Analysis, guides and explainers on India's unlisted market — from IPO pipelines to ESOP liquidity.
Fino-Paytech in the first 6 months of FY20-21 has delivered a profit of 11 Crores at the operational level as compared to a loss of 3.5 Crores despite the pandemic situation. Fino Paytech Limited Group is primarily engaged in providing technology-based solutions and services related to financial inclusion. It is a business and banking technology platform combined with extensive services delivery channel.<!--more--> The main income source of Fino-Paytech that is remittance was subdued due to pandemic situation but higher deposit- due to increase money flowing from government schemes, use of micro ATM, cash management services, and Aadhar enabled payment services have helped in getting profitability at the operational level. <strong>Stats of Fino-Paytech</strong> 1. 30% jump in micro-ATMs transactions. 2. 10% jump in Aadhar enabled payment services. 3. 22% increase in merchant enrolment. This quarter it has added 45k merchants, which was 25k per quarter earlier. <strong>Management View</strong> As per management, the remittances are at 60% of the pre-Covid level. Going forward, the management is focussing on selling credit products through its merchant on behalf of partner banks. This will generate the commission income for Fino-Paytech. At present, the management is not looking to raise money at present.
Bira beer, established in the summer of 2015 by B9 Beverages and headquartered in New Delhi, is looking to raise funds for its working capital requirement. It is looking for a strategic foreign partner for providing assistance. It is heard in the street that Bira is in talks with Japan-based Kirin Holdings, which has limited sales in India and can give Kirin Holdings a sizeable presence in the Indian market. Kirin Holdings is the biggest beer maker in Japan.<!--more--> Bira currently holds 5-6% of the beer market in India. The beer market is dominated by United Brewery (Kingfisher), and AB Inbev( Budweiser) which together holds more than 70%. <strong>UnlistedZone View</strong> The Covid-19 has made the situation really bad for Bira as the majority of its sales were coming from the restaurant and pubs only. And all the restaurants and pubs are closed as on date. If we see the impact of Covid-19 on the sectors, then Hotel, Restaurant, Aviation, etc are the biggest loser. And the situation does not seem to be looking good in the near term as fear of Covid-19 is still hanging in the mind of consumers. So Bira needs external money to run its operations. The interesting part would be to see at what valuation the deal will happen. In 2019, Bira has raised 30 Cr from Sixth Sense Ventures, at a reported valuation of 1722 Cr. Valuing per share at ~580. At that time, it was growing fast and now struggling. Selling stakes in the bad times is not advisable, but then Bira has no choice. It really needs funds to run its operations and stay alive in the market.
<p>As per the news published in the economics times, Studds Accessories, the market leader in helmet manufacturing has commissioned 2 new facilities in the state of Haryana. The company has invested a total of 200 Crores in these two plants.</p> <!--more--> <p>Studds has a market share of about 27% in the helmet market. 55% of its sales come from the Northern and Western regions. It is present in more than 40 countries mainly Europe, Latin America, Africa, the USA, and southeast Asia. This new facility will also produce helmets for bicycles. The two new plants are spread in the area of 5.5 acres and 1.5 acres each. This new facility will produce 75 lakhs helmets for motorcycle and 15 Lakh helmets for bicycles per year. The additions of new facilities will double the capacity of Studds Accessories. Now they will have 4 manufacturing plants, all in the states of Haryana. The total helmet manufacturing capacity now stands at 1.4 Crores helmet per year. <br /><br /><strong>Present Situation of Studds( Covid-19 times)</strong> <br /><br />1. The company has already started manufacturing post-covid-19. At present working at 80% capacity. <br /><br />2. The company at present has employed 1850 laborers and not facing any issue on this front. <br /><br />3. Supply chain issues are already sorted now. <br /><br />4. As per the company, the Capex and working capital requirement shall be met out of internal accruals. They will able to meet other obligations including Employee Cost, Finance cost, and other expenses from internal accrual only. 5. The company has not taken any additional credit lines for COVID. <br /><br /><strong>Outlook for FY20-21 by Manish Mehta CFO</strong> <br /><br />1. Post covid-19, the demand for 2W, new and old, is set to increase as people will prefer personal vehicles as compared to public transport. This will drive the demand for helmets as well. <br /><br />2. The management is quite