All posts by Saurav Rathod

NTPC Green Energy IPO
NTPC Green Energy IPO: Should You Apply or Avoid?

NTPC Green Energy IPO is a book-built issue of Rs 10,000.00 crores. The issue is entirely a fresh issue of 92.59 crore shares.

About NTPC Green Energy Limited

Incorporated in April 2022, NTPC Green Energy Limited is a wholly-owned subsidiary of NTPC Limited. NTPC Green is a renewable energy company that focuses on undertaking projects through organic and inorganic routes. The largest renewable energy public sector enterprise, NTPC (National Thermal Power Corporation Limited), was incorporated on November 7, 1975. The company’s renewable energy portfolio includes solar and wind power, making it easier to generate clean energy. Additionally, the company aims to develop utility-scale renewable energy projects and projects for public sector undertakings (“PSUs”) and Indian corporations. As of June 30, 2024, the company has an energy capacity of 14,696 MW, consisting of 2,925 MW from operating projects and 11,771 MW from contracted and awarded projects. Compared to its peers, NTPC has achieved higher EBITDA margins and PTA margins in the last 2 years.  The company is constructing 31 renewable energy projects in 7 states, totaling 11,771 MW. As of June 30, 2024, the workforce comprised 234 employees, and the company utilised the services of 45 contract labourers.

IPO Subscription Period

  • Open Date: November 19, 2024
  • Close Date: November 22, 2024
  • Allotment Date: November 25, 2024
  • Listing Date: November 27, 2024
  • Stock Exchanges: BSE and NSE

Pricing Details    

  • Price Band: ₹102 – ₹108 per Share
  • Face Value: ₹10 per Share
  • Minimum Lot Size: 138 shares
  • Investment Requirement:
    • Retail Investors: Minimum ₹14,904 (138 shares)
    • Small Non-Institutional Investors (sNII): 14 lots (1932 shares) – ₹208,656
  • Big Non-Institutional Investors (bNII): 68 lots (9384 shares) – ₹1,013,472

Reservation Structure

  • Qualified Institutional Buyers (QIB): 26.37% (24,44,44,445 shares)
  • Non-Institutional Investors (NII): 13.19% (12,22,22,222 shares)
    • Big NII (bNII): 8.79%
    • Small NII (sNII): 4.4%
  • Retail Investors: 8.79% (8,14,81,481 shares)
  • Anchor Investors: 39.56% (36,66,66,666 shares) raising ₹3960 crores

Key Dates and Timeline

  • IPO Open Date: Thursday, November 19, 2024
  • IPO Close Date: Monday, November 22, 2024
  • Basis of Allotment: Tuesday, November 25, 2024
  • Initiation of Refunds: Wednesday, November 26, 2024
  • Credit of Shares to Demat: Wednesday, November 26, 2024
  • Listing Date: Thursday, November 27, 2024
  • Cut-off time for UPI mandate confirmation: 5 PM on November 22, 2024

Book Running Lead Managers

Niva Bupa Health Insurance Limited has appointed prominent financial institutions as book-running lead managers for the IPO:

  • IDBI Capital Market Services Limited
  • IIFL Securities Limited
  • HDFC Bank Limited
  • Nuvama Wealth Management Limited

Kfin Technologies Limited has been designated as the registrar for the IPO.

Promoter Information

  • Promoter: The Promoters of the Company are the President of India, acting through the Ministry of Power, Government of India and NTPC Limited.
  • Shareholding:
    • Pre-Issue: 100%
    • Post-Issue: 89.01%

Financial Highlights

  • Revenue Growth: Increased by 11 folds from ₹170 crores (FY 2023) to ₹2037.66 crores (FY 2024)
  • Profit After Tax (PAT): Rose by 100%, reaching ₹344.72 crores in FY 2024
  • Net Worth: ₹6232 crores
  • Total Borrowing: ₹12796 crores

Key Performance Indicators (KPIs):

  • ROE: 7.39%
  • RoNW: 2.14%
  • P/BV: 9.89
  • EPS (Pre-IPO): ₹0.46
  • EPS (Post-IPO): ₹0.42
  • P/E Ratio (Pre-IPO): 234.97x
  • P/E Ratio (Post-IPO): 259.56x

IPO Objectives

The company proposes to utilise the Net Proceeds towards funding the following objects:

  • Investment in the wholly owned Subsidiary, NTPC Renewable Energy Limited (NREL), for repayment/ prepayment, in full or in part of certain outstanding borrowings availed by NREL
  • General corporate purpose

Subscription Status (As of November 19, 2024, 7:02:07 PM)

  • Retail: 1.47x
  • QIB: 0.00x
  • NII: 0.17x
  • Overall Subscription: 0.36x
Waaree Energies Q2 results
Waaree Energies Achieves 17% Growth in Q2 FY25 Net Profit, Reaching ₹375.6 Crore

Company Overview

Waaree Energies Ltd. is a prominent player in the renewable energy sector and one of India’s largest manufacturers of solar PV modules. Established in 1989, Waaree Energies has built a strong presence in the solar energy value chain, encompassing manufacturing, project development, and EPC (Engineering, Procurement, and Construction) services. Waaree operates state-of-the-art solar PV module manufacturing facilities with a total installed capacity of 12 GW, making it one of the largest in India. Waaree has developed and commissioned over 600 MW of solar power projects and has a pipeline of projects across multiple geographies. In FY23, Waaree Energies achieved a revenue of approximately ₹4,000 crores, demonstrating consistent growth driven by its diversified business segments.

Industry Outlook

The Indian solar sector is projected to grow at a CAGR of 15-20% between 2023 and 2030. The solar energy industry in India is at a transformative stage, driven by the government’s ambitious renewable energy targets, favourable policies, and increasing private sector participation. As of 2024, India has achieved over 80 GW of installed solar capacity, making it one of the largest solar markets globally. The country aims to achieve 280 GW of solar capacity by 2030, as part of its broader target of 500 GW from non-fossil fuel sources. The PLI (Production Linked Incentive) Scheme for solar module manufacturing provides financial incentives to enhance domestic production and reduce import dependency, particularly on China. Initiatives like Green Hydrogen Mission and solar-based hybrid projects are creating new opportunities in the solar sector. India is targeting 40 GW of domestic manufacturing capacityby 2026 under the PLI scheme.

Financial Summary

INR Cr.Q1 FY25Q2 FY25FY23FY24
Revenue34093574675111398
EBITDA5525258361575
OPM16%15%12%14%
PBT5314996771734
Net Profit4013765001274
NPM11.7%10.5%7.41%11.2%
EPS19.9913.7324.4962.72
C&CE3698381317363779

Business Segments:

  • Solar PV Modules: Waaree Energies is the largest solar module manufacturer in India, with a 12 GW annual production capacity spread across multiple manufacturing facilities. It produces high-efficiency photovoltaic (PV) modules, including monocrystalline, polycrystalline, bifacial, and PERC (Passivized Emitter and Rear Cell) technologies.
  • Power Generation: In Power Generation business segment focuses on producing electricity from diverse sources, including renewable and conventional energy.
  • EPC Contracts: Provides turnkey solar solutions for utility-scale and rooftop projects. Waaree has successfully executed over 1 GW of EPC projects, including utility-scale solar farms and rooftop installations. End-to-end project management, from design and procurement to construction and commissioning.

