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National Commodity & Derivatives Exchange Limited (NCDEX) will relaunch the Steel Futures contract on Monday, January 18, 2021, a release issued by the exchange said on Thursday.

Initially, contracts will be available for the months expiring in February 2021, March 2021 and April 2021. With this launch, the first in this year, NCDEX has re-entered the Non-Agri space expanding the bouquet of derivative products.

OVERVIEW:

India is the 2nd largest steel producer in the world and it mainly caters to the Infrastructure and Construction industry. The major steel-producing states in India are Punjab, Chattisgarh, West Bengal, UP, Orissa and Gujarat.

The steel industry is the heart of global development. It is considered crucial for the development of the economy and is considered the backbone of human civilization.

The importance of steel to the economy can be further verified by the fact that level of per capita consumption of Steel is treated as an important index to measure the level of socioeconomic development and living standard of the people of a country. All major economies around the world have been largely shaped by the strength of their steel industry in their initial years of development.

KEY BENEFITS:

• Benchmark Futures contract for Steel Long
• Hedging and price risk management tool for value chain
• Efficient and transparent price discovery
• Robust delivery mechanism
• Connects the entire value chain

Commenting on the launch, Vijay Kumar, MD & CEO, NCDEX, stated, “India is on the cusp of exponential growth in infrastructure sector due to government impetus on making the country a $5-trillion economy in the coming years. As a result, the consumption of steel is likely to take a quantum leap ahead.

As the price of steel is a major component of total cost in many infra-projects, developers find it difficult to manage the volatility in steel prices in absence of an appropriate hedging platform in the country. The steel contract being launched by us will provide these entities with a reliable and transparent risk management tool to hedge against volatile prices.”

Mr Kapil Dev, EVP & Head of Business & Products, NCDEX stated, “India’s steel consumption is probably going to develop at a lot sooner tempo as over Rs. 44 lakh crore value of initiatives is already being applied out of Rs. 111-lakh-crore National Infrastructure Pipeline (NIP).

Even the home manufacturing and exports are additionally on the rise at a brisk tempo. On the opposite hand, logistical and provide inefficiencies have made steel and its uncooked materials cost extraordinarily unstable posing challenges to the complete worth chain individuals. Because of this, having a steel futures contract at this level of time has an amazing utility for producers in addition to customers to handle their value dangers.’’

CONTRACT SPECIFICATIONS:

• Ticker symbol - STEEL
• Trading Unit – 10 MT
• Delivery Unit - 10 MT
• Maximum Order Size - 500 MT
• Tick Size – Rs.10 (per MT)
• Hours of Trading- Mondays through Fridays: 9:00 A.M. to 9:00 P.M.
• Quantity Variation - +/- 3% or 5MT (whichever is higher)
• Minimum Initial Margin- 8%
• Delivery Center - Mandi Gobindgarh, Ghaziabad (Uttar Pradesh)
• Delivery Logic - Compulsory Delivery
• Delivery Specification - Upon expiry of the contracts all the outstanding open positions shall result in compulsory delivery.
• Due date/ Expiry Date 20th day of the delivery month - If 20th happens to be a holiday, a Saturday or a Sunday, then the expiry date (or due date) shall be the immediately preceding trading day of the Exchange, which is other than a Saturday.

Corporate actions are decisions made by publicly listed companies that can have a significant impact on their shareholders. These actions are approved by the company’s Board of Directors, shareholders, or both.

Corporate actions can affect the company’s stock price, ownership structure, or financial position, and sometimes all three. The nature and type of the action determine the extent of these changes.

Types of Corporate Actions

Mandatory Corporate Actions:

These are actions where investors don’t have a choice—they happen automatically, and all shareholders are affected.

• Stock Splits: If a company decides to split its stock, every shareholder’s shares are automatically split.
• Dividends: If a company declares a dividend, all eligible shareholders will receive

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Voluntary Corporate Actions:

These are actions where investors have a choice to participate or not.

• Rights Issues: A company may offer existing shareholders the right to buy more shares at a discount, but investors can choose whether or not to buy them.
• Buybacks: If a company offers to buy back its shares, shareholders can decide whether they want to sell their shares back to the company.

In short, mandatory actions happen automatically for all shareholders, while voluntary actions require investors to decide if they want to participate.

Major Corporate Actions:

Dividend

After paying taxes, a company's remaining profits belong to the shareholders. The company can either keep these profits or distribute them among the shareholders, which is known as declaring a dividend. A company can declare an Interim Dividend during the year and a Final Dividend at the end of the financial year. Once declared, the company must distribute the dividend within 30 days.