optimistic and expects an overwhelming response. The company is expecting to surpass last year's sales in the current financial year. <br /><br />3. SMK, which is the premium brand, has received an overwhelming response in Indian and Foreign Markets. Last year they faced a shortage of supply due to capacity constraints. However, this year with two new plants already operational, the company will able to fill the gap. Studds is also coming up with new products in the market. <br /><br />4. Studds is also planning to add 12 new Exclusive Brand Outlets (EBOs) across the country. The capex for the EBOs would be about Rs 3 crores. <br /><br />5. BS-VI norms will put up a challenge for 2W manufacturers to sell as the cost of motorcycles will increase. So the impact would also be seen on helmet companies. <br /><br /><strong>UnlistedZone View</strong> <br /><br />Currently, the share price in the unlisted market is Rs. 825 per share. This translates into a valuation of 1623 Crores. The company in 2018 during IPO preparation was looking for a valuation of around 1800 Crores. With a supply shortage in 2019 and a positive outlook in 2020, doubling the capacity, we can easily conclude that it may easily command 2400-2500 Crores of valuation.</p>
<p>National Stock Exchange, the most sought unlisted share on 07.08.2020 has given its first-quarter results for FY20-21. A copy of the results is available with UnlistedZone. On examination, the results are outstanding.</p> <!--more--> <p><strong>Key Highlights</strong> <br /><br /><strong>1</strong>. NSE has shown a robust revenue growth of 38% YoY and 24% QoQ. It has clocked revenue of 1257 Crores in Q1FY21 as compared to 939 Crores in the same period last year. <br /><br /><strong>2.</strong> Expenses are up by just 2.7% in Q1FY21 as compared to last year in the same period. <br /><br /><strong>3.</strong> NSE has clocked a PAT of 706 Crores in Q1FY21 as compared to 425 Crores last year. <br /><br /><strong>4.</strong> In the first quarter, the NSE has clocked an EPS of 14. 5. Trading services during the first quarter saw tremendous growth as a lot of retail investors participated in the market. <br /><br /><strong>Segment Results (in Crores)</strong></p> <div class="table-overflow-init"> <table width="100"> <tbody> <tr> <td width="199">Revenue Segment</td> <td width="100">30.06.2020</td> <td width="100">31.03.2020</td> <td width="100">30.06.2019</td> </tr> <tr> <td>Trading Services</td> <td>934</td> <td>839</td> <td>625</td> </tr> <tr> <td>Clearing Services</td> <td>100</td> <td>105</td> <td>83</td> </tr> <tr> <td>Data feed Services</td> <td>29</td> <td>24</td> <td>29</td> </tr> <tr> <td>Index Licensing Services</td> <td>34</td> <td>34</td> <td>25</td> </tr> <tr> <td>Total</td> <td>1097</td> <td>1002</td> <td>762</td> </tr> </tbody> </table> </div> <p><strong><br />Covid-19 Impact</strong> <br /><br />The Coronavirus (COVID-19) outbreak is an unprecedented global situation, declared as a ‘pandemic’ by the World Health Organisation. Based on the Group’s current assessment, the impact of COVID-19 on its operations and the resultant financial performance except for its education and E-learning business is not likely to be significant. <br /><br /><strong>Valuation</strong> <br /><br />If we give a 25% growth in the bottom line for FY20-21, NSE can easily fetch an EPS of 48 this year. Currently, it is trading at 1150 in the unlisted market. Accordingly, the P/E based on FY21 earning would come around 24. In the listed segment, BSE currently trading at P/E of 15. With NSE almost 6x more trading volume than BSE, it can easily command a P/E of 30 for fair value. If we give P/E of 30 to NSE, the fair value comes out to be ~1480. <br /><a href="https://unlistedzone.com/storage/knowledge-logo/NSE-Results-Q1FY21.pdf">Results Link.</a></p>
Proyuga is inviting shareholders to join iB Family online get-together where they will share the progress and insights. As per company management, they are working with even more vigour in these tough times and innovating continuously. They have adopted new strategies not just to thrive, but to create a lasting success.<!--more--> So, the management is quite enthusiastic to meet all the shareholders in person and share their progress, but considering the current scenario, they are organizing the online get-together. As a shareholder or someone who wants to know more about the company can join the meeting online on YouTube. <strong>Two meetings will be hosted in Telugu</strong>. You can attend either of them based on your convenience. 9th August, 10.30 AM - 12:30 PM IST (or) 16th August, 10.30 AM - 12:30 PM IST Meeting link will be sent at 9 AM IST on the day of the meeting. <strong>For non-Telugu speakers</strong>, the same meeting will happen in English 16th August, 8:00 PM to 9:30 PM IST Meeting link will be sent at 6 PM IST on the day of the meeting. For any queries, please use the form. <a href="https://bit.ly/queries-doubts">Form Link</a>
