in Mundra is one of the largest single-location refineries in India with a capacity of 5,000 MT per day.
• The company's distributors are in 28 states and 8 union territories throughout India, catering to over 1.6 million retail outlets. As of September 30, 2021, the company had 88 depots in India, with an aggregate storage space of approx. 1.8 million square feet across the country.

Outlook & Valuation

The Company has shown a strong growth in revenue where it grew from Rs 29,766 cr to Rs 37,195 cr over the period of FY20 to FY21 and during the same period, profit has grown from Rs 460 cr in FY20 to Rs 727 cr in FY21. Again, in the period ended, by September 21, the company reported tremendous growth.

It will be the seventh listed company of the Adani Group, which has already established itself as a brand in the FMCG sector. The company is a leader in branded edible oils and packaged foods in India. The IPO is priced at a P/BV of 7x on a NAV of 28.86 and PE of 36x on its FY21 earnings which are slightly lower than its listed peers. Thus we assign a "SUBSCRIBE" rating to the IPO for listing gain and long term.

KEY MANAGERIAL PERSONNEL

• Mr. Kuok Khoon Hong is the Non-Executive Chairman of the Company. He has over 40 years of experience in the agribusiness industry. He is the co-founder of Wilmar International Limited.
• Mr. Angshu Mallick is the Chief Executive Officer and Managing Director of the Company. He has over 35 years of experience in marketing and sales in the food industry.
• Mr. Shrikant Kanhere is the Chief Financial Officer of the Company. He is a fellow member of Institute of Chartered Accountants of India. He has over 18 years of experience in the field of finance and accounts.
• Mr.Siddhartha Ghosh is the Chief Human Resource Officer of the Company. Previously he also worked at Reliance Industries Limited, Aditya Birla Insulators, Jindal Steel & Power Limited and Coal India Limited.
• Mr. Satendra Aggarwal is the Business Head - Foods & FMCG and Marketing of the Company. Previously he worked as chief operating officer at Ruchi Soya Industries Limited and has also worked at Hindustan Unilever Limited.
• Mr. Ashim Mullick is the Vice President – R&D of the Company. Previously he worked at Tata Chemicals Limited, PepsiCo India Holdings Private Limited, GlaxoSmithKline and has also worked at Hindustan Unilever Limited.
• Mr. Darshil Lakhia is the Company Secretary and Compliance Officer of the Company. He is a member of the Institute of Company Secretaries of India. He has over 14 years of experience in corporate secretarial and other related compliances.

COMPETITIVE STRENGTHS

• Diversified product portfolio with strong brand recall and broad customer reach.
• Leadership in branded edible oil and packaged food business in India.
• Strong raw material sourcing capabilities from top global suppliers.
• Focus on environmental and social sustainability.
• Pan-India distribution network supported by a robust distribution infrastructure.
• Professional management and experienced board.

KEY STRATEGIES

• Become the leading packaged food and FMCG company in India.
• Further expand the distribution network with an omni-channel approach.
• Continue to launch new products and enhance the customer base.

KEY CONCERNS

• Significant dependence on imports of raw materials and/or finished goods in addition to domestic supply.
• Dependence on edible oil segment for a significant portion of revenue.
• Fluctuation in the prices of commodities affects profitability.
• Slowdown or shutdown in its manufacturing operations or under-utilization of its manufacturing facilities.
• Inability to introduce new products and respond to changing consumer preferences in a timely and effective manner.

COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2021)

Name of the Company Total Income for FY2021 (₹ Cr)EPS(Basic)NAV(₹)P/ERoNW (%)Adani Wilmar Ltd37195.76.3728.86[●]22.1% Peer Group Hindustan Unilever Ltd4702834.03202.9969.6316.8%Britannia Industries Ltd13136.177.4148.846.7951.6%Tata Consumer Products Ltd116029.3169.5778.656%Dabur India Ltd9561.79.5843.5759.0522%Marico Ltd80489.0825.2354.0336.8%Nestle India Ltd13350215.98209.4489.73103.1%

FINANCIALS (RESTATED CONSOLIDATED)

