Month: November 2021

Policybazaar IPO opens for subscription; should you subscribe?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The initial public offering (IPO) of PB Fintech, which operates Policybazaar and Paisabazaar, opened for subscription on Monday, and will close on Wednesday.

The IPO comprises a fresh issue of shares worth Rs 3,750 crore, along with an offer for sale (OFS) of shares worth Rs 1,959.72 crore by existing promoters and shareholders.

Through the IPO, the company will raise an amount of around Rs 5,826 crore. The price band of the IPO is set at Rs 940-980 per share.

PB Fintech founders Yashish Dahiya and Alok Bansal will sell fewer number of shares through the OFS than they had decided earlier in the IPO, as per reports.

PB Fintech has garnered a little over Rs 2,569 crore from anchor investors ahead of its IPO.

Also Read | Policybazaar IPO to open for subscription today: Here are the key things to know

Shares of PB Fintech are likely to make their debut on the bourses on November 15.

Here’s what brokerages and experts have to say about the IPO:

Choice Equity Broking:

Macros of the insurance sector are positive and so are the fundamentals of PB Fintech, according to Choice Equity Broking. The company with its dominant position in the digital insurance and credit market, is expected to benefit from the abundant business opportunities in both markets. At the higher price band of Rs 980, the company is demanding an enterprise value to sales multiple of 40.5 times which appears to be very stretched. With this, Choice Equity Broking has assigned “Subscribe for Long Term” rating for the issue.

Samco Securities:

With strong brand equity, PB Fintech commands a stellar 93.4 percent market share in its digital insurance marketplace Policybazaar and a 51.4 percent in its digital consumer credit marketplace Paisabazaar. The company has delivered a notable 34 percent CAGR in its revenues and although it has expanded its contribution margin considerably from 8.6 percent to 39.8 percent over FY19 to FY21, it remains EBITDA negative, said Yesha Shah, Head of Equity Research, Samco Securities.

“Considering the intensifying competition in the sector and certain larger players delisting their products from the platform, the key challenge for the company lies in shielding its market share and consistently scaling its revenue. Speaking about the valuation, the company is seeking a market cap of around 2.5 times of its last funding round in March’21. While the insurance brokers license and the minimal online insurance penetration in India provide the company massive long term opportunities to grow, the current valuation seems pretty expensive. Hence, only investors with a longer time horizon, a larger risk tolerance and the patience to wait for the company’s return ratios to improve should subscribe,” said Shah.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Oil prices fall after China releases reserves of gasoline, diesel

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Oil prices fell on Monday after China said it released reserves of gasoline and diesel to boost supply, while investors unwound long positions ahead of an OPEC+ meeting on Nov. 4.

China released reserves of the two fuels to increase market supply and support price stability in some regions, the National Food and Strategic Reserves Administration said on Sunday.

Brent crude futures dropped 20 cents, or 0.2%, to $83.52 a barrel by 0039 GMT, after gaining 6 cents on Friday.

U.S. West Texas Intermediate (WTI) crude futures slid 37 cents, or 0.4%, to $83.20 a barrel, having risen 76 cents on Friday.

Both benchmarks fell slightly last week, marking the first weekly drop in eight weeks for Brent and the first decline in 10 weeks for WTI.

“Investors are adjusting positions after the news of China’s release of fuel reserves and ahead of the OPEC+ meeting,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

All eyes are on the Nov. 4 meeting of the Organization of the Petroleum Exporting Countries, Russia and their allies, together called OPEC+, with analysts expecting them to stick to their plan to add 400,000 barrels per day of supply in December.

Oil prices rallied to multi-year highs last week, helped by the decision by OPEC+ to maintain its planned output increase rather than raising it on global supply concerns.

“Still, some investors want to square their positions as there is a chance that OPEC+ will decide a bigger increase in output,” Kikukawa said, adding that investors will resume buying after confirming the OPEC decision.

