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<span style="font-family: georgia, palatino, serif;">Online payment services company Paytm is in talks with US asset manager T Rowe Price to lead a financing round aimed at raising $1 billion, according to two people privy to the matter. </span> <span style="font-family: georgia, palatino, serif;">The latest funding round may value Paytm at $13-15 billion, the people said. </span> <span style="font-family: georgia, palatino, serif;">T Rowe Price is in talks to invest around $150-200 million, with existing investors SoftBank and Chinese e-commerce giant Alibaba expected to infuse the rest of the capital. Some Saudi-based funds may also join in,” said one person on condition of anonymity. </span> <span style="font-family: georgia, palatino, serif;">The Vijay Shekhar Sharma-led company has been in the market since early this year to shore up funds amid mounting losses and growing competition in the digital payments sector posed by Google Pay and Walmart-owned PhonePe.</span> <span style="font-family: georgia, palatino, serif;">The size of the funding round has been trimmed from the $2 billion that Noida-based One97 Communication, Paytm’s parent, had set out to raise, people said. ET first reported in its March 28 edition that Paytm was eyeing $1.5-2 billion in new capital. If the deal goes through, it will be a rare bet for T Rowe Price, which manages more than $1 trillion in assets, on a privately held Indian technology startup, after its investment in Flipkart.</span> <span style="font-family: georgia, palatino, serif;">Paytm’s Sharma and SoftBank did not comment on the new financing. </span> <span style="font-family: georgia, palatino, serif;">Emailed queries sent to T Rowe Price and Alibaba Group on Monday evening did not elicit a response till press time.</span> <span style="font-family: georgia, palatino, serif;">SoftBank, which first invested in the company in 2017, holds a 19% stake, while the Alibaba Group, through Ant Financial and directly, owns 38% of One97 Communications. People familiar with the development said Paytm may not see a significant bump up in valuation during the fundraising. The company was said to be valued at $16 billion in a secondary round earlier this year, although Paytm did not confirm this. A secondary sale is when an existing investor sells shares to another and the money does not come to the company.</span> <span style="font-family: georgia, palatino, serif;">Paytm’s last equity funding was in 2018, when Warren Buffett-led Berkshire Hathaway invested $300 million, ascribing a $10 billion valuation. It’s been tough going for Paytm in the previous year as losses widened in the previous financial year as revenue increased marginally. One97 Communications posted a ₹3,959.6 crore net loss for FY19 against ₹1,490 crores a year earlier, according to details the company shared with investors and as ET reported in September. </span> <span style="font-family: georgia, palatino, serif;">Besides the losses, a stream of top management executives quit and its e-commerce business under Paytm Mall was being audited by EY for a cashback scam.</span> <span style="font-family: georgia, palatino, serif;">In recent media interactions, Sharma has stressed his company’s strategy to cut losses and turn profitable amid a rising chorus against the wave of cash-guzzling and money-losing startups in India and Silicon Valley. Sharma has also spoken about potential IPO. Paytm claims its margins are now growing positively and it has registered an increase in revenue across payments, commerce, and financial services. The company has said it is moving away from the discount-led, peer-to-peer payments vertical to focus on online and offline merchants. Cashbacks and subsidies have helped drive online payment transactions on the consumer side along with incentives to encourage adoption by merchants.</span> <span style="font-family: georgia, palatino, serif;"><strong>Source: Economic Times</strong></span>
Hero FinCorp, part of the ‘Hero’ group is an Indian NBFC. It is engaged primarily in financing two-wheelers for Hero Motocorp, the largest motorcycle maker in the world. To diversify its base, it has forayed into providing loans against property and in commercial lending. It has an employee base of 1500.<!