Latest news with #NarendraSolanki
Economic Times
18 hours ago
- Business
- Economic Times
Should investors subscribe to the upcoming NSDL IPO amid market uncertainty?
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Mumbai: Investors looking for a relatively cheaper bet on India's flourishing capital markets could consider putting money in the upcoming initial public offering (IPO) of National Securities Depository (NSDL), said ₹4,011 crore issue, which is set to open for public subscription on Wednesday, is priced at ₹760-800 per share."We believe the NSDL IPO is attractively priced, and would suggest investors subscribe to the issue," said Geetanjali Kedia, IPO expert at SPTulsian Investment Adviser. "It operates in a duopoly within a growing Indian capital market, making it a good long-term bet as well."The issue is entirely an offer for sale by existing shareholders. The IPO is priced at 47 times FY25 Price to earnings (P/E), compared with its listed peer CDSL 's 67 times, as per SBI Securities Narendra Solanki, head of Fundamental Research - Investment Services, Anand Rathi Shares and Stock Brokers, said investors could subscribe to the IPO and hold the stock for at least a year. "It should be noted that the issue is coming at a discount to the previously anticipated price," he NSDL IPO, which was to debut on the Indian bourses by July 31, had been delayed due to lengthy negotiations around the stock valuations. Kedia said the IPO pricing adequately factors in NSDL's relatively moderate financial position compared to CDSL, despite being a high ROE (return on equity) business with 24% net margins. In the grey market, NSDL currently commands a premium of Rs 137 per share. However, it has declined from Rs 166 on Thursday, the day before its price-band grey market premiums (GMPs) are the additional price that investors are willing to pay over the IPO price in the grey market before the stock lists on the stock exchange. A higher premium indicates the market sentiment for the IPO in question. GMPs of IPOs with robust demand tend to be high, which implies a potential upside in the stock on listing. A dampener for the NSDL's IPO would be the weak first-quarter results from its larger rival CDSL. CDSL's consolidated net profit in the June quarter rose 2% from the previous quarter. However, it declined nearly 24% from the same period a year ago. The stock dropped 5.6% on Monday.'CDSL's weaker-than-expected results and a 5% stock drop may hamper some investor sentiment ahead of NSDL's initial public offering, given both are Sebi-regulated depositories,' said Solanki. 'In the near term, CDSL's miss may weigh on NSDL's debut, but over time, a successful NSDL listing could benefit both.'
Time of India
18 hours ago
- Business
- Time of India
Should investors subscribe to the upcoming NSDL IPO amid market uncertainty?
Mumbai: Investors looking for a relatively cheaper bet on India's flourishing capital markets could consider putting money in the upcoming initial public offering (IPO) of National Securities Depository (NSDL), said analysts. The ₹4,011 crore issue, which is set to open for public subscription on Wednesday, is priced at ₹760-800 per share."We believe the NSDL IPO is attractively priced, and would suggest investors subscribe to the issue," said Geetanjali Kedia, IPO expert at SPTulsian Investment Adviser. "It operates in a duopoly within a growing Indian capital market, making it a good long-term bet as well." Explore courses from Top Institutes in Please select course: Select a Course Category Data Science Data Science Public Policy Cybersecurity Project Management Design Thinking Finance Operations Management Data Analytics MCA Management Others MBA healthcare CXO Leadership Product Management others Artificial Intelligence Healthcare PGDM Digital Marketing Degree Technology Skills you'll gain: Duration: 11 Months E&ICT Academy, Indian Institute of Technology Guwahati CERT-IITG Postgraduate Cert in AI and ML India Starts on undefined Get Details Skills you'll gain: Duration: 11 Months IIT Madras CERT-IITM Advanced Cert Prog in AI and ML India Starts on undefined Get Details Skills you'll gain: Duration: 10 Months E&ICT Academy, Indian Institute of Technology Guwahati CERT-IITG Prof Cert in DS & BA with GenAI India Starts on undefined Get Details Skills you'll gain: Duration: 10 Months IIM Kozhikode CERT-IIMK DABS India Starts on undefined Get Details Skills you'll gain: Duration: 30 Weeks IIM Kozhikode SEPO - IIMK-AI for Senior Executives India Starts on undefined Get Details The issue is entirely an offer for sale by existing shareholders. The IPO is priced at 47 times FY25 Price to earnings (P/E), compared with its listed peer CDSL 's 67 times, as per SBI Securities . Narendra Solanki, head of Fundamental Research - Investment Services, Anand Rathi Shares and Stock Brokers, said investors could subscribe to the IPO and hold the stock for at least a year. "It should be noted that the