In contrast to the same period last year (Q2FY24), Bajaj Auto's Q2FY25 financial results demonstrate consistent increase across key measures. Here is a brief summary of the figures:
Q2FY25: ₹2,005 crore
Q2FY24: ₹1,836 crore
Estimates: ₹2,228 crore
Despite falling short of the estimated ₹2,228 crore, Bajaj Auto’s net profit rose by 9.2% compared to last year.
Q2FY25: ₹13,127 crore
Q2FY24: ₹10,777 crore
Estimates: ₹13,270 crore
Bajaj Auto achieved a significant 21.8% growth in revenue compared to Q2FY24, though it came slightly below the estimated ₹13,270 crore.
Q2FY25: ₹2,652 crore
Q2FY24: ₹2,133 crore
Estimates: ₹2,704 crore
EBITDA grew by 24.3% year-over-year but was marginally lower than the forecast of ₹2,704 crore.
Q2FY25: 20.2%
Q2FY24: 19.8%
Estimates: 20.4%
The EBITDA margin has shown improvement, increasing to 20.2%, close to the market estimate of 20.4%.
Overall, Bajaj Auto's financial performance in Q2FY25 demonstrates consistent growth in revenue, profitability, and margins compared to the previous year. However, it fell slightly short of analysts' estimates in all categories. This update reflects a robust performance for the company despite minor shortfalls in hitting projected targets.
Source: CNBC
On Thursday, the shares of IRCTC was revitalized 16% after the stock turned into an ex-split. The organization had fixed October 29 as the record day for the stock split in the proportion of 1:5. Earlier, the board of IRCTC had endorsed a stock split on August 12.
Essentially, this implies that each stock will be split into 5 shares This builds the liquidity of the stock by reducing its stock value, subsequently making it more reasonable for investors and traders.
On October 19, 2021, the stock made a record high of Rs1,279 (acclimated to stock split) and has increased the investor’s wealth to a greater extent, which is more than 100% in the recent months.
A stock split builds the number of portions of a firm. In this case, the total number of shares will uplift 5 times however the offer cost will decrease.
This doesn't influence the market cap of the firm. Existing shares might slip yet the worth remains the same as before.
If we take the case of IRCTC, if investors possess 5 shares of the organization, the number of shares will increment to 25. The price of the stock of each share will get reduced. However, their fundamental value will remain the same as before.
The primary reason behind the stock split is to make shares more reasonable for the investors. It happens after a significant run-up of a stock's price.
Before declaring a stock split, the share price of IRCTC was around Rs 4000, even after a major decline from its all-time high of Rs 6,369.
Earlier, the stocks of IRCTC was quite expensive for small investors but after the stock split, the share prices had reduced to Rs 900, making it more appealing for investors.
It does not just advantage the current investors but also for the future investors. This is because IRCTC expanding the number of shares they hold.
It may be noted that there are no extra costs incurred during a stock split. The organization’s finances like revenue, income, operational expenses etc are not much affected after the stock split, nor is the market cap of the firm.
Maximize the ROI by increasing areas of core competencies.
Increase business opportunities through effective partnership between public and private agencies.
Adopt ethical and strong work culture by teamwork as well as the reposition of Railways in the emerging economy.
Concern for heritage and environment.
To be totally friendly to customers and driven by the innovation, and development of human resources.
The fundamentals of IRCTC are very strong even before the stock split. Hence, the analysts recommended their investors hold their stocks instead of buying because of higher valuations. The split just makes the stock more appealing to the investors.
Aside from the stock split declaration, the sudden increase in railway bookings because the economy gets railed again and a decline in COVID cases are the positive news for the IRCTC stocks.
IRCTC has started an online rail ticketing system where any user can book a ticket via SMS or GPRS. It likewise gives an SMS office to check the current PNR status and live train status also.
IRCTC additionally offers catering administrations to its travelers by serving freshly cooked food. IRCTC has also taken the rights for onboard catering of food on all trains operated by Indian railways.
It also has cafeterias such as a food plaza, Jan Aahar at numerous railway stations.
IRCTC accepted its approval for the stock split solely after it declared its quarterly income in August.