Aricent Technology (Holding) Limited has sent a postal ballot notice to all the shareholders of the company for approval of the following items. <strong>Item1</strong>. Approval for Amalgamation of Aricent Technologies Private Limited with Aricent Technologies (Holdings) Limited.<!--more--> Aricent Technologies Private Limited (Transferor Company) The Transferor Company bearing Corporate Identification Number (“CIN”) U72200DL2005PTC309736 is a company incorporated in 2005, under the name of “Techforce Engineering Services Private Limited”. Subsequently, in 2009, the name was changed to “Smartplay Technologies (India) Private Limited”. Further, in 2016, the name of the company was changed to “Aricent Technologies Private Limited”. Aricent Technologies (Holding) Limited (Transferee) The Transferee Company, currently bearing CIN U72100DL2006PLC149728, is a company in 2006 (previously bearing CIN U65993DL2006PLC149728), as a public limited company under the name and style of “Kappa Investment Limited”. Subsequently, in 2007, the name of the Transferee Company was changed to “Aricent Technologies (Holding) Limited” <strong>Important Note</strong> No new shares of the Transferee Company are required to be issued or allotted since the entire share capital of the Transferor Company is held by Transferee Company and on the scheme coming into effect; such entire share capital of the Transferor Company will be canceled. <strong>Item2</strong>: Approval to provide loan/financing assistance to employees to subscribe to Capgemini SE Employee Stock Ownership Plan, 2020 (“CAPGEMINI ESOP 2020”). Capgemini SE acquired Altran Technologies S.A. at a global level in the first half of the calendar year 2020. Altran Group is now part of the Capgemini Group and consequently, all Altran entities are now part of the Capgemini group including Aricent Technology (Holding) Company. <strong>ESOP Scheme</strong> Capgemini Group has proposed ESOP schemes for its employees to acquire shares of Capgemini SE. Now as Capgemini SE acquired Altran Technologies S.A, the Indian employees working in Altran technology(Holding) Company are also eligible to buy shares of Capgemini SE shares. Capgemini SE shares are listed on France Exchange. The shares will be given a 12.5% discount on reference price. The reference price will be calculated on an average price of Capgemini SE share traded at the Euronext Paris stock exchange over 20 consecutive trading days (tentatively from 8 October 2020 to November 4, 2020). These ESOP's shares can not be transferred. <strong>UnlistedZone View</strong> The step to amalgamate holding company and a wholly-owned subsidiary is a welcome step as this will make synergy among the companies and reduce the compliances. The ESOP plan for Indian employees of Aricent Technology would be a golden chance to acquire Capgemini SE shares listed in France to have global exposure in their portfolio. Capgemini will give loans as well to the employees to purchase ESOP shares. <a href="https://unlistedzone.com/storage/knowledge-logo/KIP_Postal_Ballot_Notice.pdf">Postal Notice</a>
Paytm is going to add spice to the highly competitive broking industry, as it has announced to start the broking services for its users from its flagship product Paytm Money. UnlistedZone a few days back has reported that Paytm Money has appointed Varun Sridhar a new CEO to lead broking business. Varun Sridhar is a seasoned player who has earlier worked with BNP Paribas.<!--more--> https://unlistedzone.com/paytm-money-appoints-varun-sridhar-as-new-ceo/ Zerodha started in the year 2010 has opined the concept of discount broking wherein it has offered an ecosystem of wafer-thin brokerages for the investors and traders. Prior to that, a huge sum of money was going in brokerages for the clients in the stock market. The discount broking concept became an instant hit and with razor simple trading platform has today made Zerodha a leader in the broking industry. Today, with the announcement of Paytm Money to start brokerage services, a new competitor having a large database of users will come as a direct threat to Zerodha. <strong>Paytm Money Brokerage Charges</strong> 1. Rs. 15 per trade against Rs. 20 charge by Zerodha. 2. Annual charges of Rs. 250 against Rs. 300 charge by Zerodha. 3. Demat Account opening charge Rs. 150+GST against Rs.200+GST for online and Rs.400+GST charge by Zerodha. <strong>UnlistedZone View</strong> This is good news for the shareholders of Paytm, the most valued startup in India, as this will give Paytm a new stream of revenue in the coming years. However, we will have to check the platform and service Paytm offers to traders and investors to gauze its advantage over Zerodha. It is very early to say how much competition Paytm Money will give to Zerodha, but yes, a price war will definitely begin from here on.
