NSDL, CP Plus, M&B, Sri Lotus & other July 5th week IPOs : Apply/Avoid? Primary Market Chatter

0:00 Hey everyone, welcome to primary market chatter brought to you by Sunday investing. This is the part two of July 5th week. I peers it's been a long hectic week. We have had like six to seven IPOs already closed and then we have five six more which are uh opening in the next uh one or two days. So with that maybe what we'll do is we'll try and cover them today. Uh before we actually uh go to uh those IQ just want to set up uh today's uh space we will uh and before I actually set up just want to highlight a couple of housekeeping things. If you haven't joined the YouTube channel the link is in the pinned comments. Definitely go ahead and uh subscribe uh to the uh

0:45 YouTube channel. We'll put these spaces there. And then second we are not segistered channelist show. Do not take it as a qualified opinion. Definitely research and basis apply. Do not just apply basis what we are saying. This is in no way a recommendation. This is just us friends chatting about what we are planning to do with our own IPO strategy. Having said that, today should be very very interesting interesting IPOs and we'll try and uh like wrap up some uh non-interesting ones for the lack of a better word early on. So what we'll do is we'll cover two SMMES and five main boards. We'll probably start with KEX uh then move to Lakshmi Finance then do BD industries

1:32 which is which covers the two SMMES and one smallish mainboard race. Then we'll do Lotus. Then we'll move forward to NSDL. Then we'll talk about CPU plus and then probably end with MNB and probably end is where uh most of the juices. So definitely stick around till the end and definitely okay like you'll definitely benefit what I'll say with that. maybe text and while I open this just want to again highlight that if you haven't joined the uh YouTube channel go ahead and uh join that the link is in the pinned comments join channel with that let me just

2:18 quickly set up KEX I will just cover a basic about the company and not really the details of the race which Sachin can talk about when he's covering the uh setting up KEX. It was incorporated in 1996 and is a fast fashion manufacturer that combines technology, creative design and craftsmanship to deliver highquality textiles. The company sells his products under the brand name Russia, KEX and Derbaras. So textile company or manufacturer maybe we'll find out but definitely sells it brand uh brand clothes, suits etc under these brands. So with that over to you Sachin to uh talk about KEX. Uh am I audible? Yep. Just slightly louder if you can be but yeah you are audible

3:03 better now. Yep. All right. So uh Kex Fabrics is based out of Punjab. Uh 30-year-old business started by two brothers and now the second generation has joined in. Uh they specialize in fabric manufacturing and processing. uh focusing on digital printing, jakard, dobby fabrics alongside ready to stitch garments and accessories like uh shaws and stools. So they operate across three key segments. Uh one is brand enabler 33% of the revenues where they supply fabrics to apparel brands like Reliance, Adid etc. The other is 50% of revenue for own brands uh which you just mentioned for women's ethnic wear and there is supply particularly to North India. Uh the next

3:48 is non-branded segment around 15% of the revenues in which they supply unbranded fabrics to and and ready to stitch garments to wholesalers and retailers. Uh they also have digital printing which is current capacity at 92 lakh meters peranom and they have already doubled it from FI24 by internal approvals. uh that forms part of 50 54% of the revenue which is a growing segment for them due to its eco-friendliness and low minimum order quantities. So they for the total capacity they have already increased it to 158 lakh meters perom and the average utilization is 70%. Around 400 uh clients and distributing distributors network uh they have across India. So

4:35 they uh and in 2024 they have also entered the export market. So around 6.5 CR did in export market in 2024 which they plan to increase by two or maybe three times going ahead targeting the GCC and UK markets. They have their specialized uh designer team 36 people employed. So that helps in creating uh quality products. Uh a slight positive is also that the dependence on top 10 distributors is also decreasing gradually. Coming to financials in FI23 they did 99 CR of revenue 13% AIDA 6% PAT FI 24 125 CR revenue 18% AIDA uh 9% PAT this is largely due to the product mix change and similar in FI25 around 152 CR 20% AIDA and 11% PAT uh this was

5:24 due to the focus more on digital printing for FI26 they have projected around 240 CR2 and in topline and 26 cr pet uh some risk that is there is that the inventory they have indicated they are some doing maybe overstocking so the number of days has increased the digital printing segment is uh niche segment but uh it's competitive as well but uh uh there are unlisted players as well and large textile firms are also entering uh they haven't scaled online yet so main focus is on offline channels only uh and concentration around north India is a risk which they are trying to diversify but not immediately. IP funds are for uh setting up a new office in Arisa and

6:11 expanding their digital printing capacity. Uh they also plan to uh buy one more fabric processing unit and the uh rest is for working capital. Coming to the pricing it's around 15 times trailing and near 10 to 11 times which is what the growth they project. Uh somehow uh they mentioned that Pierce has Neil Carmel furniture. I don't know why because that is uh I'm sorry not Neil Kamar uh they mentioned that their peers are not particularly the ones that do in digital uh printing so uh they are trading near 20 times currently or the digital printing one they mentioned that there are some listed players like Shrig prints etc and they are go going ahead their aspiration is to become something like a man vant fashion but that is a

6:58 larger picture not something that is happening immediately uh lead manager is Socrus which brought identical brains before uh which is hasn't done well after the listing. Ankar had some decent names invect continum pine oak and some oxono dawn fun etc. So finally uh their own brands gaining vis visibility and growing is a plus plus exports as well but the 12 year offer for sale doesn't enlighten much so it could have been reinvested for growth. So given the forward valuations if I have funds idle after the main boards I would apply. Got it. Thank you. Thanks. Thanks so much Sachin for the quick uh review and I understand you already covered everything like I said

7:44 what you will be doing but yeah I think personally I would be avoiding simply because textile plus so many mainboards to choose from that uh going to it. It's a luxury luxurious week where we can be spoiled for choices. So when that is the case, I would personally be just avoiding the textile uh race. Although 11 12p forward I don't know like maybe something's on the table but yeah not looking at it with that maybe let me move forward and talk about the second company Lakshmi finance setting it up incorporated in 1996 company NBFC offering MSME loans vehicle loans construction loans and other uh lending products supporting small businesses and entrepreneurs with over 80% of its books uh qualifying as priority sector lending