IRCTC took this choice simply because it will assist the organization with improving its liquidity in the securities exchange, which thus makes shares accessible for the small financial backers and investors.
The organization further said that the approved offer capital will remain the same at Rs 250 Crore while post-split, the share price will increment up to 1,25,00,00,000 from 25,00,00,000.
IRCTC launched its IPO in October 2019 and thus it entered the primary market. Since launching, the company has also enjoyed its monopoly in the capital market because it's the only company that provides and manages catering services to Indian Railways and at major units at railway stations.
It has been seen that after launching its IPO, the company has managed to give steady returns to its shareholders. The share price of IRCTC has increased more than 10 times from Rs 320 per share to Rs 3,790 within 2 years.
In the June quarter, the net profit of IRCTC has marked at Rs 82.5 crore, whereas its revenue rose up to Rs 257 Crore. Also, the company has increased its revenue to Rs 149 Crore and from the tourism category, the expected revenue was more than doubled to Rs 7 Crore.
The future plans of IRCTC are moving its business to transport, air tickets, tour and travel planners that could bring a new opportunity for the organization to reinforce its position.
IRCTC is the only approved organization that provide online tickets and catering services to the Indian Railways. Hence, we can say that it holds a pure monopoly in business.
Ex split of IRCTC has various advantages as it improves the liquidity in the capital market to build the investor base and makes the share affordable to small investors.
If you are a newbie who wants to start investing in stocks, then IRCTC would be a safe game to play. IRCTC is a government-owned organization and hence investing in it will give you significant gain in the future.
The government of India seeks a gigantic valuation of Rs 10 Lakh Trillion or more from the biggest insurance company of India. The government took a reference from the Zomato IPO, which accumulated a valuation of Rs 1 trillion and suggested its advisors discover if LIC has the potential to be valued at Rs 10 trillion or more.
The government intends to sell a 5-10% stake in the LIC by means of IPO. Through this, the government raise to 1 Lakh Crore according to the people with the knowledge of the matter who have requested to not be recognized, as the matter is confidential.
This, in turn, will help the government to meet Rs 1.75 trillion disinvestments in the current fiscal.
Although the valuation is much lower than Jefferies’ estimate of Rs 19 crore, it can come under the category of RBSA Advisors’ whose estimated valuation is considered as Rs 10 Lakh Crore to Rs 11.6 Lakh Crore.
The central government is pushing ahead with LIC’s IPO to help plug a widening budget gap as it aims to raise Rs 1.75 Lakh Crore via disinvestment. The LIC deal is vital to the government accomplishing this objective.
As said above, the government is looking forward to its LIC IPO as with the help of it, the government aims to meet its disinvestment target. The secondary reason behind the popularity of LIC IPO is that the government is planning to privatize two banks and one insurance company.
From Rs 1.75 Lakh Crore disinvestment, Rs 1 Lakh Crore will be made from the sale of stakes in the financial institution and PSU banks. The leftover of Rs 75,000 Crores will come as a CPSE disinvestment receipt.
Above all, while LIC will have autonomous directors and operate in a corporate structure, it will carry on with the sovereign guarantee. This could end up being of great comfort to the investors and foreign portfolio investment.
Investors met government and LIC authorities last week to officially start the deal process. A listing is expected between January and March in the FY22 said a news official.
The government has selected 10 banks, including Kotak Mahindra Bank, Gold Sachs Group, JP Morgan Chase and Co, ICICI Securities etc to arrange the IPO.
This means that the central government could fuel LIC with more capital if the need emerges.
The offer for sale in LIC IPO could be the mother of all IPOs so far in India - said, research analysts. In spite of the fact that there will be hunger, the sale begins at the end of the financial year which implies that it could deplete the liquidity and impact the secondary market to some extent, analysts said.
The LIC IPO is the biggest plan of the Indian government to raise 1.75 trillion rupees by selling its assets. The money earned after the launching of LIC IPO would be used to minimize the country’s budget deficit which is calculated as 6.8% the current year.
Also, the government aims to offer the majority of its stakes in four major state-run firms including Air India, Bharat Petroleum Corporation of India, Container Corporation of India and Shipping Corporation of India.
