Tuesday, November 3, 2015
Wednesday, October 28, 2015
SH Kelkar IPO: Social Media Compendium
The Indian primary market is back in action with big names lining up for public offers. CCD IPO just managed to cross the line via institutional investors, the retail and HNI category were in a cautious mood. Indigo IPO which opened on 27th Oct has already created a lot of furore with its hefty dividends to promoters, negative net worth and high pricing. S H Kelkar, largest domestic producer of fragrance is another name in the IPO bandwagon which opens for subscription on 28th to 30th Oct 2015.
The Rs 500 Crore SH Kelkar IPO has been priced in the range of Rs 173-180 and includes a fresh issue of shares worth Rs 210 crores which will flow into the company. The rest of the portion is an offer for sale by Private Equity Firm Blackstone Group and the promoters. The company is operational since 1922 as a manufacturer of Industrial Perfumes in British India and enjoys a 20% market share in the fragrance industry, according to a market research study.
Pros and Cons
The company has a well-diversified portfolio in the fragrance industry with its “Keva” and “Cobra” Brands. The client base is equally diversified with no client contributing 5% of its revenues. The company has been a big name in the Rs 4000 Crore fragrance industry and has been focusing on expansion in terms of client base (MNCs), geographical and technology strengthening.
On the contrary, company has a huge dependency in the FMCG Sector which is a cyclical industry. The company has a loan book of 180 crores and most part of this IPO will be deployed to retire the debt of the company and subsidiaries. The company is operating at an optimum capacity utilization and is unlikely to go for capex in the next few years. S H Kelkar also has no direct competitors in the Indian capital markets and thus has no benchmarks to gauge the valuations.
Social Media Outlook
I used various social media listening and analysis tools in an effort to capture social media vibes and overall sentiments around this IPO. The timeline chosen for the analysis was from 21st-Oct-15 to 27th-Oct-15.
Click here to read further: http://ow.ly/TVU48
Tuesday, October 27, 2015
How Social Media perceives Indigo IPO?
The long awaited airline IPO or Interglobe Aviation which operates Indigo is set to hit the primary markets, from 27th to 29th October 2015. The company is coming out with Rs 1272.2 crore issue at a price band of Rs 700-765, offering 1.66 Crore Equity Shares. Besides this, company also planned to offer up to 26,112,000 additional chunk of shares via OFS aggregating the share sale up to Rs 3268 Crores. However, on the first day of their IPO roadshow (19th Oct) few of the promoters decided to offload less shares as part of OFS, thus IPO size came down by 250 cores to Rs 3018 Crores at the highest band.
Turn-ons vs Turn-offs
Indigo, despite being a component of a very volatile airline industry has seen exponential growth in the last few years. The company has been profitable in 7 out of 9 years of its existence and has focused only on the Low Cost Carrier (LCC) approach for its survival. The LCC operations means sticking to single aircraft type, low fares, no-frills approach and concentrating on “point to point operations”. The company has the highest market share of 37.4% in domestic operations as on 30-Aug-2015.The company also has the highest 11.4 hours per day of aircraft utilization and average age of 3.12 years (youngest fleet) amongst the domestic carriers.
On the flip side, negative net worth and whopping dividend outflow to the promoters have been the most concerning pointers. The RONW was very good since last years but suddenly tanked into red as on Q1 of the ongoing fiscal. The whopping dividend to the promoters just before the IPO has raised eyebrows but company justified it that they have been always investor friendly and will continue this practice even when the company goes public. The negative net worth was also attributed to the dividend outflow to the promoters.
On a thorough analysis, the company paid 80% of the profits as dividends in FY14 and 83% of the profits as dividend in FY15. Analysts have also questioned Indigo’s approach of paying hefty dividends and not building reserves or lowering debt which tantamount to mammoth Rs 3912 Crores as on Jun 30, 2015. The industry and subsequently company also enjoys a huge advantage of lower oil prices and there is no guarantee that crude will continue to be at this bottom or trough over the long run.