--more--> The Company has one wholly-owned subsidiary company viz. Hero Housing Finance Limited (“HHFL”). HHFL had started its lending operations from April 2018. It is an all-inclusive housing finance company providing hassle-free home loans PAN India which includes the following products to its customers: (i) Home Loans, (ii) Loan Against Property, etc. HHFL has shown tremendous growth and touched loans of INR 556.75 crore during the first year of its operation in FY19. The AUM has reached nearly 20,000 crores in the current financial year. Loan mix consists: a.) Retail Individuals - 39%. b.) Retail Businesses - 30%. c.) Commercial Loans – 31%. <strong>Financials Highlight of Half-Yearly Results:</strong> <table> <tbody> <tr> <td>Particulars (Crores)</td> <td>6M FY19</td> <td>6MFY18</td> <td>12MFY18-19</td> </tr> <tr> <td>Total Revenue</td> <td>1668</td> <td>1078</td> <td>2492</td> </tr> <tr> <td>Expense</td> <td>1438</td> <td>947</td> <td>2078</td> </tr> <tr> <td>Profit/Loss Before Tax (PBT)</td> <td>244</td> <td>130</td> <td>413</td> </tr> <tr> <td>Profit/Loss After Tax (PAT)</td> <td>163.56</td> <td>82.42</td> <td>267</td> </tr> <tr> <td>Earnings per share (EPS)</td> <td>14.41</td> <td>8.32</td> <td>25.97</td> </tr> </tbody> </table> a) The company has been resilient and strengthened its footing in these tough times in the automotive industry. b) The PAT has increased to 168 crores compared to 83 crores in the H2 of FY-2018-19. A 100% increase in profits. c) The capital adequacy ratio maintained close to the 19% mark. d) The debt to equity ratio stood at a modest 4.5 e) The ROA for the past 5 years maintained at 1.6%. If the company tries to expand its asset base, the return on the asset base would be decent. After the NBFC crisis triggered by IL&FS, many of the shady NBFCs have stopped their operations or gone under. Only a few with proper discipline continued to prosper and Hero FinCorp is one amongst them. For more detail about Hero-Fin Corp please visit <span style="text-decoration: underline;"><a href="https://unlistedzone.com/shares/hero-fincorp-limited-share-price-buy-sell-unlisted-shares-of-hero-fincorp/"><span style="font-size: 18pt;">Link</a> Disclaimer: This article is only for education purposes, and not to be construed as investment advice. Please consult your advisor before making an investment.
<span style="font-size: 12pt; font-family: georgia, palatino, serif;"><strong>As per the report published in Economic Times on May 30, 2019</strong></span> <span style="font-size: 12pt; font-family: georgia, palatino, serif;"><strong>(i)</strong> Safecrop Holdings, a consortium of WestBridge Capital, Madison Capital and investor Rakesh Jhunjhunwala, is set to gain control of Star Health & Allied Insurance Co in what’s pegged as the sector’s largest M&A transaction in India. “The consortium of investors will acquire a controlling stake under the proposed deal for a total equity valuation of <strong>Rs 6,500 crore</strong>,” said V Jagannathan, chairman and managing director of the private health insurer.</span> <span style="font-size: 12pt; font-family: georgia, palatino, serif;"><strong>(ii)</strong> The transaction will include a timeline for this, said people with knowledge of the matter. Star Health had a health insurance market share of 10.6% at the end of March 2018. The existing investors include promoter Star Health Investments, ICICI Venture, Tata Capital, and Oman Insurance Company among others. Jagannathan and some of his colleagues along with other individuals are also shareholders.</span> <span style="font-size: 12pt; font-family: georgia, palatino, serif;"><strong>(iii)</strong> The consortium had invested Rs 350 crore in the company in December 2018. However, the valuation this time would be different.</span> <span style="font-size: 12pt; font-family: georgia, palatino, serif;"><strong>(iv)</strong> The company had Rs 5,400 crore of new business with a profit of Rs 275 crore in FY18-19. New business registered a growth of about 30% growth, compared with Rs 4,161crore in the previous year.</span> <span style="font-family: georgia, palatino, serif; font-size: 12pt;"><strong>(v)</strong> The Insurance Regulatory and Development Authority of India has approved the deal, Jagannathan said, for which an agreement was entered into last year.</span>
As per communication received from <strong>Religare Health Insurance Limited,</strong> it is coming with the right issue to be opened from <strong>28.10.2019</strong> to <strong>11.11.2019</strong>. The eligible shareholders can participate. " <em>The Board of Directors in its meeting held on February 14, 2019, authorized the Company to raise capital up to an amount of Rs. 150 crores in one or more tranches and further Allotment Committee through its circular resolution dated October 23, 2019, approved the Letter of offer to raise capital by issue of equity shares up to an amount of Rs. 34 crores, at an issue price of Rs.10/- per equity share to existing shareholders in their existing proportion</em>". <span style="font-size: 14pt;"><strong>Offer Detail:</strong></span> The company is offering 3,40,00,000 equity shares of Rs. 10 each to the equity shareholders of the company. The total equity of the company is 68.84 cr and the total shares offered in the right issue are 3.4 cr. So in the right issue, we may bid for 5 share per 100 shares. <strong>Example:</strong> If you are holding 100 shares as on 18.10.2019, then you are eligible