Amit Wadhwa

When a company goes public, IPO lock-up periods help stabilise stock prices and prevent major sell-offs immediately after the IPO. These periods, mandated by Securities and Exchange Board of India (SEBI) the Indian stock market, vary based on the type of investor but come with notable drawbacks. Anchor Investors: The lock-up for 50% of shares has been extended to 90 days, with the remaining 50% still at 30 days. Promoters: Lock-up for allotments up to 20% of post-issue paid-up capital reduced from 3 years to 18 months. For allotments exceeding 20%, it’s now 6 months instead of 1 year. Non-Promoters: The lock-up period reduced from 1 year to 6 months, offering quicker access to liquidity. Drawbacks: - False Stability: Can create a misleading sense of a stock’s stability and value. - Post-Lock-Up Sell-Off: Often leads to a surge in selling, causing share prices to drop. - Negative Sentiment: Retail investors might see sell-offs as a lack of confidence in the company's future. - Delayed Liquidity: Investors face delays in accessing their funds. As these periods end, they test market sentiment, revealing the true confidence of major investors in the company's long-term success. Stay informed and invest wisely! #stockmarket #IPO #SEBI #invest #investor #india #corpwisadvisorsprivatelimited #IPOlockup

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Boring bonds may deliver better than equity over next 2-3 years. Assumptions for base case 1. Corporate ROE and margins have peaked for the cycle, profits allign with Nominal GDP & Revenue growth 2. Nominal GDP growth = 5-6% real growth (last 10 year average at 5.5%) + 3-4% inflation (current run rate of core)= 8-10% 3. Fiscal deficit is shaved off by 50bps further over next 12m. After that same. 4. CAD plateaus (.5-1%) 5. Capex to GDP flatlines at current level. Policy output 1. Real rates drop to zero (RR-core inflation, at 3.5% today) 2. Re-liquify system = RR moves to RRP. System liquidity goes back to +1% Valuation output 1. Equity valuation mean reverts to LT average (18x over forward earnings) 2. 10 year IGB gets to 100bps over overnight funding rate. Risk In the interim, USD strengthens. Leading to tight fin conditions in India. Hurting bonds and equities both. https://lnkd.in/dKv9NX-i

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In debt private placements, i believe, we will henceforth be having 3 types of lot size viz. (1) Rs. 10,000; (2) Rs. 1 lac and (3) Rs. 1 crore. *(1) Rs. 10,000 lot size - just an additional option* Reduction in denomination of face value to Rs.10,000/- for privately placed debt securities (NCDs) and Non-Convertible Redeemable Preference Shares (NCRPS) *at the option of the Issuer*, subject to the appointment of the Merchant Banker. *(2) Rs. 1 lac lot size* Regular lot size with or without merchant banker *(3) Rs. 1 crore lot size* For banks Perpetual/AT1 bonds and Tier 2 bonds #debt #bonds #debentures #lotsize Rockfort Fincap LLP

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Reliance Industries has failed to break the ₹3050 price range, but is it heading towards ₹2600 ⁉️ (No reco; Views are personal) 🚨 Fundamentals: M-cap: ₹18.76L crs CMP: ₹2773 PE: 27.3 {Ind PE comparison is absurd} PB & Book value: 2.36 & ₹1173 Debt & D/E: ₹4.58L cr & 0.58 1Y ROE vs 5Y ROE: 9.25 vs 8.73 Q1FY'25 EPS: ₹22.37 EPS TTM - ₹101.6 PEG ratio - 2.28 Shareholding Pattern: Mar'18 Promoters - 47.45% Jun'24 Promoters - 50.33% Mar'18 FIIs - 24.46% Jun'24 FIIs - 21.75% Mar'18 DIIs - 11.23% Jun'24 DIIs - 17.30% Total No. of shareholders: Mar'18- 22.66L Jun'24- 34.93L Reliance Industries has been having a bumper run since Oct'17 after the stock made a 9Y breakout in price at the ₹740 range which was previously seen during Jan'08. Since Oct'17 there is no turning back to this stock as it has found multiple value unlocks which have exploded its business & stock price too. Even in the pandemic period during 2020 COVID, the stock failed to go below ₹780 range which resonates its strong brand & business reputation. A few months ago, during July'24 before its quarterly earnings release the stock hit a new all time high above ₹3200. However, since it's highs the stock has corrected up to ₹500 or over a 15% fall 🥵 But, is the fall a temporary one or will there be a pump & dump lies the true question! Also, one interesting thing to note down is that last Friday (Sept'27) the stock tried to go above the ₹3060 price range, however in a matter of 4 trading sessions of this week it has had a huge price slump of over 8% as well as it is taking a strong support from its June 5th lows of ₹2770 🔥 In the long term value investment perspective, entering right now at the CMP would not be an ideal entry considering its technicals in my POV. Also, since the stock is having a Bonus 1:1 ratio we can maybe* expect some more dip and fresh entry can be made over or below the ₹2650 price range with some cautious approach. In addition to that, the best price to buy this stock would be around or below ₹2400, but a fall to that price in a short term is least likely to happen for Reliance Industries! Reliance Industries Limited #Reliance #India #Nifty50 #Stockmarketnews

