Ongoing IPO: RBL Bank Limited

rblCompany & Business Profile

RBL Bank Ltd. began its operations in early 1943 as a small, regional bank in Maharashtra with two branches in Kolhapur and Sangli. The bank over the past six years has transformed itself from a traditional bank to a ‘New Age’ bank. As part of growth strategy the bank also acquired Indian businesses of royal Bank of Scotland including business banking, credit card and mortgage portfolio businesses in FY14. The acquisition helped bank expand its scale of operations and geographic presence. The distribution network of the bank as on 31st March, 2016 includes 362 interconnected ATM’s, 197 branches primarily covering major commercial and urban centers and 3,871 employees.

Objects of the Issue

The issue proceeds would be utilized to augment Bank’s Tier-I capital base to meet bank’s future capital requirements which are expected to arise out of growth in bank’s assets, primarily bank’s loans/advances and investment portfolio, and to ensure compliance with Basel III and other RBI guidelines.

Investment Positives

  • Bank operates through client-centric approach against product-focused approach resulting in growing brand recognition.
  • Net interest income for the bank has grown from Rs 186 crs in Fiscal 2012 to Rs 819 crs in Fiscal 2016, representing a CAGR of 44.7% for the past four fiscal years.
  • Bank has robust risk management system in place. Gross NPA for the bank for FY16 stood at 0.98 while net NPA stood at 0.59.

For IPO note, read http://bit.ly/2bJul5l , to apply call us at 0731-4217261

Value Plus – August 2016

cover page August 2016

Arihant’s Value Plus August 2016 is now available.

Going ahead, the equity markets are expected remain volatile this month due to ongoing monsoon session of parliament and quarterly results season as well as global economic factors. Further, RBI monetary policy, GDP data, other macroeconomic events, monsoon progress, movement of rupee against dollar and crude oil price movement will be closely watched for further market direction. We recommend investors to invest in good quality stocks at lower levels.

This month’s issue contains:

  • Movers & Shakers
  • Market Outlook
  • Nifty Technical Outlook
  • Technical Pick
  • Fundamental Pick
  • Auto Sector July Sales
  • Commodity Outlook
  • Mutual Fund
  • Key Financial Events

We hope you find this issue of Value Plus useful. Please share your feedback on research@arihantcapital.com.

Click here to go through our flipbook now.

Ongoing IPO: S. P. Apparels Limited

S-P-Apperals-ipoCompany & Business Profile

S.P. Apparels Limited was incorporated in Avinashi, Tamil Nadu, a public limited company under Part IX of the Companies Act, 1956, pursuant to a certificate of incorporation dated November 18, 2005 issued by the Registrar of Companies, Tamil Nadu located at Coimbatore. They are the leading manufacturer and exporter of knitted garments for infants and children in India. These are manufactured at the integrated facilities that allow them to provide end-to-end garment manufacturing services from greige fabric to finished products. They also manufacture and retail menswear garments in India under the brand ‘Crocodile’. They believe their core competency lies in their clear understanding of the specifications of knitted garments in the infants and children category, the buying preferences of their customers and their ability to deliver products of a consistent high quality that meet the product specifications and stringent compliance requirements of their international customers. The company’s long-standing relationship with major customers has been one of the most significant factors contributing to their growth.

They also manufacture a broad range of menswear garments consisting of shirts, polo shirts, t-shirts, trousers, jeans, sweaters, jackets and men’s innerwear consisting of vests, briefs, boxer shorts and socks under the brand ‘Crocodile’ which is subsidiaries through an agreement with Crocodile International Pte Limited, Singapore. They mainly export their products to United Kingdom. During FY16, the company exported approximately 3.6 crore pieces of knitted garments for infants and children directly to its international customers, including TESCO and Primark.

SP Apparels operates 21 manufacturing facilities in and around the region of Avinashi in Tamil Nadu. Company has 4,874 sewing machines, eight cutting machines, 79 embroidery machines, 17 printing machines, 16,896 spindles and 22 dyeing machines.