to get 5 shares in the right issue. <strong>Open Date:</strong> 28.10.2019 <strong>Close Date:</strong> 11.11.2019 <span style="font-size: 14pt;"><strong>Eligibility Criterion:</strong></span> The shareholders who were holding shares as on 18.10.2019 are eligible for the offer. <span style="font-size: 14pt;"><strong>How to Apply:</strong></span> The eligible shareholders must fill and sent the below-mentioned form to the company on or before 11.11.2019 for buying shares under the right issue. <span style="text-decoration: underline; font-size: 14pt;"><strong><a href="https://unlistedzone.com/storage/knowledge-logo/Application-Form.pdf">Application Form</a></strong></span> <span style="text-decoration: underline; font-size: 14pt;"><strong><a href="https://unlistedzone.com/storage/knowledge-logo/Offer-letter.pdf">Letter of Offer</a></strong></span>
NCL Buildtek is the new name of NCL Alltek & Seccolor, a change to reflect the range of building materials the NCL group firm has come to deal with over the years, from windows, doors, putties, paints and building blocks to tiling solutions. The new identity is designed to help clients visualize a one-stop solution for all their building material needs, managing director K. Madhu said. NCL Buildtek, he added, wants to add more products, grow footprint across the country and also make an IPO (initial public offer). In an interaction at the new premises of the company on Friday, he said NCL Alltek and NCL Seccolor were started as separate companies in the late 1980s and were subsequently merged. “Originally, Alltek was manufacturing spray plasters that are acrylic putty and textured paints and Seccolor was manufacturing color coated steel windows with technology from Italy,” he explained. “We added a lot more building material over time. The Alltek plant in Suryapet district started manufacturing emulsion paints, cement-based products like white cement-based putty and cement renders. At Seccolor [facility in Sangareddy district], we got into uPVC windows. We have 10 fabrication centers of uPVC across the country… forayed into ABS doors and aluminum windows,” he said. <span style="font-size: 14pt;"><strong>Steel door unit</strong></span> There are plans to set up a steel door unit in Sangareddy district, with an investment of over ₹10 crores, once the company gets possession of seven acres allotted to it by the government, he added. The company is setting up an ACC (autoclaved aerated concrete) block manufacturing unit in Nellore. “We are investing ₹80 crores on the plant, which is one of the biggest investments,” Mr. Madhu said about the second such but larger facility of the company. The Nellore plant can produce about 5 lakh cubic meters of AAC blocks per year, while the capacity of the first plant near Vijayawada is about 2.2 lakh cubic meters. <span style="font-size: 14pt;"><strong>Trial runs</strong></span> “At the Nellore facility, we have started trial runs. The plant would be fully operational by March 2020 making it the largest [such] plant in south India.” The company also plans to expand its putties and paint manufacturing facilities near Delhi. From being a company well known in south India and catering to customers in some parts of north India and doing projects in north-east, the NCL Buildtek would like to grow its footprint. Last fiscal, it had clocked revenues of ₹375 crores. Source: The Hindu
Xerox is a print technology and intelligent work solutions leader. They have expertise in imaging and printing, data analytics, and the development of secure and automated solutions to help customers improve productivity and increase client satisfaction. The primary offerings span in three main areas: Intelligent Workplace Services, Workplace Solutions, and Production Solutions. <strong>Intelligent Workplace Services</strong> offerings help customers, ranging from small businesses to global enterprises, optimize their printing and related document workflow and business processes. <strong>Workplace Solutions and Production Solutions</strong> offerings support the work processes to customers by providing them with solutions built upon a broad portfolio of industry-leading printing and workflow offerings. <strong>Production Solutions</strong> are designed for customers in the graphic communications, in-plant and production print environments with high-volume printing requirements. These solutions enable full-color, on-demand printing of a wide range of applications, including variable data for personalized content and one-to-one marketing. The company has recently published its Annual Report for FY18-19. As per the annual report; <strong>(i)</strong> The company has posted a profit before tax of <strong>Rs. 38.33 cr</strong> and a profit after tax of <strong>Rs. 23.19</strong> cr in FY18-19 as against profit before tax of <strong>Rs. 77.64 cr</strong> and profit after tax of <strong>Rs. 45.24 cr</strong> in the previous year, thereby recording a decline of 50.63% and 48.73%, respectively <strong>(ii)</strong> The company has given a dividend of <strong>Rs. 23.50</strong> per share which is excellent. <strong>(iii)</strong> The financial performance of FY18-19 is bleak and there is no growth in bottom-line and the company has performed badly in all profitability parameters. The company's performance in the last 4 years is tabulated below. <table style="width: 64.138%;" width="619"> <tbody> <tr> <td style="text-align: center; width: 24.8276%;" width="154"><strong>Particulars( in cr)</strong></td> <td style="text-align: center; width: 10.5169%;" width="103"><strong>2019</strong></td> <td style="text-align: center; width: 7.98635%;" width="132"><strong>2018</strong></td> <td style="text-align: center; width: 10.2056%;" width="123"><strong>2017</strong></td> <td style="text-align: center; width: 10.5895%;" width="107"><strong>2016</strong></td> </tr> <tr> <td style="text-align: center; width: 24.8276%;" width="154">Revenue</td> <td style="text-align: center; width: 10.5169%;" width="103">618</td> <td style="text-align: center; width: 7.98635%;" width="132">562</td> <td style="text-align: center; width: 10.2056%;" width="123">533</td> <td style="text-align: center; width: 10.5895%;" width="107">529</td> </tr> <tr> <td style="text-align: center; width: 24.8276%;" width="154">PBT</td> <td style="text-align: center; width: 10.5169%;" width="103">38.33</td> <td style="text-align: center; width: 7.98635%;" width="132">77.64</td> <td style="text-align: center; width: 10.2056%;" width="123">84.26</td> <td style="text-align: center; width: 10.5895%;" width="107">29.64</td> </tr> <tr> <td style="text-align: center; width: 24.8276%;" width="154">PAT</td> <td style="text-align: center; width: 10.5169%;" width="103">23.19</td> <td style="text-align: center; width: 7.98635%;" width="132">45.24</td> <td style="text-align: center; width: 10.2056%;" width="123">59.61</td> <td style="text-align: center; width: 10.5895%;" width="107">18.91</td> </tr> <tr> <td style="text-align: center; width: 24.8276%;" width="154">EPS</td> <td style="text-align: center; width: 10.5169%;" width="103">5.61</td> <td style="text-align: center; width: 7.98635%;" width="132">10.29</td> <td style="text-align: center; width: 10.2056%;" width="123">13.4</td> <td style="text-align: center; width: 10.5895%;" width="107">4.22</td> </tr> </tbody> </table> 1. The Xerox India Revenue is growing at a CAGR of 5.02% in the last 4 years. 2. The Xerox India PAT is growing at a CAGR of 8.13% in the last 4 years. 3. The company's ROE has gone down to 7.47% in FY19 as compared to 15% in FY18. 4. The company's EBITDA has gone down to 7.47% in FY19 as compared to 15.84% in FY18 5. The Company is debt-free. No Long-term and Short-term loan on books. The company has some seasoned investors like <strong>Rakesh Jhunjhunwala</strong> and <strong>Radhakishan S Damani</strong> holding 33366 and 75757 shares, respectively as on 31.03.2019. <span style="text-decoration: underline; font-size: 18pt;"><strong><a href="https://unlistedzone.com/storage/knowledge-logo/111081_Annual_Report_2019-Xerox_India_Ltd_.pdf">Annual Report 2019</a></strong></span>
As per ROC filing by Paytm, the Paytm has introduced new ESOP 2019 scheme for its employees for a period of 5 years. Under this scheme, the company will issue 2,42,904 shares worth Rs 357.66 crore. With this addition, the total count for ESOP in Paytm will increase to 2,166,524. <strong>What is ESOP?</strong> ESOP means employee stock options. Under this, the company issue shares to its employees generally at discount to the market value. This is a win-win situation for both the company and employees. The company gets the required funds for growth and expansion, on the other hand, the employees get the company's shares which they can encash to make good money in the future when its IPO comes. <strong>For ex</strong>., When Flipkart was taken by Walmart for Rs 1 lakh crore, the employees holding the stock in their hands became very wealthy overnight. <strong>When to apply for ESOP?</strong> If an employee thinks that the company is performing well, the employee should buy these shares and keep until the company becomes big to turn their fortunes. <strong>UnlistedZone View:</strong> <strong>(i)</strong> The Paytm will issue these shares at ~Rs. 14600 per share as per information collected from ROC. Last year, they issued shares to Warren Buffet firm Berkshire Hathway for Rs. 12300 per share. <strong>(ii)</strong> The big question is whether this ESOP 2019 scheme attracts employees? Participation in the ESOP 2019 scheme by employees will give a lot of insight. The employees are a very important source of information about the health of the company. We will keep you updating here once we get more information about ESOP 2019 scheme.