Money managers cut their net long U.S. crude futures and options positions in the week to Oct. 26, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

U.S. President Joe Biden on Saturday urged major G20 energy producing countries with spare capacity to boost production to ensure a stronger global economic recovery as part of a broad effort to pressure OPEC and its partners to increase oil supply.

But Iraq’s state oil marketing company, SOMO, said on Saturday Iraq sees no need to take any decision to increase its production capabilities beyond what has already been planned for OPEC countries.

Spurred by rising oil prices, U.S. energy firms added oil and natural gas rigs for a 15th month in a row in October, taking them to the highest since April 2020, energy services firm Baker Hughes Co said on Friday.

Exxon and Chevron are looking to add drilling rigs in the Permian shale basin after sharply cutting crews and output in the region last year, the companies said Friday. Chevron said it will add two drilling rigs and two completion crews this quarter.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

SJS Enterprises IPO opens: Key things to know

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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SJS Enterprises’ initial public offer (IPO) opened for subscription on Monday, November 1. The initial share sale of SJS Enterprises, a Bengaluru-based provider of decorative aesthetics, is estimated at Rs 800 crore. The public offer is entirely an offer for sale (OFS) of Rs 800 crore.

Here are the key things to know about the SJS Enterprises IPO:

Important dates: The SJS Enterprises IPO will close for subscription on Wednesday, November 3.

Issue price: Shares will be available for bidding in a price band of Rs 531-542 apiece under the SJS IPO.

Lot size: Potential investors will be able to bid for SJS Enterprises shares in multiples of 27 shares. At the upper end of the price band, one lot of SJS Enterprises shares under the IPO will cost Rs 14,634.

ALSO READ: Key things to know about Paytm IPO

Shareholding pattern: Promoters’ shareholding will come down to 50.4 percent after the IPO, from 98.9 percent. The public will hold 49.6 percent in the company after the IPO.

Financials: In FY21, the company’s PAT stood at Rs 48 crore, as against Rs 41 crore in FY20 and Rs 38 crore in FY19. SJS Enterprises’ total operating income stood at Rs 252 crore in FY21, Rs 216 crore in FY20 and Rs 237 crore in FY19. Its EBITDA came in at Rs 76 crore in FY21, Rs 64 crore in FY20 and Rs 68 crore in FY19.

Company profile: SJS is a leading player in the country’s decorative aesthetics industry offering a wide range of products. It is a ‘design-to-delivery’ aesthetics solutions provider. Apart from catering to the requirements for the auto and consumer durables industries, SJS also caters to the medical devices, farm equipment and sanitaryware businesses.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China’s economy slows as Beijing wrestles with debt

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China’s economic rebound from the coronavirus pandemic is stalling as President Xi Jinpings government cracks down on surging corporate debt.

For a decade, the ruling Communist Party has talked about shifting to economy based on spending by 1.4 billion consumers instead of on building factories and apartments. But with each slowdown, Beijing fell back on pepping up growth with more construction and borrowing.

Finally, Xis government is confronting the problem by clamping down on borrowing by a real estate industry that supports millions of jobs.

That is sending shockwaves through the economy. Businesses and households are jittery as housing sales and construction slump. That is chilling auto and retail sales. It has possible global repercussions as China buys less steel and other building materials.

Many customers would like to wait and see, said Liang Qiming, a salesman for online real estate broker 5i5j.com in Nanchang, a southern provincial capital that was turned into a boomtown by a flurry of construction over the past two decades.

China became the worlds factory, but the bigger power driving its economic boom was a construction frenzy that took off in the late 1990s. Developers and local governments poured borrowed money into blanketing the country with new apartments, office towers, shopping malls, bridges and railways.

Xis government appears to be willing to accept a politically painful slowdown to get that debt under control and achieve the longer-term goal of self-sustaining, safer growth.

Beijing doesnt want growth at all costs, followed by the likely or inevitable financial market crash, which is very much the sort of European-U.S. model, said Robert Carnell, head of Asia research for ING.

