On the other hand, domestic institutional investors (DIIs) were net sellers in October – the first time since January 2015. (PTI)

After two months of intense selling, foreign portfolio investors (FPIs) have turned net buyers this month, anticipating stability in global equities and better-than-expected macro-economic data from China.

Overseas investors are net buyers of $866.6 million so far this month – the highest monthly inflows in three months. In July 2015, FPIs had bought Indian equities worth $882.36 million, Bloomberg data showed.

According to Andrew Holland, CEO, Ambit Investment Advisors, foreign investors resumed investing in the Indian markets in October after positive data started coming from China. “The selloff by foreign investors during the last few months was over the concerns about China. During October, foreign investors resumed buying Indian equities as global markets stablised. However, the future inflows would depend on domestic factors like the outcome of Bihar elections,” Holland said.

The revival in fund inflows was evident through out the emerging market (EM) universe, not just India, with FPIs featuring as net buyers or partial sellers this month. Among EMs, Taiwan witnessed the highest inflows of $2.27 billion, followed by Brazil $1.17 billion.

“The scenario looks positive for all emerging markets in the near term, especially if a favorable outcome emerges from the meeting of US Federal Reserve meeting,” Holland added.

“Some FOMC participants have said they want to begin raising short-term interest rates. However, the majority of the FOMC does not seem convinced that action is needed at this moment, given the mixed nature of recent economic data, and the ongoing fragility of financial markets…an interest rate hike at this time would be disruptive,” said a team of Nomura economists, led by Lewis Alexander, MD and chief US economist.

On the other hand, domestic institutional investors (DIIs) were net sellers in October – the first time since January 2015. Local funds comprising banks, insurers and MFs, cumulatively sold equities worth R1,171.29 crore so far this month following continuous monthly purchases in the last eight months. In all, DII continue to be net buyers of R50,726.42 crore – the highest since 2008.

IndiGo’s parent InterGlobe Aviation’s Rs 3,018 crore initial public offer was over-subscribed by 1.06 times on day 2. (Reuters)

IndiGo’s parent InterGlobe Aviation’s Rs 3,018 crore initial public offer on Wednesday was over-subscribed by 1.06 times on day 2.

The IPO got bids for 3,20,48,760 shares against the total issue size of 3,01,22,088 shares, data available with the NSE till 1300 hrs showed.

The quota reserved for qualified institutional buyers (QIBs) was over-subscribed 3.59 times, sources said.

The portion reserved for retail investors saw 9 per cent subscription and non-institutional investors category was subscribed 2 per cent.

InterGlobe Aviation has already raised Rs 832 crore from anchor investors by allotting shares at the upper price band of Rs 765 apiece.

InterGlobe hit the capital markets to raise Rs 3,018 crore through the initial public offering, the biggest in nearly three years. The price band for the offer has been fixed at Rs 700-765 per share.

The offer comprises fresh issue of shares worth Rs 1,272.2 crore and the revised Offer for Sale (OFS) size that would be about Rs 1,746 crore. Together, the share sale can rake in up to Rs 3,018.2 crore.

The IPO would close on Thursday.

Barclays Bank PLC, Kotak Mahindra Capital Company Limited and UBS Securities India are managing the issue.

IndiGo has a fleet of 98 aircraft and about 75 of them are on operating lease – a business model which has helped it lower costs.

Shares of engineering solutions provider Thermax on Wednesday slumped 6 per cent after the company reported 24.6 per cent plunge in standalone net profit for the quarter ended September 30, 2015. (Express Photo)

Shares of engineering solutions provider Thermax on Wednesday slumped 6 per cent after the company reported 24.6 per cent plunge in standalone net profit for the quarter ended September 30, 2015.

The stock plunged 5.88 per cent to Rs 840.65 on BSE. At NSE, shares of the company dipped 6 per cent to Rs 837.

Thermax on Tuesday reported 24.6 per cent drop in standalone net profit at Rs 64.83 crore for the quarter ended September 30, 2015.

The company’s net profit in the year-ago period was Rs 86.01 crore, Thermax had said in a regulatory filing. Total income of the company during the period decreased to Rs 1,069.62 crore from Rs 1,180.31 crore in the year-ago period.

“As on September 30, Thermax has an order backlog of Rs 4,006 crore against Rs 5,016 crore in September, 2014,” the company had said in a statement.

Thermax Ltd, a leading energy and environment solutions provider, has manufacturing facilities in India, China and Europe.

SH Kelkar will raise Rs 210 crore by issuing fresh shares, while the US-based private equity giant Blackstone will mobilise Rs 290 crore by offloading its 10 per cent stake in the company. The issue will close on Friday, October 30, 2015.

SH Kelkar & Company’s (SHKCL) Rs 500 cr initial public offerings (IPO) hit capital market on Wednesday. The IPO comprises of a fresh issue/Offer for sale of upto 1.66 cr shares, in which Blackstone PE Fund is selling around 10 per cent share and the promoter is selling around 2.5 per cent share of the total pre-IPO outstanding shares. Shares of SH Kelkar & Company could be subscribed to in the price band of Rs 173-180 (face value of shares: Rs 10 each) via the book building route.

The company will raise Rs 210 crore by issuing fresh shares, while the US-based private equity giant Blackstone will mobilise Rs 290 crore by offloading its 10 per cent stake in the company. The issue will close on Friday, October 30, 2015.

JM Financial Institutional Securities Limited and Kotak Mahindra Capital Company Limited are the book running lead managers to the Issue, Keynote Corporate Services Limited is Advisor to the Issue and Link Intime India Private Limited is the registrar to the issue.

