Stocks to Watch: Axis Bank, Adani, Wipro, McLeod, Vedanta, Railtel, V-Guard
The key benchmark indices may seek a relief rally after two days of severe drubbing taking cues from the neighbouring Asian counterparts and SGX Nifty. As of 08:10 AM, the SGX Nifty futures indicated a gap-up opening of near around 150 points. Meanwhile, here the top stocks to focus in trade on Monday.
CE Info Systems (MapmyIndia): The IPO had received strong response and was subscribed 154.71 times, the NIIs (wealthy investors) portion was subscribed a huge 424.69 times. Breaking the recent trend of new listed, the stock is likely to debut at a premium on the bourses on Monday.
Shriram Group: Shares from the Shriram group are likely to be in focus as the group plans to foray into supply chain finance as well as trade financing and scale up its loans against property (LAP) under the combined entity Shriram Finance. Umesh Rewankar, executive vice-chairman and CEO of Shriram Transport Finance Company (STFC), said there are short-term lending opportunities on radar
The Shriram group plans to foray into supply chain finance as well as trade financing and will scale up its loans against property (LAP) under the combined entity Shriram Finance. Umesh Rewankar, executive vice-chairman and chief executive officer (CEO) of Shriram Transport Finance Company (STFC), said there are short-term lending opportunities on radar. One is discounting invoices on the technology platform as the group is already into small and medium enterprises (SME) financing (under Shriram City Union).
Supply chain financing is an area of interest where there are many options. Finance companies can now participate in factoring. Though funding is of short duration in these areas, the margins are good. There is an effort to build technology to enable it to participate in this business on a competitive footing, Revankar, who will be vice-chairman of the merged entity, told Business Standard. Last week, Chennai-based Shriram group announced that Shriram Capital (SCL) and Shriram City Union Finance (SCUF) will merge with STFC as part of business restructuring. The new entity will be called Shriram Finance. Revenkar said another area that the company will look at is LAP. Most lending in the SME segment is backed by property (as collateral) and group entities have sufficient experience and exposure in this. But he feels there is more business opportunity in this segment as Shriram City Union and Shriram Housing Finance have built expertise in understanding the property market and valuation.
About rationalisation of the branch network for the proposed combined entity, Revankar said, in the last couple of months, teams have looked at structure and decided to map everything code-wise. By the present assessment, only 45 branches may be rationalised in the first six months after the merger. Post-merger the company would like to see where the scope is to open new branches. Shriram Transport Finance has 800 rural centres, which will definitely become branches. Shriram City Union also has offices at nearly 600 locations. “In the case of Shriram City offices, we need to see location for addition,” he said. The branches will definitely come up in new locations and not crowd in the same geography to enhance reach. The current business model is fully relationship-based. It will soon be partly a relationship and partly a technology platform.
Adani Enterprises: The company has won India’s largest-ever expressway project awarded to a private company under the public-private partnership (PPP) framework, worth Rs 17,000 crore. According to a release issued to the BSE by the company, it has received a letter of award from Uttar Pradesh Expressways Industrial Development Authority to implement three major stretches of the greenfield Ganga Expressway.
Wipro: The IT firm informed BSE, that it will acquire Austin, Texas-headquartered Edgile for $230 million, a move that will strengthen the IT major’s play in the cybersecurity services space. Edgile’s experienced cybersecurity and risk management professionals will allow Wipro to further enhance its cybersecurity and risk consulting capabilities for the benefit of its customers,
Wipro on Monday said it will acquire Austin, Texas-headquartered Edgile for USD 230 million, a move that will strengthen the IT major’s play in the cybersecurity services space.
Edgile’s experienced cybersecurity and risk management professionals will allow Wipro to further enhance its cybersecurity and risk consulting capabilities for the benefit of its customers, In addition, the company’s ‘strategy-first’ approach and ‘Quick Start’ solutions will allow the combined entity to deliver enhanced value in strategic cybersecurity services, it added.
The purchase consideration is USD 230 million, and the transaction is expected to be completed before March 31, 2022, subject to regulatory approvals and customary closing conditions, the filing said.
The transaction will require approval by the Committee on Foreign Investment and Hart-Scott-Rodino Antitrust in the US, it added.
Founded in 2001, Edgile is an information security consulting firm providing professional services, primarily focused on delivering cybersecurity and risk management consulting services to corporations. It is privately held and has an onsite workforce of 182 employees. Its revenue for the year ended December 31, 2020, stood at USD 44.1 million.