Objects of the Issue

The proceeds from the fresh issue will be utilized towards the repayment or prepayment of debt incurred by the Company; Expansion and modernization of their manufacturing facility at Valapady, Salem, Tamil Nadu; Addition of balancing machineries for their existing dyeing unit at SIPCOT, Perundurai; Opening of new stores for the sale of ‘Crocodile’ products; and General corporate purposes.

Investment Positives

  • The Company’s long-standing relationship with their major customers has been one of the most significant factors contributing for the growth.
  • Over the years, they have developed the expertise to concurrently manage multiple large orders as well as developed a diversified product range which has helped the company to grow into one of the leading manufacturers of knitted garments for infants and children in India.
  • In addition to manufacturing of garments the company’s key strength is the ability to set-up and provides all necessary facilities at various units and efficiently manages such units from a centralized location that has helped them to efficiently scale-up their operations in a short period of time.

For IPO note, read http://bit.ly/2anXHC2 , to apply call us at 0731-4217261.

Ongoing ‪IPO: Dilip Buildcon Limited

dilip-buildcon-ipo

Company & Business Profile

Dilip Buildcon Ltd. is one of the leading private sector road-focused EPC contractors in India. The business comprises of (i) construction business, under which company undertakes roads, irrigation and urban development projects on an EPC basis; and (ii) infrastructure development business, under which company undertakes building, operation and development of road projects on a BOT basis with a focus on annuity projects.

In road construction business, company mainly designs, constructs and maintains roads and highways on an EPC basis with third party and EPC Contracts are awarded to the company through subsidiary companies and joint ventures.

In irrigation business, company undertakes to build canals and dams. Company entered into this business in FY14 to take advantage of the increasing opportunities in this area.

In urban development business, company undertakes redevelopment and re-densification of government housing and builds residential units under affordable housing schemes and other structures in group water supply schemes relating to irrigation or water supply for agricultural purposes. Company entered into this business in FY13.

In infrastructure development business, company develops and maintains roads and highways on a BOT basis. Presently company undertakes BOT projects opportunistically, considering factors such as their proximity to clusters where company is executing other projects to maximize efficiency of execution and profitability, and the potential cash flow from such projects after they become operational.

Objects of the Issue

The public issue comprises a fresh Issue and an offer for sale by the selling shareholders. Company will not receive any proceeds from the Offer for Sale. The proceeds from the fresh issue will be utilized towards the following:

  • Prepayment or scheduled repayment of a portion of term loans availed by the company;
  • To meet working capital requirements; and
  • General corporate purposes.

Investment Positives

  • Company operates through ownership model vs. rental model for executing its projects which has led to higher margins for the company.
  • Company has tried to keep its time to execute projects well ahead of the scheduled, winning them bonuses and lower completion costs.
  • Company owns one of the largest equipment banks in the country totalling 7,345 vehicles.
  • With best in the class equipment, the average life of their assets is 8-10 years as against 3-4 years of the other players.
  • There has been strong revenue visibility. Revenue for the company grew at a CAGR of 38% on consolidated basis.

For IPO note, read http://bit.ly/2astQHH, to apply call us at 0731-4217261.

Monsoon Session of Parliament

monsoon

The much awaited monsoon session of parliament started from July 18 and is expected to conclude on August 12, 2016. The session will have a total of 20 sittings over duration of 26 days and the main focus of the ruling alliance will be to push its economic reforms agenda. We hope that government will work amicably for the benefit of our nation and opposition party will not make ruckus in this session.

The government’s top agenda in monsoon session of parliament is GST Bill and the discussion on the Jammu and Kashmir situation is also on the cards. The GST Bill has been stuck in the Rajya Sabha since May 2015, as the ruling National Democratic Alliance does not have majority in the Upper House. The government has been trying to reach out to the Congress to resolve differences between the two sides and ensure passage of the Bill in the monsoon session of Parliament. A meeting between the government and the Congress on July 15 failed to arrive at any conclusion on the issue. All eyes are glued on the passage of the much awaited GST Bill.