8:31 the company has a aum of 1250 approximately IP 250 and 85 crores market 825 crores uh and so they are diluting like close to 30% of uh the of the company in this round in this IPO uh if I purchase financials their revenue is 246 crores uh 250 crores revenue and pat is 36 crores 36 6 crores. So they coming at like 25p traing LM is prau capital markets. So with that over to you might to talk about Laxmi Finance

9:18 is my voice audible. Yep. So Lakshmund Finance is a Jaipur based acute A-rated NBFC which provides MSME loans, vehicle loans, constructions lo construction loans and vehicle financing. So basically financing second is like six lakhs for the uh MSM loans and appro 2 and a half lakhs for the vehicle financing. So these guys I'll just read out its you

10:06 know key parameters type asset and management. Okay the company has around 158 branches. So these branches I guess 7 80% of the branches are in Rajasthan. They have some branches in Madhya Pradesh and Gujarat and they have recently started one branch in Uttar Pradesh. Uh and uh if you just check out in the gross NP and NP which is like 1.07 07 percentage and NNPS square 0.48 percentage and uh their CR is also like 20.8%. So if you just look at this company you will find normals NBFC but what I like key in AUM that is like 36% types and SN it looks like a normal what you can say retail

10:52 financing or MSME like a normal business and it is a normal business but the book looks well maintained while looking at the growth I know the NPA are rising from last 3 years GNPA I guess 50 now it is like 1.07 07 yes but that is still still lower than the you know peers sector the peers they have went like 3% 4% the best of best guys are like at 2 and 2 2.5%. So uh there the know asset quality is better than the peers if you look at the net interest margin which is close to 9.73%age which is actually quite healthy than the peers peers are some somewhere around 7 to 8%. Uh cost of borrowing was close to 11 and a half%. Okay so which is also lower than peers. So the company is raising uh 254

11:40 crores uh 165.2 2 crores towards fresh issue and 89 crores is a offs frankly speaking I did not understood key why the offs is quite large so I couldn't have mind but to 89 crs I felt is on a higher side 826 cr mcap okay so if you just look at so work so I'll just talk on the nav and the price to book to f25 was 61.57 like 2.4 four times price to book but it looks expensive because PR are trading at roughly 1.8x critics at average level but 144 crores out of like if I just remove the GCP 144 crores is towards the augmentation of fresh capital when I

12:26 take in that and when I take the normal growth uh roughly roughly uh 1.7 times type of a book value which is at par with the peers but as the company has better growth lower uh GNPS better name better credit rating uh and you know I saw they are working with like very good lenders uh like you know s top-not lenders around 45 lenders 46 46 kind of lenders uh and the presence is increasing So I felt so just valued it on like roughly two times value but

13:12 still I felt pricing wasn't on very lower side to higher side pricing they have left some scope on the table for small listing gains but didn't found it very much okay so decent business though for but parameters and you know key financials interest coverage PCR provision coverage ratio all that are very very healthy and RBN prescribed majority parameters I would say all the parameter splits much much above above the RBN norms and new capital should you know let the company increase the business by at least three times uh and I expect one more credit rating upgrade

13:57 also a minus here with a positive outlook from acute one more credit rating upgrade will take this to what we can a good tier top tier BFC even being a just 1400 1300 cr kind of a book to decent the LM is prau last I guess main board if I'm not wrong precision which did well so I felt uh the the people who have excess funds can go and try your luck negativity in this IPO during they are saying that there's one small company which has been acquired by Laxmi Finance but which hasn't been mentioned in the RHP I have no idea regarding regarding this and I'm yet to you know actually we had mailed also but there is no clarification I don't know this is real

14:42 or just uh you know things done to defame the company I have no idea but you know the people who are having excess funds can try for some and if the markets are bad so decent business but not a business to you know where I'll be very very I'll take lot of interest to decent businesses small gains but I'll I'll be applying some retail retail lots just purely for like 10 15% listing gain I'll just leave the counter got it thanks although listing gains also look slightly difficult because of the market negativity uh around this issue right so yeah but plus the sector in itself is

15:28 not in range right micro finance and this NBFC somehow they never tend to list And again we are spoiled for choices. Right. So with that maybe I will move forward and move to the third company. Quickly wrap up BD industries as well on the SM side. So set up in 1984 the company specializes in the manufacturing of rotationary molded plastic products like plastic fuel tanks for off-road uh vehicles, URA tanks, fenders, hydraulic tanks etc. It has its manufacturing facilities in Pune, Das and Hoshiarpur and there's a fourth coming uh up in Zahirad, Telangana. So with that over to over to you Sachin to quickly talk about BD industries. Uh am I audible?

16:15 Yeah. All right. So BD Industries is based out of Pune. Uh they earlier did trading activities and but now have transitioned to manufacturing solid plastic components primarily for the automotive sector. So uh they manufacture plastic fuel tanks which are used in vehicles, tractors, agricultural uh some other automotive products like fenders, transmission covers, barricades, cabin roofs. Uh also they do pallets which are used in pharma and e-commerce. So around thousand plus clients uh 520 plus squs and around 600 uh employees. Attrition rate is low uh not much significant. So currently they have three manufacturing plants. one in Pune uh one in Dwas and one in Hosharpur. Uh but the combined

17:02 utilization is nearly 53% only which they mentioned that it's a strategic move to save on logistics and freight costs as they locate their facilities near key OEM partners like Escorts, Mahindra and Mahindra, John Deers etc. Uh the Triangana facility is still in progress though completion timeline is unknown for now. For uh coming to the financials, they did uh uh the revenues were flat in FI23 and FI24 but the PAT in FI24 uh rose due to the raw material pricing which now has normalized in FI25. The big jump is only due to the consolidation of the subsidiary which uh brought the AIA nearly 90% and the PAT around 10% from the earlier 5% P. uh I

17:48 didn't find any interview or interaction to found to find out about why the margins have gone up and will they sustain or not and what what are the future business prospects. Uh coming to the risk the higher inventory and the underutilized capacity is a risk. Uh though they have mentioned the good client and good OEMs none of them have long-term contracts with BD industries. So that is one thing to note. uh for the IP proceeds uh they are paying around 18 CR of loan both for the company and for the subsidiary uh with around 9% of interest so saving around 1 1.5 CR of interest burden another 5.4 4 CR is for machinery to enhance their existing capacity and the rest 14 CR is for working capital. Uh coming to the pricing it's at 19 times trailing and