Abry Partners, a minority private equity investor in Edgile, will fully exit its investment as a result of this transaction.
“Adding Edgile’s strategic consulting capabilities and launching Wipro CyberTransform are significant milestones on our journey to becoming the trusted partner to security leaders and boardroom stakeholders. I see the team blending very well with Wipro’s CyberSecurists to deliver transformational cybersecurity on a global scale,” Wipro Senior Vice President and Global Head Cybersecurity & Risk Services Tony Buffomante said.
Together, Wipro and Edgile will develop Wipro CyberTransform, an integrated suite that will help enterprises enhance boardroom governance of cybersecurity risk, invest in robust cyber strategies, and reap the value of practical security in action, the filing said.
In collaboration with an extensive roster of alliance partners from Wipro and Edgile, Wipro CyberTransform will enable organisations to accelerate their digital transformation and operate in virtual, digital supply chains all in a highly secure manner, it added.
“Our collective full spectrum of cybersecurity risk consulting and security management capabilities will help our global customers to continue to securely embrace their digital transformation journey and sustain their on-going risk management priorities,” Edgile Chief Executive Officer Don Elledge said.
Piper Sandler acted as financial advisor to Edgile and Stone Key Partners LLC acted as financial advisor to Wipro for the transaction.
Earlier this year, Wipro strengthened its cybersecurity business by acquiring Ampion, a provider of cybersecurity services in Australia, and the cybersecurity practice at Capco, a consultancy in the BFSI sector in Europe and the US. Additionally, through its Wipro Ventures arm, the company continues to invest in cybersecurity startups.
McLeod Russel India: The country’s largest bulk tea producer, expects its debt-restructuring plan to be finalised in the next few months. McLeod owes banks about Rs 1,800 crore and with unpaid interest, the total amount is said to be around Rs 2,300 crore. Bankers are fully in support of the company as it engages “very consciously” with them for a restructuring plan, said Aditya Khaitan, McLeod Russel CMD.
McLeod Russel India, the country’s largest bulk tea producer, expects its debt-restructuring plan to be finalised in the next few months.
McLeod owes banks about Rs 1,800 crore and with unpaid interest, the total amount is said to be around Rs 2,300 crore. Bankers are fully in support of the company as it engages “very consciously” with them for a restructuring plan, said Aditya Khaitan, McLeod Russel chairman and managing director, while responding to shareholders’ questions at the firm’s annual general meeting.
“Hopefully, in the next few months, we will be able to finalise the restructuring programme with the bankers and with that the company should be able to manage its debt position,” said Khaitan.
The company had last month in a stock exchange filing said that all banking lenders had signed/executed an Inter Creditor Agreement (ICA) to provide for ground rules for finalization and implementation of resolution plan.
McLeod had been in discussion with bankers for debt resolution in terms of the Reserve Bank of India’s (RBI’s) June 7, 2019 circular for a while. The process was restarted by bankers after insolvency proceedings initiated by a financial creditor was withdrawn in September.
In the notes to September quarter results, the company had said that the Techno Economic Viability (TEV) study and valuation done are being vetted again and possible credit rating of the parent will then be obtained in due course of time.
The draft resolution plan prepared earlier by SBI Capital Markets Limited along with their recommendation concerning resolution plan will accordingly be modified in terms of ICA and placed before the bankers for their consideration, it had said then.
On the operations side, Khaitan said at the AGM that he was expecting the next season in April to open on a strong note. Tea production was higher than last year but consumption over the last two years had built up a shortage.
Tea companies saw a record surge in prices in 2020, rising on the back of lower crop due to the shutdown of estate operations as fallout of the Covid-19 pandemic. It resulted in an average increase of 34 per cent in Indian auctions in 2020 over 2019.
However, prices were lower this year with higher production compared to 2020. Khaitan said all the cost increases that were to happen had happened. The wage increase had been finalized by the governments of Assam and West Bengal.
“Hopefully, we believe that all the cost increases that needed to happen, have happened and the market is also ready to pay a higher price for the tea product,” he said.
Khaitan reckoned that the price gap between good quality and medium and low quality tea will be maintained.
Vedanta: The Anil Agarwal-led company has acquired Goa-based Nicomet, a leading nickel and cobalt producer. In a press release issued by the mining major it said, the company is making the acquisition when the nickel market is tightening with a surge in battery demand and an increase in global stainless-steel production in recent years–a trend expected to continue into 2022.
