SGX Nifty Trades Higher, Mrs Bectors Food Specialties IPO, DHFL Bidding Process, and Top Buzzing Stocks Today

Wed, 16 Dec Pre-Open | Monish Vora, TM Team

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Indian share markets ended on a flat note yesterday.

At the closing bell yesterday, the BSE Sensex stood higher by 9 points (up 0.02%).

The NSE Nifty ended up by 9 points (up 0.07%).

Bajaj Finance and Bajaj Finserv were among the top gainers.

Hindustan Unilever, on the other hand, was among the top losers.

The BSE Mid Cap index ended up by 0.4%. The BSE Small Cap index ended up by 0.1%.

Except auto and metal sector, sectoral indices ended in the red with oil & gas and FMCG sector falling more than 1% percent each.

At 8:00 am today, the SGX Nifty was trading up by 55 points, or 0.4% higher at 13,630 levels. Indian share markets are headed for a positive opening today following the trend on SGX Nifty.

Gold prices for the latest contract on MCX were trading up by 0.8% at Rs 49,344 per 10 grams at the time of closing stock market hours yesterday.

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Top Stocks in Focus Today

Ashok Leyland will among the top buzzing stocks today.

Hinduja Group company Ashok Leyland is looking to raise US$ 200-300 million in its electric vehicle subsidiary by selling a minority stake to leverage rising investor interest in clean technology transport solutions.

Reports state that feelers have gone out to Middle East sovereign wealth funds such as Mubadala Investment company, Qatar Investment Authority and Saudi Arabia's Public Investment fund.

Technology major Alphabet Inc along with investors like SoftBank Group have also been approached.

Borosil Renewables share price will also be in focus as the company has announced its plans to raise funds through a qualified institutional placement (QIP). The floor price of the QIP issue is set at Rs 133.2 apiece.

The company may, in accordance with the special resolution of the shareholders dated September 28, 2020, at its discretion, offer a discount of not more than 5% on the floor price as permitted under the market regulator guidelines.

Market participants will also track stocks from the finance sector today. As per an article in The Economic Times, some of the top non-banking finance companies and housing finance companies have seen a jump in the way they provision for some of the future uncertainties due to Covid pandemic.

42 NBFCs (including HFCs) noted a Covid-19 impact comprising 19% of the expected credit loss (ECL) allowance for the year ended 31 March 2020, the report said.

The report noted an increase in ECL allowance by 33% and an overall increase in provision coverage rate by 26% as at 31 March 2020 compared to the year ended 31 March 2019.

DHFL Bidding Process: Oaktree Capital Emerges as the Highest Bidder

In other news, days after the committee of creditors (CoC) sought a fresh round of bidding for crisis-ridden NBFC Dewan Housing Finance Corporation (DHFL) by all the four bidders, Oaktree Capital emerged as the highest bidder.

Multiple people involved in the discussions said that Oaktree's Rs 366.5 billion offer has the quickest repayment timelines and a higher overall recovery, but the equity infusion is only about Rs 15 billion.

Piramal Group has offered to make the highest cash payment upfront of Rs 127 billion to DHFL creditors and a higher equity contribution of Rs 25 billion.

The group has also reiterated its offer to merge its flagship finance firm Piramal Capital and Housing Finance with DHFL, thereby swelling the combined entity's net worth to more than Rs 180 billion and cushioning its ability to issue debt.

Piramal's bid comprises deferred payment of Rs 195.5 billion payable but it is payable over a longer tenure of 10 years in the form of bonds.

The NYSE-listed asset management firm Oaktree, in comparison, has offered a higher deferred payment of Rs 210 billion worth of bonds over 7 years and an upfront payout of Rs 116.5 billion.

Adani, which had emerged as the highest bidder after a late, unsolicited bid after round-3, has offered Rs 107.5 billion upfront and Rs 191.1 billion as deferred payment over a seven-year horizon.

SC Lowy, the fourth contender, also submitted a bid but only for the wholesale book.

The lenders are likely to meet in the next few days to vote for the highest bid.

Note that in November last year, the Reserve Bank of India (RBI) referred DHFL, the third-largest pure-play mortgage lender, to the National Company Law Tribunal (NCLT) for insolvency proceedings.

DHFL was the first finance company to be referred to the NCLT by the RBI using special powers under section 227.

How the above developments pan out remains to be seen. Meanwhile, we will keep you updated on the latest developments from this space.

IPO Buzz: Mrs Bectors IPO Fully Subscribed on First Day of Bidding

In latest developments from the IPO space...

Bakery products manufacturer Mrs Bectors Food Specialties which opened its initial public offering (IPO) yesterday witnessed huge buying interest as the IPO was fully subscribed within the first two hours of the bidding process.

By afternoon yesterday the IPO was subscribed 2.3 times as the public issue received bids for 3.07 crore equity shares against an offer size of 1.32 crore equity shares, excluding the anchor book portion.

The company raised Rs 1.6 billion from anchor investors.

Retail investors showed interest in the IPO as the portion set aside for them was subscribed 4.37 times within hours of opening and that of employees had been bid 1.4 times.

The reserved portion of non-institutional investors witnessed a subscription of 66%.

This is the fifteenth IPO in 2020.

The company plans to raise Rs 5.4 billion via its public issue. The IPO consists of a fresh issue of Rs 405.4 million and an offer for sale of Rs 5 billion by selling shareholders.

The company has fixed a price band of Rs 286-288 per share for its public issue.

SBI Capital Markets, ICICI Securities and IIFL Securities are acting as the book running lead managers to the offer.

Note that the previous IPO to this - Burger King India's IPO - received an overwhelming response from investors, with the public offer being subscribed 157 times. The issue generated bids for 11.7 billion shares, worth Rs 700 billion, as against only 75 million on offer.

That made Burger King India the fourth mainboard IPO this year, which saw bidding of 100 times and more. The other three were Mazagon Dock Shipbuilders (157.41 times), Happiest Minds (156.65 times) and Chemcon Speciality (149.3 times).

While Mazagon got listed at a near 50% premium to its IPO price, Chemcon Speciality saw a 115% surge. Shares of Happiest Minds Technologies rallied 111% at its listing.

How the IPO of Mrs Bectors Food Specialties sails through remains to be seen. Meanwhile, we will keep you updated on the latest developments from this space.

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