The government plans to list LIC shares in the first three months of the year 2022. Earlier, the IPO was planned to be launched at the beginning of the fiscal year April 1, 2020. However, it got delayed due to the Covid 19 and the pandemic issues which interrupted the IPO process to a greater extent.
Calculating the valuation of the biggest insurance company in India is without a doubt a challenging job. LIC, which cover the total size of India’s mutual fund industry, holds $ 511 billion of assets. The firms, that has been appointed to work on the valuation process, will look through million trillion of policies to represent the parameters such as morbidities, mortalities, lapses and surrenders. Additionally, they need to compute the worth of LIC’s fixed property across its 2000 branches.
Few people know that LIC release its balance sheet only once a year and there is no exact number to arrive at its embedded value that incorporates the current worth of future benefit with the net value of assets.
Japan Post, whose privatization began in 2015, was Japan's greatest holder of bank stores and its biggest backup plan while it ran the public postal service.
Like LIC, it was exceptionally apparent, with the greatest chain of retail facades in Japan and a fleet of 86,000 motorbikes for mail conveyance.
Saudi Aramco, which organized the world's greatest IPO in 2019, was in like manner an image of Saudi Arabia's economy might be creating almost 90% of the Saudi government's income.
The huge measure of liquidity presently kicking around in worldwide monetary business sectors could help the IPO sail through. Organizations have raised about $10.2 billion through IPOs in India so far this year, putting 2021 on target to beat the unsurpassed record of $11.8 billion.
Market observers now see great potential in LIC IPO as it may heavily improve future growth as well. Insiders predict that if 22 lakh agents sell one policy per year, it will result in huge volume.
Apart from that, the LIC of India comes with a huge investment portfolio that can create a massive investment return in the future.
Many companies have started IPO filing since the end of 2020. This is because many businesses had suffered due to the impact of the COVID 19 pandemic and exuberant stock market activity.That’s why many SMEs and big organizations have participated in the IPO. Here is the list of the companies that are ready to get launched in November 2021:
Company Name IPO Size Tentative Date CMS Info Systems Rs 2000 Crore November 2021 Emcure Pharmaceuticals Rs 4500 Crore November 2021Star Health And Allied Insurance Co. Limited Rs 3000 Crore November 2021 Jana Small Finance Bank Rs 2000 Crores November 2021 MobiKwik Rs 1900 Crores November 2021Arohan Financials Rs 1800 Crores November 2021 Northern Arc Capital Rs 1800 Crores November 2021 Ixigo Rs 1600 Crores November 2021 Penna Cement Rs 1500 Crores November 2021 Utkarsh Small Finance Bank Rs 1350 Crores November 2021 Fincare Small Finance Bank Rs 1330 Crores November 2021 Sterlite Power Transmission Rs 1250 Crores November 2021RateGain Travel Technologies Rs 1200 Crores November 2021ESAF Small Finance Bank Limited Rs 998 Crores November 2021Shriram Properties Rs 800 Crores November 2021 Shri Bajrang Power and Isp at Rs 700 Crore November 2021Studds Accessories Limited Rs 450 Crore November 2021
Emcure Pharmaceuticals is considered one of the leading pharmaceutical companies in India. Headquartered in Pune, Emcure pharmaceuticals, is planning to make its debut with an IPO of Rs 4500 crore. The company offers numerous products including tablets, capsules including soft gel and hard gel and injectables. The IPO will offer new issue equity shares of Rs 1,100 crore and OFS of about 18 million shares for its current shareholders and company promoters. The primary objective of Emcure pharmaceuticals is to pay its existing debts.
Star Health and Allied Insurance are considered one of the leading health insurance companies in India. Headquartered in Chennai, the company is known for providing health, overseas travel and personal accident insurance. Recently, the company has submitted its DRHP to the Security and Exchange Board of India for filing IPO of Rs 3000 Crore. The offer for sale includes 6 crore equity shares and fresh issue equity shares of Rs 2000 Crore. By launching its IPO, Star health wants to expand its current capital. Currently, the company has a market share of 15.8%.
Jana small finance bank is a leading small finance bank of India in terms of asset under management and deposit size. Founded in 2008, the bank mainly works in the rural and semi-urban parts of the country. The OFS of Jana Finance Bank will be Rs 1,300 Crore and Rs 700 Crore will be through fresh issue equity shares, hence the total IPO worth of Jana Finance bank would around Rs 2000 Crore. The primary objective of the bank is to improve its tier-1 capital.