Bonus Issue

A bonus issue is an alternative to a cash dividend, where a company issues additional shares (bonus shares) to its existing shareholders. The number of bonus shares each shareholder receives depends on their current shareholding.

Stock Split

In a stock split, the face value of existing shares is reduced in a specific ratio. Companies may split their shares if the stock price becomes too high, which can limit investor participation. After a split, the price per share decreases, increasing the stock's liquidity in the market.

Share Consolidation

Share consolidation is the opposite of a stock split. The company increases the par value of its shares in a specific ratio and reduces the number of shares accordingly. This action is taken when the share price is perceived to be too low, which can negatively affect investor perception. Post-consolidation, the share price increases, potentially improving the market’s view of the company.

Merger and Acquisition

Mergers, acquisitions, and consolidations are corporate actions that change a company's ownership structure. In a merger, one company absorbs another, and the acquired company ceases to exist. In an acquisition, one company buys a substantial portion of another company's stock, and both companies typically continue to exist. In a consolidation, two companies combine to form a new entity, and the original companies cease to exist.

Buyback of Shares

A buyback occurs when a company repurchases its own shares using its reserves and surplus. These repurchased shares are canceled, reducing the company’s share capital. For a company to be eligible for a buyback, it must not have defaulted on payments such as interest, principal on debts, or dividends.

Delisting of Shares

Delisting refers to the removal of a company's shares from a stock exchange. This can be either compulsory or voluntary. In a compulsory delisting, shares are removed due to the company’s non-compliance with regulations. In voluntary delisting, the company chooses to remove its shares from the exchange and go private.

Impact of Corporate Actions on Investors

Here's how these actions can influence investors, especially in the Indian stock market:

Financial Gain or Loss

Dividends:
When a company pays dividends, investors receive regular income. For example, if a company declares a dividend of ₹10 per share, an investor holding 100 shares will receive ₹1,000.

Stock Splits and Bonus Issues:
These actions increase the number of shares an investor owns without changing the total value of the investment. For instance, in a 2-for-1 stock split, if you own 100 shares priced at ₹500 each, after the split, you'll have 200 shares priced at ₹250 each.

Mergers and Acquisitions:
If a company merges with another or is acquired, the stock price may change significantly. For example, if Company A acquires Company B, the share price of both companies might rise or fall, leading to potential gains or losses for investors.

Voting Rights

Rights Issues:
When a company offers new shares to existing shareholders at a discount, it can dilute voting power. If an investor doesn't buy the new shares, their voting influence decreases. For example, if you own 5% of a company, but new shares are issued and you don't buy them, your ownership percentage and voting power may drop.

Portfolio Diversification

Spin-Offs:
When a company creates a new independent company from one of its divisions, investors receive shares in the new company. This allows them to diversify their investments. For example if Reliance Industries spins off its telecom business, you might end up owning shares in both Reliance and the new telecom company, each with different growth prospects.

Information Signals

Share Buybacks:
When a company buys back its own shares, it might signal that the management believes the stock is undervalued. For example, if TCS announces a buyback, it could indicate confidence in its future performance, which might positively impact the stock price.

 The Bottom Line

Corporate actions can have a big effect on a company’s future and its stock price, so it’s important for shareholders and investors to stay updated. These actions usually need approval from the board of directors and sometimes from shareholders as well.

Corporate actions can be either mandatory or voluntary and can have positive or negative effects. Generally, actions like paying dividends, buying back shares, or other moves to increase shareholder value are seen positively, unless investors believe the company could have used its resources better. On the other hand, rights issues and liquidations are usually disliked by investors.

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सोने और चाँदी के भाव मे ऊपरी स्तरों से आई गिरावट पिछले सप्ताह रुकी और कीमती धातुओं में बढ़त दर्ज की गई है। अमेरिकी राष्ट्रपति जो बिडेन के द्वारा 1.9 बिलियन डॉलर के बिल का अनावरण और फेड प्रमुख जेरोम पॉवेल द्वारा मौद्रिक निति को डोवीश रखने की बात से कीमती धातुओं मे निचले स्तरों पर सपोर्ट देखा गया। गुरुवार को राष्ट्रपति बिडेन ने "अमेरिकी सुरक्षा योजना " का अनावरण किया जिसमे सरकार के खर्चे और अन्य दी जाने वाली सहायता के बारे मे बताया जिससे कीमती धातुओं को सपोर्ट मिला। अमेरिका से जारी होने वाले बेरोज़गारी के साप्ताहिक आंकड़े अनुमान 7.95 लाख से बढ़कर 9.65 लाख पर पहुंच गए।