Financial markets are on edge about whether one of the biggest developers, Evergrande Group, might be allowed to collapse under 2 trillion yuan ($310 billion) in debt as a warning to others.

Beijing wants to make sure families receive apartments sold to them by Evergrande before they were built, as is common in China, economists say. But they say it is trying to avoid sending the wrong message by bailing out the company.

Evergrande is a pre-emptive cleanup, Carnell said.

China revived from the coronavirus pandemic earlier than the United States, Europe or Japan, but but that rebound quickly flattened out.

Depressed by the building slump, the economy expanded just 4.9% over a year earlier in the three months ending in September much weaker than the previous quarters 7.9% growth. Compared with the previous quarter the way other major economies are measured growth in the three months ending in September fell to 0.2%, among the weakest of the past decade.

Housing sales fell 32% in September from a year earlier. Buyers were put off by curbs on mortgage lending and anxiety about whether developers might fail to deliver apartments paid for in advance. That means less spending on furniture and appliances.

With no sign Beijing will ease up, forecasters expect the economy to weaken further, since consumers who are reluctant to spend won’t fill the gap left by lower investment.

This quarter’s growth might fall as low as 3% over a year ago, according to Nomura. Bank of America cut its full-year forecast from 8% to 7.7%, which still would be among the worlds strongest. It slashed next years outlook from 5.3% to just 4%.

The total owed by companies, households and the government rose to almost the equivalent of three times annual economic output last year from 270% in 2018 high for a middle-income country.

Xi affirmed his priorities at an August planning meeting, calling for high-quality development and forestalling major financial risks, according to the official Xinhua News Agency.

China is in the middle of a transformation from growth driven by blind investments to high-quality growth, said Zuo Xiaolei, an economist in Beijing.

Regulators tightened control over use of debt by real estate developers last year. Hundreds already had gone bankrupt following other restrictions imposed since 2017.

Tightening control, Beijing on Oct. 15 declared 19 of China’s biggest banks that account for three-quarters of their industry’s assets to be domestic systemically important banks” that will face closer government scrutiny and lending controls.

A midsize developer, Modern Land (China) Co., announced it failed to pay off on a $250 million bond due Oct. 25. Earlier, another developer, Fantasia Holdings Group, missed a $205.7 million payment to bondholders due Oct 5.

Evergrande has caused more anxiety due to its vast debt, which includes $18 billion owed to foreign bondholders.

It failed to make a bond payment due Sept. 23. An official newspaper said the company avoided being declared in default by wiring $83.5 million for the payment on Oct. 22, one day before the end of a 30-day grace period.

The risk of a sharper slowdown in real estate activity cant be ruled out, Tommy Wu of Oxford Economics said in a report.

Meanwhile, the economy also faces headwinds from power rationing imposed in major manufacturing areas to meet official efficiency goals. Automakers and other factories have been disrupted by shortages of processor chips.

Auto sales plunged 16.5% in September from a year earlier, according to the China Association of Automobile Manufacturers.

Buyers are uneasy about the pandemic and economic outlook, said Chu Xianwu, who sells Jeeps at Shandong Xinju Auto trading Co. in the eastern city of Jinan. He said sales there were down 20% from six months ago.

I really hope the situation will improve in the near future, Chu said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian factories shake off lockdown blues, now face supply headaches

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asia’s manufacturing activity grew in October as emerging economies saw COVID-19 infections subside, but rising input costs, material shortages and slowing Chinese growth cloud the outlook, business surveys showed on Monday.

Policymakers in the region face pressures on multiple fronts as they steer their economies out of the pandemic-induced doldrums while also trying to keep prices under control amid rising commodity costs and parts shortages.

China’s factory activity expanded at its fastest pace in four months in October, the private Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) showed on Monday, as dwindling COVID-19 cases drove up domestic demand.

But a sub-index for output showed production shrank for the third straight month due to power shortages and rising costs, falling in line with Sunday’s official PMI that showed factory activity in October shrank more than expected.