18:34 around 13 times this is what they project in working capital plus the reduced interest burden. Now for this I don't know why they have mentioned Neil Kamill furniture as a pier uh because the other peers mentioned is time techno which is a better pier and a larger one as well which trades near 25 30 times in theme we have had premium blast which is at the lower end of the products that is manufactured for the automotive segment but it trades near 10 times. Uh the recent cell app is also something relatable. Uh one larger pier is Lomax auto which does some uh exposure in plastic fuel tanks but then the comparison comes at two extreme ends. Uh the lead manager is RMN financial year which has brought in some decent issues in FI23 and FI24. Uh the anchor name was

19:19 decent to good. It nean is there and some wire uh investment opportunities fund is also there. Uh Aban's finance is taking their first entry as an anchor probably. So that was one thing to note. So uh forever 25 as the I said the growth is only due to the consolidation and on stand alone it has actually degrown but they're trying to do better this year. So if asking price would have been lower could have thought of it but for now skipping and revisiting later as and when the clarity is available. Thanks perfect. Thank you Sachin. Thank you for that uh as well and again like SMMES we were trying to cover simply because size so we wanted to do some justice but with that we'll kind of now move on and talk about four companies that we are left with we'll start with Lotus uh then we

20:07 will move to NSDL then we'll move to CP plus and then finally we'll finish with M&B that is the order which is left we start I understand comments so if you have any questions that you want to ask or have any that you want to put in YouTube comments, put it there. I will kind of read from there. And second, while you are at it, if you haven't joined the YouTube channel, definitely go ahead and subscribe if you're uh listening to us for the first time. Uh now moving forward and setting up uh Lotus Developers. Three Lotus Developers uh incorporated in 2015. The company is a developer of residential and commercial properties located in Mumbai,

20:52 Maharashtra specializing in redevelopment projects with ultra luxury and luxury segments of the western suburb. So real estate or luxury and ultra luxury redevelopment projects IP all of which is a fresh issue company market cap that is 7,300 800 to 900 million market cap FI25 financials they had a revenue of 569 crores revenue and a bottom line of 230 crores. So very healthy pack margins 40% back margins for a real estate business development business is something which is probably unheard for we'll see we'll

21:38 try and uh figure out why that is and uh like do we think that is sustainable lmak capital and motil so with that let me just try and deconstruct Lotus a bit having said it's a slightly tricky company I don't understand it fully in terms of like because this company just seems too good to be true. Uh so if you don't listen to anything else probably I would say that I would be avoiding this company simply because it seems that it has came at the top of this uh uh real estate boom where it is everything is doing well. So my margin of safety is rather less and everything can fall down from here. But having said that let me just try and set up the company and talk about it a lot more systematically. So the company was started as AKP ventures. AKP uh AKP stands for Anand

22:25 Kamill Naran uh Pandit who is the promoter of the company and the CMD of the company and then was changed to Lotus uh developers which I'm assuming uh goes with his father's name uh Kaban Nar. Uh so started as AKB and as I said the company does residential and commercial uh premises in Mumbai and has a focus on redevelopment projects like book 93% of all its uh revenue comes from redevelopment. this one green field project which it does. So just to highlight the difference. So redevelopment is basically where you uh are taking in let's say a contract or uh a society and then essentially if it is let's say four four flows bringing it down and then redeveloping it and then four floors

23:12 and then you have let's say you have built a 10 floor story building then you are uh selling out the fifth to 10th floor something like that. So that's the model on which they operate. It tends to be a lot more uh asset light simply because so if you are buying the uh land that's when it is costly right but if you're not buying the land and then uh those costs don't tend to hit your books which is why it is saying that it is a asset light model. It operates under the asset light model and focus on redevelopment projects mostly in the ultra luxury and the luxury segment. So redevelopment projects players market but they have not really been in the ultra luxury and the luxury segment. I remember Surya Estate developers was

23:57 one uh IPO which never really got fancy disc listed in discount and then something happened in because of which it went crazy up and then came back back to below IPO price. But yeah so the segment has essentially been around but has never worked so much fancy. I majorly feel that's because the s it's a very niche market right it's a Mumbai based thing because redevelopment is probably big in Mumbai and not really big in other parts of the area because it will be big wherever you have very tight spaces right where uh availability of new land is not possible which is probably then you think about is like Bombay etc. Uh so u having said that uh let me just go back in terms of like projects. So uh the promoter himself uh

24:45 is a very seasoned person as I said Anan Kamill Nar and Pandit he has worked with Bank of Maharashtra with Hoodco uh Housing and Urban Development Corporation Syndicate Bank and has like 24 years of experience. So that is where you know most of his experience is coming from. Uh the company in itself has sold four projects till now which has like uh 4 lakh square ft of salable area and 9 lakh square ft of uh develop de developed area which in itself doesn't look a lot when you think about it right because for the lack of a better word that's like 300 homes

25:30 in all its experience, right? Because that's because the promoter before this entity has done like some 30 33 lakh square ft² development under 12 projects under different companies in his past 24 years. But this is a new sort of a thing which has started in 2015 and has picked up base over time. So out of developable area 50 lakh company or developable area 20 30 company this

26:16 is what the company is saying. uh so big plans as of as of now ahead company USP according to the promoter and again I slightly difficult for me to believe that the company doesn't do any sales company sales expense sales is a major P&L item in almost all uh real estate players because you have to keep sales uh team you have to do marketing you have to do launch events you have to uh keep in channel partners in between channel partners very very very tricky value system which exist. These are super luxury uh homes that we sell that our clients kind of come to us. 50% of all our clients are through

27:04 referrals. Second, the company is a net depth free company. loan working capital manage. So that's uh because of which they also save on interest payment according to uh the promoter uh because of which they also uh save on interest pay payment which is uh another second good thing with respect to the company. The third thing with respect a good thing with respect to the company which promoter said was that uh the company doesn't have any uh rare litigations in its history. there has been no

27:49 complaints of Vera which again I find it slightly difficult to believe because it just seems too good to be true like how how do you have a society um how do you how are you build up with without having to go through those rare related complaints but again that's probably because this is a very very niche segment in the societ under this uh company probably total develop some 300 units so when you have developed some 300 units And all of these are going to your ultra luxury segments and you're kind of catering to them. So it just makes more sense to be able to manage that way. real estate projects