Particulars (Rs. In Millions)FY 2021FY 2020FY 2019Equity Share Capital1,142.951,142.951,142.95Other Equity31,838.4624,564.0219,967.12Net Worth32,981.4125,706.9721,110.07Total Borrowings19,040.0823,002.7618,294.56Revenue from Operations370,904.22296,570.36287,974.59EBITDA14,305.5914,194.7512,534.57Profit Before Tax7,566.416,090.135,672.52Net Profit for the year7,276.494,608.723,755.21

DISCLAIMER:

The information contained herein are strictly confidential and are meant solely for the information of the recipient and shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written permission of Swastika Investmart Ltd. (“SIL”). The contents of this document are for information purpose only. This document is not an investment advice and must not alone be taken as the basis for an investment decision. Before taking any decision to invest, the recipient of this document must read carefully the Red Herring Prospectus (“RHP”) issued to know the details of IPO and various risks and uncertainties associated with the investment in the IPO of the Company. All recipients of this document must before acting on the given information/details, make their own investigation and apply independent judgment based on their specific investment objectives and financial position. They can also seek appropriate professional advice from their own legal and tax consultants, advisors, etc. to understand the risks and investment considerations arising from such investment. The investor should possess appropriate resources to analyze such investment and the suitability of such investment to such investor’s particular circumstances before making any decisions on the investment. The Investor shall be solely responsible for any action taken based on this document. SIL shall not be liable for any direct or indirect losses arising from the use of the information contained in this document and accept no responsibility for statements made otherwise issued or any other source of information received by the investor and the investor would be doing so at his/her/its own risk. The information contained in this document should not be construed as forecast or promise or guarantee or assurance of any kind. The investors are not being offered any assurance or guaranteed or fixed returns on their investments. The users of this document must bear in mind that past performances if any, are not indicative of future results. The actual returns on investment may be materially different than the past. Investments in Securities market products and instruments including in the IPO of the Company are highly risky and they are generally not an appropriate avenue for someone with limited resources/ limited investment and low risk tolerance. Such Investments are subject to market risks including, without limitation, price, volatility and liquidity and capital risks. Therefore, the users of this document must carefully consider all the information given in the RHP including the risks factors before making any investment in the Equity Shares of the Company.

Swastika Investmart Ltd or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither Swastika Investmart Ltd nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. Swastika Investment Ltd may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the Subject Company or third party in connection with the Research Report.

CORPORATE & ADMINISTRATIVE OFFICE - 48, Jaora Compound, M.Y.H. Road, Indore - 452 001 | Phone 0731 - 6644000

Compliance Officer: Ms. Sheetal Duraphe Email: compliance@swastika.co.inPhone: (0731) 6644 241

Swastika Investmart Limited, SEBI Reg. No. : NSE/BSE/MSEI: INZ000192732 Merchant Banking: INM000012102 Investment Adviser: INA000009843 MCX/NCDEX: INZ000072532 CDSL/NSDL: IN-DP-115-2015 RBI Reg. No.: B-03-00174 IRDA Reg. No.: 713.

There has been a lot of buzz in the stock market about IPOs as many IPOs came in the year 2021 and gave extraordinary returns to their shareholders.

Also, people take much interest in IPOs as they find them as a major investment product and provide new hopes to the people.

In other words, investors find new investment hope in these IPOs and as a result of this, the IPO of Zomato, which opened on July 14, was subscribed 1.05 times on the first day of its launching.

The retail investors subscribed to the Zomato IPO almost 2.69 times which is a history in itself. If we talk about the non-institutional investors, then they have put in bids of 13 per cent against the reservation which is a difficult thing to forget in the history of SME-IPOs.

Here, an important question often comes to the investor’s mind: How did the listing price of an IPO decide?

Before getting a dig deep into the whole scenario, let's take a sneak peek at the listing price:

What is the Listing Price?

When a private limited company wants to become public for the very first time, it needs to get its stock listed on the major stock exchanges. To complete a process, the company is required to decide the opening price of shares which is known as the listing price.

The launching period of IPO is of three days and post that the investors are allowed to purchase the shares at a given price. Here, the listing comes into place.

