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Natco Pharma share price hits 20% upper circuit, stock at a new record high on starting trials for COVID drug

Natco Pharma share price hits 20 per cent upper circuit at Rs 1,188.95 apiece, also its all-time high, in intraday on BSE, after the company initiated phase III clinical trial to evaluate the efficacy and safety of Molnupiravir capsules in mild COVID-19 patients in India. Natco’s clinical trial has been planned in 32 hospitals across India. Natco Pharma stock price has surpassed its previous high of Rs 998 per share, touched in the previous session. Technically, the stock looks overbought and a correction looks likely, said an analyst. “Long-term investors should book some profits at current levels and look to buy near 920- 940 levels for better returns in the future,” AR Ramachandran, Co-founder & Trainer, Tips2Trades, told Financial Express Online.

Pre-clinical data have shown that Molnupiravir has broad anti-influenza activity, including highly potent inhibition of SARS-CoV-2 replication. Patients treated with Molnupiravir achieved response within 5 days of therapy indicating that the duration of treatment with Molnupiravir is short, with the additional advantage of being an oral therapy. In traded volume terms, 3.27 lakh Natco Pharma shares have traded on BSE so far in intraday, while a total of 62.19 crore shares have exchanged hands on NSE.

After the Drug Controller General of India (DCGI) permitted Natco Pharma to commence manufacturing of the anti fungal drug, namely, Amphotericin B, liposomal injection, which is crucial in the treatment of mucormycosis, often known as ‘Black Fungus,’ the stock hit 20 per cernt upper circuit. Further, the US Food and Drug Administration (US FDA) has given final clearance to the company for two new medicine applications, one of which is an anti-cancer drug. “We believe both these recent developments are long-term positive for the company, helping the stock to attract investment,” Ashis Biswas at CapitalVia Global Research, told Financial Express Online.

On Monday, Natco Pharma announced that it has received USFDA approval for Everolimus tablets in US markets. Natco’s partner BPI plans to launch 0.25 mg, 0.5 mg and 0.75 mg strengths of the product shortly. “The strengths of Everolimus are indicated in the Prophylaxis of organ rejection in kidney transplantation and liver transplantation,” the company said. In another release, Natco Pharma has received final approval from the US Food and Drug Administration (US FDA) for abbreviated new drug applications (ANDA) for Lenalidomide Capsules. The company along with its marketing partner (Arrow International Limited) had settled litigation with Celgene. NATCO and Arrow shall launch the product on agreed-upon launch dates in the future. In the afternoon deals, Natco Pharma pared some of its gains to trade 9.37 per cent higher at Rs 1,083.65 apiece.

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Go Air files IPO papers with SEBI for Rs 3,600-cr issue; firm rebrands as Go First ahead of IPO

Go Airlines has filed a Draft Red herring Prospectus with capital markets regulator SEBI to launch an IPO (initial public offering) worth Rs 3,600 crore. The Wadia group-owned airline company in consultation with its lead managers will issue shares through a preferential issue or any other method to raise up to Rs 1,500 crore. Ahead of Go Airlines IPO, India’s ultra-low-cost airline has rebranded itself as ‘Go First’. The company has planned to utilise the net proceeds from issue towards prepayment or scheduled repayment of all or a portion of certain outstanding borrowings availed by the company worth Rs 2,015.8 crore. While Rs 279.26 crore will be used for the replacement of letters of credit which are used to certain aircraft lessors towards securing lease rental payments and future maintenance of aircraft with a cash deposit. The company will also use it towards repayment of dues to Indian Oil Corporation Limited, in part or full, for fuel supplied to the company, and general corporate purposes.

Key things to know about Go Airline IPO
– The global coordinators and book running lead managers to the issue are ICICI Securities, Citigroup Global Markets India Pvt Ltd, and Morgan Stanley India Company Pvt Ltd. The registrar to the issue is Link Intime India Private Ltd. Upon listing, Go Airline will join the likes of Interglobe Aviation Ltd (IndiGo) and Spicejet Ltd.

– Khaitan & Co is the legal counsel to the company as to Indian law while AZB & Partners is the legal counsel to the GCBRLMs as to Indian law. Clifford Chance Pte Ltd. is the International Legal Counsel to the GCBRLMs.

– According to the CAPA report, Go Airlines is one of the fastest-growing airlines in India, with an increase in domestic market share from 8.8% in fiscal 2018 to 10.8% in the fiscal 2020.

– GoAir had a high aircraft utilization during fiscal 2020, with average utilization of 12.9 hours per day and a load factor of 88.9%.

– The company has said that it has not raised any bridge loans from any bank or financial institution as on the date of this Draft Red Herring Prospectus, which are required to be repaid from the pet proceeds.

– As on January 31, 2020, GoAir covered a network of 28 domestic and 9 international destinations. The airline’s network is spread across major cities in India and abroad. Indian cities include Ahmedabad, Aizawl, Bagdogra, Bengaluru, Bhubaneswar, Chandigarh, Chennai, Coimbatore, Delhi, Goa, Guwahati, Hyderabad, Indore, Jaipur, Jammu, Kannur, Kochi, Kolkata, Leh, Lucknow, Mumbai, Nagpur, Patna, Port Blair, Pune, Ranchi, Srinagar, Varanasi, Abu Dhabi, Bangkok, Colombo, Dubai, Dammam, Kuwait, Male, Muscat and Phuket.