issue is coming at a discount to the previously anticipated price," he said. The NSDL IPO, which was to debut on the Indian bourses by July 31, had been delayed due to lengthy negotiations around the stock valuations. Kedia said the IPO pricing adequately factors in NSDL's relatively moderate financial position compared to CDSL, despite being a high ROE (return on equity) business with 24% net margins. In the grey market, NSDL currently commands a premium of Rs 137 per share. However, it has declined from Rs 166 on Thursday, the day before its price-band announcement. Live Events The grey market premiums (GMPs) are the additional price that investors are willing to pay over the IPO price in the grey market before the stock lists on the stock exchange. A higher premium indicates the market sentiment for the IPO in question. GMPs of IPOs with robust demand tend to be high, which implies a potential upside in the stock on listing. A dampener for the NSDL's IPO would be the weak first-quarter results from its larger rival CDSL. CDSL's consolidated net profit in the June quarter rose 2% from the previous quarter. However, it declined nearly 24% from the same period a year ago. The stock dropped 5.6% on Monday. 'CDSL's weaker-than-expected results and a 5% stock drop may hamper some investor sentiment ahead of NSDL's initial public offering, given both are Sebi-regulated depositories,' said Solanki. 'In the near term, CDSL's miss may weigh on NSDL's debut, but over time, a successful NSDL listing could benefit both.'
Time of India
7 days ago
- Business
- Time of India
PSU banks looking better against private peers at least for next 2 quarters: Narendra Solanki
Narendra Solanki , Head Fundamental Research-Investment Services, Anand Rathi Shares & Stock Brokers , notes that PSU banks have outperformed private banks due to improved fundamentals like interest margins and declining NPAs . Consequently, PSU bank valuations are approaching those of private banks, trading around 1.5-1.7 times book value. Despite recent profit booking, PSU banks are expected to maintain their advantage over private peers for the next two quarters. Eternal held on to the 11.5% gains yesterday. How are you looking at the stock movement from here on and how much more head do you believe can be there for the stock from these levels because it is at an all-time high level for this particular counter? Narendra Solanki: The results were good, especially on the part of Blinkit. The results were very exciting. The food delivery business has seen a moderation but the margins are slated to improve and the growth should continue to remain strong. So, on both fronts, we continue to see improvement for the stock going ahead, especially the Blinkit turnaround is very positive for the company and that has been reflecting in the prices of the stocks lately. So, we are still positive on the stock for the medium to long term. Explore courses from Top Institutes in Please select course: Select a Course Category Operations Management Technology PGDM Public Policy others MBA healthcare Data Science Cybersecurity Artificial Intelligence Leadership Data Science Others Product Management Data Analytics CXO Project Management Degree Digital Marketing Design Thinking Healthcare Management MCA Finance Skills you'll gain: Quality Management & Lean Six Sigma Analytical Tools Supply Chain Management & Strategies Service Operations Management Duration: 10 Months IIM Lucknow IIML Executive Programme in Strategic Operations Management & Supply Chain Analytics Starts on Jan 27, 2024 Get Details What got the entire Nifty PSU basket so spooked because there were two consecutive days of big losses coming in over here. Select names like Canara Bank are down and out by about 3%. What is marring the entire Nifty PSU bank pack and what could be the reasons other than the earnings overhang on some from the Nifty PSU banks pack? Don't you think that the reaction is being a little overplayed right now? Narendra Solanki: It is a mix of two factors. One is definitely a reaction to the earnings and the other is historical performances of the past one to three months. Then the PSUs outperformed the private peers on the back of improving fundamentals like improvement in the interest margins, improvement in the profitabilities and the gradually declining NPA. So, the valuations have also started coming very close to their private peers where some PSU banks have started trading at around 1.5, 1.7 times book value. The majority of the pack on an average was trading at around 0.9 to 1.1 price to book value while their private counterparts like larger private banks which once traded at higher than 3.5-4x book values are still trading at somewhere between 2.5 and 3 book value. So, the valuation gap has narrowed and it is a combination of near-term profit booking on back of earnings reaction . These both factors have played out but our view is that PSU as a pack is still looking better in comparison with the private peers at least for the next two quarters. You Might Also Like: Not top-down, it's time to go stock-specific; wait for clarity on consumption stocks: Harsha Upadhyaya Get ready for a narrower market over next 2-4 years where earnings surprises will drive share prices: Rakshit Ranjan