Subsidiary Information:

  • Waaree Clean Energy Solutions Private Limited: WCESPL is currently engaged in the business of generating, trading, purchasing, marketing, selling, importing, exporting, producing, manufacturing, transmitting, distributing, supplying, exchanging, or otherwise dealing in all aspects of thermal, hydro, nuclear, solar, wind power and power generated through non-conventional / renewable energy sources.
  • Waaree Power Pvt Ltd: WPPL is currently engaged in the business of carrying out the business of generating, trading, purchasing, marketing, selling, importing, exporting, producing, manufacturing, transmitting, distributing, supplying, exchanging or otherwise dealing in all aspects of thermal, hydro, nuclear, solar, wind power and power generated through non-conventional / renewable energy sources.
  • Waaneep Power Pvt Ltd: WSPL One is currently engaged in the business of generating, trading, purchasing, marketing, selling, importing, exporting, producing, manufacturing, transmitting, distributing, supplying, exchanging, or otherwise dealing in all aspects of thermal, hydro, nuclear, solar, wind power and power generated through non-conventional / renewable energy sources.
  • Sangam Solar One Power Pvt Ltd: SSPL One is currently engaged in the business of generating, trading, purchasing, marketing, selling, importing, exporting, producing, manufacturing, transmitting, distributing, supplying, exchanging, or otherwise dealing in all aspects of thermal, hydro, nuclear, solar, wind power and power generated through non-conventional / renewable energy sources.
  • Waaree Renewables Technologies Ltd: WRTL is currently engaged in the business of generating, trading, purchasing, marketing, selling, importing, exporting, producing, transmitting, distributing, supplying, exchanging or otherwise dealing in all aspects of thermal, hydro, nuclear, solar, wind power and power generated through non-conventional / renewal energy sources.

Q2 FY25 & Business Highlights

  • Revenue of ₹3574 crore in Q2 FY25 down by 1.05% YoY from ₹3105 crore in Q2 FY24.
  • EBITDA of ₹525 crore in this quarter at a margin of 15% compared to 14% in Q2 FY24.
  • Profit of ₹376 crore in this quarter compared to a ₹321 crore profit in Q2 FY24.
  • Capex of 5.4GW Cell Mfg. expected to be operational by FY25, 1.6GW Module Mfg. in USA expected to be operational by FY25.
  • The current order book for the Company stands at approx. 20GW, and presently has 13.3 GW capacities. It has 5.4 GW Cell Manufacturing Facility at Chikli, 6 GW integrated facility at Odisha. And it has production volume of 3.3GW.
  • The Solar and Batteries cost has been declined by almost 80% from 2012 till now.
  • The order book as per geography is 27.5% domestic and 72.5% overseas. And till now, Pan India it has total 372 franchisees.

SWOT Analysis

Strengths:

  1. Market Leadership: A dominant position in the industry ensures competitive advantage and strong market share.
  2. Technological Edge: Advanced technologies provide an edge over competitors and drive innovation.
  3. Strong Brand Presence: A well-established brand fosters customer trust and loyalty.
  4. Policy Support: Favorable government policies and incentives promote growth and stability.

Weaknesses:

  1. High Dependency on Imports: Reliance on imported components increases vulnerability to supply chain disruptions.
  2. Limited Product Diversification: A narrow product portfolio limits the ability to tap into diverse customer needs.
  3. Capital-Intensive Operations: High operational costs can strain resources and profitability.
  4. Intense Competition: Fierce market competition pressures pricing and margins.

Opportunities:

  1. Rising Solar Demand: Increasing adoption of renewable energy drives growth potential.
  2. Energy Storage Solutions: Expanding into storage technology complements solar offerings.
  3. Global Expansion: Entering international markets opens new revenue streams.
  4. Backward Integration: Controlling supply chains enhances efficiency and cost management.

Threats:

  1. Regulatory and Policy Risks: Changes in regulations or government policies can impact operations.
  2. Price Volatility: Fluctuations in raw material costs affect pricing and profitability.
  3. Global Trade Wars: Tariffs and trade restrictions disrupt supply chains and market access.
  4. Economic Uncertainty: Economic slowdowns or instability could hinder growth prospects.
Techno Electric & Engineering Q2 Results
Techno Electric & Engineering Q2 Results: 4.88% YoY Profit Decline

Company Overview

Techno Electric & Engineering Company Limited (TEECL) founded in 1963 with headquarters in Kolkata, is a leading Indian company specialising in Engineering, Procurement, and Construction (EPC) services for the power sector. It also has a strong presence in Renewable Energy through its wind power generation segment. It has expertise in developing power transmission, distribution, and substation projects and focuses on the efficient execution of turnkey solutions for high-voltage substations and industrial electrification. Operates wind energy projects with an installed capacity of 129.9 MW spread across Tamil Nadu. Techno Electric aims to expand its portfolio in renewable energy and smart grid technology while also focusing on digital transformation in the power sector. The company is strategically positioned to benefit from India’s push for green energy.

Industry Outlook

India’s power demand is expected to grow at a CAGR of 6-7% over the next decade due to population growth, industrial expansion, and increasing per capita energy consumption. India’s power sector is the third-largest in the world in terms of installed capacity, standing at 425 GW (as of 2024). Renewable energy accounts for 40% of the total installed capacity, with solar and wind energy playing pivotal roles. Thermal Power still dominates the generation capacity but is witnessing a decline due to environmental regulations and rising fuel costs. Renewable energy capacity is projected to reach 500 GW by 2030, aligning with India’s commitment to achieving net-zero emissions by 2070. Smart grid technology is expected to grow at a CAGR of 10%+ in India. Companies like Techno Electric are well-positioned to benefit from this transformation due to their focus on renewable energy and smart grid solutions.

Financial Summary

INR Cr.Q1 FY25Q2 FY25FY23FY24
Revenue3754418301502
EBITDA527087210
OPM14%16%11%14%
PBT117105233319
Net Profit9894187268
NPM26.1%21.3%22.5%17.8%
EPS9.128.1017.3624.98
C&CE162191146137

Business Segments:

  • Power Generation: TEECL offers turnkey solutions for captive power plants, specializing in the balance of plant and flue gas desulphurization (FGD).
  • Transmission & Distribution: The company excels in EHV substations up to 765 kV, advanced metering infrastructure, and STATCOM installations, ensuring robust transmission and efficient distribution networks.
  • Data Centres: TEECL provides comprehensive solutions for data centers, encompassing design and engineering, civil and structural works, fire protection systems, water and allied systems, and plant electrical and illumination systems.
  • Industrial Sector: In the industrial domain, TEECL offers MEP works, procurement of long-lead equipment, and solutions for power-intensive industries. The company specializes in executing less capital-intensive projects with a high risk-reward ratio, including captive waste heat recovery and conventional power plants of up to 200 MW on a turnkey basis.

