The stock listed at Rs 735, a 5% premium against its initial public offer price of Rs 700 per share on the National Stock Exchange.
SBI Life Insurance Company made a quite debut by listing at Rs 735, a 5% premium against its initial public offer (IPO) price of Rs 700 per share on the National Stock Exchange (NSE).
At 10:02 AM; the stock was trading at Rs 734 on the NSE. It hit a high of Rs 740 and low of Rs 730 so far. A combined 11.5 million shares exchanged hands on the NSE and BSE.
The company’s Rs 8,400 crore IPO was subscribed 3.587 times. The portion meant for qualified institutional buyers (QIBs) was oversubscribed 12.56 times, while that of non-institutional investors received 70% subscriptions and retail investors 85%, data available with the NSE showed.
SBI Life is a joint venture between India’s largest lender State Bank of India and BNP Paribas Cardif, the insurance holding company of France.
SBI Life InsuranceIPOis the largest private insurer in terms of new business premium (NBP) generated with 20.04% market share and has assets under management (AUM) of Rs 97,700 crore. The company is riding on ULIP business (71% APE mix) which has lower regulatory risk, lower capital requirement and long term opex benefit, but also has lower margins and is highly dependent on capital market performance.
“SBI Life is increasingly focusing to improve protection business share which is high margin and have moderate opex. Hence, we believe Operating RoEV to remain stable at 23% currently and improve post over‐run margins to around 18% by FY19 from currently 15%. At the upper band of Rs 700, the company would trade at 3.18x Sep‐19 EV which we believe is fully priced and hence we recommend to Subscribe for long term gains,” analysts at Prabhudas Lilladher said in IPO note. Read Full Article
Firm to prune domestic costs through initiatives such as voluntary separation
Cognizant Technology Solutions plans to sharply increase local hiring in the US this year with increased demand for co-innovation and on-site presence from clients. The Nasdaq-listed technology services major said it would look at talent across local community colleges to big management universities to man different projects in the US.
Last month, when the United States Citizenship and Immigration Services opened the window for applications, Cognizant applied for “less than half” H1B visas compared with last year.
“We are evolving our workforce and delivery in the United States. Cognizant hired 4,000 US citizens in 2016, and in 2017 and beyond, we expect to significantly ramp up our US based workforce by hiring experienced professionals in the open market and by making more use of university programmes. We are shifting our workforce largely in response to clients’ increasing need for co-innovation. But we still seek visas for highly-specialised and skilled talent…We expect to further reduce our need for these visas going forward. As part of our shift, we continue to expand our US delivery centres,” Rajeev Mehta, President, Cognizant told analysts on Friday.
At the same time, the company has taken up initiatives such as the voluntary separation package, which was announced last week, for senior employees to optimise costs.
“We are looking for opportunities to further optimise cost structures…We just launched earlier this week a voluntary separation package that programme will go till the end of Q2 and we will see the benefit of that in Q3,” said Karen McLoughlin, chief financial officer, Cognizant.
The company is the second software provider after Infosys to announce increase in local hiring in the US. Cognizant, however, has not disclosed any numbers. Beyond the business shift towards digital, Donald Trump-led US administration’s moves towards H1B visa restrictions have resulted in companies focusing on local hiring there.
Cognizant saw a 26 per cent growth in net profits to $557 million for the quarter ending March 31, 2017, while revenues grew by 10.7 per cent to $3.55 billion. ReadMore
HNI category has got 1.14 times subscribed and the retail quota was subscribed 42%
SH Kelkar & Company has received full subscription from its Rs 500-crore Initial Public Offering (IPO), which closes on Friday. IPO is the act of selling shares in a company for the first time.
SH Kelkar Listing Date: The Mumbai-based firm has so far received 22.3 million bids for the 20.2-million shares on offer in the IPO. The qualified institutional buyer category quota got subscribed 2.25 times. Wealthy or high net worth individual quota was subscribed 1.14 times. The retail quota was subscribed 42 per cent.
SH Kelkar Allotment Date: SH Kelkar has set a price band of Rs 173-180 apiece for its IPO. On Tuesday, the company had raised Rs 150 crore from 13 anchor investors, including T Rowe Price, ICICI Prudential Mutual Fund, and Axis Mutual Fund.