Please note that the allocation of shares takes place only after IPO launching.

The IPO listing price is different from the offer price and is decided majorly by the investment bank which is assisting the company during the IPO launching process.

After the successful launching of an IPO on the stock exchange, it becomes available for every shareholder to trade in the stock market.

Now, the shareholders can be actively involved in buying and selling shares in the secondary market.

How Is The IPO Listing Price Determined?

Several factors will impact how the good IPO gets listed on the stock exchange and how does it affect the IPO listing price:

1.Demand

Demand for a share makes a huge impact on the listing price of an IPO. Hence, the IPO price is also affected by the market demand of the company as the higher the demand, the higher will be the listing price.

The demand for the SME-IPO is affected by numerous factors including the potentiality of a company, its expected valuation, growth sector and more.

Let’s understand the listing process with a suitable example:

If the demand for an IPO is higher, then the chance of that IPO getting oversubscribed more, which in turn makes few of many get a chance to subscribe to it. If it is oversubscribed, many investors will get deprived of the IPO allotment process, and hence the demand surge.

The rising demand makes the IPO firm increase its listing price and hence more investors will trade it in the stock market.

Hence, a high demand, low availability of shares can result in great listing prices and hence great listing gains or vice-versa.

2. Growth Prospects of the Company

The listing price of an IPO is also affected by the growth prospects of a company. For instance, a company that wants to launch its IPO often comes with several objectives like paying debts, operational costs, which also plays a major role in the listing prices.

If a company comes with the objectives of growing and expanding its businesses, the majority of the retail investors will look forward to the same.

This will increase the orders, which in turn increase the demand of the IPO which eventually increases its listing price. The company is likely to list at a good price if there are any chances for good growth.

3. Grey Market Premium

A grey market is a place that is considered under regulated but often gets highlighted when it comes to a demand for IPO. It is the extra amount investors pay along with the offer price.

For example: if the offer price of an IPO is Rs 150 and its GMP is Rs 50. This indicated that the investor is willing to pay Rs 200 for the same IPO in the grey market.

4. The OFS (Offer for Sale) Value

An offer to sell an IPO indicates the number of shares that existing investors are willing to dilute in the IPO.

If OFS is more than a fresh issue, it certainly means that there is a reason why current investors no longer want to be part of the company.

This can be a turn-off for some investors. However, this is not always the case. If a company has high growth potential, it can prosper.

However, a large OFS value can adversely affect the list price.

5. Market Sentiments

Retail investors play a crucial role in deciding the IPO listing price. As more retailers are looking for an IPO, it further results in deciding the listing price.

A comparative analysis of the stock market analysts can also affect the market sentiments to a greater extent. If the investors are looking interested in a particular IPO and the market sentiments are positive, it is a good indication.

However, if there is a lack of interest of the retail investors, there are higher chances that the IPO listing price is considered low.

These are various factors that have a significant impact on the listing price of an IPO.

Therefore, always keep these factors in mind if you don't know how to choose an IPO listing time in India.

Conclusion

Good IPO listings are those which can give you attractive profits and also help you to increase the visibility of the company.

As stated above, numerous factors help promoters find the listing price of the company which includes investors’ interest, GMP, company valuation and most importantly the demand and supply of an IPO.

Rating AVOID Issue Offer Issue Opens on Jan 19, 2022Issue Close on Jan 21, 2022Total IPO size (cr) 680.00Fresh issue(cr) NilOffer For Sale (cr) 680.00Price Band (INR) 166-175Market Lot 85Face Value (INR) 10Retail Allocation 35%Listing On NSE, BSE

Objects of the issue

• To carry out an offer for sale.
• To achieve the benefits of listing

Issue Break-up (%) QIB Portion 50NIB Portion 15Retail Portion 35 Shareholding (No. of Shares) Pre Issue 120,392,576Post Issue 120,392,576 Indicative Timetable Finalization of Basis of Allotment 27-01-2022Refunds/Unblocking ASBA Fund 28-01-2022Credit of equity shares to DP A/c 31-01-2022Trading commences 01-02-2022

Incorporated in 2002, AGS Transact Technologies Ltd was one of the largest integrated Omni-channel payment solutions providers in India in terms of providing digital and cash-based solutions to banks and corporate clients, as of March 31, 2021.