“Shortages of raw materials and soaring commodity prices, combined with electricity supply problems, created strong constraints for manufacturers and disrupted supply chains,” said Wang Zhe, senior economist at Caixin Insight Group.

Factory activity in October expanded in Vietnam, Indonesia and Malaysia as operations gradually normalised after being hit by shutdowns caused by a spike in COVID-19 infections.

Taiwan saw manufacturing activity growth accelerate on robust chip demand, while Japan’s factory activity expanded at the fastest pace in six months in October in an encouraging sign for the world’s third-largest economy.

In a sign of the patchy nature of Asia’s recovery, however, South Korea’s factory activity rose at the slowest pace in 13 months in October on shrinking output and softer demand.

Material shortages and delivery disruptions drove up Japan’s input prices by the most in over 13 years.

“While October Manufacturing PMIs point to a strong rise in manufacturing output, industry is likely to be working through huge backlogs of orders for many months to come and resulting supply shortages further afield are set to persist,” said Alex Holmes, emerging Asia economist at Capital Economics.

The final au Jibun Bank Japan PMI in October rose to 53.2 from 51.5 in the previous month, expanding for the ninth consecutive month.

South Korea’s PMI, by contrast, fell to 50.2 in October from 52.4 in September, though it managed to stand above the 50-mark threshold that indicates expansion in activity, for a 13th straight month.

Vietnam’s PMI rose to 52.1 from 40.2 in September, while that of Indonesia increased to 57.2 from 52.2, the surveys showed. Malaysia’s index stood at 52.2, up from 48.1.

Asia’s emerging economies have lagged advanced economies in recovering from the pandemic’s pain as delays in vaccine rollouts and a spike in Delta variant cases hurt consumption and factory production.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Here’s a look at buzzing stocks for trade on Nov 1

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian benchmark indices is likely to start the week on a positive note following a similar trend in SGX Nifty50 futures that were up 0.3 percent at 17,801.50 as of 7:00 am. Here are the top 10 buzzing stocks for trade today:

Bajaj Consumer Care, Housing Development Finance Corporation, Graphite India, IRCTC, Phoenix Mills and Tata Motors | These companies will report their quarterly numbers today.

Reliance Industries | Much-awaited JioPhone Next, the made-for-India smartphone, will be available in stores from Diwali at the down payment of Rs 1999. The remaining amount can be paid via easy EMI schemes.

Indian Oil Corporation | The company’s Q2 profit rose 7 percent Year-on-Year (YoY) to Rs 6,360 crore and revenue was up 14 percent to Rs 1.35 lakh crore.

Equitas Small Finance Bank | Gross and net non-performing asset ratio weakened sequentially with net profit and net interest income falling short of expectations at Rs 41 crore and Rs 483.9 crore.

Vedanta | The company reported a higher consolidated net profit at Rs 5,813 crore in Q2FY22 against Rs 1,642 crore in Q2FY21. Revenue rose to Rs 30,101 crore from Rs 21,107 crore YoY.

Steel Authority of India | The company reported a net profit of Rs 5,794.9 crore in Q2FY22 against Rs 660.2 crore logged in Q2FY21, while revenue was up at Rs 26,828 crore as compared to Rs 16,925.5 crore YoY. Both net profit and revenue exceeded Street’s expectations.

Adani Enterprises | The company has acquired a significant minority stake in Cleartrip Private Ltd, an online travel aggregator and part of the Flipkart Group.

Bharat Petroleum Corporation Ltd | BPCL’s net profit and revenue for Q2 FY22 were sharply above the estimates, at Rs 2,694 crore and Rs 81,536.8 crore respectively.

Bandhan Bank | The bank reported a loss of Rs 3,008.6 crore for Q2 FY22 as against CNBC-TV18 poll’s expectation of a profit and net interest income of Rs 1,935.4 crore which was also below estimates.

Policybazaar, Sigachi Industries and SJS Enterprises | Initial public offerings of these companies will open today.

