LIC IPO opens on May 4. Should you subscribe? What brokerages suggest

 While LIC policyholders are entitled to Rs 60 discount over the issue price, the retail investors will be offered the issue at a discount of Rs 45 per equity share

The Rs 21,000 crore initial public offer (IPO) of Life Insurance Corporation of India LIC IPO Date will open for subscription on May 4. Ahead of the IPO, the public sector insurance behemoth has raised Rs 5,627 crore from anchor investors, allotting around 59.3 million shares to 123 investors at Rs 949 per share.

While LIC policyholders are entitled to Rs 60 discount over the issue price, the retail investors will be offered the issue at a discount of Rs 45 per equity share. The minimum bid lot is 15 shares and in multiples of 15 equity shares thereafter. So, should you invest in India’s largest public offer till date? Here’s what brokerages suggest.

Angel One

Valuations factor in most of the negatives. Expected improvements in product mix and greater transfer of surplus to shareholders account over the coming years are expected to drive profits from current low levels, which along with cheap valuations provide comfort. Moreover, the discount of Rs 45 and Rs 60 for retail investors and LIC policyholders makes the issue more attractive for them. Hence, we are assigning a subscribe recommendation.

Foxconn's India subsidiary Bharat FIH files for Rs 5,000-crore IPO

 Foxconn’s Bharat FIH is India’s largest EMS provider to the mobile phone industry, with a 23 per cent market share in FY 2021

Bharat FIH, a subsidiary of Foxconn group, has filed its draft red herring prospectus (DRHP) for its initial public offering (IPO). The Rs 5,004-crore IPO comprises a fresh issue of Rs 2,502 crore and an offer for sale (OFS) of Rs 2,502 crore. The offer for sale is by its promoter, Wonderful Stars.

Wonderful Stars and FIH Mobile are its promoters, its prospectus stated. Wonderful Stars, together with its nominees, holds 99.97 per cent of the company’s shares. FIH Mobile does not directly hold any shares in Bharat FIH. But it owns Wonderful Stars through its subsidiaries. As of September 30, 2021 Foxconn held 63.43 per cent of the share capital of FIH Mobile. Kotak Investment Banking, Citigroup Global Markets India, BNP Paribas and HSBC Securities and Capital Markets India are the bankers to the issu

SBI Cards lists 12% below issue price of Rs 755; recovers later

At 10.09 am, SBI Cards was trading at Rs 751 after hitting a high of Rs 754 on the BSE

Markets News: Portions of SBI Cards and Payment Services (SBI Cards) recorded at Rs 661, 12.45 percent underneath its issue cost of Rs 755 on the National Stock Exchange (NSE) on Monday. On the BSE, it opened at Rs 658, 13 percent lower against issue cost. In any case, at 10:09 am, the stock was exchanging at Rs 751, in the wake of hitting a high of Rs 754 on the BSE. A joined around 26 million offers have changed hands on the counter on both the trades up until this point.

The stock saw a frail introduction because of winning economic situation as the vulnerability in regards with the impact of the coronavirus scourge kept on holding financial specialist notion under tight restraints. The benchmark lists Nifty50 and S&P BSE Sensex have declined 16.6 percent since the SBI Card beginning open offer (IPO) opened for membership on March 2, 2020. The records have failed almost 21 percent, since the Visa arm of the State Bank of India (SBI) documented Draft Red Herring Prospectus (DRHP) for its IPO with Sebi on February 26.

Practically all financiers were sure on the underlying open offer (IPO) and some had anticipated up to 60 percent upside from the IPO value scope of Rs 750-755, given its predominant situation in the Visa showcase and solid parentage, SBI Cards is very much set to profit by the rising pattern of computerized installments and online business. SBI Card’s IPO had figured out how to draw in offers worth Rs 2 trillion, despite testing economic situations. The 100-million offer contribution produced near 2.7 billion offers (multiple times). The certified institutional purchasers (QIBs) segment of the IPO was bought in multiple times, trailed by high networth individual (HNI) (multiple times) and investors (25.4 occasions)…

China’s first high-speed rail company launches IPO to raise over $5 billion

The listing adds to signs that China is pushing to further open industries dominated by state-owned companies.