The company provide customized products and services comprising ATM and CRM outsourcing, cash management and digital payment solutions including merchant solutions, transaction processing services and mobile wallets.

The company operate its business in three major segments: Payment Solutions;  Banking Automation Solutions; and other Automation Solutions (for customers in the retail, petroleum, and color sectors).

• It is the second-largest company in India in terms of revenue from ATM managed services and also the largest deployer of POS  terminals at petroleum outlets in India.
• It not just serves the Indian market but has also expanded internationally in other Asian countries including Sri Lanka, Cambodia, Singapore,  Indonesia, and the Philippines.
• As of August 31, 2021, it had approximately 50 banking customers,  including ICICI Bank Limited, HDFC Bank Limited and Axis Bank  Limited.
• The company’s colour operations primarily comprise the supply of automatic paint dispensers and related services, and serve customers including Asian Paints Limited, Kansai Nerolac Paints  Limited and Berger Paints India Limited.
• As of August 31, 2021, it had installed a network of  221,066 merchant POS, 17,924 petroleum outlets, 72,000 ATMs and CRMs offering cash management services, 46,800 cash billing terminals, and installed 88,521 colour dispensing machines.

The business serves customers in 2200 cities and towns through  446,000 machines or customer touchpoints.

Outlook & Valuation:

The company's revenue has been flat over the last three years, mostly on the declining side where revenue in FY21  fell to Rs 1,797 cr from Rs 1,833 cr in FY20.

The company's profit, on the other hand, has been decreasing. The company's profit fell from Rs  83 cr in FY20 to Rs 54.7 cr in FY21.

The company's margin also shrank.  The company is one of India's leading Omni-channel payment solution providers with a strong network.

However, the government's focus on digital payments will further decrease the use and availability of cash can have an adverse effect on business activities.

The IPO is priced at a  PE of 38x and P/BV of 3.71x on the NAV of Rs 47.11, which is slightly higher than its listed peers however, they are not comparable on an apple-to-apple basis, also the IPO is purely OFS based. Thus we assign an "AVOID" rating to the IPO.

IPO Note

AGS TRANSACT TECHNOLOGIES LTD

KEY MANAGERIAL PERSONNEL

Mr Ravi B. Goyal is the Chairman and Managing Director of the Company.

He is responsible for the management of the overall operations of the company and its subsidiaries. He has approximately 26 years of experience in the field of technology.

• Mr Stanley Johnson P is an Executive Director on the Board of the Company. He has been instrumental in strengthening and expanding the company’s banking outsourcing operations across India.
• Mr Vinayak R. Goyal is an Executive Director on the Board of the Company. He works closely with management to drive strategic and business initiatives for the Company.
• Mr SaurabhLal is the Chief Financial Officer of the Company and of its Subsidiary, SVIL. He has over 15 years of experience in the financial service industry.
• Mrs Sneha Kadam is the Company Secretary and Compliance Officer of the Company and its Subsidiary,  SVIL. She is an associate member of the Institute of Company Secretaries of India. She has over eight years of experience as a company secretary in Indian companies.
• Mr Ricardos El Khoury is the Chief Executive Officer and a director of its Subsidiary, Novus SGP. He has approximately 28 years of experience in the information technology sector.
• Mr Mehernosh Parekh is the Chief Operating Officer and a Director of its Subsidiary, SVIL. He holds a Bachelor of Commerce degree from theUniversity of Bombay. He has work experience in the cash management industry.

COMPETITIVE STRENGTHS

• An integrated omnichannel payment and cash solutions provider.
• Customer Driven Portfolio with Strong Capabilities to Develop Customized Solutions In-house.
• Diversified Product Portfolio, Customer Base, and Revenue Streams Leading to Cross-Selling Opportunities.
• Long-Standing Relationships with Technology Providers and Customers.
• Dedicated In-house Infrastructure and Technological Capabilities.
• Experienced Board of Directors and Senior Management.