<p>Amid escalating India-China tensions and rising anti-Chinese sentiment, the IPL's decision to retain VIVO, a Chinese mobile manufacturer, as its title sponsor has sparked intense debate. This decision underscores a complex interplay of business interests and national sentiments, particularly in the backdrop of recent governmental actions against Chinese entities.</p> <p>Despite social media's push against Chinese products and the Indian Government's decisive steps like banning TikTok and sidelining Huawei from BSNL's 4G tender, IPL's governing council opted to continue its association with VIVO. This move raises questions about the balance between economic interests and national sentiments.</p> <p><strong>Financial Dynamics</strong></p> <p>The financial stakes in this partnership are significant. In 2018, a landmark deal was struck with Star Sports for broadcasting rights and VIVO for title sponsorship, amounting to approximately ₹16,000 Crores and ₹2,200 Crores respectively over five years (2018-2022). This translates to an annual income of about ₹3,700 Crores for BCCI and IPL, equating to roughly ₹460 Crores per team. After BCCI's 20% cut, each IPL team nets around ₹370 Crores solely from these two sponsors.</p> <p><strong>UnlistedZone Perspective</strong></p> <p>The timing of this decision is critical. With just one and a half months before IPL 2020, finding a replacement for VIVO, willing to invest a comparable amount, is a formidable challenge, especially in the current COVID-19 impacted business landscape. For shareholders of unlisted entities like Chennai Super Kings, VIVO's sponsorship is a relief, cushioning potential revenue losses and stabilizing market valuations.</p> <p>For VIVO, this sponsorship represents a strategic opportunity to recapture its market share, which has waned amid negative public perception. Thus, this decision, while contentious, is a pragmatic move for IPL stakeholders, balancing economic viability with prevailing public sentiments.</p>
As per the news sourced from Paytm blogs, Varun Sridhar has joined as Paytm Money’s new CEO. He will manage and develop Paytm’s broking, Mutual funds, NPS, and Gold services business. Before joining Paytm, Varun was previously the part of top retail banks in India and abroad. He has worked 7 years with BNP Paribas, where he led the acquisition and integration of Sharekhan and <!--more-->BNP Paribas. After that, he has also worked as CEO in Finshell India, an OPPO Group company. The Finshell platform offers UPI payments, mutual funds, personal loans, channel finance, insurance, and free credit reports. The past experience of Varun in similar businesses will help Paytm Money achieves its mission to empower millions of Indians with wealth management products. Paytm’s Money is headquartered in Bengaluru and has a team of 300 employees. The company claims to have 60 Lakh users on its platform, buying a direct mutual fund and investing in NPS. The Paytm Money has already received the broking license from SEBI and they are expecting to hit the market with equity services next year. They have also set aside to invest Rs.250 Crores in the equity business to grow it. However, the competition is very tough in the broking industry with discount brokers such as Zerodha, 5Paisa, Uptox, etc are already running businesses in very thin margins. Let us see how this business unfolds for Paytm.
