The IPO of Sapphire Foods India opens on 09th November and closes on 11th November. Sapphire is the largest franchisee of YUM Brands in the Indian sub-continent comprising India, Sri Lanka and the Maldives. The entire issue of Rs.2,073 crore will be an offer for sale to give exit to early investors including WWD Ruby, Amethyst and Edelweiss Fund, apart from the promoters. The price band for the IPO has been set at Rs.1,120 to Rs.1,180 and the minimum lot size is 12 shares. Only 10% is reserved for the retail category.
According to a recent report by ICRA, housing finance companies or HFCs are likely to grow at 8-10% in fiscal 2021-22. This will be on the back of retail and commercial demand. Since the end of Jun-21, most of the HFCs have seen a spike in collection efficiency, which is a good signal. HFC are estimated to have a loan portfolio of Rs.11 trillion comprising home loans, LAP, builder finance and lease rental discounting. COVID 2.0 had pushed up gross NPAs of HFCs from 2.9% in Mar-21 to 3.6% in Jun-21 on sequential basis.
Inspira Enterprise India, an IT solutions provider, got SEBI approval to raise Rs.800 crore via IPO. The IPO comprises a fresh issue of Rs.300 crore and OFS of Rs.500 crore. The Jain family trust will offload shares in the OFS. Inspira had filed DRHP with SEBI in August. It is considering a pre-IPO placement of Rs.75 crore which will reduce the IPO size proportionately. The fresh issue proceeds will be used for debt repayment. Inspira specializes in cybersecurity and digital transformation services across verticals and geographies.
Future Retail of the Biyani group, has asked the Supreme Court to reject the arbitral award of the SIAC to freeze the $3.4 billion asset sale of FRL to Reliance Retail, after objections from Amazon. The Rs.28,300 crore deal has been in limbo since then. Amazon has cited its agreement with Future Coupons for stalling this deal. FRL has cited risk of financial stress if the deal does not go through. Future was almost forced into this deal with over Rs.11,000 crore dues to banks. The outcome delay is hitting Future group hard.
Both the principal stock exchanges in India will introduce T+1 settlement cycle in phases from 25-Feb 2022. To begin with, the 100 stocks at the bottom of the market cap ranking will be added to the T+1 group. From Mar-22 onwards, each month SEBI will move 500 stocks by market cap to the T+1 settlement mode. This is likely to give enough time to adjust. Most large Asian markets are still on T+2 while Taiwan had shifted to T+1 and then reverted to T+2. FPIs have cited time zone differences as a major constraint.
Britannia reported 23% fall in net profits for the Sep-21 quarter at Rs.384 crore as input cost inflation hit prices of palm oil, industrial fuel and packaging. However, cost of raw materials was up 8% yoy while sales were up 6% yoy. On the cost front, Britannia also took a hit on fuel inflation. The big hits came from a 54% spike in palm oil prices and a 35% rise in fuel prices. While cost and inventory efficiency gains helped, they were not able to fully mitigate cost spikes. Gross margins fell 485 bps while EBITDA margins fell 428 bps.
Moody’s announced that 6 Indian companies had exited the list of “Fallen Angels” following the upgrade in its rating outlook. A fallen angel is a company that risks losing its investment grade rating. The 6 entities included ONGC, OIL, IOCL, HPCL, Petronet LNG and Ultratech Cements. Most of these companies are now away from their vulnerability to downgrades. However, BPCL continues in the list of Fallen Angels due to ownership uncertainty. Typically Fallen Angels face higher cost of funds, which could impact refinancing.
Canara Bank stock hit a 2-year high after a slew of its bonds saw upgrades from ICRA. The current price of Rs.242 is the highest price since Jul-19. Now, Canara Bank has rallied 37% in the last one month and nearly 62% since its QIP placement, in which Rakesh Jhunjhunwala had also participated at a price of Rs.149.35. Canara Bank had raised Rs.2,500 crore via the QIP in August to augment Tier-1 capital. ICRA noted that improved capital cushion had improved Canara Bank’s solvency profile. This is part of a larger PSU rally.