Mumbai-based fragrance manufacturer SH Kelkar’s Initial Public Offering (IPO) was subscribed 42 per cent on day one, on Wednesday. The 20.2-million share offering has so far received 8.4 million bids. SH Kelhar is looking to raise a little over Rs 500 crore from its IPO, to close on Friday. The company has priced its IPOin the range of Rs 173 to Rs 180 per share.
JM Financial, Kotak Mahindra Capital, and Keynote Capital are handling the IPO.
70% of bids from foreign investors; share offering lapped up six times; retail quota under-subscribed
The Rs 3,000-crore initial public offering (IPO) of InterGlobe Aviation, which runs IndiGo, sailed through without any turbulence, with foreign investors on board. It was subscribed a little over six times. The 30-million share offering saw nearly 185 million bids, worth about Rs 14,000 crore. About 70 per cent of the offering, or 127 million bids, came from foreign institutional investors (FIIs).
IndiGo Listing Date: Global investors scrambled to buy InterGlobe shares, hoping India’s air travel penetration would increase through the next few years. As of now, the penetration level is only 0.08 annual domestic seats per capita, against penetration rates of 0.35-0.6 in other developing markets such as Brazil, Turkey, Indonesia and China, according to Angel Broking.
IndiGo Allotment Date: IndiGo operates in the lucrative low-cost carrier (LCC) segment. On listing, the airline would be one of the world’s leading LCCs in terms of market value.
The qualified institutional buyer segment, which includes institutional investors such as FIIs, mutual funds and insurance companies, was subscribed 17.8 times. The non-institutional investor category was subscribed 3.6 times.
IndiGo IPO flies mostly on global wings The retail investor category — those investing less than Rs 2 lakh — was subscribed only 92 per cent. Around 45 per cent of the IPO was reserved for retail investors, while seven per cent of the issue was reserved for InterGlobe employees.
Despite a 10 per cent discount on offer, the employee quota was subscribed nearly 13 per cent. The undersubscribed shares meant for the retail category, as well as employees, will be distributed among other investor segments, which saw high subscription.
Experts said the retail investor portion received a lukewarm response, owing to concern over valuations. Most domestic brokerages had termed the IPO pricing expensive; grey market activity, too, suggested marginal listing day gains.
For the IPO, InterGlobe had set a price band of Rs 700-765 a share. Given the heavy demand, the IPO is likely to be priced at the top end of the band. That will value the company at about Rs 27,500 crore. At Rs 765 a share, InterGlobe’s market value will be six times that of Jet Airways and 10 times that of SpiceJet.
Though most analysts had hailed IndiGo’s operational efficiencies, they felt the pricing had left little on the table for investors. “While we appreciate Indigo’s efficient operations and management capability to deliver profitable growth in a sector where few have succeeded globally, we find valuations expensive. At 10.2 times the FY15 EV (enterprise value)/Ebitdar (earnings before interest, tax, depreciation, amortisation and rent), at the higher end of the peer sector range, the proposed issue price fully factors profits on aircraft trading and lower than the sector’s aircraft maintenance costs in perpetuity, plus the benefits of lower crude prices and mid-teen volume growth through the next 10 years,” domestic brokerage house Ambit had said in a report.
“Foreign investors that applied in IndiGo have a record in being invested in other LCCs like RyanAir, Air Asia and others. So, they had a greater level of confidence, while for domestic investors, this offering was a first of its kind. That’s why it was more FII-led. Still a deal of this size has seen good demand from most investors,” V Jayasankar, head of equity capital markets, Kotak Investment Banking.
Investment bankers handling the IPO had said marquee global investors made big-ticket applications. According to reports, famed investor Rakesh Jhunjhunwala invested a significant sum. Business Standard couldn’t confirm this independently.
Citigroup Global Markets, JP Morgan, Morgan Stanley, Barclays Bank, Kotak Mahindra, UBS Securities were the investment banks that handled the IPO.
India’s largest airline company, InterGlobe Aviation, which operates IndiGo, is seeking to raise about Rs 3,000 crore from its initial public offering (Indigo IPO). While about Rs 1,800 crore of this is an offer for sale, going to the existing shareholders, the rest is a fresh issue. At Rs 765, upper end of the band, the company is looking at a valuation of Rs 27,500 crore. The two listed aviation players, Jet Airways and SpiceJet, have a combined market cap about a fourth of this number.