<span style="font-size: 12pt;"><span style="font-weight: 400;">Reliance Retail, the largest retailer in India and a subsidiary of Reliance Industries demonstrated a stellar performance amidst the so-called consumption slowdown, and GDP growth rate declining to the lowest levels since the past decade. </span><span style="font-weight: 400;"> </span></span> <span style="font-size: 12pt;"><span style="font-weight: 400;">The Reliance Industries Mcap reaching no. 1 in India is due to stellar performances by the Retail and JIO segment.</span><span style="font-weight: 400;"> </span><span style="font-weight: 400;"> </span><span style="font-weight: 400;">The total store count of Reliance Retail now equals 11,000. With 337 stores added this quarter, Reliance Retail has been adding nearly a store every day for the past few years!</span><span style="font-weight: 400;"> </span><span style="font-weight: 400;"> </span><strong>Financials of Q2FY20</strong><b> </b></span> <span style="font-weight: 400; font-size: 12pt;"><strong>(i)</strong> Revenue increased 27% y-o-y to INR 41,202 crores. </span> <span style="font-weight: 400; font-size: 12pt;"><strong>(ii)</strong> EBDIT increased by 66.8% to nearly INR 2,322 crores. </span> <span style="font-weight: 400; font-size: 12pt;"><strong>(iii)</strong> Net Profit increased 55% to INR 1,148 crores.</span> <span style="font-weight: 400; font-size: 12pt;"><strong>(iv)</strong> Cash Profit (adding back Depreciation and Amortization to Net Profit) increased by a whopping 70% to INR 2,341 crore</span> <span style="font-weight: 400; font-size: 12pt;"><strong>(v)</strong> EBIT Margin has increased to 4.9%.</span> <span style="font-size: 12pt;"><strong>UnlistedZone View</strong></span> <span style="font-weight: 400; font-size: 12pt;">The way Reliance Retail is performing, the annualized revenue for FY20 will easily cross 1.50 lakh cr. So if we give Mcap/Revenue of 2.5x to Reliance Retail and with outstanding shares of ~498 cr, the share price can easily go up to 750 per share.</span>
<p>HDB Financial Services, a prominent player in the financial sector, recently published its half-yearly results, offering a comprehensive look into the company's financial health. This detailed analysis focuses on the performance of HDB Financial's unlisted shares, leveraging the latest data to provide investors and stakeholders with valuable insights.</p> <p>For the half-year ended on September 30, 2019, HDB Financial Services reported a total income of ₹5,250 Crores, a significant increase from ₹4,078 Crores in the corresponding period in 2018, and almost 60% of the full year's income of ₹8,724 Crores in the year ended March 31, 2019. This growth in income highlights the company's robust revenue-generating capabilities and its strong market position.</p> <p>However, the company's expenses also saw a parallel increase, rising from ₹3,266 Crores in the half-year ended September 30, 2018, to ₹4,495 Crores in 2019. This accounts for approximately 64% of the full year's expenses of ₹7,000 Crores in FY 2018-19, indicating a consistent upward trend in operational and other costs.</p> <p>In terms of profitability, the Net Profit for the half-year ended September 30, 2019, stood at ₹427 Crores, a decrease from ₹525 Crores in the same period last year. This represents a decline of approximately 18.6%, suggesting challenges in maintaining profitability amid increasing expenses. Despite this, the company's earnings per share (EPS) stood at ₹5.44, compared to ₹6.71 in the same period the previous year, and ₹14.64 for the full year ended March 31, 2019. This EPS reflects the company's ability to generate earnings for its shareholders.</p> <p>The equity position of HDB Financial Services remained stable, with equity at ₹785 Crores as of September 30, 2019, marginally higher than the ₹782 Crores in 2018, maintaining a consistent level with the year ended March 31, 2019.