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The commentary of multiple major FMCG companies calling out D2C brands a real threat questions the distribution strength which was considered a meaningful moat given the length and breadth of the country. Cheap data plans along with over active platforms has shrunk moats for several traditional players and is proving that consumer loyalty switches within a heart beat. It appears that innovation remains the only relevant moat to play on in current set up.

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Do you know the Revolutionary story of Cafe Coffee Day? From 7500 crore Debt to almost Debt free in just Few years. Veerappa Gangaiah Siddhartha Hegde wanted to join the Indian Army. But he ended up in portfolio management and securities at JM Financial. After two years, he started his own firm, Sivan Securities. The profits he made there, was reinvested to buy coffee farms in Chikmagalur and Purchased 10,000 acres of land and Soon, he became the second largest exporter of coffee beans from India. He started Cafe Coffee Day's first outlet in 1996, in Bangalore. It quickly became a favorite hangout spot for the city's youth. Siddhartha's vision was to create a chain of cafes that provided a space for people to socialize, work, and relax. The brand's popularity soared, and CCD expanded rapidly across India, becoming the largest coffee chain in the country, by 2010 the presence of CCD got internationally, and they secured the $210 million+ Investment from KKR. The tide turned in 2012. Costa Coffee, Barista and Starbucks had entered the Indian market. Competition was eating into margins and growth. Its IPO saw a tepid response. But VGS was in no mood to buckle down. He kept piling massive debt (₹7500 Crore) to service the stores. At its peak, VGS had ₹1000 Cr+ personal debt, and CCD had ₹7500 Cr+ more. Unable to continue with the burden further, he took his life with suicide in river. His wife Malavika Hegde took over the reins and Malvika is brilliant lady with sharp mindset and Leadership skills. To reduce the debt, Malavika Hegde implemented several strategic measures: Asset Disposals: CCD divested some of its non-core assets to generate funds and streamline its operations. This included selling stakes in subsidiary companies and real estate properties. Operational Efficiency: Malavika Hegde focused on improving operational efficiency across CCD's outlets to enhance profitability. This involved optimizing supply chains, controlling costs, and implementing measures to increase sales and customer satisfaction and closing all non-profitable outlets across the Globe. Debt Restructuring: CCD engaged in negotiations with lenders to restructure its debt obligations, including extending repayment schedules and renegotiating interest rates. This helped alleviate immediate financial pressures and provided breathing room for the company to stabilize its finances. Focus on Core Business: Malavika Hegde prioritized CCD's core coffee business while reevaluating and restructuring its other ventures. This allowed the company to concentrate its resources and efforts on its flagship brand, which had been the primary driver of its success. Financial Discipline: Under Malavika Hegde's leadership, CDEL adopted stricter financial discipline and governance practices to ensure prudent management of resources and mitigate future risks.  

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As an investor, finding the right opportunity in upcoming IPOs is key. But understanding the IPO process in India can truly elevate your investment strategy. Here’s a brief rundown on how companies transition from private to public entities through the Initial Public Offering (IPO) process. An IPO allows a company to raise capital and gain liquidity by offering its shares to the public. However, the IPO process in India is intricate and involves several critical steps. --> Steps in the IPO Process: - Hiring an Underwriter or Investment Bank: Companies begin by hiring financial experts who act as intermediaries and ensure the capital is raised efficiently. The underwriting agreement details the deal, the amount to be raised, and securities being issued. - Registration for IPO: This involves preparing a registration statement and the Offer Document, which includes definitions, risk factors, use of proceeds, industry and business descriptions, management information, financial statements, and legal disclosures. - Verification by SEBI: The Securities and Exchange Board of India (SEBI) reviews the company's disclosures. Upon approval, the company can announce its IPO date. - Application to Stock Exchange: The company applies to the stock exchange to float its initial issue. - Creating a Buzz through Roadshows: Before the IPO, companies market their impending IPO via roadshows, engaging with potential investors, business analysts, and fund managers through presentations, Q&A sessions, and virtual events. - Pricing of IPO: The company sets the IPO price either through a Fixed Price or Book Building Offering. The bidding process allows investors to place bids within a set price range. - Allotment of Shares: Once the price is finalised, shares are allotted to investors. In case of oversubscription, partial allotments are made, and shares are usually distributed within 10 working days. Understanding this process not only helps investors make informed decisions but also ensures a smoother transition for companies entering the public market. #Finance #CorpwisAdvisorsPrivateLimited #stock #IPO #stockmarket #IPOprocess #india #SEBI