Why IndiGo is asking for a higher valuation is due to a consistent record of superior operational performance, across parameters. The key differential is, of course, the way it manages costs. Costs per available seat km (CASK, measured in US cents) at 5.95 is much lower than SpiceJet’s 6.68 and Jet Airways’ 9.05. Excluding fuel, the single biggest cost item, its CASK at 2.87 cents is lower than GoAir and SpiceJet, the other low-cost carriers. A single aircraft type, low distribution costs and a younger fleet have helped keep down costs on operations and maintenance. Its decision to order 100 A320s in 2005 helped it negotiate favourable terms, analysts say. The sale-and-lease back arrangement helped it gain about Rs 3,500 crore.
IndiGo Airline IPO: A robust business model but no discount in IPO price Coupled with the fleet expansion and strong passenger volumes, the low CASK has helped it grow faster than the market. IndiGo’s market share has increased from 14.5 per cent in FY10 to about 36 per cent with passenger volumes increasing 26 per cent. Higher volumes and load factors, along with growing revenue per passenger, has translated to 40 per cent annual growth in domestic revenues over FY10-15, while earnings before interest, taxes, depreciation, amortisation and rentals (Ebitdar) have grown 25 per cent. The company has also benefited due to the multiple challenges faced by competition (management change, high cost structure, lack of pricing discipline, etc.), which helped IndiGo move ahead.
A few favourable tailwinds will benefit the entire sector going ahead. The first is passenger volumes. The sector has been growing at about 12 per cent annually and analysts say demand would be 1.2-1.5 times gross domestic product growth which should help all players. Especially IndiGo, given its fleet strength and the fact that it is growing faster than the market. Growth in recent months has been a strong 20 per cent for the sector, with IndiGo outperforming peers. The other positive for the company is cheaper fuel costs which should boost its profits.
In FY15, the company made Ebitdar margins of 27 per cent and net margins of nine per cent as compared to 20 per cent and four per cent in FY14. Ebitdar margins, given lower fuel costs, spurted to 37 per cent in the June quarter, with net margins at 15 per cent enabling the company to report a net profit of Rs 640 crore. While the September quarter and the March quarter are not the best quarters of the year, analysts believe the company should be able to close the year at about Rs 2,400 crore in net profits.
The listed players far lag IndiGo and have a patchy net profit record; so, a comparison with the better global performers is in order. Low cost European and American carriers have their enterprise value/Ebitdar ranging between seven and eight times. While the company deserves a higher multiple given that the Indian market is growing faster, the IndiGo IPO, at about 7.6 times its FY16 EV/Ebitdar estimates, is slightly on the expensive side. Analysts say the company should have left something on the table for investors.
The low-cost carrier, India’s largest by market share, is reported to be working on a public listing in the first quarter of FY2015-16
Low-cost carrier Indigo Airlines is preparing for a public listing in the April-June 2015 quarter to raise about Rs 2,500 crore, the Times of India newspaper reported Wednesday.
Indigo Ipo date: The airline, which is India’s largest by market share, has consistently reported profits, is also expected to be profitable in the fiscal year ending March 2015.
Indigo Ipo: Indian commercial airlines have also had a reprieve of late due to all-time lows in crude prices, enabling them to save significantly on aviation fuel costs, which is the single largest operational expense. Some of the fuel savings, however, have been offset by heavily discounted tickets offered by airlines to try and increase passenger load and market share.
However, private airlines Jet Airways and SpiceJet, both of which are listed, continue to bleed money, while debt-addled Kingfisher Airlines has closed operations for close to three years now, with no signs of resuscitation by either promoter Vijay Mallya or any new investors.
indigo airlines ipo price: The operator of top Indian airline IndiGo has set the indicative price band for its initial public offering of shares at between 700 rupees ($10.83)and 765 rupees ($11.83) apiece, three sources directly involved in the transaction said.
Indian markets have been on a rise since late last year, with the BSE Sensex breaching the 29,000 mark, driven largely by expectations of reforms from the Narendra Modi-led government and two surprise interest rate cuts by the Reserve Bank of India.
Indigo has been preparing for the IPO since last year when it restructured its shareholding to become eligible for foreign direct investment (FDI), the newspaper reported.