Subsidiary Information:

  • Techno Infra Developers Pvt Ltd: It focuses on Renewable energy development and infrastructure projects. Owns and operates wind energy assets that contribute to TEECL’s clean energy portfolio. It facilitates the expansion of renewable energy capacity for long-term sustainability.
  • Techno Green Energy Ltd: Manages wind farms in Tamil Nadu, supporting TEECL’s clean energy initiatives. Contributes to steady cash flows through Power Purchase Agreements (PPAs) and it focuses on wind energy projects for the parent company.
  • Techno Wind Power Pvt Ltd: It focuses on the development and operation of wind energy farms and its role is to expand TEECL’s renewable energy capacity in high-wind potential regions.
  • Techno Power Transmission Ltd: It implements power transmission projects in partnership with utilities. And focuses on EPC and power transmission. Enhances TEECL’s ability to secure and execute high-value contracts.
  • Techno Renewable Energy: It manages solar and wind energy assets to align with the renewable energy push and focus on renewable projects for the parent company. Positions TEECL as a significant player in India’s green energy transition.

Q2 FY25 & Business Highlights

  • Revenue of ₹441 crore in Q2 FY25 is down by 4.51% YoY from ₹462 crore in Q2 FY24.
  • EBITDA of ₹70 crore in this quarter at a margin of 16% compared to 17% in Q2 FY24.
  • Profit of ₹94 crore in this quarter compared to a ₹74 crore profit in Q2 FY24.
  • We have already received 4 sites from Adani and Power Grid, and we are confident to make it up in batch 2 as we have a robust order book and clear visibility of additional opportunities in the T&D sector.
  • There has been delay in handing over of sites by various clients like Power Grid, IndiGrid, Apraava or Adani.
  • The current investment and cash are around INR 2600 crores, about INR2.25 per share.
  • The present peak growth demand is about 240 gigawatts or more, and this is likely to be 400 gigawatts by 2030. Thus, per capita consumption will be no less than 1,700 units by 2030 as against 1,200 units today.
  • We have an extremely robust order book of around INR 9725 crores as of September 2024 and ₹642 crore as booked in this quarter.

SWOT Analysis:

Strengths:

  1. Diverse business portfolio catering to multiple sectors.
  2. Robust financial stability ensures resilience.
  3. Market leadership in renewable energy initiatives.
  4. Secure long-term contracts providing consistent revenue streams.

Weaknesses:

  1. High Dependence on Government Policies Impacting Operations.
  2. Limited international footprint, reducing global market share.
  3. Concentration in specific sectors restricts growth potential.

Opportunities:

  1. Expansion in renewable energy projects to meet rising demand.
  2. The adoption of digital energy solutions enhances efficiency.
  3. Leverage the global shift toward sustainable energy for growth.

Threats:

  1. Uncertainty from regulatory and policy changes.
  2. Intense competition within the energy sector.
  3. Delays in project execution affect timelines and costs.
  4. Volatility in energy prices is impacting profitability.
Torrent-Power-Q2-Result
Torrent Power Q2 Profit Declines 8.6% Amid Reduced Thermal & Renewable Output

Company Overview

Torrent Power Ltd. is a leading integrated power utility in India, engaged in generation, transmission, and distribution of electricity. The company is part of the Torrent Group, a major business conglomerate. Known for its focus on efficiency and sustainability, Torrent Power operates across the power value chain, offering a diversified mix of thermal, renewable, and gas-based energy generation. Torrent Power’s generation portfolio includes a growing share of renewables, aligning with India’s green energy goals. It has more than 8200 employees working for the success of company. Torrent Power has a significant footprint in Gujarat, Maharashtra, Uttar Pradesh, and Madhya Pradesh. With India’s increasing focus on renewable energy, urban electrification, and energy efficiency, Torrent Power is well-positioned to capitalize on these trends. The company aims to increase its renewable capacity to 2,500 MW by 2025and enhance its digital and operational capabilities in power distribution and transmission.

Industry Outlook

India’s power industry is a vital component of its infrastructure, supporting the country’s rapid economic growth and urbanization. With growing demand for reliable and sustainable energy, the industry is evolving to address supply constraints, improve efficiency, and embrace renewable energy sources. The Central Electricity Authority (CEA) projects India’s power demand to reach around 817 GW by 2030, up from 416 GW in 2023, fuelled by increased residential and industrial consumption. India aims to achieve 500 GW of non-fossil fuel-based energy capacity by 2030 and Net Zero emissions by 2070. The Revamped Distribution Sector Scheme (RDSS) introduced in 2021 focuses on improving DISCOM performance with a ₹3 trillion investment, aimed at reducing AT&C losses to below 15% by 2025. Despite renewable energy growth, coal continues to account for 57% of India’s energy mix.

Financial Summary

INR Cr.Q1 FY25Q2 FY25FY23FY24
Revenue903471762569427183
EBITDA1858120747894596
OPM21%17%19%17%
PBT131568930412583
Net Profit99649621651896
NPM11.09%6.91%8.42%6.97%
EPS20.2310.0144.0638.14
C&CE423446344419

Business Segments:

  • Transmission & Distribution: The Company is a licensed operator for electricity distribution in Ahmedabad, Gandhinagar, Surat, Dahej SEZ, etc. aggregating to 2,050 sq. km of area. It distributes nearly 30 billion units of power to over 4.13 million customers. The company operates 355 km of 400 kV and 128 km of 220 kV double circuit transmission lines and is building two new transmission assets of 104 km 400 kV for Rs. 1,300 Cr.
  • Thermal Power Generation: The Company has an aggregate installed thermal power generation capacity of 3,092 MW, including 2,730 MW of gas-based and 362 MW of coal-based power plants.
  • Renewable Power Generation: The Company has a solar power generation capacity of 2,091 MWp including 403 MWp operational and 1,688 MWp under development, further, it has a wind power generation capacity of 2,260 MW, comprising 921 MW operational and 1,339 MW under development.

Subsidiary Information:

  • Torrent Power Grid Limited (TPGL): It is currently operate 354 km of 400 kV double-circuit transmission lines and 128 km of 220 kV double-circuit transmission lines for the transmission of power generated at our gas-based power plants to various off-take centres.
  • Solapur Transmission Ltd: Power transmission, specifically the development and operation of transmission infrastructure in and around Solapur, Maharashtra. It plays a crucial role in improving grid reliability and supporting the transmission of electricity in the region, enabling Torrent Power to deliver efficient services. The work includes setting up, managing, and maintaining transmission lines and substations to ensure stable electricity supply and reduce transmission losses.
  • Torrent Pipavav Generation Ltd: It is a subsidiary of the company and a joint venture between the Company and Gujarat Power Corporation Limited (“GPCL”), had made payments in nature of compensation for the acquisition of private land as per the court orders in Amreli, Gujarat for the purpose of developing a coal-based power plant of 1,000+ MW.
  • Torrent Solargen Ltd: It focuses on renewable energy, specifically in the domain of solar power generation. It plays a crucial role in Torrent Power’s strategy to diversify its energy portfolio and enhance its presence in the renewable energy sector. It aligns with India’s renewable energy goals under government policies like the National Solar Mission.
  • And there are other subsidiaries for city wise production and distribution like in Bhiwandi, Surat, Ahmedabad, etc. and Torrent Urja subsidiaries for renewable and solar energy distributions.