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*Suzuki's Puzzle: When a Part is Worth More Than the Whole* We have an interesting situation with Suzuki and its subsidiary, Maruti Suzuki: Maruti Suzuki (India's largest car maker): • Revenue: $17 Billion  • Profit: $1.6 Billion • Market Value: $46 Billion Suzuki Global (Japanese parent company): • Owns 58.16% of Maruti Suzuki • Has a significant global car business apart from Maruti • Maintains a net cash position of approximately $1.5 billion • Market Value: $21.5 billion Here's the puzzle: Suzuki's 58.16% stake in Maruti Suzuki is worth about $25 billion, exceeding Suzuki's entire market value of $21.5 billion. This is puzzling because Suzuki owns more than just Maruti. In fact, Maruti contributes only 40% of Suzuki's global sales and 50% of its global profits. This means Suzuki's other operations, which match Maruti in size and are debt-free, are essentially valued at less than zero by the market. It's as if investors are getting this entire business for free, and then some. This is an example of Holding Company Discount: Sometimes, a company that owns parts of other companies is valued less than the sum of its parts. This can happen due to concerns about inefficient management, complex tax structures, one part of the business being perceived as so unprofitable or risky that it more than offsets the value of the company's other assets. Real-world examples include Meta's VR division, the Mistry family's stake in Tata Sons, Bajaj Holdings etc. Is the market efficiently pricing Suzuki's holding company discount, or does this present a potential opportunity? Let's consider key factors: 1. Maruti Suzuki's Strengths: • Robust revenue growth and margins • Negative working capital cycle driving significant cash flow • Trades at <30x earnings, relatively undervalued compared to Indian peers 2. Suzuki Global's Challenges: • Stagnant growth • Negative sentiment around USD/JPY exchange rate • Uncertainties in traditional auto industry due to EV revolution 3. Suzuki's Strategic Options: Potential to reduce Maruti Suzuki stake and buyback parent company shares (similar to BAT's recent actions with ITC), potentially boosting Suzuki's stock price and narrowing the valuation gap. Factors 1 and 2 suggest continued divergence, while 3 offers a path to convergence. While this situation appears inefficient, markets can remain irrational longer than investors can stay solvent. This divergence isn't new: Over the past decade, Maruti Suzuki has surged ~400% (INR) and ~290% (USD), while Suzuki has grown only ~65% (JPY) and ~45% (USD). The gap continues to widen. As this valuation gap persists, the question for investors becomes clear: Does the Suzuki-Maruti puzzle present a statistical arbitrage opportunity, or is the market pricing in risks we've yet to fully appreciate?

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Market rally in FY24 was unusual. High returns have flown across market caps but let's dissect where did it come from. 𝐒𝐭𝐨𝐜𝐤 𝐩𝐫𝐢𝐜𝐞𝐬 𝐢𝐧 𝐥𝐚𝐬𝐭 1𝐲𝐫 🌟 Low ROE & Low Sales Growth companies (71% return) > High ROE & High Sales Companies (47% return) 𝐒𝐭𝐨𝐜𝐤 𝐩𝐫𝐢𝐜𝐞𝐬 𝐢𝐧 𝐥𝐚𝐬𝐭 10𝐲𝐫𝐬 🌟Low ROE & Low Sales Growth companies (17% return) < High ROE & High Sales Companies (28% return) Investors need to be cautious of exposing their portfolio against such Low ROE & Sales growth companies. 𝐌𝐚𝐫𝐤𝐞𝐭 𝐭𝐞𝐧𝐝𝐬 𝐭𝐨 𝐫𝐞𝐰𝐚𝐫𝐝 𝐠𝐨𝐨𝐝 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐢𝐧𝐠 𝐜𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬, 𝐬𝐩𝐞𝐜𝐢𝐚𝐥𝐥𝐲 𝐰𝐡𝐞𝐧 𝐭𝐡𝐞𝐲 𝐡𝐚𝐯𝐞 𝐮𝐧𝐝𝐞𝐫𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐞𝐝. Source: PGIM India Mutual Fund. #Equity #Investment

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India's IPO market 2024 is set to feature high-profile entries across various sectors, reflecting the country's dynamic and evolving economic landscape. These IPOs will drive growth and innovation in their respective industries. FirstCry.com (BrainBees Solutions Ltd.): > Sector: E-commerce > Details: FirstCry is a leading online retailer specialising in baby and kids' products. Its extensive inventory includes clothing, toys, and other essentials. > Impact: As the most significant player in its niche, FirstCry's IPO is anticipated to boost the e-commerce sector and provide significant growth opportunities in the rapidly expanding market for children's products in India​​. Ola Electric: > Sector: Electric Vehicles > Details: OLA Electric is a prominent player in the electric vehicle industry, known for its electric scooters and ambitious plans for expanding EV infrastructure. > Impact: The IPO is expected to accelerate the adoption of electric vehicles in India, supporting the country's transition to sustainable transportation solutions and reducing dependence on fossil fuels​​. MobiKwik: > Sector: Financial services > Details: MobiKwik is India's leading digital banking platform, offering a wide range of financial products for both consumers and merchants, including payments, digital credit, and investments. > Impact: This IPO is expected to fuel financial & payment services growth, investments in AI & technology, and product expansion. Hyundai Motor India Ltd.: > Sector: Automotive > Details: Hyundai India is a South Korean automobile giant Hyundai Motor Company subsidiary. It is one of the top car manufacturers in India, offering a range of popular models. > Impact: This IPO is expected to be one of the largest in 2024, potentially raising ₹25,000 crore. It will strengthen Hyundai's investment in new technologies and product development in the Indian market​​. These IPOs represent diverse sectors and can potentially drive significant economic growth and innovation in India throughout 2024. #corpwisadvisorsprivatelimited #ipo #india #companies #stockmarket #market #upcomingipos #economy

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PROFITING OFF BANKRUPTCY: Private Equity Playbook In BYJU'S CASE private equity firms want it to fail, or at least go bankrupt, to get rid of unwanted debts. And here, private equity’s true advantage—its ability to navigate the bankruptcy code. Bankruptcy is an opaque, enormously complex process and one where great lawyering (though not necessarily great business acumen) is rewarded. Private equity firms thrive in this part of the law, and they have certainly been rewarded. History has it. This is akin to ManorCare's fate when Carlyle pushed it to bankruptcy. Everyone made money. Founder. Investors. BYJU'S has no option but to go this path for the founder and board to win. They already made money in this game with the founder sipping juice from an umbrella straw and his PR team putting in all the effort in media to make him look like a saint. And it's the nature of the beast: "Who cares about the vendor and customers?" #startup #byju #privateequity #vc

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IPO Alert: Multibagger IPO👀 JNK India Limited is here🚨 Date: March 23rd - 25th, April 2024 Price Band: ₹395 - ₹415 per share Lot Size: 36 GMP: currently 0 Issue size: ₹649 crore ( almost 48% fresh issue) Financials: Financials are rising and looks good. ROE & ROCE is above 31% What They Do: Company is into design, manufacture, supply, installation, & commissioning of process-fired heaters, reformers & cracking furnaces. IPO Objective: 52% towards OFS rest will be used for working capital & general purpose USP: 90% revenue is generated from oil & gas companies thus it is in ever growing sector. Final Decision: Company is good but let's wait for solid GMP numbers and Encouraging Anchor List and then will decide. Stay Tuned! #ipo #investing #personalfinance #stockmarket

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https://lnkd.in/e-CZjv9m Why Creep, if we are not serious to control Food & Vegetable inflation by increasing the interest rates or increasing the supplies. We can learn from Western Countries Central Banks on how they have brought down double digit inflation to below 3% in less than 1 year.....

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"Great work, Subir Saha! It's always exciting to see in-depth research on such a prominent company like Mahindra & Mahindra. The comprehensive analysis you've provided, covering everything from annual results to peer comparisons, offers valuable insights for investors and industry professionals. I'm particularly interested in the section on new launches. Given Mahindra's strong presence in the Indian market, it's fascinating to see what they have planned for the upcoming fiscal year. Keep up the excellent work!"