KEY STRATEGIES

• Focus on Growing of Digital Payment Solutions Business.
• Focus on Enhancing the Integrated Technology Payments Platform.
• Focus on Cash Management Services and international expansion.

KEY CONCERNS

• Covid -19 epidemic has had and may continue to have some adverse effects on their business.
• A small number of clients account for a large amount of their revenue.
• A decrease in the use of cash as a mode of payment could have an adverse effect on its business.
• Engaged in fee-based activities and their financial performance may be adversely affected by an inability to generate income from such activities.
• The RBI and other government authorities heavily regulate the sectors in which they operate.

IPO Note

AGS TRANSACT TECHNOLOGIES LTD

COMPARISON WITH LISTED INDUSTRY PEERS(AS OF 31st MARCH 2021)

There are no listed companies in India whose business portfolio is comparable with that of the company’s business and comparable to the scale of operations. Hence, it is not possible to provide an industry comparison.

FINANCIALS (RESTATED CONSOLIDATED)

Particulars (Rs. In Millions) FY 2021 FY 2020 FY 2019Equity Share Capital 1,185.81 1,185.81 1,185.81Other Equity 4,400.81 3,803.74 3,063.53Net Worth 5,586.62 4,989.55 4,249.34Gross Debt 16,223.41 11,590.17 11,053.03Revenue from Operations 17,589.44 18,004.43 18,057.42EBITDA 4,767.60 4,954.61 4,428.75Profit Before Tax 824.27 1,195.24 788.89Net Profit for the year 547.92 830.14 661.94

DISCLAIMER

The information contained herein is strictly confidential and are meant solely for the information of the recipient and shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written permission of Swastika Investmart Ltd. (“SIL”).

The contents of this document are for information purposes only.

This document is not investment advice and must not alone be taken as the basis for an investment decision.

Before taking any decision to invest, the recipient of this document must read carefully the Red Herring Prospectus (“RHP”) issued to know the details of SME-IPO and various risks and uncertainties associated with the investment in the IPO of the  Company.

All recipients of this document must before acting on the given information/details, make their own investigation and apply independent judgment based on their specific investment objectives and financial position.

They can also seek appropriate professional advice from their own legal and tax consultants, advisors, etc. to understand the risks and investment considerations arising from such investment.

The investor should possess appropriate resources to analyze such investment and the suitability of such investment to such investor’s particular circumstances before making any decisions on the investment. The Investor shall be solely responsible for any action taken based on this document.

SIL shall not be liable for any direct or indirect losses arising from the use of the information contained in this document and accept no responsibility for statements made otherwise issued or any other source of information received by the investor and the investor would be doing so at his/her/its own risk.

The information contained in this document should not be construed as a forecast promise guarantee or assurance of any kind.

The investors are not being offered any assurance or guaranteed or fixed returns on their investments. The users of this document must bear in mind that past performance if any, are not indicative of future results. The actual returns on investment may be materially different from the past.

Investments in Securities market products and instruments included in the IPO of the Company are highly risky and they are generally not an appropriate avenue for someone with limited resources/ limited investment and low-risk tolerance.

Such investments are subject to market risks including, without limitation, price, volatility liquidity and capital risks. Therefore, the users of this document must carefully consider all the information given in the RHP including the risks factors before making any investment in the Equity Shares of the Company.

Swastika Investmart Ltd or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with the preparation of the stock market research report.

Accordingly, neither Swastika Investmart Ltd nor Research Analysts have any material conflict of interest at the time of publication of this report.

The compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.

Swastika Investment Ltd may have issued other reports that are inconsistent with and reach different conclusions from the information presented in this report.

The research entity has not been engaged in the market-making activity for the subject company.

The research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the Subject Company or third party in connection with the Research Report.

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Swastika Investmart Limited, SEBI Reg. No. : NSE/BSE/MSEI: INZ000192732 Merchant Banking: INM000012102 Investment Adviser: INA000009843 MCX/NCDEX: INZ000072532  CDSL/NSDL: IN-DP-115-2015 RBI Reg. No.: B-03-00174 IRDA Reg. No.: 713.