Economic Times
01-07-2025
- Business
- Economic Times
EMS has huge growth prospects for next five years; 5 direct & ancillary plays to bet on: Narendra Solanki
Narendra Solanki, Head Fundamental Research-Investment Services, Anand Rathi Shares, says India's Electronic Manufacturing Services (EMS) sector is poised for substantial growth. Consumption of electronic goods is expected to triple by FY28. EMS share will also increase significantly. Government support is boosting chip manufacturing and ODM. Supply chain shifts from China are underway. New manufacturing plants are being established, focusing initially on high-volume, low-margin products but gradually shifting to high volume, low margin businesses. Further, Solanki says among EMS companies, likes three direct plays like Kaynes, Dixon Technologies and CG Power. In terms of ancillary plays, also likes PG Electroplast and Epack Durable. The India EMS sector some projections say that for the next five years or till FY28, the CAGR growth stands at close to 34%. What as per you will drive this hyper growth phase for this industry and how do you see the growth panning out in the years ahead? Narendra Solanki: Definitely, there is a huge growth prospect for EMS companies in India. If you see the existing numbers, we have currently almost 10 trillion consumption of electronic goods in India which is expected to grow to 30 trillion, of which EMS right now has around 3.5 trillion share, which is also expected to rise to 9 trillion by FY28. So, the CAGR is approximately 30% plus. So, definitely, as an industry we see huge growth prospects for the next five years. Import is expected to decline and export expected to surge. With the support of the government, a lot of companies have also set up different facilities, like chip manufacturing facilities or facilities. Even the ODM, design development and manufacturing, is also picking up pace. There has been a lot of growth available for most of the companies in different areas – be it product design development, outsourcing, manufacturing, contract manufacturing, as well as after sales service space is also opening up with a lot of these companies making inroads into different aspects of this sector. The sector is in a high growth phase and we would expect it to have high growth for the next five to seven years. The other thing I also wanted to figure out was the China factor because that is not helping growth. How are Indian firms emerging as credible alternatives as of date? Narendra Solanki: As far as supply chain shifts related to China are happening, it would be a slow process, but definitely things have started moving. There are already six manufacturing plants coming out including one from Tata Electronics, one from CG Power facility and one from Kaynes. Four of these plants are coming up in Gujarat. So, a lot of these facilities have started to come up. Initially, we expected things would start from high volume and low margin chips and then gradually we would pick up into low volume and high margin chips, which would be less than 30 nm chips. So, right now, we are trying to build capacities ranging from 28 nm to 45-50 nm kind of chips and gradually, we will improve over the next few years. So, definitely within the next five to seven years, we would see a significantly greater shift from China happening, but initially, we would start off with high volume, low margin products and gradually start shifting. We would see shifts happening for high margin and lower volume products as well. Kaynes keeps on diluting. The Dixon promoter has just about sold out. Why are some of these growing EMS companies hitting the market either with a stake sale or a QIP or a fundraise? Narendra Solanki: As a technology, all these businesses are very capital intensive and initially you need to have very high capital cost to set up these facilities. For a chip manufacturing facility, you have to have efficiency of more than 90% and even in some cases you have to have efficiency of 95% to 98% in order to just breakeven. So, if you need that kind of a high capital intensity and that kind of efficiency, it becomes very difficult to find the capital and hence initially, they have to raise a huge amount and then invest into acquiring technologies and building partnerships in order to secure long-term customers and to achieve the returns. Which is your favourite in terms of pecking order? Is it Kaynes? Is it Dixon? Is it Amber? Which is your preferred bet? Narendra Solanki: It depends on the kind of exposure. We like Kaynes right now. We like Dixon Technologies as well and CG Power. These three are the direct plays