CMS info systems is a well-known cash management company that has recently filed its DRHP with SEBI. The net worth of the IPO would around Rs 2000 Crore. Here, the IPO will only consist of sales and no fresh issues.
MobiKwik is an Indian digital payment company that has filed a DRHP with SEBI of launching its IPO of Rs 1900 Crore. Founded in 2009 by Bipin Preet Singh and Upasana Taku, the company believes in offering peer to peer payment facilities through UPIs. MobiKwik allows you to make your bill payments and different recharge through its app. By launching its IPO, the company plans to raise a $1 billion valuations.
Northern Arc Capital is an NBFC with 10+ years of experience in the financial sector. Recently, the company has filed DRHP with the SEBI.The IPO consists of an OFS of 36, 520,585 shares and the issuance of fresh equity shares worth Rs 300 Crore.
Arohan Financial Services is an NBFC that provides income-generating loans and other services to people who have zero access to financial services.By launching its IPO, the finance company is planning to make a public issue of around Rs 1800 Crores. The IPO consists of an OFS of 27,055,893 shares and new issue equity shares of Rs 850 Crores.
iXigo is an AI-based online travel portal that has recently filed its DRHP with SEBI. The company has planned to raise Rs 750 Crore through fundraising and an OFS of Rs 850 Crore. In a pre IPO funding round, the company raised around Rs 395 Crore.
The bank filed its DRHP with SEBI in the 1st quarter of this year and got the approval from the same in June 2021 to begin its IPO proceedings. The main motive of this organization behind launching its IPO is business expansion. The total issue size of the IPO will be around Rs 1350 Crore - which can be divided into OFS and fresh issue. Here, the fresh issue of equity will be around Rs 750 Crore and OFS will be Rs 600 Crore.
The initial public offering of Penna Cement will likely have a total valuation of Rs. 1,550 crores. It will comprise an offer for sale of Rs. 250 crores and freshly issued equity shares of Rs. 1,300 crores. ICICI Securities, Axis Capital Limited, JM Financial, Yes Securities (India) Limited, and Edelweiss Financial Services are the lead managers of this IPO. KF in Technologies Private Limited is the registrar of this IPO. Penna Cement is one of the leaders in its segment in India. It has an annual production capacity of 10 million tonnes and has a strong presence in the Southern and Eastern parts of India.
Sterlite Power is a leading integrated power transmission developer and solution provider company. The company is all set to release its IPO of about Rs 1250 Crore. According to the DRHP, the lead manager of this IPO is JM Financial Capital, ICICI securities limited, Axis Capital Limited. However, the registrar of this IPO is KFin Technologies.
RateGain Technologies is all set to release its IPO, which would be worth Rs 1200 Crores. The face value of RateGain’s share is Rs 1 per share. The company is planning to invest its proceedings to pay off debts first and then invest the money in technological innovations and acquiring capital equipment.
Fincare small finance bank is preparing to go public in the current financial year. However, the company has already filed for DRHP to start IPO. The total valuation of around Rs 1,330 Crore, which consists of an OFS of Rs 1000 Crore through the company’s promoters and freshly issued equity shares of Rs 300 Crores.
ESAF Small Finance Bank is ready to go public by the end of 2021. The total size of the IPO is Rs 800 Crores and the remaining is through OFS.
Shriram Properties have filed its DRHP with SEBI. The total valuation of Shriram properties is around Rs 800 Crore. It consists of fresh equity shares of Rs 250 Crores and Rs 550 Crores for OFS.The face value of Shriram properties is Rs 10 per share.
Shri Bajrang Power & Ispat Limited IPO will list 41,18,000 freshly issued equity shares with a face value of Rs. 10 per share.
Studds Accessories Limited, IPO is expected to have a valuation of around Rs 98 Crore. Also, current investors are likely to divest around Rs 3,939,000 crore equity shares.
A stop-loss order is used to mitigate the losses happening in the stock market. The order can be placed on both - the buy and sell orders. As you know the stock market is full of ups and downs and hence there is also a chance of falling stock.