28:38 all of which is a fresh issue 550 is for work for putting in in three new projects working capital for GCP high level financial so FI23 company did three uh did 166 crores of top line FI20 24 461 crores or FI25 550 crores. So the top line has been on a tangential jump 160 crores 540 cr 3x and iita margins are insane like 12% IITA the fi which went up to 34% in fi 24 and is right now at 52%. So it's a

29:24 52% IATA margin business. Um a lot of people might say that some of the other players like let's say Ober realy also has like 58% margin when you think about it but that's also because margin is 52% which just seems really high at least to me uh to be able to talk about but Having said that they have a pat of 227 crores or 7,000 crores per so it's coming at like 32p trailing uh in although everywhere that you listen to

30:10 it says that luxury and ultra luxury residential segment most of their amount is coming from commercial uh segment like FI25 maybe uh 80% of their revenue is coming from commercial segment uh FY24 may 68 was from commercial. So it seems that I don't know how they define luxury, ultra luxury and commercial. I'm assuming it's the same building which they built and need for commercial and is residential. But yeah and as I said most of the revenue has came from signature anaya Ayana and AR1 like FI25 340 crores of all 550 crores has came from signature project. Uh so it just

30:56 seems like a very small operations ran really really well by one person. So that's if I had to define a company that would be the company uh it's a key man who is running the company is able to secure very good deals simply because of his previous relationships etc and then is able to execute. The company is able to execute without having to do marketing without having to put in have sales etc. and people are just there referrals coming in but when it increases that's when you want to figure out that what would the execution look like would it be similar to what it has been or do you think that the margins will fall my guess is towards the later but it's something which everyone has to be judged for themselves so in terms of upcoming projects they have like uh 50

31:43 lakh uh square worth of uh projects coming up uh they have done four projects till now panch ongoing or So in terms of the units sold, they have sold 64 units in all of FY25. So 64 because they are just really really expensive per say that is like 66,000 per square foot that would come to like let's say 17 18 cr if I'm not wrong but it's a expensive sort of a setup

32:28 even higher than Oberoy with like 41,000 per square foot but that's also because these these people tend to do their business in Vasoa, Joo, Andi who are just expensive regions. I don't understand Bombay. Uh I don't understand Mumbai completely. So uh like bear with me while I kind of uh do that superior compared to PS and that is majorly because of not having depth pre which is big. they have a lot of people on their uh books from uh Bollywood uh goes from like let's say Mabachin to Ritik Roshan to Akta Kapoor to to a lot of other names as well which you can

33:15 essentially look at and then you have a few names from uh the investment fraternity as well like Ashish Kolia uh and then Joy and a few other names as well in preIPO placement December which was a 400 CRA coincidentally the price hasn't which is probably good and promoter he wanted to treat his retail investors as celebrities as well which was just good to listen to because it's very difficult I feel to be able to assertain a peer to this business because like multiple

34:01 So even if I like take a good case 40% jump and a bit of 380 crores in FY26 it's coming still coming at like 19x bita which I feel is on the higher end. Uh Ooy is like at 21 but uh Loa is at like 28 but both of them are like giants of their own. Loa has been growing at 40% year-over-year with like a 30,000 growth market cap. So it's like I feel those are difficult those those are not the true peers per se. This doesn't enjoy that segment and those are wellrun machineries. This is a oneperson show. So I don't know how you compare that to this. Uh but if you look with against a loai you will see space lab. But if you look let's say against a keystone

34:47 realtor which is at 15 uh EB beta or against uh Arcade uh which is at 18 EV bida or a Suraj Estate who would probably be according to me the closest because Suraj Estate works in uh redevelopment. Uh it's at 9p 9 EVA. So this guy is coming in at 18 and this guy is coming in when their margins are at the peak. I don't see margins improving from here, right? Uh so there's only one way to go from here. So somehow I don't get that comfort but yeah that is how it is priced in terms of like compared to its PS. It is just very hot in terms of how it is being done. So that is why I see some uh listing gain opportunity in there.

35:33 But I'm not super uh bullish on the company in the long term. I'll tell you why. Uh three four risk which I feel one is the keyman risk. there's one key man who's running the company who understands everything. Uh so it's a big key man risk which you need to factor in when you are factoring in valuations which I don't see it happening right now. Second is the uh IITA margins. I feel IA margins are towards the higher end and there's only one way to go from here. Maybe they will maintain it or maybe it will fall. But it's just risky to be able to enter at a company with let's say a 52% IITA margin without having annuity income will be 52% margin just too good to be true per say third thing I don't really

36:19 think that market values the redevelopment segment a lot because this redevelopment uh like it's a very niche segment end of the day like it's can it can only be Mumbai MMR region players government regulations etc. Suraj estate has is majorly in redevelopment. It has struggled for the long longest period of time. So having said like because of which I also feel that this will also probably not get that fancy but I can be wrong. Um fourth uh like from what I could see the anchor book didn't have a lot of interest per say while the preipo had great names none of them came repeated themselves in the anchor book

37:05 and usually what I have seen is names repeat but what has changed something has changed right the biggest example of this think of it this way the biggest person 20% of anchor book is society general oi odi by definition we know is some HNI who are putting in money through society general. So that's your biggest anchor book allocation. I don't remember any time that your biggest allocation in an anchor book was ODI filed. So that just shows that the demand which was being thought of it. Having said that I will come to the last thing GMP is brilliant. I think the GMP was somewhere around 45 rupees but has went up to like even 60 rupees and has

37:52 came down to 30 rupees. So it's at like somewhere between 20 to 40% with a 30% median. Do I think it will give some gains? Probably yes. Do I think that it will do well in the long term? Probably no. I think it will continue to consolidate. Will I apply? Most probably no. or I'll put retail applications in this just to uh see uh what is happening. That is what my honest review was of uh Lotus. I know I have spoken a lot probably more than what I had promised the 10 minutes but yeah over to you uh Sachin Tanme Rohit to uh speak about anything which I have missed uh the leing part that they need to source from various sources the