which we like and in terms of ancillary plays, we also like PG Electroplast and Epack Durable. Some would argue that while EMS is growing, where are the margins? Margins are 2%, 3% on a net level. That means it is one of those businesses, where the top line is great, but on the bottom line, either there is a huge currency risk, or a huge client risk. If margins are 2-3%, that is not a great business to be in. Narendra Solanki: That is what I have said. Initially when we have to start, it has to be high volume, low margin products and gradually when we build up our technologies and ramp up our scale and efficiency, then gradually we would see that all these high volume, low margin business would start converting into a low volume and high margin businesses and gradually will pick up from there. So, this is the transition we have to make and it would take around two to three years and when that transition happens, we would see margins improving significantly for these companies. I believe you retain a buy call on Dixon Technologies, with a target price of over Rs 18,000. But some of the reports recently suggest that one of their biggest clients – Motorola – is now diversifying in terms of their suppliers. Firstly, it was only Dixon Tech, but some of the other companies are now getting into the foray and will be supplying to Motorola as well. What is your take on this particular news flow? Will it change anything for Dixon Technologies? Narendra Solanki: Not immediately because they have other strategies as well. They have partnerships into camara modules, lithium-ion batteries as well, which is coming up. A lot of different business would come up for Dixon and we do not see any immediate threat in the near term from this. What is the right PE multiples to look at these businesses? 50, 60 are the PE multiples in the sector now. I can say that the growth is great, but the stock prices are priced to perfection? Narendra Solanki: In the case of Dixon, we model in around 45% CAGR for the next two years and if you factor that in, the valuations with such high growth would adjust significantly and the PE would also come lower. So, right now, it could be around 54-52 PE for FY27 and with such high growth, I think it is still at a decent stage and gradually the margins will also improve going ahead as within two to three years, we will transition from low margin to high margin business.
Time of India
27-06-2025
- Business
- Time of India
HDB Financial's IPO gets $19 billion in bids as institutional buyers pile in
HDB Financial Services' $1.5 billion IPO drew bids worth $19 billion by Friday's close as institutional buyers rushed for India's largest offering so far this year, signaling investor confidence in a stock market recovery. India's IPO market is gaining momentum after a slow start, as the stock market stabilizes following earlier volatility driven by global trade concerns. The blue-chip Nifty 50 index, which hit a one-year low in April, now sits just 2.4% below record highs from last year, as easing geopolitical tensions and trade fears spurred risk-on sentiment. HDB Financial, a unit of India's biggest private lender HDFC Bank , saw its issue subscribed 16.7 times over, driven by qualified institutional buyers such as foreign investors and mutual funds who bid for 55 times their reserved portion. Non-institutional investors bid for 10 times their portion, while retail investor interest was comparatively muted, with their shares being oversubscribed just 1.4 times, exchange data showed. Live Events The strong investor response makes HDB Financial's IPO the most subscribed offering over $1 billion since Zomato's in 2021, data from Prime Database showed. "The response to the issue has been very encouraging, and considering the issue size signals that investors are growing increasingly confident of the local market as global trade worries ebb out," said Narendra Solanki, head of research at Anand Rathi Shares and Stock Brokers. "The bid numbers show that the primary markets are coming back to life after a lull earlier this year, and such a response for a sizeable issue like HDB's should give IPO hopefuls in the pipeline confidence to also come forth to test waters," Solanki added. HDB Financial' s IPO, the biggest ever by an Indian non-bank lender, was one of six offerings this week, five of which were oversubscribed in a range of 2-86 times. Earlier this week, Credila Financial Services and Pine Labs filed for IPOs. HDFC Bank, which holds a 94% stake in HDB, sold shares worth up to 100 billion rupees, while HDB issued new shares worth 25 billion rupees. The company is targeting a valuation of up to $7.1 billion at the upper end of the 700-740 rupees price band. The stock is expected to start trading on July 2. HDB had already raised $392 million from anchor investors, including BlackRock funds, Life Insurance Corporation of India (LIC) and Norway's sovereign wealth fund. ETMarkets WhatsApp channel )