Amidst all these favourable and unfavourable pointers, the IPO price band of 700-765 has been also questioned by the analysts. The analysts and brokerage house feel IPO pricing is on the higher side and company is quoting a huge premium for the all advantages it relishes in the airline industry.
Social Media Outlook
In an effort to capture social media vibes and overall sentiments around the Indigo IPO. I used “Talkwalker”, a Social Media Listening and Analysis tool. The timeline chosen for the analysis was from 20th-Oct-15 to 26th-Oct-15.
Please read further @ http://ow.ly/TSTMk
Tuesday, October 20, 2015
Coffee Day Enterprises IPO: Social Media Analysis
Coffee Day Enterprises Limited (CDEL) Rs. 1150 Cr IPO closed on 16th Oct with an over-subscription of 1.81 times. It was the biggest IPO in three years since Bharti Infratel in Dec 2012. Also, huge expectations were set on this one, hoping that this will be the initiator of much awaited revival in the primary market. On the contrary, a muted response was witnessed from all categories of investors in their subscription figures (QIB: 4.39, NII: 0.54, Retail: 0.90 and Employees: 0.86).
On preliminary analysis CDEL which owns a big brand CCD has lots of positives: It acts as a holding company for diversified business such as ITES (Mindtree), Logistics (Sical Logistics) and Financial Services (Way2Wealth Securities Ltd.). The promoter, VG Sidhartha has a good reputation in the Industry and CCD is a well-known brand having presence in almost all major Indian cities. On the flip side, the major negative for CDEL is its dreadful financial performance which continues to sink into hefty losses year after year.
Amidst all the hype of a big bang IPO, CDEL just managed to sail through on the last day as the investors analyzed all the positive and negative aspects about this IPO. The negative sentiments outnumbered the positives which is reflected in the dismal subscription numbers.
I analyzed the CDEL IPO from the Social Media perspective to gauge the overall sentiment around the same.
Please continue to read further @ http://ow.ly/TC2Ip
Friday, December 28, 2012
A foggy dreary December
Dalal Street ended November on a promising note with two back to back triple ton sessions for Sensex. The euphoria in the Indian Markets was primarily because of more support to the government’s reform process from its allies and positive global cues.
December started on pleasing note in terms of events, the UPA secured victory in their battle of Retail FDI in both houses of parliament. The IIP numbers for the month of October 2012 painted a rosy picture as it stood at 8.2%, a 16 month high. WPI Inflation eased to 7.24% in November as against 7.45% for Oct 2012. CPI inflation climbed to a three month high at 9.90% but still quoted below 10%.
Markets were not at all impressed with the series of these events and failed to maintain the zeal and enthusiasm as was visible in November end. The key benchmarks struggle to find any direction and continue to face headwinds in the upside amidst weak global cues.
In the U.S, the economy is apprehensive of the “Fiscal Cliff” problem. Fiscal Cliff is a challenge that the U.S. government will face at the midnight of 31 December, 2012, when the terms of the Budget Control Act of 2011 are scheduled to go into effect.
As per the article in about.com, “the laws set to change at midnight on December 31, 2012, are the end of last year’s temporary payroll tax cuts (resulting in a 2% tax increase for workers), the end of certain tax breaks for businesses, shifts in the alternative minimum tax that would take a larger bite, a rollback of the "Bush tax cuts" from 2001-2003, and the beginning of taxes related to President Obama’s health care law. At the same time, the spending cuts agreed upon as part of the debt ceiling deal of 2011 will begin to go into effect”.
This problem in U.S did not emerge in a day, it was open for discussion since more than a year but no breakthrough has been achieved till date. Republicans prefer a cut in spending instead of raising taxes while Democrats want a balancing act of spending cuts and increase in taxes as well.
Global Markets are keenly eyeing the developments on the Fiscal cliff story and the possible breakthrough, if and when it happens. The structure of the possible solution will govern how it impacts the U.S economy as a whole and the world markets as well.