38:39 authorities and the government that doesn't work out of Mumbai. So they're probably not going out of Mumbai which is a risk as well. Yeah. Yeah. Uh they are they are saying they don't want to go out of Mumbai leave alone Mumbai. They are saying they don't even want to go out of West Bomb Mumbai which is like don't even want to go to MMA because MMA right they are saying they will only do redevelopment because that is cash flow positive like that is very asset heavy asset light they don't want to do cet asset heavy work per say yes and that CEO Mr. Sanjay Jan is a recently appointed one I don't know why they appointed just a year back ago they changed the CEO Mr. Sunday then

39:27 one more thing I would like to add you know especially on the dates and the pricing part so dates you know same time and uh I just read it from somewhere that the pricing is done exactly at the preipo because uh the promoters wanted to bring the bring the parity between preipo investors and retail investors You know this is such a big joke. Earlier the anchor pes was were being conducted at 7,800 valuation. Now it is coming at 7,300. This is the real meaning and I feel you know in the public and the anchor was complete you know very bad anchor

40:16 no demand even you know very very general lower level funds have also not you know put in any kind of allocation in the anchor book those don't know it's been 600 IPOs I have analyzed the first time even in an SMA I haven't seen an ODI fund taking 19% allocation even that in a mainboard of like 800 cr don't know and actually I have literally failed to understand company seems there is something out of market or anything I am missing out of reading but you know I'm not very comfortable from day one in this issue

41:02 Perfect. Rohit, do you have anything to add or you will go with my review? Nothing to add, man. Perfect. So, with that, we'll move forward and talk about the fifth company, NSDL, uh, setting up NSDL incorporated in 2012. And I know a lot of people would have been waiting for NSDL. So, if you are waiting for NSDL, if you know someone else is waiting, now is your time to forward it to others. Make sure we hit 1 th00and concurrent uh users please. We are at 960 right now. And while we are at 960 if you haven't joined the YouTube channel the link is in the pin comment. I will also go and look at your comments now. But yeah uh in setting up uh NSD incorporated in 2012. The company is a SB registered market infrastructure institution. It

41:48 acts as a security uh depository in India and maintains electronic records of allotment and ownership transfer of securities. Uh setting up the IPO. It's a 4,000 cr IPO cr IPO uh at a market cap of 16,000 crores. Uh so 25% company dilute NSL and all of it is a offs there's no growth capital which is going into the company. uh the promoters which are different banks etc are taking a exit uh and 525 financials about the company revenue 1500 crores type top line and 340 crores bottom line 343 crores to be uh specific so they are coming at like 4243b trading uh which seems just too high but

42:33 then it is the acceptable norm because it's a monopoly duopl CDSL ICIS HSBCI and SBI gap. Uh so with that maybe over to you TME to talk about NSDL. So National Securities Depository Limited NSDL is India's largest depository in terms of the active uh instruments and uh the market share and the volume of assets in the custodian. What this mean custodian assets they are the highest in terms of market share they're highest and in terms of uh active securities they are the highest

43:20 in uh FI25 fund the company had 65,391 depository participants and meanwhile CDSL had 19,000 uh and also the company has 80,000 plus issuers and CDSL has close to 60 uh uh 63,000 Okay. So roughly 20% difference. NSDL has three core functions. First is maintaining allotment and transfers. Second facilitation uh and asset servicing and uh giving the records analytics of those and third transaction services and other value added services. Uh so now just understand a very basic difference between CDSL and NSDL. CDSL is driven by the retail investors and NSDL is from institutions

44:07 uh and the HNI clients. If I just talk on the demat accounts CDSL crsd has I guess four cr types you can understand one thing out of this CDSL growth is driven by the more market participation uh of the retailers retailer transition CDSL and NSL is more into institutional which is kind of a sticky revenue but not of very high growth revenue okay uh now you can uh I'll Come on the depositor participants. The company has 294 depositor participants. Okay. Which combinely handle 4 cr plus demats. If I just go in the revenue breakdown, the depositor business has 43.6%age.

44:52 The banking business is 50.7%age and the database management is 5.75% uh of the revenue share. Now one thing here is you know very very important to understand. I just said the second point banking is 50.57%. Next, NSDL payments bank which is India's third largest payment banks after and fo payments. So this is a banking business which is a and the revenue I'll tell you the revenue of the NSDL payments bank is 722 crores. Okay, almost and is 2 crores. You heard it right. Just 2 crores. And if I just remove this to stand

45:42 frankly NSDL is this 830 and 340 PAT and not the 1500 shown to us actually. So a a business of payments bank is just zero and has no value in it because this company is not a what we can say touch point kind of a it's a tech enabled NSDL which doesn't have even the core functions which uh your AIL and FO provide. So FO is more and is more into door doorstep banking services. This these just have two branches. Those guys have 5,000 10,000 15,000 kind of a branches to growad it's like 2% business

46:29 if you just come on the recurring revenue the recurring revenue NSDL which is a sticky revenue that is 20%. And NSDL sorry uh NSDL is 20% CDSL as closed is 50 60%. CDSL revenue break 80% revenue depository. Okay, you can understand CDSL qualitative revenue revenue completely uh and the repository is 1% and data entry has like roughly 20% 78% precisely CDSL depository 20% data entries and storage or 1% repository and 1% others okay uh to why I mentioned I just I want to just tell you CDL is a high growth company NSDL is

47:14 a sticky company CDSL uh has higher number of demands. NSDL has lower number of demands or market share. So you cannot say this is high largest. Yes, it is larger in some what I can say parameters but not largest completely in terms of volume of transaction number of demats value pure depository revenues may you know both are at power only. Okay. The IPO is of 4,000 401 completely an offer for sale. So that is very okay. It is coming at 16,000 cr valuation MAP

48:02 translate to 46.64 64 P FR25 for CDS 59.560 times coming on its financials FIR23 revenue was 1100 crores PAT was 234.8 28 235 round figure F24 the company did a revenue of 1366 crores pat was 275 crores which was 24% kind of a growth in F25 uh the company did a revenue of 1535 crores which was a 12% growth and pat of 343 crores now comparing with CDSL uh CDSL did a I guess growth of roughly 35 40% in 24 and I guess 22 23% types in 25 almost double uh So valuation