Automobile companies | Automobile companies will announce their sales data for October today and on Tuesday.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Fuel prices at fresh highs: Petrol rises by 33-35 paise, diesel increases by 35-37 paise

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The oil marketing companies (OMCs) hiked petrol, diesel prices for sixth consecutive day on Monday. While petrol rates were raised by 33-35 paise, diesel rates were increased by 35-37 paise.

The price of petrol in Delhi rose to its highest-ever level of Rs 109.69 a litre and Rs 115.50 per litre in Mumbai, according to a price notification of state-owned fuel retailers. In Mumbai, diesel now comes for Rs 106.62 a litre, while in Delhi, it costs Rs 98.42 per litre.

Oil companies revise rates of petrol and diesel daily based on the average price of benchmark fuel in the international market in the preceding 15-days, and foreign exchange rates.

The prices of petrol and diesel are reviewed by oil marketing companies such as state-run Indian Oil on a daily basis and any revision is implemented from 6 am.

Fuel prices differ from state to state depending on the incidence of local taxes such as VAT and freight charges. Rajasthan levies the highest value-added tax (VAT) on petrol.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Key bond market deals: ICICI Home Finance, Bajaj Housing Finance, Godrej Industries

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Here’s a look at the key bond market deals on Monday

NON-CONVERTIBLE DEBENTURES:

• ICICI Home Finance to raise:

a. Rs10cr via reissue of 6.27 percent Sept’26 bonds

b. Rs25cr via reissue of 7.25 percent Aug’31 bonds

• Hinduja Leyland Finance to raise Rs50cr via reissue of 7.8 percent Dec’23 bonds
• Spero Properties takes Rs95cr at 10.75 percent IRR via 10 year bonds
• Kotak Mah Prime tajes Rs765cr at 5.74 percent via 3 year bonds
• Bajaj Housing Fin takes Rs2221cr at 7.25 percent coupon via 10 year bonds
• Aadhar Housing Fin takes Rs120cr at 6.9 percent coupon via 3 year bonds
• SBI Cards & Payment Services approves raising of upto Rs2000cr via bonds
• HDFC Ergo General Insurance likely to raise funds via 10 year subordinated bonds this week

COMMERCIAL PAPERS:

• Godrej Industries to raise funds via three-month CP at 3.88 percent coupon

Catch all the stock market live updates here.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Policybazaar founders to reduce sale of own shares in IPO by 85-90%: Report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

PB Fintech, parent of Policybazaar, founders Yashish Dahiya and Alok Bansal will sell fewer number of shares through the offer for sale (OFS) than that they had decided earlier in the initial public offering (IPO) set to open on Monday, according to an Economic Times report.

Increased interest in tech IPOs and the headroom for further growth in its business as well as likely valuation after the share sale led to the founders reducing their OFS by 85-90 percent by value, the ET report said citing sources aware of the matter.

Dahiya, also chairman and CEO of PB Fintech, was supposed to sell his shares worth Rs 250 crore in the Policybazaar IPO as per the draft red herring prospectus (DRHP) filed in August.

According to the latest DRHP filed by the company, he will now sell shares worth Rs 30 crore.

Similarly, Bansal, also whole-time director and CFO at the firm, had earlier decided to sell his holding of Rs 95 crore but now will sell shares worth just under Rs 13 crore. SoftBank, the largest shareholder with a stake of over 15 percent, is selling shares worth Rs 1,875 crore, the report said.

Policybazaar’s Rs 5,700 crore IPO is looking at a listing valuation of $6.15 billion.

Policybazaar’s anchor investment slot had seen 40 times demand in terms of bids. Leading insurance firms have also picked up stakes in the firm. It raised Rs 2,569 crore from 155 anchor investors, according to the report.

According to the RHP, Dahiya owns 4.27 percent, while Bansal has 1.45 percent in PB Fintech.

Policybazaar has set a price band of Rs 940-980 per share for the IPO.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow