Happy new year

Team FirstChoiceIPO wishes happy new year to one and all.

Six PSBs gets capital infusion

Six Public Sector Banks have been infused much needed capital by the Center. The banks are -  IDBI Bank Rs 2,729 crore, Bank of India (Rs 2,257), UCO Bank (1,375 crore), Bank of Maharashtra (650 crore), Central Bank of India (323 crore), Dena Bank (243 crore).

ADRs shine

Indian ADRs ended higher on 29-012-2017. In the IT space, Infy rose 0.37 percent at $16.22 and Wipro gained 1.11 percent at $ 5.47.

In the banking space, HDFC Bank gained 0.63 percent at $ 101.67 and ICICI Bank was down 0.21 percent at $ 9.73.

Biocon gets Brazilian regulatory approval

Bangalore based bio pharmaceutical enterprise Biocon has received approval for its proposed biosimilar 'trastuzumab' by Brazilian regulatory agency ANVISA, through their partner Libbs Farmaceutica.

Biocon has developed the drug along with  US based drug major Mylan. 

Biosimilar trastuzumab, indicated for breast cancer treatment.

India's foreign exchange reserves touches new high

India's Foreign Exchange Reserves, as on December 22, not only crossed the $400 billion mark but touched a new lifetime.

The reserve stood at $404.921 billion aided by an increase in foreign currency assets. In the previous week, foreign exchange reserves had risen by $488.2 million to $401.385 billion.

India’s Forex reserves are a win-win situation if any international crisis arises amidst the fiscal slippage fear due to the crude oil price hovering over $60 per barrel. The current Forex reserves are enough to cover close to 11 months of import.

Parliament passes IBC amendment bill

Parliament has passed an amendment to IBC bill. The amendment is that the Loan defaulters can participate in bidding under the insolvency proceedings after paying due interest and making their bad loan accounts operational.

Jio picks up Rcom's call

Reliance Communications has entered into an agreement to sell its wireless assets to Reliance Industries' telecom arm Reliance Jio. The transaction, which is subject to lenders' and other applicable approvals, will close in phased manner in January-March 2018.

While the two companies did not disclose the deal size, banking sources pegged the transaction value around Rs 22,000 crore.

The deal will benefit the banks which are struggling with bad loans.

The announcement comes just two days after Reliance Communications disclosed a new deal with the lenders under which nearly Rs 40,000 crore will be raised through sale of assets, averting an imminent takeover by the 35 local and foreign banks.
 Rcom has around Rs 45700 Cr debt, Rs 20,000 Cr foreign currency loans and the rest are rupee loan. 



Rcom shares closed at Rs 31.35 in yesterday's trading. The stock is up more than 130% in the last 30 days.

Lupin gets USFDA approval for Dovonex scalp solutions

Lupin has received USFDA approval for its generic version of Dovonex scalp solution used in treatment of psoriasis of scalp.

Lupin closed at Rs 885, up Rs 10 in yesterday's trading.

IPO ANALYSIS : JHANDEWALAS FOODS LIMITED - AVOID

 

ISSUE DETAILS :

Issue opens / closes on	29-012 / 04-01-2018
Issue Size	29,10,000 equity shares
Face Value	Rs 10
Price band	Rs 55
BUSINESS	Mfrs of ghee / allied products
Promoters	RAAKESH B. KULWAL AND JINKO DEVI KOOLWAL
LISTINGS	Bse, sme
BRLMs	GUINESS CORPORATE ADVISORS
REGISTRAR	Big Share

Remarks : 

1.Tax disputes / unpaid taxes.

2. Pricing is on the higher side.

Oil Ministry : Crude oil import bill may swell by 15%

India's crude oil import bill will likely swell 15% to $81 billion in the current fiscal year as prices soar amid output cuts led by OPEC and Russia. 

In rupee terms, the value is estimated to go up to Rs 5.2 lakh crore from Rs 4.7 lakh crore. 

The volume of crude import would remain little changed at 213.5 million metric tonnes in 2017-18 but the value would jump to $ 81 billion from $70 billion in the previous year, according to an estimate by the Oil Ministry. 

S&P places Indian banking sector under Group 5

Ratings agency Standard & Poor’s (S&P), in its Banking Industry Country Risk Assessment for India, has classified the nation’s banking sector under ‘Group 5’, along with countries such as Italy, Spain, Ireland, the UAE and South Africa. The S&P BICRA categorizes banking systems based on a nation’s economic health and industry risk criteria. The S&P BICRA rates banking systems globally, on a scale of ‘1’ to ‘10’, wherein group ‘1’ represents the lowest-risk banking systems and group ‘10’ the highest.

Noting that the “low-income” Indian economy and the government’s limited fiscal flexibility constrain the country’s economic resilience. in its India report. 

However, said the medium-term outlook for growth remains healthy, which provide sound development opportunities for Indian banks.

KeyBanc cuts Tesla's production estimate

Tesla shares lost around 2 percent  and closed at $ 312 in yesterday's trading after KeyBanc analysts slashed their fourth-quarter estimates for Model 3 deliveries to about 5,000 from 15,000.

The bank's analysts expects the numbers for the mass-market sedan that was launched in July to be unveiled early next week.

While it is likely to be a few quarters before the company’s true Model 3 gross margin judgment day arrives, they remain sector weight as they think the [Model 3] margin ramp will disappoint and investors will have to acknowledge no [Model S and Model X] growth at some point, which is not reflected in the shares.

Sun Pharma gets USFDA approval, stock up 6 percent

 Sun Pharmaceutical stock gained 6 percent and closed at Rs 574, after the company announced the acceptance by the US Food and Drug Administration  for a new drug application to treat dry eye disease.

The Street expectation is that final approval for launch will be faster than current estimates of end-2018 or early 2019. Any launch ahead of the earlier estimates will not only give it a head start in a category with limited competition but help it fend off generic competition for a competing product.

Tech giants offers low salaries to freshers by forming cartel, alleges TVMP

Big Indian information technology companies have formed a cartel to keep salary of entry-level engineers low, alleged IT industry veteran T V Mohandas Pai, raising a strong pitch for a better deal for freshers.

There is a cartel...there has been a cartel, there is no doubt. They (big IT companies) talk to each other, sometimes tell each other not to increase, that's been there for a long time," according to  Pai.

"I know that people (of big IT companies) used to get together and tell each other not to raise (entry-level) salary. If one took into effect inflation, the remuneration of freshers in the IT industry has in fact come down by 50 per cent in the last seven years," he said.

Bank of America ML : RBI to go for a rate cut in April 2018

 According to global financial services major Bank of America Merrill Lynch,  inflation risks are “overdone” and though CPI inflation is likely to be 5.2 per  cent in December 2017, it would cool down to around 4.5 per cent in the first  half of 2018.

 Reserve Bank of India is expected to go in for a policy rate cut of 25 bps in  April next year to signal lower lending rates, which are key to the economic  recovery. 

ICRA : NBFCs to grow around 18% in FY 18

According to rating agency ICRA, NBFCs are likely to grow around 18% in FY 18.

NBFCs retail credit grew by nearly 16 percent year-on-year to Rs 6.6 trillion as of September, against 15 percent in FY 17 and 19 percent in FY 16.

WhatsApp data leakage : Axis Bank under Sebi scanner

Sebi has ordered an probe into the leakage of price sensitive information with regard to Axis Bank. The unpublished and price sensitive information was circulated among select WhatsApp group, in respect quarterly numbers. 

During the investigations, Sebi has observed,  that  the messages circulated in WhatsApp  groups almost  matched with the quarterly financial results of Axis  Bank for June 2017,  which were published subsequently.

As per Sebi order, the preliminary probe to be completed in 7 days and within 3 months complete probe report and action taken thereof must be failed with the Sebi. 

Axis Bank shares closed marginally lower at Rs 553 in today's trade. The stock is likely to be hammered in tomorrow's trading.

DLF's debt to come below Rs 20,000 Cr

DLF promoters have concluded the sale of stake in rental arm to Singapore’s sovereign wealth fund and GIC for nearly Rs. 9,000 crore. With the closure of this deal, DLF promoters have received the funds.