Q2 FY25 & Business Highlights

  • Revenue of ₹7176 crore in Q2 FY25 up by 3.09% YoY from ₹6961 crore in Q2 FY24.
  • EBITDA of ₹1207 crore in this quarter at a margin of 17% compared to 18% in Q2 FY24.
  • Profit of ₹496 crore in this quarter compared to a ₹543 crore profit in Q2 FY24.
  • The thermal generation segment had a revenue of ₹1833 crore in Q2 FY25 vs ₹1963 crore in Q2 FY24.
  • The Power Transmission and Distribution segment had a revenue of ₹6596 crore in Q2 FY25 vs ₹6352 crore in Q2 FY24.
  • The Thermal Generation segment had a revenue of ₹291 crores in Q2 FY25 vs ₹366 crores in Q2 FY24.
  • The company has installed a total capacity of 4850 MWp but by adding the pipeline the capacity increases to 7559 MWp.
  • The Solapur Transmission project (in the new SPV) for the evacuation of 1,500 MW RE power was won by the company through the Tariff-Based Competitive Bidding (TBCB) process, and the expected project cost is ₹470 crore.
  • Sites/projects of 8.4 GW are under the planning stage in the states of Maharashtra and Uttar Pradesh and received LOA from MSEDCL for a 2,000 MW/16,000 MWh pumped hydro storage project in Raigad District with energy storage capacity for 40 years.
  • One of the reasons for low PAT is due to an increase in finance & depreciation costs due to capex & commissioning of additional renewable generation capacity.

SWOT Analysis: A Closer Look at Key Business Dynamics

Strengths:

  1. Efficient Distribution: Demonstrates robust supply chain and energy delivery mechanisms.
  2. Integrated Operations: Combines generation, transmission, and distribution for seamless functionality.
  3. Strong Financial Position: Solid financial health supports sustained growth and investment opportunities.

Weaknesses:

  1. Geographic Concentration: Limited presence in diverse markets may restrict growth potential.
  2. Regulatory Changes: Vulnerable to shifts in government policies and regulations.
  3. Debt Levels: Higher borrowing could pose financial strain.
  4. High Project Expenditure: Significant investments required for infrastructure and expansion.

Opportunities:

  1. Renewable Energy Expansion: Growing focus on sustainable energy solutions presents untapped potential.
  2. Grid Modernization: Technological upgrades and innovation in grid systems can enhance efficiency.
  3. Global Collaborations: Partnerships with international players can open new avenues for growth.

Threats:

  1. Competition: Intense rivalry in the energy sector can impact market share.
  2. Coal Supply and Price Fluctuation: Dependence on coal exposes the business to supply and cost volatility.
  3. Climate Risks: Environmental challenges and stricter climate regulations may pose operational hurdles.
Zydus Lifesciences Q2 Results
Zydus Lifesciences Q2 Results: Net Profit Soars 14% YoY to Rs 911 Crore

Company Overview

Zydus Lifesciences Ltd. (formerly known as Cadila Healthcare Ltd.) is one of India’s leading pharmaceutical companies, known for its diverse portfolio in both generics and specialty medications. Established in 1952, Zydus has a strong presence across multiple therapeutic areas, including cardiovascular, gastroenterology, pain management, diabetes, oncology, and dermatology. The company is also a significant player in bio similar, vaccines, and novel therapies, catering to both domestic and international markets. Operates across 50+ countries, with a significant focus on the U.S. and Indian markets. It is among top 5 pharmaceutical companies in India, with a share of around 4-5% in the Indian pharma market. It operates 25+ manufacturing facilities worldwide, including U.S. FDA and WHO-GMP certified plants, ensuring compliance with international quality standards.

Industry Outlook

The Indian pharmaceutical industry is one of the largest globally, with India positioned as a major supplier of generic medicines worldwide. The industry, valued at approximately $50 billion in 2023, is expected to grow at a compound annual growth rate (CAGR) of around 10-12%, driven by increasing healthcare needs domestically and sustained demand for affordable generics in international markets. Healthcare expenditure is increasing, with the government aiming to raise public health spending to 2.5% of GDP by 2025, which will benefit the pharma sector. India is the largest provider of generic medicines, supplying around 20% of global generics. With over 3,000 pharma companies and 10,000+ manufacturing facilities, India continues to dominate in terms of affordable drug exports, particularly to the U.S., Europe, and other emerging markets. The Government of India has introduced the Production Linked Incentive (PLI) scheme. Increased competition from both Indian and global players is intensifying in generic and speciality segments. Mergers and acquisitions are common as companies seek to scale and expand product portfolios.

Financial Summary

INR Cr.Q1 FY25Q2 FY25FY23FY24
Revenue620852371723719547
EBITDA2084146138605384
OPM34%28%22%28%
PBT1900127125854832
Net Profit148292020923973
NPM23.9%17.5%12.1%20.3%
EPS14.119.0619.3738.36
C&CE123815945731105

Business Segments:

  • India Formulations: It is a branded prescription business in categories of therapies like Pain, Anti-infective, Respiratory, Oncology, and many other segments. It has 7 brands which were ranked among world’s top 300 brands. 37 brands had value between ₹25-₹50 crore, 21 brands between ₹50-₹100 crore and 10 were having yearly ₹100+ crore.
  • Consumer Wellness: The Company has many successful brands in the consumer wellness segment like Glucon-D, nycil, Sugar-Free, Complan, etc. And a skincare brand called Everyuth naturals. It is in category of personal care and food and nutrition and has recently acquired Naturell Pvt Ltd. A leading player in the healthy snack category.
  • US Formulations: The company predominantly operates in the generics and specialty segments of the market through its wholly-owned subsidiary, Zydus Pharmaceuticals USA Inc. In this quarter company had filed 8 ANDA and received approvals of 9 ANDAs. It has entered into an exclusive licensing and supply agreement with Viwit Pharmaceuticals for 2 Gadolinium-based Magnetic Resonance Imaging (MRI) injectable, contrast agents.
  • International Market Formulations: In the emerging markets space, the Company predominantly operates in the branded generics segment with Cardiology, Diabetology, Neuro-Psychiatry and Pain Management being the focused therapeutic areas. The Company keeps on evaluating partnership opportunities with local players in select geographies as it looks to expand its footprint in different emerging market countries

Subsidiary Information:

  • Zydus Wellness Ltd: The Company’s subsidiary spearheads the group’s operations in the wellness space. ZWL operates in two different segments viz. personal care segment and food and nutrition segment and has a portfolio of category-leading health and wellness products. Five out of the six brands of the Company continue to hold leadership positions in their respective categories
  • Zydus Pharmaceuticals (USA) Inc.: It operates as Zydus’s main subsidiary in the United States, focusing on manufacturing and marketing generic formulations approved by the U.S. FDA. A significant contributor to Zydus’s international revenue, given the high demand for generics in the U.S. market.
  • Zydus Healthcare Ltd: It manages Zydus’s branded formulations business in India, catering to a wide range of therapeutic areas such as cardiovascular, gastrointestinal, pain management, and oncology. A major revenue driver for Zydus in the Indian domestic market.
  • Zydus Animal Health and Investments Ltd: It provides animal health products across livestock, poultry, and companion animals, including treatments, nutritional supplements, and anti-infectives. It expands Zydus’s reach into veterinary and animal health segments, which are growing markets in India and internationally.
  • Zydus Biosimilars Ltd: A dedicated unit for biosimilars, developing and commercializing biosimilars for therapeutic areas like oncology, immunology, and nephrology. Positions Zydus as a key player in biosimilars, targeting high-growth opportunities in biologics.
  • Simayla Pharmaceuticals (South Africa) Pty Ltd.: Operates in South Africa, focusing on providing affordable generic and branded pharmaceuticals across a range of therapeutic areas. Extends Zydus’s market presence in Africa, catering to regional healthcare needs with affordable solutions.

Q2 FY25 & Business Highlights

  • Revenue of ₹5237 crore in Q2 FY25 up by 19.27% YoY from ₹4369 crore in Q2 FY24.
  • EBITDA of ₹1461 crore in this quarter at a margin of 28% compared to 26% in Q2 FY24.
  • Profit of ₹920 crore in this quarter compared to a ₹803 crore profit in Q2 FY24.
  • India branded formulations business posted double-digit growth and outpaced the market growth both in the chronic and acute segments. Consumer Wellness business delivered robust double-digit growth aided by strong volume uptake.
  • The US formulations business continued its upward journey with robust YoY growth driven by volume expansion and new product launches. International markets business grew in double-digit on the back of strong performance across key markets.
  • Capex for this quarter has been done by internal accruals and cash from the company worth ₹302 crore, for acquisition and patents.
  • India Formulations launched 12 new products (incl. line extensions) with 4 first-in-India launches. In the consumer wellness segment, growth was largely driven by strong 8.4% volume growth.
  • In Biotech and Vaccine R&D the company has completed patient recruitment for Phase III clinical trials for one of the biosimilars and follow-up has been completed and completed Phase II clinical trials for Hepatitis E vaccine.
  • Forayed into animal free fermentation-based protein business by forming a JV with Perfect Day Inc. through acquisition of 50% stake in Sterling Biotech Ltd (SBL).

SWOT Analysis:

Strengths:

  1. Strong presence in the domestic market
  2. Broad and diverse product portfolio
  3. Advanced research and development capabilities
  4. Significant global market footprint

Weaknesses:

  1. Heavy reliance on the U.S. market
  2. High expenditure on R&D
  3. Exposure to patent litigation risks

Opportunities:

  1. Expansion into biosimilars and specialty drugs
  2. Government initiatives like the PLI scheme
  3. Growth potential in the healthcare and wellness sectors

Threats:

  1. Challenges in regulatory compliance and security
  2. Pricing pressures in the market
  3. Increasing competition from domestic and global players
  4. Risk from foreign exchange fluctuations

Britannia Industries Q2 Earnings
Britannia Industries Q2 Earnings: 9.6% Decline in Net Profit, 8% Volume Growth Achieved

Company Overview

Britannia Industries Ltd., one of India’s leading FMCG companies, has established a prominent position in the food and beverages sector, primarily focusing on bakery products. Known for its vast portfolio of biscuits, bread, cakes, dairy products, and other snacks, Britannia enjoys high brand recognition and consumer trust across India and in various international markets. Britannia is best known for its biscuit brands, commanding over 30% market share in India. Britannia has established a strong distribution network of 30000, reaching both urban and rural markets, helping it maintain a leading position in India’s competitive biscuits market. Britannia has a growing international presence, operating in over 70 countries, including the Middle East, Africa, North America, and Southeast Asia. Britannia has 13 manufacturing facilities across India, producing a wide range of products with a focus on quality and efficiency. It also has an extensive network of third-party manufacturing units. Britannia’s robust portfolio, brand strength, extensive distribution, and continuous innovation place it at a strong position within India’s FMCG sector.

Industry Outlook

The Indian Fast-Moving Consumer Goods (FMCG) industry is one of the most robust and dynamic sectors, driven by strong demand, population growth, rising income levels, and increased urbanization. The Indian FMCG sector is projected to grow at a CAGR of 10-12% over the next five years, driven by rural market expansion, rising incomes, and a favourable demographic dividend.  As of recent estimates, the FMCG market in India is valued at over $110 billion, making it the fourth-largest sector in the Indian economy. Rural demand now contributes to 45-50% of total FMCG sales and is expected to continue growing. Rising disposable incomes are shifting consumption patterns toward premium and value-added products. Online FMCG sales have grown rapidly, particularly in urban areas, and are expected to account for 10-12% of FMCG sales by 2025.

Financial Summary

INR Cr.Q1 FY25Q2 FY25FY23FY24
Revenue425046681630116769
EBITDA75378028313167
OPM18%17%17%19%
PBT68171530332913
Net Profit50553223162134
NPM11.8%11.4%14.2%12.7%
EPS20.9922.0696.3988.84
C&CE215250198446

Business Segments:

  • Bakery Business: It involves many sub segments in it, Biscuit is a major part of this segment and is continued to grow. Cakes are in category continuous to grow in of ₹5-10 price points products and large priced products are having substantial growth. Rusk is having some tough competition from its strong new entrants. In bread category, it is having a great growth as more demand from consumers with over turnover of ₹450 crore.
  • Dairy Business: It involves cheese and drinks like Lassi which is showing a healthy double digit growth. Packaged liquid milk remains a key growth driver of the industry, healthy demand and growth is also expected in cheese, yogurt and other value added dairy products.
  • Adjacent Business: This segment has Wafers which is highly fragmented market of ₹1000 crore. Croissant is also a product of Britannia in this segment, able to achieve good growth in urban areas. Salted snacks or packets is a growing at double digit rate and is most profitable and high volume category.
  • International Business: International Business for the Company is largely centered on Middle East, Americas, Africa and Asia Pacific. The business environment in these geographies is highly competitive with the presence of large local and international players. And exports contribute around 6% in the revenue.

Subsidiary Information:

These are majorly big subsidiaries of Britannia Industries established in India and all over the world. But, there are total over 25+ subsidiaries under it.

