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Future group stocks hit lower circuit after Sebi bans Kishore Biyani and other promoters from capital markets

Most of the Future group shares have hit their respective lower circuits on Thursday, after the capital market regulator Sebi banned Kishore Biyani, along with certain other promoters of Future Retail Ltd from the capital market for one year for indulging in insider trading in the shares of the company. Future Consumer Ltd shares hit 5 per cent lower circuit at Rs 7.80, Future Enterprises Ltd at Rs 11.15 apiece, Future Market Networks Ltd at Rs 19.95 apiece, Future Lifestyle Fashions Ltd at Rs 83.95 apiece, Future Retail at Rs 74.20 apiece and Future Supply Chain Solutions Ltd at Rs 95.15 apiece.

AR Ramachandran, Co-founder & Trainer, Tips2Trade, told Financial Express Online that the current development of Sebi announcing a one year ban on Kishore Biyani in securities market along with the legal tangle they find themselves in with Amazon has led to a breakdown in the faith of investors leading to a sharp sell-off in the Future group stocks. “Investors are best advised to look for every opportunity to exit these stocks and invest in better and more stable retail stocks like Avenue Supermarts (DMart) and V-Mart Retail Ltd for better returns,” Ramachandran said.

Sebi has also imposed a fine of Rs 1 crore each on Kishore Biyani, Anil Biyani and Future Corporate Resources. Apart from this, they have been asked to disgorge Rs 17.78 crore for the wrongful gains made by them. In comparison, BSE Sensex was trading 117 points or 0.23 per cent up at 50,373, while the Nifty 50 index was trading 45 points or 0.30 per cent at 14,835.

Moreover, Future Corporate Resources and FCRL Employee Welfare Trust have been directed to disgorge Rs 2.75 crore for the wrongful gains made by it. Anil Biyani and Future Corporate Resources are promoters of Future Retail Ltd. The market regulator had also conducted an investigation in the shares of Future Retail Ltd to ascertain whether certain persons and entities had traded during March 10, 2017, to April 20, 2017 period on the basis of Unpublished Price Sensitive Information (UPSI) pertaining to segregation of certain business of the firm.

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Stove Kraft IPO: Issue opens for anchor investors, grey market premium jumps 26%; check price band

The Rs 412.62 crore Stove Kraft initial public offer (IPO) is set to open for subscription on Monday, January 25, in the price band of Rs 384-385 apiece. This will be the fourth public issue of the calendar year 2021, after the just-concluded Indian Railway Finance Corp IPO, and the ongoing Indigo Paints and Home First Finance Company India IPOs. Stove Kraft IPO comprises fresh issue of shares worth Rs 95 crore and an offer-for-sale (OFS) of up to 82.50 lakh equity shares. The anchor investors portion will open for subscription today, January 22, 2021. Stove Kraft shares were commanding a grey market premium of Rs 101 today. The shares were seen trading at Rs 486, implying an upside of 26 per cent over the IPO price in the grey market.

Abhay Doshi, Founder, UnlistedArena.com — dealing in Pre-IPO & Unlisted Shares — told Financial Express Online that as the brand name ‘Pigeon’ which contributes to 80 per cent sales is under dispute which seems to be a concern. The kitchen appliances manufacturer company, Stove Kraft, operates in a highly competitive market and has turned profitable just two years back. Stove Kraft has posted exceptional figures in the first half of FY21. “Owing to the euphoria in the primary market and small issue size for retail participants this might perform well on the listing. Even though Stove Kraft has posted good numbers in the first half of FY21, it would be more canny to watch the further performance before taking long term decisions,” Doshi added.

The OFS consists of 6.90 lakh equity shares by promoter Rajendra Gandhi, 59,300 equity shares by promoter Sunita Rajendra Gandhi, 14.92 lakh shares by Sequoia Capital India Growth Investment Holdings I, and 60.07 lakh shares by SCI Growth Investments II. Investors can bid for a minimum of 38 equity shares and in multiples of 38 shares thereafter for a minimum amount of Rs 14,630. The book running lead managers to the offer are Edelweiss Financial Services and JM Financial. While KFin Technologies Private Ltd will be the registrar to the issue.

Stove Kraft proposes to utilise the net proceeds from the fresh issue towards repayment or pre-payment of certain borrowings availed by the firm and for other general corporate purposes. Stove Kraft IPO is priced at 34.5x PE on a trailing basis. Keshav Lahoti, Associate Equity Analyst, Angel Broking Ltd, said that the company is a kitchen solutions and an emerging home solutions brand. The company is engaged in the manufacture and retail of a wide and diverse suite of kitchen solutions under our Pigeon and Gilma brands, and propose to commence manufacturing of kitchen solutions under the BLACK + DECKER brand, covering the entire range of value, semi-premium and premium kitchen solutions, respectively.