बेरोज़गारी और बदतर होते कोरोना वायरस आकड़ो के कारण रोज़गार बाजार मे कमजोरी आ रही है। फेड प्रमुख जेरोम पॉवेल ने गुरुवार को कहा की जब तक मुद्रास्फीति अत्यधिक नहीं बढ़ जाती तब तक ब्याज दरे नहीं बढ़ाएंगे।पॉवेल के मुताबिक बांड खरीद योजना मे किसी भी तरह के बदलाव को पहले से ही आगाह कर दिया जाएगा। इस सप्ताह निवेशकों की नज़र अमेरिकी सीनेट पर रहेगी जिसमे पूर्व राष्ट्रपति ट्रम्प पर दूसरा दोषारोपण किया जायेगा।

तकनिकी विश्लेषण

इस सप्ताह फ़रवरी वायदा सोने के भाव मे तेज़ी रह सकती है और इसमे 48600 रुपय के निचले स्तरों पर समर्थन तथा 49600 रुपय के ऊपरी स्तरों पर प्रतिरोध है। चाँदी मार्च वायदा के भाव तेज़ रहने की सम्भावना है और इसमें 66000 रुपय पर समर्थन और 67000 रुपय पर प्रतिरोध है।

प्रमुख आंकड़े

इस सप्ताह ग्लोबल अर्थव्यवस्था से जारी होने वाले प्रमुख आंकड़े जिनमे, सोमवार को चीन की तिमाही जीडीपी, बुधवार को राष्ट्रपति बिडेन का भाषण, गुरुवार को बेरोज़गारी के दावे और यूरोपियन सेंट्रल बैंक की प्रेस कांफ्रेंस तथा शुक्रवार को अमेरिकी फ़्लैश मैन्युफैक्चरिंग पीएमआई के आंकड़े प्रमुख है।

Indigo Paints is the fastest growing amongst the top five paint companies in India. We are the fifth-largest company in the Indian decorative paint industry in terms of its revenue from operations for Fiscal 2020. Indigo has achieved this position in a highly competitive Indian decorative paint industry on the back of our multi-pronged approach.

This includes introducing differentiated products to create a distinct market in the paint industry, building brand equity for our primary consumer brand, creating an extensive distribution network, and installing tinting machines across our dealer network.

Indigo Paints has a strong market network with dealers in Tier 1, Tier 2, and Metros as well. It has 3 manufacturing facilities situated in Jodhpur (Rajasthan), Kochi (Kerala), and Pudukkottai (Tamil Nadu). It is further looking to expand its manufacturing capacities at Pudukkottai to manufacture water-based paints.

As of September 30, 2020, Indigo Paints owns and operates three manufacturing facilities in Rajasthan, Kerala and Tamil Nadu with an aggregate estimated installed production capacity of 101,903 KLPA for liquid paints and 93,118 MTPA for putties and powder paints.

As of September 30, 2020, Indigo Paints distributed their products to a network of 10,988 Active Dealers. In the six months ended September 30, 2020, their overall capacity utilization for liquid paint production was 20.77% and for powder, paint production was 57.98%.

Product Portfolio

Unique Products in the Existing categories:

• Dirt-proof & Water-proof Exterior Laminate – Indigo Paints launched India's first and only paint that gives equally effective protection from dirt as well as water. It offers superior resistance from dirt, while the silicone polymer repels water, and offers the walls an extremely smooth finish.
• Acrylic Laminate – Indigo Acrylic Laminate is a premium quality emulsion that gives the walls (both exterior and interior walls) a rich sheen finish offering a high-quality finish to the walls;
• PU Super Gloss Enamels – Indigo Paints’ PU Super Gloss Enamel is an all-surface enamel paint that delivers superior gloss and protects wood and metal with its anti-fungal and non-yellowing properties; and
• Polymer Putty – Indigo Paints’ Polymer Putty is a white cement-based putty with special polymers that gives double protection to the wall with a smooth and bright finish.