  • Manna Foods: Manna Foods allows Britannia to tap into the health and wellness market, expanding its footprint in the packaged foods segment. The yearly turnover for this subsidiary is ₹367 crore, It provides traditional and health-focused foods like millet-based products and ready-to-cook items.
  • AI Sallan Food Industries: This subsidiary helps Britannia access new markets and diversifies revenue streams outside of India. It manufactures and distributes bakery products, primarily in Oman and the Middle East. It had a main focus of international expansion and it has a turnover of ₹ 231 crore in FY24.
  • Britannia Nepal Pvt Ltd: This entity manufactures and distributes Britannia’s core product lines in Nepal, catering to local demand and establishing a stronger footprint in South Asia. Enables Britannia to reduce logistics costs and gain market share in Nepal’s packaged food sector.
  • Strategic Foods International Co. Ltd: It is based in Dubai have product categories of biscuit, cookies and cakes. Predominantly in the Middle East and Africa, where it taps into a growing demand for packaged food and snacks. It plays a key role in diversifying Britannia’s revenue streams beyond India, supporting the company’s goal of becoming a global food brand.

Q2 FY25 & Business Highlights

  • Revenue of ₹4668 crore in Q2 FY25 up by 5.29% YoY from ₹4433 crore in Q2 FY24.
  • EBITDA of ₹780 crore in this quarter at a margin of 17% compared to 20% in Q2 FY24.
  • Profit of ₹532 crore in this quarter compared to a ₹586 crore profit in Q2 FY24.
  • Metro FMCG growth rate is lower compared to Urban and Rural regions of India.
  • Adjacent Businesses are doing really well in cake, wafers, Rusk, Cheese and Drinks.
  • Commodity prices of Sugar, Cocoa, Flour Oils, etc. are increasing due to inflation, which will affect the profitability.
  • Capex of ₹450-₹500 crore is planned to use in FY25, through internal accruals, long-term debts and cash and use it to expand in India and International markets.

SWOT Analysis:

Strengths

  1. Established brand with strong recognition.
  2. Wide-ranging product portfolio.
  3. Broad and effective distribution network.

Weaknesses

  1. Heavy reliance on the biscuits segment.
  2. High sensitivity to input cost fluctuations.

Opportunities

  1. Expansion into dairy and health food categories.
  2. Potential growth in untapped rural markets.
  3. Opportunities for mergers, acquisitions, and partnerships.

Threats

  1. High levels of competition in the market.
  2. Volatility in raw material prices.
  3. Potential impacts from economic slowdowns.
  4. Rising health consciousness shifting consumer preferences.

Asian Paints Q2 FY25 Earnings
Asian Paints Q2 FY25 Earnings: Net Profit Drops 42%

Company Overview 

Asian Paints Ltd. is India’s largest paint manufacturer and one of the leading paint companies globally. Founded in 1942, it operates in more than 15 countries and has over 26 paint manufacturing facilities worldwide. It is No.1 or No.2 in its each segment, showing a great brand. Its product portfolio extends beyond decorative paints to include industrial paints, coatings, home decor, and waterproofing solutions, serving residential, commercial, and industrial markets. It has more than 140,000 customers and 3000+ dealers and 160,000+ retail touchpoints. The company has filed approx. 21 patents, Asian Paints has established itself as the most recognizable brand in India’s paint market. Through initiatives like the ‘Beautiful Homes Service’ and online colour consultation tools, Asian Paints enhances customer experience, leveraging digital solutions to strengthen customer engagement. 

Industry Outlook 

The Indian paints industry is projected to grow at a CAGR of 11-13% over the next five years, aiming to reach a valuation of ₹1.2 lakh crores by 2028. Demand for water-based paints, low-VOC (Volatile Organic Compounds) products, and anti-bacterial coatings is on the rise, driven by eco-conscious and health-focused consumers. Major players, such as Asian Paints and Berger Paints, are continuously investing in R&D for product innovation and are expanding manufacturing capacities to meet rising demand. Infrastructure growth and government focus on boosting the manufacturing sector are expected to increase demand for industrial coatings, especially in construction, automotive, and machinery sectors. Crude oil derivatives are key inputs for paint manufacturing, and price fluctuations can impact profit margins. 

Financial Summary

Business Segments: 

  • Decorative Business: The Company offers interiors and exterior wall paints, waterproof solutions, textured coatings, etc. with major products like Royale, TruCare, Apcolite, etc. It includes service of Beautiful Homes Service which shares about 4% in total revenue of company and includes services for kitchens, wardrobes, bath fittings, Sanitaryware, decorative lightings, rugs, furniture, etc. provides customers every possible services. 
  • International Business: Asian Paints has a global footprint with manufacturing operations and markets across 15+ countries in the Middle East, South Asia, Southeast Asia, and the Caribbean. While international operations currently represent a smaller portion of total revenue, they contribute to the company’s goal of becoming a leading player in emerging markets. 
  • Industrial Business: The Company operates in the industrial coatings segment through a 50:50 joint ventures with PPG Industries Inc. It offers custom-formulated products for the automotive and industrial sectors, including automotive, marine, and packaging coatings, as well as industrial protective coatings. 

Q2 FY25 & Business Highlights 

  • Revenue of ₹8028 crore in Q2 FY25 down by 5.32% YoY from ₹8479 crore in Q2 FY24.  
  • EBITDA of ₹1240 crore in this quarter at a margin of 15% compared to 20% in Q2 FY24. 
  • Profit of ₹694 crore in this quarter compared to a ₹1232 crore profit in Q2 FY24. 
  • Decorative Business registered volume decline of 0.5% with revenue decline of 6.7%, due to weak consumer sentiments coupled with rains and floods in some part country impacted the consumption. 
  • All categories in the Home Decor business benefited from synergies with our Beautiful Homes stores network, though at a lower clip than expectations. 
  • Forex loss on currency devaluation (₹ 56 crore in Ethiopia) along with subdued performance in Asia impacted overall profitability 
  • International business registered a marginal value decline despite some challenging market conditions in Ethiopia and Bangladesh. Though on a constant currency basis, the international portfolio delivered revenue growth of 8.7% for the quarter. 

Subsidiary Information: 

  • Asian paints international Pvt Ltd.: Asian Paints International Private Limited (“APIPL”), Singapore, is a wholly-owned subsidiary of the Company and is the holding company for all of its subsidiary companies carrying out operations overseas. The principal activities of APIPL are those of investment holding and management. The Board of Directors at its meeting held on 28th March 2024, approved an investment of approximately ₹200 crores by way of subscription of equity shares of APIPL, for repayment of borrowings. 
  • Asian Paints (Nepal) Pvt Ltd: Asian Paints (Nepal) Private, is a subsidiary company of the Company. Its principal business is the manufacturing and selling of paint products in Nepal. The revenue of AP Nepal was ₹335.04 crores with de-growth of 38.5% YoY. 
  • Obgenix Software Pvt Ltd: It is popularly known by the brand name “White Teak” is a subsidiary company of the Company. White Teak is engaged in the business of decorative lighting products, fans and other décor accessories. The revenue of White Teak was ₹133.43 crores with growth of 23.0% YoY. 
  • Weather seal Fenestration Pvt Ltd: It is a subsidiary company of the Company. Weatherseal is engaged in the business of uPVC windows and doors. The revenue of Weatherseal was ₹51.68 crores growth of 110.0% year on year. 