If things happen exactly the opposite of what you think, then you need to do something to stop it right. Here, the term is known as a stop-loss order.
Let’s understand it with a suitable example: Suppose you have purchased a stock of Rs 100 and wish to go that stock high. If this is not happening, then you need to take some action to mitigate the losses. Here, the stop-loss order comes into play.
In the stock market, you can limit your losses by putting a stock loss order at 95. By doing this, you are placing it to stop a loss more than what you are ready to risk.
Stop-loss orders are of two types:
Case 1 > If you have a buy position, then you will place a sell SL.
Case 2 > If you have a sell position, then you will place a buy SL.
In Case 1 if you have a buy position at 100 and you wish to place an SL at 95.
SLM order type: With this order type, you must place a Sell SLM order with a trigger price of 95.
Then, when the price of 95 is triggered, a sell market order will be sent to the stock exchange and your position will be will settle at the market price.
SL order type: With this type of order, you must place a sell order with price and trigger price. Here your order must be triggered first, the trigger price is always greater than or equal to the price.
This order offers you a series of stop-loss limits.
Assume a range of Rs 0.10 (10 Paise). Here you can enter the trigger price = 95 and the price = 94.90.
When the price of 95 is triggered, the sell limit order is submitted to the exchange and your order is squared with the next available offer above 94.90. So your SL order can run at 95 (or higher) or 94.95, but not below 94.90.
The downside of this order is that if the market falls sharply, your Stop-Loss order is placed after the trigger of 95 and before the sell limit order of 94.90, if the share price is already below After 94, 90, your Stop-Loss order is still open and your losses could be much higher.
In Case 2, If you have a sell position at 100 and you wish to place an SL at 105.
SL-M Order Type: You place an SLM buy order with the trigger price = 105.
When the price of 105 triggers, a buy market order is sent to the stock exchange and your position is squared with the price market.
SL Order Type: Make a Buy SL order with price and trigger price.
Since your order must be activated first (the triggered price ≤ price). Here this type of order gives you a stop loss range.
Let’s assume a range of Rs 0.10 paise. Here you can keep the trigger price = 105 and the price = 105.10.
When the price of 105 is triggered, the buy limit order will be submitted to the stock exchange and your order will be squared below 105.10 on the next available offer.
Therefore, your SL order can be executed at 105.05 or 105, but not above 105.10.
Since SL sell orders are used above their buy price and SL buy orders below their sell price, you can use these types of orders to buy via LTP (last traded price) and sell below LTP.
What are the Methods of Calculating the Stop-Loss in Intraday Trading?
Percentage Method
This method is mostly used by intraday traders to calculate the stop loss. In the percentage method, traders are required to set the percentage price of the stock price they are prepared to lose before exiting the trade.
For Example: if you think that you would be losing 10% of the stock price before you exit your trade. Let’s say your stock is trading at ₹50 per share. Hence, your stop loss would be set at ₹45. This is because 10% of ₹ 50 is Rs 5. ₹50 - ₹45 = ₹5
₹5 under the current market value of the stock (₹50 x 10% = ₹5).
This method is comparatively easier than the support method to figure out where to set their stop loss. A moving average can be applied to the stock chart.
The moving average for the long term is better as it helps you keep your stop loss too close to the stock price. Once the moving average has been inserted, kindly set your stop loss just below the moving average level.
In a support area, the stock price often stops falling, and in a resistance area, the stock price often stops rising. Once your support level is determined, all you need to do is set your stop-loss price point below the support level. For example, let's say you own a stock that is currently trading at ₹ 500 per share, and ₹ 440 is the last support level you can identify. It is recommended that you set your stop loss a little less than ₹ 440.
Don’t let a single bad day ruin your whole month. When you do intraday trading, there are so many things that go wrong. Successful traders know how to handle the situation and hence they know when to quit - they set and abide by a daily loss. According to stock market research analysts, the 3% rule is your maximum loss for the day; reduce this amount if you wish, but try never to lose more than 3% in a day.
Incorporated in 2012, Nykaa is a consumer technology platform, delivering a content-led, lifestyle retail experience to consumers. The company has a diverse portfolio of beauty, personal care, and fashion products, including their own brand products manufactured by them.