48:49 if I come on CDSL when you look at 60 CDs 47 retailers you know that comes into mind but when you just look on FI 27 because up to you know this 40 50 60 P looks very high you know and that is not the reality when you just break down CDSL 40 * 27 chalice time sice or NSDL 36 to 37 times. Okay. And frankly speaking, CDL CDSL should get minimum to minimum 50%. Premium over uh NSDL due to the high growth retail facing markets. Uh and what we can say CDL is a kind of an

49:34 aggressive investment aggressive revenue growth. I want to ride on India's retail retailers booming what we can say participation in the securities market and while NSDL is mostly in the institution part that is sticky but not very high growth just look at NSDL's what we can say standalone business 24 single kind of growth where saw I guess if I'm not type growth even 25 markets were a bit you know on a lower tumbling on a lower side but and also the IPO transaction fees so serious

50:20 but NSG also does that to frankly speaking if the hype was not there and if the premium was not there or whatever you say or the what we can say the high you know the the talks were not to be very frank I I would have given this an avoid but seeing the frenzy and you know seeing the hype behind this IP I would say I would be applying for 10 12 14% listing or I'll be leaving this counter to I am not at all happy with the valuations business anchor book frankly wasn't very good I would rate it like 6 on 10 or 6.5 on 10 to I would just say apply for small

51:05 listing and I'm not considering this for long term I know it's a bit harsher when you So I'll just apply for 10 15% and I'll just leave this counter. Got it. Thanks. Uh couple of questions on this. Uh selling con who are the people who are exiting? Is everyone taking a partial exit? I'll tell you I'll give you some background IP that is also important to understand. So there's an RBI market infrastructure MF market infra MI market infrastructure institution

51:52 single shareholder cannot more than 15% equity okay and just come on NSDL national stock exchange and IDBI bank had a holding of if I'm not wrong holding so these both guys are the major sellers about your unit trust of India which is UTI is selling some and I one to more banks are selling some stakes. So after the IPO this this 25% will come to below that threshold of 15%. Got it. Uh that is helpful. And you're saying that uh in itself this is high

52:39 sticky business will probably continue with the revenue but growth would be slower to a CDS% growth. Okay. and payments bank I'll tell it's a complete dustbin business that should have been I'll tell you one more issue with this company the government and the regulatories pushing very hard for the small finance banks to get listed you know and recently regulatory I guess after that one specific threshold you have to list your business know is already listed No eventually

53:29 is so I feel there's one angle of value unlocking which is on a good side but value and 700 revenue is nonsense and it's 50% of your 1550% of top line is banking. I remember that time and I'll tell you

54:14 I'm not able to understand what was the you know thinking bad pricing and when the markets were bad the thing you know good level guys who knows some depra % you know frankly so this is like NTPC green of your world you know but it just disappointed on the pricing this is a similar thing and actually I know I am talking against I'm going against 1100 of them 1000 of

55:07 you got it with that I also will be applying and if you want to go for long I'll tell you why because when you'll go after 2 years 2829 so this company is coming on 278* 29 okay so if we wish to invest for 2 years then you'll get a gain of 30% if you just look at but if you want to invest something like

55:52 serious so this is also not a stock to invest for long-term. So I'll be applying low double digit gains. So I'll take that and I'll just leave this counter. You got it. Very helpful. So I will also be applying to this issue majorly because I expect it to be fully subscribed. I think there are better opportunities which we just saw actually was laughing after seeing what happened in this you know big guys there were some very serious guys which did not participated

56:37 I could not understand this army army fund yes they they have right to invest but this is not the counter all the insurance companies GIC oriental insurance actually took like I guess and that was very LIC in a market what we can say government or this kind of a you company taking 12% that is very normal

57:24 that was very normal but I was I'm disappointing disappointed on this IP on each front good for retailers everyone will get at least some I'm not very happy on the cycle got it with that we'll close NSDL probably similar views on NSDL and on Lotus we don't understand the hype fully that is what uh we mentioned sir but not all things are negative the next two companies we are moving to will definitely be positive uh but yeah with that we'll kind of move forward and talk about Adita Infoch before we go there assignment for you I know everyone's

58:10 asking so like so while you do then we go to MNB. While we are doing M andB can you just do rough calculations in your mind while you can if possible or else we'll try and do it them on the go. With that let me just move forward to add infoch. Uh the company manufactures and provides video security and surveillance products solutions and services under the brand name CP plus CP plus consumer brand everybody would be knowing CCTV that is Adita info. it is not related to Adita and the company had to issue a a notification for that as well. Uh the company's manufacturing facility is located in Kapata, Andhra Pradesh and is supported by a network of 41 branch

58:56 offices and 13 written merchandise authorization centers nationwide. They have multiple uh branches as well and distributors essentially. So with that maybe uh setting up the IPO it's a 1300 cr IPO IPO fresh 800 crores offs company market cap that is 7,900 crores so 1300 cr 7,900 crores so 15% dilution fi25 financials about 3,100 crores top line and 350 crores bottom in it. Uh so it's coming at like let's say close to 25p FY25 but I understand there's a big

59:42 component of other income in it. We'll try and talk when Rohit explains it in terms of the LM. The LM is ICIC securities and so with that over to you Rohit to talk about Adit Infoch. Thanks Manish. Uh so Adita Infoch as Manisha has set it up is India's largest video security and surveillance products uh company. They have a 21% market share. So that's obviously very very significant for a consumer brand in one single uh segment. Uh they they market their products primarily under or about 75% of what they sell is products under their own brand which is CP plus which you would have seen. They also sell this

1:00:29 Chinese product uh or this Chinese brand called Dahwa which is I think one of the largest Chinese and I'd say globally uh camera product. Uh they are the exclusive distributor in India that makes up the other 25% of their business and I'll come to the relevance of this uh shortly when I cover this whole SD uh QC sort of point that some people might know about. Uh so what do they sell? They sell the CCTV cameras, uh video recorders, uh these doorbells, dash cams, uh these pan and tilt and zoom cameras. A lot of the stuff that you might have nowadays be using either on on your vehicle, in your home. Uh plus of course a lot of these are used in more commercial settings. You know, you'll see it in a mall, you'll see it in uh a police station, in a school, uh