Indian markets have performed reasonably in 2012 despite the fact India Inc. was suffering from policy paralysis and political logjam for the major portion of the year. Mint Street has eased the interest rates earlier in the year but the key rates are still close to their peaks. The inflation numbers are still looking scary.
On the flip side, when we closely look at the impressive performance in 2012, all this has come from a lower base and good economic fundamentals. The condition of Indian economy is far weaker now than what it was a year ago. The weakness is reflected in the GDP numbers, manufacturing stats which continue to suffer and last but not the least, inflation which has still not reached in the safe territory.
December has been generally a progressive month for the markets if we look at the historical numbers. Out of 12 occasions, benchmarks faltered on only 3 instances in the Christmas month.
December 2012, has been a sedate month till date. Overlooking all the positive events and worried over the global cues specifically the Fiscal Cliff, the markets have been clueless on finding the right direction.
Markets pundits forecasted as darling December but it has turned to be a dreary December till date. With just one more trading day in this month, any miraculous movement in the markets either way will solely depend on a solution or no solution to the Fiscal Cliff puzzle.
Sunday, December 2, 2012
Indices Pack: Performance Review
Indian Markets have shown a remarkable strength in the last week and ended November on a promising note. The euphoria in the Indian Markets was primarily because of more support to the government’s reform process from it’s allies and positive global cues.
All this positive sentiments aided to a 4.5% upsurge in the benchmarks in a shortened week. Both the Sensex and Nifty created a new 2012 high and are currently quoting at 19 month highs. These positives overpowered the market so much that it completely neglected a setback on GDP front, which continued it’s negative trend in the eighth consecutive quarter. This up move in the market resulted in a net gain of 2, 50,000 Crore Market Cap on a week on week basis.
Following is the analysis of returns of all NSE and BSE indices including the benchmarks on a Year-to-date basis (As on 30-Nov-12). Additionally, the list conveys the closeness of all indices w.r.t their respective 52 week highs and lows.
Key Observations:
Sensex and Nifty have posted 25.14% and 27.15% returns on a year to date basis.
36 Indices have managed to generate returns greater than Sensex. The leader in the pack is Consumer Durables with 53% returns followed by Bank Nifty which managed to generate 52.5%.
15 Indices underperformed Sensex and out of which, 10 managed to end up in double digit gains.
The worst performer on YTD basis was IT which managed to gain only 2 %, followed by Teck which was superior to IT with 4% gains.
All the indices have ended up with positive gains on a YTD basis and 25 indices touched their respective 52 week highs on 30 Nov 12.
Closeness to 52 Week Highs/Lows
46 indices are currently quoting in the range of 10% with respect to their 52 week highs. 5 of them quoting in 10 to 20% range and only 1 of them, CNX Metal in the range of greater than 20%.
11 indices are currently quoting in the range of 20% with respect to their 52 week lows. 30 indices are quoting in a 20 to 40% range and another 11 of them quoting in a range of 40 to 60%.
Wednesday, November 14, 2012
Muhurat and Samwat Performances: Key Benchmarks
Pointers:
- In last 13 Muhurat Trading sessions, Sensex along with BSE 100 and BSE 200 have ended in green on 11 occasions.
- BSE 500 ended up in green for 10 instances and Nifty ended up with 4 red sessions.
- 2008 Muhurat Trading generated blockbuster returns for the above mentioned indices to the tune of almost 6%.
- On an average basis, BSE 100 generated the highest returns of 1.02% in the pack and Nifty generated the least to the tune of 0.74%.
- In last 12 Samwat’s, Sensex and Nifty posted negative returns on 4 occasions while the other three generated negative returns on three instances.
- In Samwat 2065, all the benchmarks posted greater than 100% returns and BSE 200 emerged as the winner with 112% returns.
- On an average basis, BSE 500 generated the highest returns of 24.42% in the pack and Nifty underperformed all other indices with returns of 21.75%.
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