The company operates under 2 major verticals: Nykaa: Beauty and personal care and Nykaa Fashion: Apparel and accessories. They have a diverse portfolio of beauty, personal care and fashion products, including their owned brand products manufactured by them.
⮚ As of March 31, 2021, Nykaa offered approximately 3.1 million SKUs from 4,078 national and international brands to their consumers across business verticals.
For the 3 months ended June 30, 2021, the total GMV was ₹1,469.61 crore, which grew 238.8% from the 3 months ended June 30, 2020.
⮚ The beauty and personal care offering is extensive with 256,149 SKUs from 2,644 brands primarily across make-up, skincare, haircare, bath and body, fragrance, grooming appliances, personal care, and health and wellness categories as of August 31, 2021
⮚ The company manufactures owned brand beauty and personal care which are sold under their owned brands such as “Nykaa Cosmetics”, “Nykaa Naturals” and “Kay Beauty”.
⮚ The company provides an omnichannel shopping experience to its customers by providing both online and offline shopping channels. Online channels include mobile apps, websites, and mobile sites while in the offline channel Nykaa opened their first physical store in 2014, and has 80 physical stores across 40 cities as of August 31, 2021. Their physical stores currently exist in 3 formats, Nykaa Luxe, Nykaa On Trend and Nykaa Kiosks.
⮚ Falguni Nayar is the Founder, Executive Chairperson & Managing Director and Chief Executive Officer of the company. She has over 26 years of experience in e-commerce, investment banking and broking. Prior to founding the company, she was associated with Kotak Mahindra Capital Co Ltd for 18 years where she also served as a managing director.
⮚ Sanjay Nayar is an Additional Non-Executive Director of the company. He has over 35 years of experience in banking and private equity. He was associated with Citibank N.A. for over 23 years, where he also served as the chief executive officer of the bank in India for over 6 years. He was chief executive officer of KKR India Advisors Pvt Ltd from 2009 to 2020.
⮚ Adwaita Nayar is the Executive Director of the company, since July 1, 2021. She also serves as the chairperson and chief executive officer of Nykaa Fashion. She co-founded the company and has been involved in the areas of marketing, operations and product development.
⮚ Anchit Nayar is the Executive Director of the company, since July 1, 2021. He also serves as the chairman and chief executive officer of Nykaa E-Retail. He has previously served as the vice president of the Investment Banking Division at Morgan Stanley, New York. He is currently responsible for the beauty business and also serves as a member of the investor relations team
⮚ Arvind Agarwal is the Chief Financial Officer of the company. He has been associated with the company since June 1, 2020. He has over 21 years of experience in various fields, including accounting, finance, regulatory and strategic planning. Previously, he was associated with Amazon Seller Service Pvt Ltd, Vodafone India Ltd, Tata Teleservices Ltd, YOU Telecom and Adani Port Ltd.
⮚ Rajendra Punde is the Head - Company Secretary & Legal and Compliance Officer of the company. He has been associated with the company since October 22, 2020. He has more than 17 years of experience in legal, compliance and company secretarial.
Issue Break-up (%)QIB Portion 75NIB Portion 15Retail Portion 10
Shareholding (No. of Shares) Pre Issue 467,036,850Post Issue 472,924,550
Indicative Timetable Finalization of Basis of Allotment 08-11-2021Refunds/Unblocking ASBA Fund 09-11-2021Credit of equity shares to DP A/c 10-11-2021Trading commences 11-11-2021
COMPETITIVE STRENGTHS
⮚ Continue to acquire new consumers and increase consumer loyalty
⮚ Deepen and broaden the brand relationships
⮚ Leveraging on the art of retailing to expand into lifestyle adjacencies and launch new channels
⮚ One of India's leading speciality beauty and personal care companies.
⮚ Major brands offering their products on Nykaa's platform for sale
⮚ Capital efficient business with strong growth and profitability
⮚ Company's advanced technology platform
KEY CONCERNS
⮚ They may not be able to boost revenue if they are unable to attract new customers or do it in a cost-effective manner.
⮚ Any damage to their brand or reputation could have a negative impact on their business.