1:01:17 in a bank, you know, wherever you need cameras, wherever security surveillance is important, you'll see these products. Uh and you will see effectively there's a very good chance you'll see Aditya Infertex products because one in five products sold in India is theirs. Uh they sell this through a network of around,000 distributors. Uh which which makes up about 80% of what they sell. So they did about 3,100 crores about 80% is through distributors. Uh 2% is oh sorry little more than 4% I think is from e-commerce which is actually surprisingly small. Uh and the balance which is about 16% comes from projects which is a piece of business that I found interesting which is where you work with uh let's say a bank you want to uh make that bank uh surveillance and video uh you know secure. Uh so it is

1:02:04 not simply going and installing a camera but it's an entire solution of what needs to be done. They do this through what they call system integrators who these guys will train and help uh and they sort of have the processes for and those system integrators will then go on and install this in that uh end client install all these products together as one giant system at the end client. Uh so some some might say key facts. So this is the largest manufacturer of video products outside of China. I think they're the third largest uh manufacturer in the world. They have a capacity of 17 million units per year. Uh they utilize I think almost 77% of their capacity last year. Uh they are looking to expand the capacity though they have not specified by how much. Uh

1:02:49 there is some capital work in progress in their uh balance sheet but it's hard to tell exactly how much but they've mentioned that there is enough space and they're constantly doing it. So let's we we can kind of assume that they will keep adding uh machinery and equipment as they uh as they grow. Uh one point here is the average value of what they sell. So they did about 3,100 cr at 77 capacity with 71 million units. The price of what they sell is around 2,2,500 rupees only. If you go on Amazon, you'll see their products. You'll see the typical ticket of what they sell. Uh so these are not very I would say high-end products. fairly uh massy products not going to have the highest margin that reflects in their P&L also which I'll come to but yeah it

1:03:35 just gives you a sense that these are not like ultra premium products they're fairly affordable accessible but also in by that regard they're also thin margin uh products u one thing is this whole manufacturing plant was actually not set up under uh this company it was initially set up as a JV 50/50 JV with Dixon which is obviously a very well-known EM MS player uh last year they acquired this full entity in house that it shows up in their balance sheet as well and in return they also gave some shares to Dixon and Dixon today has uh I think 6 odd% share in Adita for tech and there was some consideration of I think 248 cr or so which is what will show up in the P&L as that exceptional item and I'll cover that when I just

1:04:20 talk about the valuations. Now this company I think I mentioned that they use they they they a quarter of their business is this Dahua brand uh products which are these Chinese products. Now there is one good and bad thing. So the government has introduced this uh uh certification called the SVQC for sale of all CCTV cameras India from April 9th of this year uh which is basically this uh financial year. The thing is the good thing is Adityan Forc CP plus most of their products are STQC compliant. So anyone who's not STQC compliant uh especially a lot of the imported products will suddenly not be allowed to be sold uh in India but 25% of Aditya's

1:05:05 business is from this Dwa product which is essentially trading right they're bringing that product and they're distributing it here that business will stop now because those products are obviously not SQC certified. uh I am not sure exactly how they're going to offset that 25% business loss. Obviously their current products can uh make up for it but they also have some restrictions right they are 77% capacity utilization manufacturing cannot suddenly immediately ramp up and take care of that 25% that will have to stop so the management has said that they will obviously shift focus to CP plus but I'm not clear on how quickly how fast how practically that will happen so let's see that's one of that's one of the concerns that I have now I had mentioned earlier that this is a fairly thin margin product what they do obviously they have these assembly lines. They

1:05:52 have assembly lines and stuff but majority of what they get is uh you know kind of assembly or or super assembly you can say. Uh they put together these cameras based on all the parts that they source largely from China. Uh this is to be honest this is the extent of manufacturing that happens in the electronic space in in in India. As we get more and more mature we will start manufacturing some of those components too. But in terms of capability, they're at the top of where India is but obviously not really truly manufacturing. Uh it it would reflect also India margins. They have singledigit AIDA margin of around 8% or so. Uh like I said there is fairly low price. You can see that their volumes have risen a lot from FI24 to 25 30 35%

1:06:39 but the revenue has only risen by 10 12%. So again there is no pricing power in this product. uh now the if you look at the PN they did 3,000 cr they did around uh I think a PBT of 185 cr uh before the exceptional income it looks like they've done a pat of almost 350 cr but if you remove that 250 cr of that uh exceptional income that came from that Dixon uh from the Dixon deal they are actually at more or less flat with last year at a PAT level uh you'll have to kind of calculate it but broadly My sense is if you take the standard tax rate, they would have done about a 140 cr pat for FI25. Uh on that base, this company is coming at a 7,900 cr market

1:07:24 cap, which is about 5556 cr uh 5556x. They are now part of the funds that they're raising the nonoffs component is to pay off debt. I think about 370 odd cr they're paying off uh which will which will make them almost debtree that will save them you can say mathematically some 30 cr of debt of uh uh interest before tax which is 20 22 23 cr of interest after tax so even if I add that back it's coming at around say 160 cr of effective pack which is around 50 times for this year that is fi25 going forward maybe you can say they're coming around 40 times This is being a bit generous because even last year FI 24 to 25 they grew only 12% year on year. This company is coming at 50

1:08:11 times. The EMS space the true EMS players do trade at you know like a Dixon and Amber and all of these guys do trade at very very high multiples. They trade at 90 100 110 you know crazy numbers. They also have exceptional growth to go with it. They all are growing anywhere from 30 50 60 80 times so 80% yearonear while this company is actually growing at 12%. Now for me it all depends on how this STQC thing plays out. Are they able to replace the lost revenue from DA fast enough accelerate uh manufacturing fast enough that they are able to grow and use the fact that there'll be you know there'll be vendors who have lost the certification or don't have the certification. therefore will

1:08:57 lose business and and capture that market fast enough. Uh I didn't get any comfort on that from any of the interviews. I'll be honest. I'm still waiting. I'm hoping there are more interviews. I think I just saw one from NDTV. Uh there are more interviews where they talk about this. I will obviously change my mind. Uh but I am finding this business expensive. Very very expensive. I don't think it can be compared just because Dixon has 6% in this company. I don't think this is going to get 100p. uh at 50 times being very generous and saying 50 times if it lists as for GMP it lists at 65 70 times for a business that right now is growing at 12 to 15%. I would need a lot more comfort that this company can grow at 40 50 60% before giving it this kind of a multiple.