Unique Products disrupting the market to create a New Category (the first company to launch these products)

• Metallic Emulsion (Walls) – Indigo Paints pioneered the Metallic Emulsion segment, which gives a designer finish with glossy metallic texture effect. This has been used to glam up spaces suitable for interior and exterior walls of homes and offices and is available in shades of Gold, Silver, and Copper.
• Tile Coat Emulsion (Roof Tiles) – The Tile Coat Paint is a special paint for external roof tiles that provides unmatched gloss and sheen with excellent protection against algae and fungus.
• Bright Ceiling Coat (Interior Ceilings) – Indigo Paints created a new category for Ceiling Paints with the introduction of the Bright Ceiling Coat which offers unmatched brightness to the ceilings with a smooth matt finish to enhance the brightness of the room.
• Floor Coat Emulsion (Driveways) – This is India's first Floor Coat Paint that offers a glossy finish while also protecting the terrace floor, driveways, walkways and cement surfaces.

Strengths of the Company:

• Track record of consistent growth in a fast-growing industry with significant entry barriers.
• Differentiated products leading to greater brand recognition and enabling expansion into a complete range of decorative paint products.
• Focused brand-building initiatives to gradually build brand equity.
• The extensive distribution network for better brand penetration.
• Leveraged brand equity and distribution network to populate tinting machines.
• Strategically located manufacturing facilities with proximity to raw materials.
• Well-qualified and professional management team with a committed employee base.

IPO Details:

IPO DateJanuary 20, 2021, to January 22, 2021Issue TypeBook Built Issue IPOIssue SizeEquity Shares of Rs.10 totalling up to Rs.1169.12 CroreFresh IssueEquity Shares of Rs.10 totalling up to Rs.300 CroreOffer for Sale5,840,000 Equity Shares of Rs.10Face ValueRs.10 per equity shareIPO PriceRs.1480 to Rs.1490 per equity shareMin Order Quantity10Listing AtBSE, NSE

IPO Objective:

Offer For Sale: OFS money will not be received by the company.

Fresh Issue:

• To meet the capital expenditure requirements for manufacturing facility expansion at Pudukkottai, Tamil Nadu.
• To purchase tinting machines and gyro shakers.
• To repay all or certain borrowings.
• To meet general corporate purposes.

Financial Performance:

Financial Performance (in INR crore)FY2018FY2019FY2020H1 FY2021Revenue403.1537.3626.4260.2Expenses389.2503.2559225Net income13.22747.727.2Net margin (%)3.357.610.5

Tentative Time Table:

14 Jan 2021: Price Band announced

18 Jan 2021: Anchor List

20 Jan 2021: Offer Opens

22 Jan 2021: Offer Closes

27 Jan 2021: Finalization of Basis of Allotment

28 Jan 2021: Unblocking of ASBA

29 Jan 2021: Credit to Demat Accounts

02 Feb 2021: Listing on NSE & BSE

Outlook:

Among the top 5 in the Decorative Paint Industry in India, Indigo Paints is growing over 40% CAGR in terms of sales since inception. Revenue from operations has grown by 16.65% between FY19 to FY20, against the range of (8.8)% to 4.9% compared to peers. The quality of the paints is good, especially the exterior ones. The net margin of the company has been improving. We assign a "Subscribe" rating for listing gain and long-term eyeing the growth of their innovative products and their penetration in 3-tier and 4-tier cities.

India is predominantly an agrarian economy, ranking second in farm production in the world. The contribution of agriculture to the GVA has decreased from 18.2% in 2014-15 to 16.5% in 2019-20.

While keeping pace with the increasing population, the growing agricultural production over the past several decades has thrown up major challenges in marketing, as well as supply, storage, and distribution. With highly fragmented markets and volatile commodity prices, it is a challenge to ensure a ‘fair’ and ‘remunerative’ price for the Indian farmer. Keeping these in mind, the government introduced several reforms. In all this, the strengthening of existing institutions in spot and derivative trade has become crucial as commodity markets do influence the lives of millions of stakeholders in the country’s diverse and large commodity ecosystem.

There is so many agri-commodities that are available for commodity trading whereas some of them are available on more than one platform. Majorly, KAPAS is the only commodity that is available for trading on both platforms i.e., NCDEX and MCX.

The National Commodity & Derivatives Exchange of India (NCDEX) is a nation-level, technology-driven online commodity Exchange with an independent Board of Directors and professional management. It is committed to providing a world-class commodity exchange platform for market participants to trade in a wide spectrum of commodity derivatives.

Multi Commodity Exchange of India Ltd (MCX) is an independent commodity exchange based in India. It was established in 2003 and is based in Mumbai. It is India's largest commodity derivatives exchange. It mainly provides a platform for trading in bullion, Base Metals and Energy.