</p> <p>This analysis of HDB Financial Services' unlisted shares provides a clear picture of the company's financial trajectory. While the growth in total income is promising, the decrease in net profit and EPS underscores the need for efficient cost management and strategic initiatives to bolster profitability. Investors and market analysts closely watching HDB Financial Services will find these insights crucial in assessing the company's performance and future prospects in the dynamic financial landscape.</p> <!--more--> <table width="429"> <tbody> <tr> <td style="text-align: center;" width="124"><strong>Particulars(cr)</strong></td> <td style="text-align: center;" width="122"><strong>Half-Year ended</strong> <strong>30-09-2019</strong></td> <td style="text-align: center;" width="103"><strong>Half-year ended</strong> <strong>30-09-2018</strong></td> <td style="text-align: center;" width="80"><strong>Year Ended</strong> <strong>31.03.2019</strong></td> </tr> <tr> <td style="text-align: center;">Total Income</td> <td style="text-align: center;">5250</td> <td style="text-align: center;">4078</td> <td style="text-align: center;">8724</td> </tr> <tr> <td style="text-align: center;">Expense</td> <td style="text-align: center;">4495</td> <td style="text-align: center;">3266</td> <td style="text-align: center;">7000</td> </tr> <tr> <td style="text-align: center;">Net-Profit</td> <td style="text-align: center;">427</td> <td style="text-align: center;">525</td> <td style="text-align: center;">1149</td> </tr> <tr> <td style="text-align: center;">Equity</td> <td style="text-align: center;">785</td> <td style="text-align: center;">782</td> <td style="text-align: center;">785</td> </tr> <tr> <td style="text-align: center;">EPS</td> <td style="text-align: center;">5.44</td> <td style="text-align: center;">6.71</td> <td style="text-align: center;">14.64</td> </tr> </tbody> </table> <p>To get more details <span style="text-decoration: underline;"><strong><a href="https://unlistedzone.com/storage/knowledge-logo/IMG-20191016-WA0002.jpg">Click here</a></strong></span></p> <p> </p>
The bank has given notice for the Extra Ordinary General (EGM) meeting to the members of Suryoday Small Finance Bank Limited (“ the Bank”) which is to be held on Tuesday, November 5, 2019, at the registered office Navi Mumbai 400614 at 11.30 a.m. to transact the following business: <strong>(i)</strong> Increase in the limits of investment by NRIs to 24% of the paid-up share capital of the Bank. <strong>(ii)</strong> Alteration of Clause 3(xx) of Part A and Clause 1(lix) of Part B of the Articles of Association of the Bank. The clause (ii) is of less importance as far as retail investors are concerned. It is related to changing shareholding from one of the promoters to family members. <em>"One of the Promoters has indicated his desire to transfer his shareholdings to his family members who will continue to hold the shares subject to the conditions imposed by the RBI on shares held by the Promoter. While the necessary applications have been submitted to the Reserve Bank of India for its consideration, it is proposed to alter the definition of ‘Promoters’ to allow the concerned transferees to hold shares as Promoters of the Company in case the RBI permits them to do so"</em> <strong>The clause (i)</strong> is important for us as it indicates that NRIs are interested in purchasing shares of the bank. As per the shareholding pattern of the Bank as on September 30, 2019, foreign shareholding in the Bank is <strong>43.89%</strong> and the aggregate NRI holdings (on the non-repatriation basis) in the Bank’s paid-up capital is <strong>16.67%.</strong> As per FEMA, a private sector banking company is permitted to have Foreign Direct Investment up to 49% of its paid-up share capital under the Automatic route and up to 74% with Government approval. Further, in the case of NRI holdings, whether on repatriable or on a non-repatriable basis, the individual holdings are restricted to 5% of the total paid-up share capital of the Bank and the aggregate limit restricted to 10% of the total paid-up share capital of the Bank. As a research team, we would be like to see at what valuation the bank will issue shares to NRI. Thanks for reading!! We will update once the EGM's outcome or any funds raising news comes.