1:09:43 So I am actually not very very bullish. I like what they're doing and the fact that they're a very niche company, very large market share. so on. So this definitely deserves a premium but I am surprised you know the anchor book sorry anchor book was also fantastic was absolutely a top-notch anchor book but I find the pricing very very high so for me personally this is going to be a get in get out play the hype probably will list maybe do well short in the short term also but at the end of the day in my view this is a like these products selling 2,000 2,500 rupee cameras that sit in people's homes uh majority of what they sell is that to me not super exciting unless they can show some change in trajectory and that SQC is

1:10:29 that is their way out is their is the thing that will provide that for them maybe after the listing they will be able to give more guidance of how they're going to scale up revenue which today they're not able to because of whatever uh sevy rules so let's see I think it is okay to uh apply it it will definitely not list negative might as as well list you know as per the GMP also But I personally did not find it when I first saw this I thought wow this would be an extraordinary company amazing and then I saw the sad revenue growth and like the fact that revenue growth is looking very doubtful for me going forward so I'm little bit like I'm quite neutral beyond disting third company of the day which we are not super bullish on but I remember when

1:11:16 you had first read the company you were going on and spamming people's YouTube telling them about how income which was cute. But having said that, I have a pointer which is what I think you should be considering how I look at this business. I would think a true peer is a HL and hear me out while you say this. HL would be super like low uh growth in terms of sales but will still enjoy a great P simply because why would consumer uh stop. So in a way it is that only right here like like cvas etc. This guy is the biggest player probably biggest organized player will continue to become bigger. So everything

1:12:03 is aligned for it. So even if the sales growth doesn't uh come in the P would essentially rerate so much that that will give you a lot of goodness is what I feel personally. Anything that you have to add on that part it's coming at 50 times this year. Okay. At a 40% pop if you have to believe the GMP it is and 50 is after I have completely removed the debt. At a 40% pop it is coming at 70x. I cannot for the life of me understand why HL trades at the multiples that it does. I it's not okay again a lot of these reviews are not absolute right everyone has a view based on how they invest. I cannot invest in a company that trades at 70 times and is growing 12 to 15%. It just doesn't sit

1:12:52 in my my my value equation. So that is why it is my own view that I cannot the same way I cannot invest in an HOL though it will probably HOL has traded at those multiples forever. So I am wrong in that sense that the market should not give this micro. So obviously the market is giving it. It's just my own personal mental models don't work. And so it's something similar here. Again this is a very good company. What they've built is excellent. But just look at their margins. Their margins have actually fallen. Look at their volume growth to revenue growth. Again it has fallen. They're growing volume not growing margins. Selling products for 2,000 2,500 rupees. These are not very like I find these fairly almost commoditized products. If you go online and try to

1:13:37 buy this or if you go to a shop and try to buy this the one camera will look like another camera. The only game is SDQC. The fact that there is now a sudden stop on Chinese effectively Chinese imports that gives these guys one major tailwind. Apart from that I am finding this business very very I mean it's not for me. Got it. Uh, no, I'll tell you. And again, since you said online is just 4%. So maybe my affiliation doesn't sit with it, but I have ordered a few those 360° cameras and I just tend to go and order a CC plus I have I have like multiple in my house. There's not even one SC plus because it just didn't like for me there

1:14:23 is no brand only in this space. I just use I use Cubo one room. I use some tapo in another room. So it's like yeah it it's very very commoditized is what I feel the the products that you use at home are extremely commoditized. So again that's just my view. Market obviously will will take a call but at 70x I can't discount your fast. Yeah. But yes, hopefully hopefully it does better from because it it's something that will give a chance of a lotment I think because of all the Basad uh so many IPOs and I think clearly the the interest is there. So it's definitely something I will apply for and I hope I get a 40% and I will also run for the hills. Okay. I will probably hold on for a few

1:15:11 more days after if I get a lotment. I would want to see how much can it do well. Well, I think there's some story which we don't fully understand. Uh maybe this SEQC thing which you said which will uh uh add in Sachin. Do you have something to say or I can move on to then? Uh they they have a separate brand something on which uh what's that uh some command control center is it part of the revenue mix currently? I did see this. I think this has something to do with their system integration piece. So when they do the system integration, they do it as part of this on vigil brand. Uh when they sell say an entire solution to a bank or an entire solution to a uh hospital or a hotel that that's my understanding. I mean I I skimmed it. I saw this briefly

1:15:57 but that is what it is. So maybe this can replace that da share going ahead but it's the same products. It's the same products. It's just integrated into a solution. It's not a brand per se. It is not a it's not an SKU or a bunch of SKUs. It is the putting together of the uh integrated solution. All right. All right. Tell me any views from you before we move forward to the last company. Actually, you know, I did not read Ajit Infoch at this point where maybe tonight I'll be reading. uh I am also know having some concerns regarding that uh China business that will go off and bet the margins from last 3 years are going down

1:16:44 the PAT is going down the values are I guess 73 74 times if I just adjust but you know this is a business where the institutions like to be in key know you can there's a very less chance you are going to lose money at least an institutional front was good So uh I have lot of concerns but I'm not very negative on this business. I would say neutral to positive but very positive on listing in but this again I'll be by I'll be taking a backseat from this business but I'll analyze more tonight and I'll present it maybe tonight itself or tomorrow. So uh it's it will be less prudent for me to comment on uh CP plus. Perfect. I look forward to that although

1:17:31 I will be applying. This is the company which I would probably be targeting of all uh because I think a lot of people would be waiting for NSDL is the biggest size IPO. So I would want to put in my big H&A applications tomorrow in Adita. That is what I'm going to do. Uh but with that maybe let's move forward and talk about M&B engineering before we start MNB Rohit. If you can do a rough match if possible if not we'll try and see in terms of subscription. I haven't done it yet but yeah maybe I'll try after MNB. Yeah. Yeah, you have 10 minutes because like I'm assuming you'll do 10 minutes of M&B. Uh or if you want to listen to M&B, we can do it later as well. So just setting up MNB incorporated in 1981. Companies engaged in the business of uh PB pre-engineering buildings and self

1:18:16 supporting roofing systems. The company operates two manufacturing facilities in Sanin an Gujarat and Shy Tamil Nadu with a combined PB facility capacity of 1 lakh 800 metric tons perm setting up the IPO it's a 650 cr IPO IPO out of which 275 crores is a fresh issue

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