Reliance Industries yesterday has given the earning detail for Q1FY21 to the exchanges. The consolidated revenue has decreased by 42% in the first quarter of FY21 as compared to the same period last year. The PAT has gone up from ~10K Crores in Q1FY20 to ~13K Crores in Q1FY21, due to the addition of exceptional gain of ~5K Crores by selling the Petro Retail Marketing business to Reliance BP Mobility Limited (RMBL). Finally, BP has acquired a 49% equity stake in RBML.<!--more--> At present, Reliance Industries is doing business in many verticals, however, in the unlisted market, we are keen to track the performance of Reliance Retail, the most talked and in-demand unlisted stock. So, let us do that. <strong>Reliance Retail </strong>The EBITDA margins of the Reliance Retail has gone down to 1083 Crores in Q1FY21 as compared to 2060 Crores in Q1FY20. The sharp fall in EBITDA is mainly due to the Covid-19 situation which forced Reliance Retail to completely shut down 50% stores and 29% partially. The EBITDA margins also fell from 6% to 3.80% particularly impacted by drop from profitable categories such as Fashion & Lifestyle. Reliance Retail gets its revenue from the following business; 1. Consumer Electronics. 2. Fashion & Lifestyle. 3. Grocery. 4. Connectivity. 5. Petro <strong>Revenue Contribution (in Crores)</strong> <div class="table-overflow-init"> <table width="100"> <tbody> <tr> <td width="137">Retail business</td> <td width="137">1QFY20</td> <td width="92">1Q FY21</td> <td width="92">% Growth YoY</td> <td width="108">% contribution</td> <td width="94">Footfall drop due to lockdown</td> </tr> <tr> <td width="137">Consumer Electronics</td> <td width="137">10618</td> <td width="92">3243</td> <td width="92">-69%</td> <td>10%</td> <td>-65%</td> </tr> <tr> <td width="137">Fashion & Lifestyle</td> <td width="137">3221</td> <td width="92">939</td> <td width="92">-71%</td> <td>3%</td> <td>-90%</td> </tr> <tr> <td width="137">Grocery</td> <td width="137">7633</td> <td width="92">8027</td> <td width="92">5%</td> <td>25%</td> <td>-45%</td> </tr> <tr> <td width="137">Connectivity</td> <td width="137">12997</td> <td width="92">16,939</td> <td width="92">30%</td> <td>54%</td> <td>NA</td> </tr> <tr> <td width="137">Petro Retail</td> <td width="137">3747</td> <td width="92">2485</td> <td width="92">-34%</td> <td>8%</td> <td>NA</td> </tr> <tr> <td>Total</td> <td>38216</td> <td>31633</td> <td></td> <td></td> <td></td> </tr> </tbody> </table> </div> From the above table, the major impact in revenue seen due to consumer electronics and the F&L segment, which obviously has low demand during the lockdown, and the same is expected to pick up once the Govt. eases out lockdown conditions. The grocery segment was the essential item during a lockdown, saw 5% revenue growth, despite a 45% fall in footfall. The connectivity segment saw a sharp 30% growth due to JIO's momentum. <strong>Highlights of the Q1FY21</strong> 1. Reliance Retail has Opened 69 new stores and SIS sections; >250 stores could not be commissioned due to the prevailing situation. 2. Reliance Retail going more digital and launched JioMart. Reliance Retail and WhatsApp have entered into a commercial partnership agreement to further accelerate Reliance Retail’s Digital Commerce business on the JioMart platform using WhatsApp and to support small businesses on WhatsApp. 3.Partnerships with kiranas/merchants, vendors and farmer ecosystem to be accelerated. <a href="https://unlistedzone.com/storage/knowledge-logo/Reliance-Retail-Q1FY21-performance.pdf">Reliance Retail Q1FY21 Presentation</a>
Moody's yesterday has downgraded Hero-FinCorp local currency and foreign currency rating from "Baa3" to "Ba1". They have also revised the rating to a negative outlook. Let us check the meaning of this rating downgrade. <strong>Moody's Rating Definitions:</strong> <!--more--> <table width="100"> <tbody> <tr> <td rowspan="10" width="161">Investment Grade</td> <td width="124">Aaaa</td> </tr> <tr> <td>Aa1</td> </tr> <tr> <td>Aa2</td> </tr> <tr> <td>Aa3</td> </tr> <tr> <td>A1</td> </tr> <tr> <td>A2</td> </tr> <tr> <td>A3</td> </tr> <tr> <td>Baa1</td> </tr> <tr> <td>Baa2</td> </tr> <tr> <td>Baa3</td> </tr> <tr> <td rowspan="11" width="161">Non-Investment grade</td> <td>Ba1</td> </tr> <tr> <td>Ba2</td> </tr> <tr> <td>Ba3</td> </tr> <tr> <td>B1</td> </tr> <tr> <td>B2</td> </tr> <tr> <td>B3</td> </tr> <tr> <td>Caa1</td> </tr> <tr> <td>Caa2</td> </tr> <tr> <td>Caa3</td> </tr> <tr> <td>Ca</td> </tr> <tr> <td>C</td> </tr> </tbody> </table> 1. Baa means they are considered as medium-grade. 