The operator of China’s high-speed rail line between Beijing and Shanghai kicked off its initial public offering, which will for the first time allow investors to buy shares in what is the world’s largest such network.

Beijing-Shanghai High-Speed Railway Co., a unit of state-owned China Railway Corp., plans to sell as many as 6.3 billion new shares, or 12.8% of enlarged capital, through the listing in Shanghai, according to its prospectus released Wednesday. Book building for the IPO will begin Jan. 6, it said. The company didn’t say how much it aimed to raise through the sale.

The listing adds to signs that China is pushing to further open industries dominated by state-owned companies. Beijing on Sunday outlined plans to allow private-sector businesses to enter industries including energy, telecoms and rail, and on Tuesday, Premier Li Keqiang pledged to give foreign investors greater access to service sectors including finance and health care.

Those steps have come as a campaign to rein in China’s shadow banking industry has sapped financing for many non-state firms and the trade war with the US has led some multinationals to reassess their investments. With economic growth at the slowest since the early 1990s, Beijing has sought to reassure these contingents and spur more capital spending.

Rail Vikas Nigam IPO opens today: Why analysts suggest subscribing to it

RVNL, which is a project executing agency working for and behalf on Ministry of Railways, has an order book of Rs 77,500 crore.

Markets News: The Rs 482 crore initial public offering (IPO) of state-run Rail Vikas Nigam (RVNL) will open on Friday and close on April 3. The price band has been fixed at Rs 17 – Rs 19 per share. The issue is entirely an offer for sale (OFS) of 25.35 crore shares (12.2 per cent of post-dilution equity) by Government of India. Of the total issue, 0.3 per cent, or 6,57,280 shares, are reserved for the employees of RVNL. Retail investors and employees will be offered a discount of Rs 0.5/share.

SHOULD YOU SUBSCRIBE?

Most analysts have assigned ‘subscribe’ rating to the IPO, given its robust executable order book, growth prospects, government focus on rail infrastructure spend and attractive valuation.

In the recent past, two Indian Railway entities – IRCON International (IRCON) and RITES (RITES) – debuted at the bourses. Of these, only RITES is trading above the IPO price, while the former is trading at 16 per cent discount (as of Thursday’s close) to the IPO price.

“RITES predominantly is a consulting arm of Indian Railways, while IRCON is normally into project execution and can execute projects across the spectrum. Though both IRCON and RITES are not perfect peers to RVNL but can be considered as proxy peers as they majorly cater to Indian Railways,” wrote analysts at Choice Research in the IPO note…

Click Here: Rail Vikas Nigam IPO

RITES IPO opens for subscription on June 20. Should you invest?

Established in 1974, RITES has undertaken projects in over 55 countries including Asia, Africa, Latin America, South America and Middle East

 

The initial public offer (IPO) of RITES – a government-owned railway consultancy firm and a Miniratna (Category – I) Schedule ‘A’ Public Sector Enterprise – opens for subscription on June 20. The price band for the issue has been fixed at Rs 180-185 a share (discount of Rs 6 per share for retail shareholders and employees), and the government aims to raise up to Rs 460 crore via this sale. The issue closes on June 22.

Established in 1974, RITES has undertaken projects in over 55 countries including Asia, Africa, Latin America, South America and Middle East regions. It is the only export arm of Indian Railways for providing rolling stock overseas (other than Thailand, Malaysia and Indonesia).

Also Read: Investors will know we are here for 44 yrs, like an Indian MNC: RITES CMD

Going ahead, the company plans to scale up operations in the transport infrastructure space (expansion into turnkey railway, airport, metro projects etc.) along with strengthening its international operations, reports suggest.

So, should you subscribe to this IPO? Here’s what leading brokerages across the country suggest.