Anil Agarwal-led Vedanta Limited said on Monday it has acquired Goa-based Nicomet, a leading nickel and cobalt producer.
The company is making the acquisition when the nickel market is tightening with a surge in battery demand and an increase in global stainless-steel production in recent years–a trend expected to continue into 2022, said Vedanta in a press release.
“We are excited about Vedanta’s foray into nickel and cobalt production which will play a critical role in supporting Govt’s mission for an Atma Nirbhar Bharat. Nickel and Cobalt are a metal of great strategic importance, especially for our transition towards clean energy and electric mobility. Currently, India imports 100 percent of its nickel requirements and our focus will be to boost domestic production that would fuel India’s transition to a net zero economy,” the release quoted Anil Agarwal, chairman of Vedanta Limited, as saying.
Nicomet has a capacity to produce 7.5 tonne per annum of nickel and cobalt. With an ambitious growth plan in place, Vedanta said it is well poised to meet 50 percent of the country’s total nickel demand.
“Not every acquisition needs CCI approval. Under the Competition Act, certain jurisdictional thresholds have to be crossed by the parties to trigger a notification requirement. Moreover, there are also certain exempts that parties can avail from a notification requirement. Since Nicomet was in liquidation, it is possible that based on its asset and turnover value, the acquisition was able to avail such an exemption and no notification was needed” explained Neelambera Sandeepan, joint partner at Lakshmikumaran & Sridharan Attorneys, referring to the Competition Commission of India, the anti-trust regulator.
With this acquisition, Vedanta Limited has become the only nickel producer in the country. The comany didn’t disclose the deal size of the acquisition. “Since the asset acquired was under Insolvency and Bankruptcy Code (IBC), it does not require CCI (Competition Commission of India) approval,” said spokesperson at Vedanta Limited.
Nicomet marks a major strategic acquisition for Vedanta as it is expected to strengthen its iron and steel business portfolio. Nickel is a key raw material used in the manufacturing of stainless steel and batteries for electric vehicles (EVs). Alongside, cobalt is used for lithium-ion batteries for EVs, energy storage systems and in superalloy for steelmaking.
“The plant has not been operational since 2018 so there is no head count at the unit at present. We (Vedanta) plan to restart this unit by March 2022,” said the Vedanta spokesperson.
The Nicomet acquisition is in line with Vedanta’s ESG mission and will support India’s carbon neutrality goals, said Vedanta.
Certified with ISO 9001 for quality and with strong R&D focus, Nicomet has emerged as a certified producer of high-quality battery grade Nickel Sulphate Crystals used for manufacturing batteries of electric vehicles globally. India’s demand for nickel is currently pegged at 45,000 tonne per annum which is entirely met through imports at present.
Axis Bank: The private lender plans to raise up to Rs 5,000 crore by issuing bonds. According to a release issued by the bank to the BSE, it will be issuing senior unsecured taxable redeemable non- convertible debentures of Rs 10 lakh each for cash at par with base issue size of Rs 2,000 crore and green-shoe option to retain over-subscription of Rs 3,000 crore thereby aggregating up to Rs 5,000 crore.
Railtel Corporation of India: The company has informed BSE, that it has received an order from Defence R&D Organisation for Expansion and Enhancement of CIAG Network Capacity at a total cost of Rs 68.31 crore. The order needs to be executed in a period of 7 months.
V-Guard Industries: The company’s board has approved the amalgamation plan of Indian business of the Spain-based Simon Group, Simon Electric with itself. The value of the deal is said to be around Rs 27.30 crore.
Tantia Construction: According to the company’s FY21 audited earnings, its net plunged 75.4 per cent to Rs 50.33 crore for the full-year ended March 2021 as against Rs 204.56 crore in the corresponding period a year ago. Total income, however, was up 98.3 per cent YoY at Rs 350.95 crore from Rs 176.96 crore in the same period.
Eldeco Housing & Industries: The company’s board has approved stock split in the ratio of 1:5, accordingly each equity share with a face value of Rs 10 will be sub-divided into 5 equity shares with face value of Rs 2 each. The company has fixed January 18 as the record date for determining eligible shareholders for the stock split.
Stocks in F&O ban: Escorts and Indiabulls Housing Finance are the only two stocks in the F&O ban period today.