⮚ The sale of their own items exposes them to new risks and increases the severity of others.
⮚ They operate in an extremely competitive sector, and their inability to compete successfully could affect their bottom line.
⮚ Their business’ seasonality has an impact on their quarterly performance and puts a burden on their operations.
Issue OfferIssue Opens on Oct 28, 2021Issue Close on Nov 01, 2021Total IPO size (cr) 5,351.92Fresh issue (cr) 630Offer For Sale (cr) 4,721.92Price Band (INR) 1085 – 1125Market Lot 12Face Value (INR) 1Retail Allocation 10%Listing On NSE, BSE
FSN E–Commerce Ventures Limited IPO (Nykaa)
FINANCIALS (RESTATED CONSOLIDATED)
Particulars (Rs. In Millions) FY 2021 FY 2020 FY 2019Equity Share Capital 150.58 145.50 142.43Other Equity 4,748.81 3,075.99 2,163.15Net Worth 4,899.39 3,221.49 2,305.58Total Borrowings 1,874.65 2,675.49 2,256.43Revenue from Operations 24,408.96 17,675.33 11,113.94EBITDA 1,614.26 810.55 205.10Profit Before Tax 753.38 (124.30) (317.20)Net Profit for the year 619.45 (163.40) (245.39)
COMPARISON WITH LISTED INDUSTRY PEERS
There are no listed companies in India that engage in a business similar to that of the Company. Accordingly, it is not possible to provide an industry comparison in relation to the Company.
Nykaa redefined the art of e-retailing beauty and personal care in India. Nykaa's revenue for FY 2021 was at Rs 2,452 crore VS Rs 1,777 cr while profit for the year in the FY 2021 was Rs 61.9 cr, as compared to a restated loss of Rs 16.3 cr for 2020.
Q1FY22 financials also looked better than previous years, but need to see how it grows further. The beauty and personal care market have a large market opportunity especially in India where millennials are more into buying brands and look for easy buying options such as e-commerce.
At the upper price band of Rs 1125, the PE works out to be 839x and the price to sales comes at 21.6x to its FY21 earnings. The valuation of the IPO is pretty high however eyeing the higher valuations of other unicorns we may expect some listing gain.
Thus, we assign a “SUBSCRIBE” rating to the IPO only for listing gains.
RatingAVOIDIssue OfferIssue Opens on Oct 29, 2021Issue Close on Nov 02, 2021Total IPO size (cr) 1,200.30Fresh issue 300.00Offer For Sale (cr) 900.30Price Band (INR) 560 – 577Market Lot 25Face Value (INR) 10Retail Allocation 10%Listing On NSE, BSEObjects of the issue ⮚ Augmenting Bank’s Tier – 1 capital base ⮚ Achieve the benefits of listingIssue Break-up (%)QIB Portion 75NIB Portion 15Retail Portion 10Shareholding (No. of Shares)Pre Issue 78,014,996Post Issue 83,214,302Indicative TimetableFinalisation of Basis of Allotment 09-11-2021Refunds/Unblocking ASBA Fund 10-11-2021Credit of equity shares to DP A/c 11-11-2021Trading commences 12-11-2021
Incorporated in 2017, Fino Payments is a growing fintech company offering a wide portfolio of digital financial products and services in India. The company offers a diverse range of financial products and services via a pan-India distribution network and proprietary technologies. Since 2017, they have grown their operational presence to cover over 90% of districts as of September 31, 2021.
⮚ Fino Bank operates an asset-light business model that is underpinned by their “phygital” delivery model (i.e., a combination of physical and digital) and relies on their merchant network and other participants.
⮚ The company is looking to target a population of India which has low levels of financial literacy and technology use and typically does not have access to even basic banking services.
⮚ In 2020, the Ministry of Electronics & Information Technology ranked Fino payments third among banks in facilitating digital transactions in India. According to CRISIL, the company also has the largest network of micro-ATMs and the third-highest deposit growth rate in FY' 2021.
⮚ Fino Banks has built a pan-India presence with 724,671 merchants (own and API) which are typically located in Tier-2 and Tier-3 towns. They currently have approximately 17,430 active BCs across India. Additionally, they operate 54 branches and 130 Customer Service Points (“CSPs”).