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https://lnkd.in/dGMUGCSY Anjali Kumari Rs 32,619 cr and rising: India Inc back with overseas bonds in 2024 Reduced hedging cost, appetite for high-yield bonds help big-dollar borrowing Overseas fundraising by Indian firms is experiencing a robust revival in 2024, following a lacklustre 2023. This resurgence is primarily driven by strong demand for high-yield bonds from international investors amid improving liquidity conditions and reduced hedging costs. The elevated global yields, a consequence of the US Federal Reserve’s rate hikes in 2023, had initially discouraged India Inc from seeking funds through overseas bonds. It turned to local borrowing amid ample domestic liquidity. “Companies are diversifying their borrowing. The hedging cost has come down, and they are preferring the overseas market because they are unable to secure large amounts from the domestic market,” said Venkatakrishnan Srinivasan, founder and managing partner of Rockfort Fincap LLP. “Certain lower-rated companies are not getting favourable rates or investor appetite in the domestic market. Additionally, following the RBI’s circular on bank lending to non-banking financial companies (NBFCs), banks are now more cautious about lending to NBFCs.” November last year, the Reserve Bank of India (RBI) increased risk weighting for bank loans to NBFCs, asking shadow banks to diversify their funding sources beyond traditional bank loans. This regulatory push has led NBFCs to explore alternative financing avenues, including the domestic and overseas bond markets. #bonds #ncd #debentures #overseasbond #offshorebond #debtmarkets #bondmarkets #fixedincome #dollarbond

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The curious case of Nobroker, the company that began with an intention to remove brokers, then became one. Nobroker's FY 23 financials are out, their operating revenue is up to ₹609 crores, while their losses are ₹506.2 crores (total expenditure is ₹1189 crores). They raised a ₹1752 crore funding round in 2021, the feverish peak of venture idiocy, led by the worst tourist into VC that's ever taken a stroll, Tiger Global. (honestly wish I could have shorted their investments, one made every single day with their DD being conducted by 22 year olds at Bain) Nobroker is piloting a new strategy, becoming a broker. They are offering a success fee based model for finding a tenant for people's flats, effectively becoming a broker. I do enjoy their services (handyman, plumber, AC cleaning) with fairly good folks who come on time, however these numbers are simply shocking. Startups have to remember that they are real businesses, that need to make money. With these kind of losses at scale, it feels like they haven't found product-value fit yet. #startups #founders #venturecapital

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Excited to know granular details about Hyundai India which will be going public shortly!!! Refer to the tweet: https://lnkd.in/dTc7_8GC Our research & marcom team puts lots of effort to curate this piece of information from the heap of data. One like for them on SBI Securities X handle, if you find this piece of info helpful Kindly spread the information amongst your friends/family/well-wishers. SBI Securities Deepak Lalla Suresh Shukla Kapil Tandon Sudeep Shah SUMEET SHAH Misba Khan

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To VC or not I came across two separate notes yesterday. One where Zomato and PolicyBazaar (InfoEdge is the common and largest investor) topped the charts on the market cap of all the 20-30 tech IPOs in the last few years. And the second about 65% IRR growth of Rohit and Kunal's investment. It got me thinking of operating entrepreneurs are yielding impressive returns compared to regular VC's Most first time founders get lured into raising VC funding as they get instant recognition from their social circle. But they suffer unimaginably. 1. The day they raise VC funding they cease to be an entrepreneur but a glorified CEO/senior exec working over time and severely under compensated. 2. Most VC's don't like founders to take enough salary (barely to make ends meet) and they don't like them to sell shares till they get an exit. I meet so many first time founders who are proud of this act of sacrifice hoping for a glorious victory at the end of it all. Their first time romance of entrepreneurship and gullibility gets exploited by VC's who misguide them at times to go without salaries/comp leaving them torn between family care and business priorities. 3. VC's like to invest in high growth, strong businesses with low risk(ideally, showing signs of profitability already) but as soon as they invest, they want the company to grow 100X continuously citing examples from the silicon valley of that one company which did amazing. They only care about the "power law" which is even 2-3 of their 10 investments work, they make enough but in that process the poor first time founder gives the best years of his life to the startup in vain as unwinding from this mindless experimentation and growth is nearly impossible 4. VC's celebrate Job's brashness or Travis's aggression and calls you a weak or a soft founder if you grow and manage business sensibly without undue aggression. They steadily try to influence your character and personality through stories of inspiration of "aggressors" but the moment you get there, ditch you for your insolence. 5. VC's don't bring any operating experience but have high conviction coming from their gut experience and reading a book or two on silicon valley startups. The reality of India dawns on to them after 10-20 years of investing and by that time, several founders have wasted their most productive years getting misguided by the intuition and gut feelings of the inexperienced VC's What's the solution - 1. There are some ideas that need VC capital and some don't - anything that required deep tech, strong network effects (mobility), research need VC capital. 2. Good businesses (so already existing business models getting improved by tech/AI etc) should not need too much VC capital. They should treat VC capital as an expensive debt and don't get influenced by VC's too much (discipline is key here). Example - D2C, or SAAS, or Edtech or Traveltech or such.

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