NCDEX AGRIDEX is India’s first return-based agricultural futures index which tracks the performance of the ten liquid commodities traded on the NCDEX platform. The index represents the basket of ten commodities that are selected based on the liquidity on the exchange platform. The NCDEX AGRIDEX serves as a benchmark and one can replicate the performance of the underlying commodities.

AGRIDEX COMPONENTS FOR FY 2020-21

Here's the corrected version of the product specifications for the mentioned agri-commodities:

And for the new product specifications:‍‍

NOTE: The expiry of every futures contract is on the 20th of the delivery month. If the 20th happens to be a holiday, a Saturday, or a Sunday then the due date shall be the immediate preceding trading day of the Exchange, which is not a Saturday.

Indian Railway Finance Corporation known as IRFC is a finance arm of the Indian Railways. Incorporated in 1986, Indian Railway Finance Corporation (IRFC) is a public-sector enterprise that is wholly-owned by the Government of India.

The company is registered with the RBI as a systemically important NBFC and is classified under the category of an “Infrastructure Finance Company”. Its primary business is financing the acquisition of rolling stock assets, which includes both powered and unpowered vehicles, for example, locomotives, coaches, wagons, trucks, flats, electric multiple units, containers, cranes, trollies of all kinds and other items of rolling stock components as enumerated in the Standard Lease Agreement (collectively, “Rolling Stock Assets”), leasing of railway infrastructure assets and national projects of the Government of India (collectively, “Project Assets'') and lending to other entities under the Ministry of Railways, Government of India (“MoR”).

It follows a financial leasing model to finance rolling stock assets procurement for a lease period of 30 years. The key thing to note is in the last 30 years IRFC has zero NPA. In fiscal 2019, the actual capital expenditures by the Indian Railways were Rs. 1,334 billion, out of which, IRFC financed Rs. 525.35 bn accounting for 39.34% expenditures.

Strengths of the Company:

1. Plays Strategic role in financing the growth of Indian Railways.
2. The cost of borrowings is comparatively low based on strong credit ratings in India and diversified sources of funding.
3. Financial performance is a consistent and cost-plus model.
4. Low-risk business model.
5. Strong asset-liability management.
6. Experienced senior management and committed team.

IRFC IPO is a main-board IPO of 1,782,069,000 equity shares of the face value of ₹10 aggregating up to ₹4,633.38 Crores of which Fresh Issue 11,88,04,60,000 Shares Equity Shares, aggregating up to Rs 3088.92 Crore Offer for Sale comprises: Up to 59,40,23,000 Equity Shares, aggregating up to Rs 1546.44 crore. The issue is priced at ₹25 to ₹26 per equity share.

The minimum order quantity is 575 Shares. The IPO opens on Jan 18, 2021, and closes on Jan 20, 2021. The shares are proposed to be listed on BSE, NSE.

IPO Objective:

• Offer for Sale: The Company will not receive any proceeds from the Offer for Sale.
• Fresh Issue: Net Proceeds from the Fresh Issue are proposed to be utilized in augmenting the company’s equity capital base to meet business future growth requirements.

Financial Performance:

FY2018FY2019FY2020H1 FY2021Revenue9,207.8010,987.4013,421.107,384.80Expenses6,675.908,232.0010,229.005,498.00Net income2,002.302,140.103,191.501,887.30Margin (%)21.719.523.825.6

Tentative Time Table:

• 13th Jan: Announcement of Price Band
• 12th Jan: Anchor Investors Allotment
• 18th Jan: Offer Opens
• 20th Jan: Offer Closes
• 27th Jan: Finalization of Basis of Allotment
• 27th Jan: Unblocking of ASBA Accounts
• 28nd Jan: Credit of Equity Shares to Depository Accounts
• 29th Jan: Commencement of Trading

Outlook:

The market cap @26/share on listing day will be around 33000 crores and it is going to enter the top 100 large-cap company list. IRFC operates on a unique business model, quite contrasting to REC/PFC. Whatever price they borrow from the market, while financing to MoR, they provide it with a 40 basis point margin.

For railway companies, the margin is 150 basis points. Eyeing the budget it is expected that IRFC may get further orders from the railways as the government is planning to run 150 private trains. However, if the government doesn't fix IRFC as the only NBFC for Railways, IRFC may lose its monopoly. We recommend a "Subscribe" rating only for the long term.