2. Ba means subject to substantial credit risk. So, we can conclude this from the above ratings that as of now Hero-FinCorp is under "substantial credit risk" <strong>Why rating downgrade has happened?</strong> Moody's feels that HeroFinCorp's unseasoned loan book and rapid growth in the past few years may pose risk to asset quality due to economic disruption posed by COVID-19 outbreak. <strong>UnlistedZone view</strong> In the near term, the effect on asset quality will not be easily seen on the balance sheet as RBI has given a 6M moratorium, under which even if the borrowers do not pay debt obligation on time, they will still not be counted as NPA. And we are hoping the economy will revive in one year's time as the economy is slowly opening up and vaccine hope are around the corner. However, despite problems in the NBFC from the last 2-3 years, Hero-FinCorp has able to pay all its obligation on time. The strong parentage of Hero Group will offset all the weaknesses, as they can easily able to raise money from banks in case of such a crisis.
<p>HDB Financial, the HDFC Group Company, is the leading NBFC in India. The HDB Financial is doing business in two operating segments, i.e. Lending business and BPO services. <br /><br /><strong>Revenue Streams</strong> <br /><br />1. The lending business includes providing finance to retail customers for a variety of purposes like purchase of commercial equipment and commercial vehicles, personal purposes, enterprise loans, etc.</p> <!--more--> <p>Revenue from lending business includes <br /><br />(i) interest income and processing fees net of loan origination costs.<br /><br />(ii) collection-related charges like cheque bouncing charges, late payment charges, and foreclosure charges. <br /><br />(iii) insurance commission. <br /><br />2. BPO services comprise of sales support services, back office, operations, processing support, running collection call centers, and collecting overdue amounts from borrowers for HDFC group companies. <br /><br /><strong>Q1 Numbers:</strong> <br /><br />On July 23, it has informed the National Stock Exchange regarding its financial results for Q.E June-20. HDB Financials has shown revenue growth of 6% YoY in the first quarter of June-20 as compared to the same period last year. However, QoQ, there is a fall in revenue of 4.2%. The fall is mainly on sales of services. The interest income, the core business income has seen no impact. The interest income has gone up from 1951 Crores in June-19 to 2153 Crores in June-20. The expense has increased from 2187 Crores year in the first quarter to 2531 Crores this year. Due to this, the net profit after tax has gone down to 111 Crores from 210 Crores last year.<br /><br /><strong>Why has Expense gone up?</strong> <br /><br />If you check the financials of the company, there is an item called “Impairment on financial assets”. The value of this item has gone up from 337 Crores to 686 Crores, resulted in a decrease in profit in the first quarter as compared to the same period last year. This figure indicates that the market value of the financial investment done by the company has gone down. These days in the new accounting system the company needs to show a decrease in the value of the financial asset in the P&L under expense. This helps investors to know the impact of market forces on the assets of the company. The balance sheet is not available with UnlistedZone to know the exact financial asset whose value has gone down. <br /><br /><strong>UnlistedZone View:</strong> <br /><br />The PAT numbers are looking bad because of impairment. However, HDB Financials is doing business quite well. The Company is duly servicing its debt obligations, maintaining a healthy capital adequacy ratio, and has adequate capital and financial resources to run its business. They are not facing any issue in raising money for lending as well, which is otherwise becoming difficult for low-grade NBFCs. <br /><br /><a href="https://unlistedzone.com/storage/knowledge-logo/HDB-Q1-Result.pdf">Results Link</a></p>
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