Here is all you need to know about the IPO and what analysts are saying

Business and Background: SHKCL is the largest fragrance and flavour company in India by revenue, with a market share of approximately 12 per cent. The company has four manufacturing facilities, three of which are located in India and one in the Netherlands, with a total installed manufacturing capacity of over 19,819 tonne annually. The company exports fragrance products to 52 countries and are an emerging flavour producer in India with exports to 15 countries.

Objectives of issue: The company proposes to use the issue proceeds for repayment/pre-payment in full or in part of certain loans availed by the company, investment in their wholly owned subsidiary KV Arochem Private Limited and general corporate purposes.

Company’s brands: The company has established brands like SHK, Cobra and Keva, which enjoy leadership positions in their respective categories and draw substantial brand equity in India. For the year ended December 31, 2013, SHKCL had a market share of 12 per cent in the Indian fragrance and flavour (F&F) industry. “On bifurcating, the company’s market share stood at 20.5 per cent in the fragrance industry and 2 per cent in the flavour industry,” Angel Broking said in a research report.

Product Offering and customer Base: SHKCL has a wide portfolio of offerings with over 9,700 fragrances, ingredients and flavour products and a large library of product formulations created over the past 90 years. The company enjoys a competitive advantage over its peers on the back of its wide product portfolio. It has a deep understanding of its customers’ requirements and preferences and has over 4,100 customers, including leading national and multi-national FMCG companies, blenders of fragrances and flavours, and fragrance and flavour producers.

Promoters and management team: Company is led by a experienced management team that has the expertise and vision to manage and grow business. Ramesh Vaze and Kedar Vaze, co’s Promoters, have over 50 years and 15 years of experience in the fragrance and flavour industry, respectively. In addition to promoters, co’s senior and mid-level management teams are also very experienced, having worked in large multi-national companies, in the fragrance and flavour and FMCG industries, with an average experience of over 20 years.

Analysts View

Angel Broking: SHKCL is valued at a P/E multiple of 40.4x its FY2015 EPS. In terms of P/BV, the company is valued at 5.1x its pre-IPO and 3.2x its post-IPO at the upper end of the price band. The brokerage house believes that the valuation is expensive, considering its low return on equity (RoE) numbers (around 12-13 per cent) and considering that they are expected to continue to remain in the same range. Further, the domestic F&F industry is not a high growth industry, expected to grow at a subtle rate of 9-10 per cent going forward. The company’s global peers Givaudan SA and International Flavors & Fragrances Inc trade at 28.1x and 20.1x their CY2014 earnings, respectively. Givaudan SA and International Flavors & Fragrances Inc have strong market shares in the global market of around 21 per cent and around 12 per cent, respectively, and deliver higher RoEs. On the other hand, SHKCL has negligible market share at the global level. SHKCL’s valuation looks expensive vis-a-vis these companies.

Angel Broking said, “We recommend an “Avoid” on the issue. Investors having conviction in the long term growth prospects of the company and the emerging consumption story in India, and wanting to enter the stock to tap this perceived opportunity could consider waiting for a possible correction in the stock price post the listing of the IPO.”

Hem Securities: The company is bringing the issue at price band of Rs 173-180 per share that will convert into P/E multiple of 30-31.5 on post issue annualised EPS of Rs 5.71. The company having established market leadership and brand name has comprehensive product offering and diverse customer base. Also company with its strong research and development skills has long standing relationships with suppliers. Hem Securities recommend investors to “Subscribe” the issue.

Entertainment firm Eros International on Wednesday sought to assuage investors on its stock price fluctuations, saying downgrading or upgrading of its shares is not a “cause of concern” as nothing has materially changed in its “strong business fundamentals”.

Entertainment firm Eros International on Wednesday sought to assuage investors on its stock price fluctuations, saying downgrading or upgrading of its shares is not a “cause of concern” as nothing has materially changed in its “strong business fundamentals”.

Reacting to reports of San Francisco-based Wells Fargo downgrading the company’s stocks, it said: “We would like to confirm that nothing has materially changed to the strong business fundamentals of the company communicated previously.

“We have significantly grown the business over the last decade and continue to be market leaders in the Indian film industry with a dominant market share of the global Indian box office.”

On the stock price fluctuations, it said: “We believe that the recent movement in share price volatility at our NYSE listed parent level and today at Indian stock exchanges are based on speculative media reports.”

Eros International shares closed on Rs 369.50 per scrip on BSE, up 4.26 per cent from its previous close.

Eros has claimed it has been rated positively by analysts such as Macquarie’s Tim Nollen on the same day as leading Wall Street bank Wells Fargo downgraded its stock.

“Another analysts from Macquarie, Tim Nollen, published a very positive report and maintained outperform rating with a USD 25 price target on the same day…on October 23,” Eros International said in a statement.

It further added that analysts downgrade or upgrade stocks of any company and that “as such is not a cause of concern”.

“Note that Well Fargo did not revise down their earnings estimate for the quarter or the year and the price target is USD 22, well above the price the stock was trading on the date it was published,” Eros said.

Eros, which has significantly grown its business over the last decade, would continue to be market leaders in the Indian film industry with a dominant market share of the global Indian box office, it added.

It further added that the company has continued its growth momentum in the second quarter as well.

“We will be announcing what we expect to be strong second quarter results in the first half of November, which will allow us to demonstrate growth in revenues, profitability and cash flow from operations. As previously announced, we expect that the company will be free cash flow positive by the end of fiscal 2016,” said Eros.

Eros International distributes films in over 50 countries, dubbed and subtitled in over 25 different languages. It has a library of over 3,000 films.