Disc- invested

Hero Motors files DRHP for Rs 900 crore IPO

Hero MotoCorp owns 55% of the manufacturing company and the rest 45% is owned by Niloy Motors (A subsidiary of Nitol Niloy Group).

To begin with – all this is dependent on the probability of unwinding – its an important but unknowable (in terms of timing)…

As for 0.53% of total credit outstanding, if I were to assess, I would not assess in this way. It is probably very naive and uninformed thought process that everything is individual and unlinked in nature. There are quite a few companies, thousands of individuals, and even non-Indian entities and their employees and associated livelihoods linked to Adani group.

Not to downplay the cascading effects of above groups, but even more importantly, in an event of unwinding, its the indication to the market that matters more because it impacts the psychology and reveals deep rooted governance concerns that have been raised for decades but ignored by govts, regulators, industries, investors and so forth.

Anyway, the thought (may be concern) related to IDFC First bank is that bank probably has active exposure to the tune of 350 crores that is publicly disclosed and directly linked to Adani. For e.g. if Adani sub contracts HG Infra engineering for an expressway in Uttar Pradesh, and IDFC First also has exposure (I haven’t verified) to HG Infra, that is second order exposure.

But again – all this is dependent on presumed unwinding – this piece of information is important but unknowable.

Even though Zomato’s value has surged 5 times from $5 Bn to over $25 Bn in the last 2 years, but I believe we are missing the biggest point!

The more relevant and most underappreciated fact is that the rise has happened when roughly 40% of its total equity was actually being sold by pre-IPO investors/owners in open market! Ownership of Uber, Alipay, Tiger Global Management, Sequoia and more have fallen to 0% or at below 1%. Just last week, Antfin sold its 2.12% stake in Zomato.

India has never seen a similar circumstance before, where a listed entity has continuous supply of shares being dumped in the market, adding to its free float, but the share prices doesn’t stop rising & goes on to become part of ‘Top 50’ most valued listed entity in the same time frame.

𝐐: 40% was sold, did the retail investors buy it?
𝐀𝐧𝐬: NO! The share of individual investors have actually fallen from 9.88% two years ago to 8.67% today.

Then WHO BOUGHT IT?

INSTITUTIONS! (The FPIs now own 55% of Zomato, includes Govt. of Singapore, Canadian Pension Fund, etc., and many domestic MFs which collectively own 13%) – Detailed analysis of this coming soon.

Have a look this interview with the promoter to get to know more about the business.

IPO Talk with WTi Cabs: Exclusive Interview with Founder & CEO Mr. Ashok Vashist | SMEmitra