SWOT Analysis:

Strengths:

  • Market Leadership
  • Diverse Product Portfolio
  • Strong Distribution Network

Weaknesses:

  • Dependency on Raw Materials
  • Limited Presence in Industrial Coatings

Opportunities:

  • Expansion in Rural Markets
  • Rising Demand for Eco-Friendly Products
  • Growth in Home Improvement Solutions

Threats:

  • High Competition
  • Volatile Raw Material Prices
  • Environmental and Regulatory Risks
  • Potential Economic Slowdowns
TVS Electronics Q2 Results
TVS Electronics Q2 Earnings: Marking 13.47% Year-on-Year Growth

Company Overview

TVS Electronics Ltd. is a prominent Indian technology solutions provider within the TVS Group, focusing on electronic products and services catering to sectors like retail, banking, and e-governance. Established in 1986 and headquartered in Chennai, TVS Electronics has a strong market presence in India and is known for its wide range of offerings, from hardware manufacturing to after-sales services. The company operates in both B2B and B2C markets, consistently evolving to meet changing consumer and enterprise technology needs. Its service network, covering over 5,000 locations across India, makes it a preferred partner for companies requiring maintenance and repair solutions. The company also acts as a distributor and solution provider for IT peripherals and other electronic products. It has various big global and Indian clients Starbucks, Bharat Petroleum, Amazon, Dell, Acer, HP, Banks like SBI, ICICI, HDFC, etc. then Paytm, PhonePe, etc.

Industry Outlook

The Indian electronics industry is expected to grow at a CAGR of around 16-18% over the next decade, driven by strong domestic demand, robust government support, and increasing interest from global investors. The Indian electronics industry is one of the fastest-growing sectors in the country, driven by rising consumer demand, government initiatives, and foreign investments. India is rapidly evolving from an electronics import-dependent nation to a manufacturing hub, as demand for electronics continues to raise across various sectors, including consumer electronics, automotive, healthcare, and IT hardware. With a focus on both domestic consumption and exports, the industry is projected to see substantial growth in the coming years. India’s electronics demand is anticipated to reach approximately $400 billion by 2025, fuelled by increasing digitization, rising incomes, and a growing middle class. India’s electronic exports are increasing, with mobile phone exports alone reaching $11 billion in FY 2022-23. This trend is supported by the country’s participation in global value chains.

Financial Summary

INR Cr.Q1 FY25Q2 FY25FY23FY24
Revenue111.32104.61353366
EBITDA3.162.632010
OPM2.84%2.51%6%3%
PBT-1.12-1.4913-1
Net Profit-1.26-1.32100
NPM-1.13%-1.26%2.83%0.01%
EPS-0.68-0.715.10.14
C&CE57114

Business Segments:

  • Products & Solutions: It is a core segment of TVS Electronics, it makes printers, cash machines, mobile handsets, keyboards are a major part, then provides software services also. It has clients in segments like retail, manufacturing, healthcare & hospitality, Banking and Financial services, IT, Audio, Solar companies and large government companies are also clients of this company. It also provides a one-stop solution service to its clients. It earned a revenue of ₹73.10 crore in this quarter.
  • Customer Support Services: In this segment, company offers after sales support services for many global and Indian clients. Provides field support to consumer electronics, solar customers, electric vehicles, etc. to make it seamless for the company’s clients. It also provides repair and management services for display panels, payment sound boxes and electronics. The in-house CRM platform integrates AI and machine learning capabilities to connect brands, service partners, parts management, and logistics seamlessly.

Q2 FY25 & Business Highlights

  • Revenue of ₹104.61 crore in Q2 FY25 up by 13.4% YoY from ₹92.19 crore in Q2 FY24.
  • EBITDA of ₹2.63 crore in this quarter at a margin of 2.51% compared to 4.18% in Q2 FY24.
  • Loss of ₹-1.32 crore in this quarter compared to a ₹1.12 crore profit in Q2 FY24.
  • The Product & Solution segment registered a YoY growth of 8.3% in revenue in Q2FY25 with revenue of ₹ 731 mn.
  • The customer support service vertical generated revenue of INR 315 Mn in Q2-FY25, representing an increase of 27.5% YoY and an increase of 15.8% on QoQ basis.
  • The top 10 customer concentration is reduced to 30% from 41% in FY20.
  • There was also an increase in finance costs on YoY basis, incurred for servicing the loans procured for capital investments and working capital requirements.

SWOT Analysis:

Strengths

  1. Established Brand with Strong Legacy
  2. Diverse Product Portfolio
  3. Extensive Service Network Across India

Weaknesses

  1. Highly Competitive Market Environment
  2. Lower Profit Margins
  3. Heavy Reliance on Domestic Market

Opportunities

  1. Potential for New Product Line Expansions
  2. Government Support for Local Manufacturing
  3. Growing Demand for After-Sales and Support Services

Threats

  1. Fast-Paced Technological Advancements
  2. Ongoing Supply Chain Challenges
  3. Intense Price Competition
Oil India Q2 Results
Oil India Q2 Results: Net Profit Surges to ₹2,016 Crore, Marking Multi-Fold Growth

Company Overview

Oil India Ltd. (OIL) is one of the largest national oil and gas companies in India, primarily engaged in the exploration, development, and production of crude oil, natural gas, and liquefied petroleum gas (LPG). Founded in 1959 and headquartered in Duliajan, Assam, the company plays a crucial role in securing India’s energy needs through its significant contributions to domestic oil and gas production. It operates under the Ministry of Petroleum and Natural Gas and has international interests as well. OIL operates a large network of pipelines, including a 1,157-km trunk pipeline in the North East, which transports crude oil from Assam to various refineries. The company has reserves and production blocks across India, as well as strategic international assets in locations like Russia, Mozambique, and the United States.

Industry Outlook

The Indian oil and gas industry is poised for robust growth, fuelled by rising energy demands, government initiatives for energy security, and ongoing reforms aimed at modernising the sector. With India being one of the largest consumers of oil globally, the industry is a critical part of the country’s energy landscape. The country’s oil demand is projected to double by 2040, and natural gas demand is expected to grow by 4-5% annually over the next decade. The government’s target to reduce oil import dependence by 10% by 2022 and achieve 15% natural gas share in the energy mix by 2030 underscores the importance of boosting domestic production.

Business Mix

  • Crude Oil: The company has continued to improve its crude oil production, which is higher by 4.79% in quarter ended 30 September 2024, at 0.875 MMT from 0.835 MMT in the quarter ended 30 September 2023. Crude oil production has increased by 5.5% in half year ended 30 2024 at 1.746 MMT from 1.655 MMT in the half year ended 2023.
  • Natural Gas: The sale of natural gas during FY 2023-24 was 2521 MMSCM as compared to 2507 MMSCM during the previous year. The nation’s commitment is to increase the share of natural gas in the energy basket from the current level of 6% to 15% by 2030.
  • LPG: LPG Filling Plant was in operation for 292 days. Revenue earned by selling LPG during FY 2023-24 was ₹ 170.40 crores. Net realisation of condensate was ₹ 34.13 crores in the FY 2023–24 as against ` 52.15 crore in the previous year.
  • Pipeline: The crude oil pipeline transported 6.74 MMT of crude oil as against 6.79 MMT in the previous year. The company operates a total network of 1,243 km of crude oil pipeline.