⮚ Their retailers also use their existing client connections in their communities to help us cross-sell additional financial products and services like third-party gold loans, insurance, bill payments, and recharges.
The revenues of the company have seen consistent growth in the last 3 years. The company's revenue for FY 2021 was at Rs 791 crore VS Rs 691 cr in FY 2020 while profit for the year in the FY 2021 was Rs 20.4 cr Vs loss of Rs 32 cr in 2020.
The company has a brief history while the margins of the company might expand. Fino Payment is a fast-growing fintech company and it is one of its kind company to list on the stock exchanges. If we consider last year's profit then the PE ratio turns out to be around 235 however it has carried forward losses which is a major concern. Its unique DTP network and new edge business model may garner investors' interest while we have an "AVOID" rating for this on the back of expensive valuation and regulatory risk.
IPO Note
FINO PAYMENTS BANK LIMITED
KEY MANAGERIAL PERSONNEL
⮚ Rishi Gupta is the Managing Director and CEO of the Bank. He is a founding member of the Bank and he was an employee of Financial Information Network and Operations Pvt Ltd (erstwhile name of their Promoter, Fino PayTech Ltd). Prior to joining Fino PayTech Ltd, he worked with International Finance Corporation, ICICI Bank Ltd and Maruti Udyog Ltd.
⮚ Ashish Ahuja is the Chief Operations Officer of the Bank, he joined the Bank with effect on April 1, 2017.
⮚ Ketan Dhirendra Merchant is the Chief Financial Officer of the Bank, he joined the Bank with effect on August 30, 2018.
⮚ Shailesh Pandey is the Chief Sales Officer of the Bank, he joined the Bank on April 1, 2017.
⮚ Vinod Kumar KB is the Chief Information Officer/ Infrastructure and Facilities of the Bank. He joined the Bank with effect from July 18, 2017.
⮚ Bharat Bhanushali is the Head – Business Technology of the Bank, he joined the Bank with effect on April 1, 2017.
⮚ Amit Kumar Jain is the Head of – Business Alliance of the Bank, he joined the Bank with effect on April 1, 2017.
⮚ Anand Bhatia is the Chief Marketing Officer of the Bank and he joined the Bank with effect from February 5, 2018.
⮚ Pratima Pinto Thomas is the Head- Human Resources of the Bank and she joined the Bank with effect from May 27, 2019.
⮚ Basavraj Loni is Company Secretary and Compliance Officer of the Bank, he has been associated with Fino since November 1, 2017, and was transferred to the Bank as Head – Legal and Secretarial with effect from May 6, 2020.
COMPETITIVE STRENGTHS
⮚ Unique DTP (Distribution, Technology, Partnership) network helps in better customer servicing.
⮚ A technology-focused business model with an advanced digital platform
⮚ Customer centricity and innovation at the core of business
⮚ Asset light and scalable business model
⮚ Operational experience and expertise
⮚ The socially inclusive model with positive social impact
⮚ Highly experienced and committed leadership team, supported by marquee investor base in our promoter and shareholder
⮚ The company has a limited operating history as a payments bank.
⮚ The company is engaged in fee and commission-based operations, and their financial performance could be impacted if they are unable to collect revenue from these sources.
⮚ The company relies heavily on their information technology platforms, and any flaw or failure in such systems, as well as a data breach, could have a negative impact on its business.
⮚ The company has introduced new products and services and will continue to do so, but they cannot guarantee that such products and services will be successful today or in the future.
⮚ In the financial years 2019 and 2020, the company made losses.
IPO Note
FINO PAYMENTS BANK LIMITED
COMPARISON WITH LISTED INDUSTRY PEERS
There are no listed companies in India that engage in a business similar to that of the Company. 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 2019Equity Share Capital 445.80 445.80 445.80Other Equity 1,059.67 854.9 1,175.29Net Worth 1,505.47 1,300.70 1,621.09Total Borrowings 1,807.98 1,107.90 829.03Revenue from Operations 7,910.27 6,913.97 3,711.21Expenses 7,705.53 7,234.33 4,335.05Net Profit for the year 204.74 (320.36) (623.84)Margin (%) (16.8) (4.6) 2.6
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