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This US healthcare stock set to outperform in 2021; Credit Suisse raises target price

2020 was the year of the healthcare and pharmaceutical sector when it came to stock market investment. Global Brokerage and research firm Credit Suisse, in a recent report, highlighted that the price-performance of healthcare subsectors such as clinical laboratories, managed care, medical devices, and contract research organizations outperformed the S&P 500 index. The brokerage firm said that it selectively views further upside potential for stocks that have demonstrated ability to enhance market positioning throughout the pandemic with strategic innovation and capacity investments. With this, Credit Suisse has upgraded Thermo Fisher to an ‘outperform’ rating.

Upgrade to ‘Outperform’

The report said that Thermo Fisher (TMO) is highly levered to healthy industry fundamentals, as well as drivers in rising biopharma demand, increased exposure to faster-growing services markets, innovation, geographic expansion, and improving operational efficiency. Credit Suisse had initiated the coverage of the stock less than a year ago with a ‘Neutral’ rating. “Since that time, the market has evolved meaningfully with the COVID pandemic, driving some unexpected catalysts and opportunities for the Life Science group broadly speaking. TMO has admittedly far exceeded expectations in the current environment, with the company recently increasing its 4Q guide meaningfully, now calling for +40% organic growth,” they added.

Although analysts at Credit Suisse see risks to the stock as covid-19 testing reduces with the distribution of the vaccine, the report said there are other potential offsets. These include significant 2020 PCR instrument placements, COVID vaccine/therapy development and commercialization opportunities along with expanded capacity enabled by COVID-driven investments. “More specifically, as it relates to COVID vaccines and therapies, TMO is working on 250+ projects, representing an opportunity now estimated to be north of its prior expectation of $1 billion in revenue,” Credit Suisse said.

Valuation below peers

In terms of valuation, the stock trades at 18.6x 2022 EV/EBITDA, below the Life Science Tools peer average (20.9x), albeit still above its historical five-year average of 17.0x. However, the brokerage firm believes that valuations do not adequately reflect its higher organic revenue growth run-rate and strengthening margin profile, particularly as it enhances its market-leading positioning with strategic investments across the biopharma arena.

Target price

The revised target price for Thermo Fisher has been set at $556 per share. Currently, the stock trades at $503 apiece. In its Blue Sky scenario, Credit Suisse does see the potential for the stock zooming as high as $667 per share. On the other hand, if things go south and R&D slows down along with a stringent regulatory environment, the stock could tumble to $445.

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IEX expands Green Market; Adds daily, weekly contracts

Indian Energy Exchange (IEX) on Friday announced the expansion of its Green Market with the launch of new contracts that will offer greater choice to market participants to buy renewable energy on the same day and up to 11 days ahead.
IEX has expanded its delivery-based Green Market with the launch of two new products – Green Daily Contract and Green Weekly Contract, an IEX statement said. According to the statement, trading in the new contracts in both solar and non-solar segments will commence with immediate effect.

With this launch, the IEX Green Market now has four contracts, and offers greater choice to market participants to buy renewable energy on the same day and up to 11 days ahead. In a first for IEX Green Market, the Daily and Weekly contracts, will enable market participants to trade in on energy basis (MWh) with the bidding taking place on a 15-minute time-block.
The trading in energy terms will help to address the intermittency issues involved in renewable energy procurement.

Further, this will also assist market participants to minimise deviations as well as related penalties. Energy will be delivered leveraging the national, regional and state level transmission network. The Green Market at IEX, a first of its kind initiative in the country, was formally launched by Power Minister R K Singh on September 1, 2020. The market has received encouraging response from all stakeholders and has cumulatively traded 459 MU (million units) comprising 404 MU under Solar and 55 MU under Non-Solar segments within 100 days since the commencement of trading on August 21, 2020.

Moreover, it stated that with an average price of Rs 3.47 per unit in solar and Rs 3.77 per unit in non-solar segments, the market offers an attractive avenue to participants for renewable energy procurement. “India is witnessing a rapid change in the energy sector with renewables driving the energy shift. To meet our ambitious renewable energy targets and sustain the existing pace of growth in renewable capacity addition, there is a need for a market-based framework.” IEX Chairman S N Goel said.

IEX Green Market allows the obligated entities to meet their Renewable Purchase Obligation as well as facilitates efficient and seamless integration of the renewable energy. With a total of 36 market participants, the platform is being leveraged by the distribution utilities, renewable generators and open access consumers.

The utilities from the States and Union Territories of: West Bengal, Haryana, Dadra and Nagar Haveli (DNH), Daman & Diu, Delhi, Bihar, Maharashtra, Delhi, UP, Telangana and Karnataka amongst the top market participants on the IEX

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