Quarterly Highlights

  • Revenue of ₹7247 crore in Q2 FY25 is down by 3.33% YoY from ₹7497 crore in Q2 FY24.
  • EBITDA of ₹2536 crore in this quarter at a margin of 35% compared to 46% in Q2 FY24.
  • Profit of ₹2069 crore in this quarter compared to₹640 crore in Q2 FY24.

Business Highlights

  • Average crude oil price realization for Q2 FY25 is $79.33 per barrel and $86.86 per barrel for Q2 FY24, decreased by 8.67%.
  • Out of ₹28,000 crore capex, ₹1400 crore is for E&P business, and NRL has debt of ₹11,500 crore.
  • For City Gas Distribution (CGD) bids won for 9 areas and functioning are Kolhapur, Ambala, and Kurukshetra.
  • From April 2025, we will be getting a $0.25 premium over. So it would be averaging $6.75 this coming April.
  • Phase 1 for DNPL is adding 55 kilometres of new capacity, and after achieving it, Phase 2 will begin.

SWOT Analysis

Strengths:

  1. Extensive Domestic Market Presence
  2. Strong Government Backing
  3. Well-Established Pipeline Infrastructure

Weaknesses:

  1. Heavy Reliance on Crude Oil Prices
  2. Outdated Infrastructure in Key Areas
  3. High Operational Costs

Opportunities:

  1. Rising Demand for Natural Gas
  2. Expansions in Renewable Energy Initiatives
  3. Supportive Government Policies
  4. Potential for Strategic International Partnerships

Threats:

  1. Increasing Environmental and Regulatory Scrutiny
  2. Heightened Market Competition
  3. Risks from Geopolitical Uncertainty

NIva Bupa Limited IPO
Niva Bupa Ltd IPO: Review, Expert Analysis, and Investment Recommendations

Niva Bupa Health Insurance is set to launch its IPO with total issue size of ₹ 2200 crore, which comprises fresh issue of ₹800 crore and offer for sale of ₹1400 core.

IPO Subscription Period

  • Open Date: November 7, 2024
  • Close Date: November 11, 2024
  • Allotment Date: November 12, 2024
  • Listing Date: November 14, 2024
  • Stock Exchanges: BSE and NSE

Pricing Details

  • Price Band: ₹70 – ₹74 per Share
  • Face Value: ₹10 per Share
  • Minimum Lot Size: 200 shares
  • Investment Requirement:
    • Retail Investors: Minimum ₹14,800 (200 shares)
    • Small Non-Institutional Investors (sNII): 14 lots (2800 shares) – ₹207,200
  • Big Non-Institutional Investors (bNII): 68 lots (13,600 shares) – ₹1,006,400

Reservation Structure

  • Qualified Institutional Buyers (QIB): 30% (8,91,89,190 shares)
  • Non-Institutional Investors (NII): 15% (4,45,94,595 shares)
    • Big NII (bNII): 10%
    • Small NII (sNII): 5%
  • Retail Investors: 10% (2,97,29,730 shares)
  • Anchor Investors: 45% (13,37,83,783 shares) raising ₹8,315.28 crores

Key Dates and Timeline

  • IPO Open Date: Thursday, November 7, 2024
  • IPO Close Date: Monday, November 11, 2024
  • Basis of Allotment: Tuesday, November 12, 2024
  • Initiation of Refunds: Wednesday, November 13, 2024
  • Credit of Shares to Demat: Wednesday, November 13, 2024
  • Listing Date: Thursday, November 14, 2024
  • Cut-off time for UPI mandate confirmation: 5 PM on November 11, 2024

Book Running Lead Managers

Niva Bupa Health Insurance Limited has appointed prominent financial institutions as book-running lead managers for the IPO:

  • ICICI Securities Limited
  • Morgan Stanley India Company Private Limited
  • Kotak Mahindra Capital Company Limited
  • Axis Capital Limited
  • HDFC Bank Limited
  • Motilal Oswal Investment Advisors Limited

Kfin Technologies Limited has been designated as the registrar for the IPO.

Promoter Information

  • Promoter: Bupa Singapore Holdings Pte Ltd and Bupa Investments Overseas Limited.
  • Shareholding:
    • Pre-Issue: 62.27%
    • Post-Issue: 56%

About Niva Bupa Health Insurance Limited

Incorporated in 2008, Niva Bupa Health Insurance Company Limited is a joint venture between the Bupa Group and Fettle Tone LLP that provides insurance in the health sector.

Niva Bupa offers a variety of health insurance policies catering to individuals and families, covering hospitalization, pre- and post-hospitalization expenses, and additional benefits like annual health check-ups, daycare treatments, and ambulance services.

Popular plans include Health Companion, ReAssure, and GoActive, which provide customizable options to meet diverse healthcare needs. The company’s products are broadly categorized into

  1. Retail products designed for individuals and families.
  2. Group products intended for employers and employees.

As of March 31 2024, the company had 14.73 million active lives insured. As of March 31, 2024, the company is present across 22 states and four union territories in India.

Financial Highlights

  • Revenue Growth: Decreased by 21% from ₹413.07 crores (FY 2023) to ₹328.71 crores (FY 2024)
  • Profit After Tax (PAT): Rose by 650%, reaching ₹81.85 crores in FY 2024
  • Net Worth: ₹2049.6 crores
  • Total Borrowing: ₹250 crores

Key Performance Indicators (KPIs):

  • ROCE: 13.69%
  • RoNW: 5.68%
  • P/BV: 6.14
  • EPS (Pre-IPO): ₹0.48
  • EPS (Post-IPO): ₹-0.42
  • P/E Ratio (Pre-IPO): 153.7x
  • P/E Ratio (Post-IPO): -177.74x

IPO Objectives

The company proposes to utilise the Net Proceeds towards the following objects:

  1. Augmentation of its capital base to strengthen solvency levels and
  2. General corporate purposes

Subscription Status (As of November 8, 2024, 7:02:07 PM)

  • Retail: 0.76x
  • QIB: 0.83x
  • NII: 0.35x
  • Overall Subscription: 0.69x

Total Applications Received: 20,51,35,135 shares for 29,72,97,298 shares bid.

Recommendation

Apply (for Long-term investment) Niva Bupa Health Insurance Ltd. stands as one of the larger players in India’s health insurance sector, boasting strong financial performance and a well-diversified portfolio. However, the high Price-to-Earnings (PE) ratio indicates overvaluation, which could limit immediate upside. For those considering applying, tepid investor sentiment around the IPO suggests a relatively lower likelihood of strong listing-day gains. Long-term investors, however, may find potential in adding this stock to their portfolios, given the sector’s growth trajectory and Niva Bupa’s established market position.