– For the nine months ended December 2020, Go Air reported a profit of Rs 470.6 crore. While it posted a profit of Rs 1,270.7 crore in the financial year 2019-20.

– Go Air said that the reduction of its overall debt will reduce interest costs and improve our lease rate factors. “We expect our financial position to be improved by this reduction in debt coupled with our cost management and reduction measure and the anticipated growth in our business,” it said.

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JSW Hydro Energy raises USD 707 mn via green bonds overseas

JSW Energy on Tuesday said that its arm JSW Hydro Energy has raised USD 707 million through green bonds abroad. “JSW Hydro Energy raises USD 707 million from international bond markets through debut Green Bond Issue under 144A / Reg S format,” a JSW Energy statement said.

According to statement, JSW Hydro Energy has priced the fixed rate senior secured green 144A/Reg S Bond for a 10-year tenor at 4.125 per cent. The proceeds from the issuance will be used towards repayment of existing green project-related rupee-denominated indebtedness, it said.

The green bond framework for the company’s debut bond transaction has been reviewed by Sustainalytics, who has issued a second party opinion. The company engaged with several investors on a global deal roadshow across Hong Kong, Singapore, London, New York and Los Angeles.

Backed by an extremely strong investor feedback, the transaction was launched with an initial price guidance of 4.500 per cent area and tightened by 37.5 bps (basis points) to 4.125 per cent as final pricing. The final order book was in excess of USD 2.6 billion with oversubscription of more than 3.7x. The transaction witnessed 64 per cent participation from Asia, 14 per cent from the US and 22 per cent from EMEA with 82 per cent investment from long haul funds, 17 per cent from financial institutions (including Sovereign Wealth Funds), and 1 per cent from private banks, it said.

There was strong demand from some of the largest marquee fixed income investors globally, it added. Prashant Jain, Chairman of JSW Hydro, and Joint Managing Director and CEO of JSW Energy said, “We are overwhelmed by the strong response from international bond investors in our debut issuance.”

Jain further said, this fundraise will enable the company to further strengthen and diversify our sources of funding and we look forward to strengthening our partnership with global investors as we continue to build and grow our renewable energy business.

“From a total installed capacity of about 4.6 GW today, where about 30 per cent is from renewable sources, we currently have visibility on a pipeline of about 2.6 GW of renewable projects comprising of wind, solar and hydro which are likely to get commissioned over the next 24 to 30 months. On completion of these projects, the share of renewables in our portfolio will be over 55 per cent,” he said.

JSW Hydro Energy has an installed generation capacity of 1,391 MW. The group as a whole has 4,559 MW capacity, of which 3,158 MW are thermal power and 10 MW are solar power.

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DMart share price falls after Q4 results; analysts views mixed on Radhakishan Damani’s firm

Radhakishan Damani’s Avenue Supermarts shares (DMart) gave up initial gains on Monday to slip into negative territory, as investors reacted to Januar-March quarter results. DMart hypermarket chain reported a 52% on-year jump in net profit during the January-March quarter to Rs 414 crore, with 18% on-year revenue growth. The strong performance was helped by the low base of the previous year. Although the performance has been robust, the management has already cautioned of headwinds owing to the second wave of Covid-19. This has forced leading brokerage firms to maintain bearish views on Avenue Supermarts stock price. Currently, Avenue Supermarts share price is down 0.71%, trading at Rs 2,868 per share.

During the previous quarter, Avenue Supermarts’ gross margins recovered to 14.8%, 10 basis points above ore-covid levels. However, fresh restrictions could impact margins in the coming quarters. Further, the firm managed to add 13 stores in the quarter taking the total tally to 22 stores added in the fiscal year. Employee expenses were also lower in the quarter, aiding the financial performance of the company.

Headwinds ahead

Overall in the previous fiscal year, the same store sales growth (SSSG) was -13% due to the coronavirus aided disruptions. SSSG had recovered 6% on-year in January and February before tanking in March as covid hit once again. “We believe this weakness in revenues will continue in the first quarter of this fiscal year (with possibly some spillover into 2QFY22 as well); on-year growth numbers may still look okay due to the favourable base,” analysts at Kotak Securities said.

Avenue Supermarts’ management has cautioned on near-term drag on store operations due to the second Covid wave. Additional concerns for the company emerge from the competitive landscape in the retail industry. Avenue Supermarts remains one of the top earnings compounding plays in our coverage, however, concerns over the impact of changing competitive landscape (GT/Ecomm surge + Reliance Retail/JioMart scale-up) on DMart’s earnings potential keeps us on the sidelines at current valuations,” said Axis Securities.

Cash-rich balance sheet to help tide through

Although challenges remain for Avenue Supermarts, analysts at Yes Securities believe the company’s strong balance sheet would help it tide through. “In this environment, the company’s strong cash‐rich balance sheet will not only help it tide over this difficult period but also help in accelerating its offline and online footprint expansion despite lower throughput and cash flows,” they said in a report. “We continue to like DMART for its best‐in‐class execution, lowest cost of retail, aggressive expansion plans, industry-leading asset and inventory turnover and high customer conversion and loyalty given its EDLP model, albeit we would have been happier with more and faster growth in its online presence,” they said.

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