Here’s a list of crucial bills on finance, labour, law, health and strategic affairs, among others, that will be discussed for introduction and passing across 20 sittings of Parliament during Monsoon Session.

Bills pending in the Lok Sabha:

  1. The Indian Trust (Amendment) Bill, 2015 (agreeing to amendments made by the Rajya Sabha)
  2. The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016 (after report is presented by the joint committee)

Bills pending in the Rajya Sabha: 

  1. The Whistle Blowers Protection (Amendment) Bill, 2015
  2. The Regional Centre for Biotechnology Bill, 2016
  3. The Constitution (One Hundred and Twenty second Amendment) Bill, 2014
  4. The Enemy Property (Amendment & Validation) Bill, 2016 (all these bills have been already passed by the Lok Sabha)
  5. The Child labour (Prohibition and Regulation) Amendment Bill, 2012
  6. The Homeopathy Central Council (Amendment) Bill, 2015

Bills for Introduction:

  1. The High Court’s (Alteration of Names) Bill, 2016
  2. The Institute of Technology (Amendment) Bill, 2016
  3. The Use and regulation of DNA based technology in Civil and Criminal Proceedings, Identification of Missing Persons and Human Remains Bill, 2016

Just a week into the Monsoon Session of Parliament, Lok Sabha has cleared four Bills during the five sittings viz., the Indian Medical Council Bill,2016, the Dentists (Amendment) Bill,2016 and the National Institutes of Technology, Science Education and Research Bill (Amendment) Bill, 2016. These were among the six Bills introduced in the House last week. The Rajya Sabha passed two bills on July 18 – The Regional Centre for Biotechnology Bill, 2016, as passed by the Lok Sabha earlier, and The Child Labour (Prohibition and Regulation) Amendment Bill, 2012.

However, the politics has yet again reigned over national cause with ED proceedings over the weekend against the former Haryana Chief Minister Bhupinder Singh Hooda and others in an advance on the National Herald Case. With already the sensitive issue of atrocities on Dalit ongoing in the Parliament, this unexpected state of affairs is going to play a spoil sport and jolt the passage of the much needed GST Bill. No matter what, the Congress party continues to hold a strong hold in the Upper House.

What remains to be seen now is whether Mr Arun Jaitley manages to garner consensus and reduce the differences in today’s meeting with states to make the GST dream of Modi a reality.

Ongoing IPO: Advanced Enzyme Technologies Limited

Advanced-Enzyme-ipo

Company & Business Profile

Advanced Enzyme Technologies Ltd. is among top 15 companies in enzyme sales in the world and second largest in India. Company is engaged in the Research and Development, Manufacturing and marketing of 400+ proprietary products developed from 60 indigenous enzymes. Having more than two decades of fermentation experience in the production of enzymes, Rank among the top 15 global companies in terms of enzyme sales, and have the second highest market share domestically, next only to the world’s largest enzyme company Novozymes. It has six geographically spread and accredited manufacturing facilities to produce a wide range of products and help cater to a diverse set of industries globally.  It operates in two primary business verticals namely Healthcare & Nutrition (human and animals) and Bio-Processing (food and non-food).

Industry Overview:

Industrial enzymes constitute the larger portion of the world enzyme demand accounting for $3.6 billion in FY12. The global demand for industrial enzymes is expected to grow at a 5-year CAGR of 5.6% to reach $4.8 billion in FY17 and 10-year CAGR of 5.7% to reach a size of $6.3 billion by 2022. The strongest demand for industrial enzymes shall be experienced in the sub segments of food and beverages and animal feed.

Objects of the Issue:

  • The objects of the Offer are to achieve the benefits of listing the equity shares on the stock exchanges and to carry out the Offer for Sale by the selling shareholders.
  • The money from IPO will be use for repayment/pre-payment of certain loans, Incremental Working capital, towards debt repayments and Capital expenditure.

For IPO note, read http://bit.ly/29UHt5H , to apply call us at 0731-4217261