A recent circular by SEBI which is released on Oct-1 has restricted debt Mutual funds to invest in the unlisted commercial paper issued by companies. <strong><span style="text-decoration: underline;"><a href="https://www.livemint.com/mutual-fund/mf-news/big-bang-reform-sebi-puts-an-end-to-investment-in-unlisted-commercial-paper-11570011890801.html">The information was published recently in the live mint.</a></span></strong> Commercial papers(CPs) are the debt instruments through which companies raise funds for the short term typically less than a year. Generally, companies raise money via CPs as they carry fewer coupon rates and result into more spread. Now with this guideline in place, the companies which are issuing CPs have to list them compulsory on NSE or BSE. This means additional financial disclosure for the companies. However, the existing CPs are grandfathered until their maturity. This has been done due to a recent crisis that happened in the debt market after ILF&S fiasco and the fall of DHFL due to the overexposure of these companies to these commercial papers.
The UTI AMC is planning for IPO in the next 6 months and started the preparation of appointing investment bankers. UTI AMC was incorporated on November 14, 2002, and commenced operations from February 1, 2003. UTI AMC is today a household name in India and has a wide portfolio to suit the varied needs of investors supported by industry-led best practices, long-term vision, and shareholder values. With <strong>150 branches</strong>, <strong>47,000 highly trained IFAs</strong>, 320 Chief Agents and Business Development Associates and over 1 crore investor accounts, UTI AMC is one of the leading financial institutions with a pan Indian presence. As of 30.07.2019, the company is currently having an <strong>AUM</strong> of <strong>159764 Crore.</strong> Two mutual funds i.e. HDFC AMC and Nippon India Mutual Fund( erstwhile RNAM) are already listed on the bourses. As per Economic Times, the UTI AMC may get a valuation of Rs. 12000-13000 cr and they are looking to raise Rs. 2500-3000 cr from IPO. Let us see how this valuation is faired up with listed AMCs. <table style="width: 66.2029%;"> <tbody> <tr style="font-weight: inherit;"> <td style="text-align: center; width: 8.74466%;" width="79"><strong>Company</strong></td> <td style="text-align: center; width: 16.9061%;" width="64"><strong>Price</strong></td> <td style="text-align: center; width: 10.009%;" width="93"><strong>Mcap(cr)</strong></td> <td style="text-align: center; width: 15.2022%;" width="91"><strong>AUM(cr)</strong></td> <td style="text-align: center; width: 2.61097%;" width="100"><strong>Mcap/AUM</strong></td> </tr> <tr style="font-weight: inherit;"> <td style="text-align: center; width: 8.74466%;" width="79">Nippon</td> <td style="text-align: center; width: 16.9061%;" width="64">282</td> <td style="text-align: center; width: 10.009%;" width="93">17,314</td> <td style="text-align: center; width: 15.2022%;" width="91">2,09,484</td> <td style="text-align: center; width: 2.61097%;" width="100">8%</td> </tr> <tr style="font-weight: inherit;"> <td style="text-align: center; width: 8.74466%;" width="79">HDFC</td> <td style="text-align: center; width: 16.9061%;" width="64">2610</td> <td style="text-align: center; width: 10.009%;" width="93">55,509</td> <td style="text-align: center; width: 15.2022%;" width="91">3,75,560</td> <td style="text-align: center; width: 2.61097%;" width="100">15%</td> </tr> <tr> <td style="text-align: center; width: 8.74466%;" width="79">UTI</td> <td style="text-align: center; width: 16.9061%;" width="64">750-800</td> <td style="text-align: center; width: 10.009%;" width="93">9500-10143</td> <td style="text-align: center; width: 15.2022%;" width="91">1,59,764</td> <td style="text-align: center; width: 2.61097%;" width="100">6-6.35%</td> </tr> </tbody> </table> The UTI AMC is currently available at Rs.750-800 range in the unlisted market, which translates into the valuation of Rs. 9500 to 10143 cr. At Mcap/AUM multiple of 6%, the UTI AMC is the cheapest AMC among all.
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