ANGEL BROKING

In terms of valuation, pre-issue price-to-earnings (PE) works out to 12x of annualised FY18 earnings per share (EPS) of Rs 17 (at the upper end of the issue price band), which is reasonably priced considering: (a) 3.5x of order book with execution capability and experienced management, (b) maintaining the RoE level in the range of 17- 18%, (c) diversified client base and (d) increasing opportunity of revenue from Railways due to new investment in electrification and infrastructure.

Given that the RITES is a preferred consultant of Indian Railways along with other government authorities with exposure in international operation and fair valuation of issue, we recommend subscribing to issue.

CENTRUM WEALTH

Over FY13-17, RITES registered revenue and PAT CAGR of 9% and 11%, respectively. Average earnings before interest, taxation, depreciation and amortisation (EBITDA) margins and return on equity (RoE) over the period stood at 28% and 18%, respectively. RITES is a virtually debt free company.

Keep Reading : RITES IPOs

How did D-Mart shares double on day one?

Answer lies in pre-open call auction, which is a 45-minute window for price discovery

 

Shares of Avenue Supermarts, which operates successful retail chain D-Mart, doubled during their stock market debut on Tuesday. 

While, DMart is not the first company whose stock has doubled on listing day—there have been at least eight other companies— but it is the first since market regulator Securities and Exchange Board of India (Sebi) introduced listing day circuit filters. 

To curb listing day volatility, Sebi in 2012 introduced circuit filters and the so-called pre-open call auction for IPO stocks. Depending on the size of the Initial Public Offer (IPO), stocks were allowed to move in a trading band of either 10 per cent or 20 per cent on their listing day.

Then how did Dmart shares double? The answer lies in pre-open call auction, which is a 45-minute window for price discovery before the actual trading begins. During this pre-open sessions, buyers and sellers key in the price at which they want to buy or sell a stock. The prices are then collated and price at which most bids are received becomes the “equilibrium price”. The circuit filters apply on the equilibrium price. 

In case of DMart, the equilibrium price was Rs 604, 102 per cent higher than the issue price of Rs 299. The 20 per cent circuit filter in case of DMart was on the discovered price. Therefore, trading would have halted in the counter if the stock would have gone to either Rs 725 or Rs 483.| READ MORE 

Music Broadcast Limited IPO: Should you invest?

According to reports, Radio City is ranked No. 1 in terms of number of listeners

#LATEST | The initial public offer (IPO) of Music Broadcast Limited (MBL) that owns FM radio channel, Radio City, opens today for subscription. The issue consists of equity shares of face value of Rs 10 each for cash at a premium consisting of a fresh issue of up to Rs 400 crore and an offer for sale up to 2,658,518 equity shares. The price band for the offer is fixed from Rs 324 to Rs 333 per equity share.

The issue proceeds will be used to repay most of its Rs 300 crore debt, thereby reducing its interest cost and improving the overall cash flow. Last week, Music Broadcast Limited finalised allocation of 44,01,158 equity shares to anchor investors at Rs 333 per equity share, aggregating Rs 146.56 crore.

According to reports, Radio City is ranked No. 1 in terms of number of listeners, total 49.6 million listeners across top 23 cities, followed by Entertainment Network India Ltd (ENIL) with 40.5 million listeners. Even in the metro cities like Mumbai, Bangalore and Delhi, Music Broadcast owned Radio City enjoys a leadership position.

So, should you invest in this IPO? Here is what leading brokerages across the country suggest?


ANGEL BROKING

Radio City operates 20 markets, while ENIL operates a total of 38 markets. Despite this, Radio City has 23% revenue share compared to 24% share of ENIL. We attribute this to its dominant position in listenership and ability to charge premium advertising rates.

Radio City, with ~19% CAGR in revenue, has outperformed its closest peer ENIL, which reported ~14% CAGR in revenues over FY2013-16. In profitability too, Radio City, with ~54% CAGR in profit after tax (PAT) over FY13-16, has performed much better than ENIL (~17% CAGR in PAT over FY2013-16).

• ANTIQUE STOCK BROKING
• IDBI CAPITAL
• NIRMAL BANG
• IIFL

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