The net proceeds will be utilized for paring the debt. Currently, DLF has a debt around Rs 27,000 Cr which will come down below Rs 20,000 in next few weeks.

Fiis net buy for Rs 172 Cr

Fiis have net bought for Rs  172  Cr  in cash market.  They have net long positions in index futures and Options too.

Govt to borrow more

The Center has announced an additional borrowing of Rs 50,000 crore via gilts, which is double the amount that was estimated by the market. The government will borrow Rs 50,000 crore extra via gilts between January and March. This is due to low GST collection in the last 2-3 months.

GST collections down in Nov

GST collections were just Rs 80,808 crore, down from around Rs 83,350 crore revenue garnered in October till the corresponding reporting time, and much lower than a comparable monthly average of close to Rs 92,000 crore in the July-September, 2017.

Apple closes lower on forecast rumor

Apple stock closed at $ 171, down $ 4.44 in Tuesday trading. The sentiment in the counter was negative as a report from a Taiwanese newspaper, said that Apple will lower its forecast for its flagship phone in the first quarter. The news  has shaved more than $20 billion from Apple's market valuation. 

Rcom to exit SDR, stock up 41 percent

Rcom says that it will exit SDR scheme. It will sell its telecom towers, real estate and other assets, and also will get a strategic investor. The process would help reduce its debt by Rs 39,000 crore. 

 After restructuring, R Com will reduce its debt by 87 per cent to Rs 6,000 crore. As of March 2017, the company had a debt of Rs 44,700 crore. 

On this news the stock skyrocketed and closed at Rs 23, up 41% in yesterday's trading.

FORTHCOMING IPO : INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LIMITED

ISSUE DETAILS :

Issue size	13.9 Cr equity shares
Face Value	Rs 10
Promoters	Govt of India
Business	Financing of renewable energy companies
Registrar	Link Intime
Listings	Bse, Nse
BRLM	SBI Caps, Elara Capital, Yes Securities, IDBI Capital

IPO ANALYSIS : Apollo Micro System Limited -Invest

ISSUE DETAILS :

Issue opens / closes on	10-01 /12-01-2018
Issue Size	Rs 156 Cr
Face Value	Rs 10
Price band	Rs 270-275
BUSINESS	Electronic,  electro -mechanical,  engineering  designs  manufacturing  and  supplies  company
Promoters	Karunakar Reddy Baddam
LISTINGS	Bse, Nse
BRLM	Aryaman Financial Services
REGISTRAR	Big Share

BUSINESS :

The company is in to  electronic, electro-mechanical, engineering designs, manufacturing and supplies. The enterprise designs, develops and sell high-performance, mission and time critical solutions to Defence, Space and Homeland Security, public sector undertakings / others. The customised solutions are developed using common hardware and software technology IP’s which can be re-configured to suit the end application and domain requirements of end customer.

OBJECTS OF THE IPO :

        To meet the additional working capital requirements  and for general corpo purposes.

FINANCIALS : (Rs in crores)

   

	31-03-2017	31-03-2016	31-03-2015
Revenues	212	159	109
Equity	13.71	13.71	13.71
PAT	19	10	7
EPS (Rs)	13.54	7.29	5.43

 The company has reported Rs 7 Cr net for the period ended 30-9-2017.  NAV as on 31-03-2017 is Rs 54.

RISK FACTORS :

1. Business is significantly dependent  Public Sector Undertakings / Government entities.
2. Working capital intensive business.
3. The company has not disclosed the details of one of the members of the Promoter Group of  Promoter in the Red Herring Prospectus.

STRENGTHS:

1.Strong track record in developing new technological systems and order execution.  

2. Experienced team of R&D professionals and strong relationship with customers.    

3. CEMILAC Certified for Design of Avionic Systems

VALUATION AND RECOMMENDATIONS :

                        The company is likely to report an EPS of  Rs 15, on post issue capital. The offer is made around 18, which is attractive. Invest for listing and as well as far long-term capital appreciation.