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13th December 2021
Good Morning! 

Happy Monday!!
Our Prime Minister's Twitter account was hacked yesterday for a bit. Now of all the things the hackers could do they decided to tweet about crypto.
The hacker had tweeted that how India had officially adopted bitcoin as a legal tender. Yeah as you probably know that's not happening anytime soon here.

With the govt already considering banning crypto and our Prime Minister supposedly having the final say we don't think this hack will help. So now if crypto gets banned here we'll know who to blame 😜
  MARKETS
 

SENSEX

58,786.67

- 0.03%

NIFTY

17,511.30

- 0.03%

US$

75.78

+ 0.34%

GOLD

48,189

+ 0.52%

10-YR

6.37%

+ 2.1 bps

OIL

5,395

- 0.20%

*As of market close

  • Markets: Friday was another choppy trading day which ended almost flat for the headline indexes. Some mid and small caps did well though and the Nifty Midcap 100 and Smallcap 100 indexes closed 0.8% higher each.

Economy

Driving Downhill
Car going downhill

Auto Sales
Passenger vehicle sales in India in November came down sharply as per latest data from the Society of Indian Automobile Manufacturers (SIAM).

19% lower sales in Nov'21 v/s Nov'20 as passenger vehicles sent to dealers dropped to 2.15 lakh units last month. The reason for this (and many other things these days) is said to be th global semiconductor shortage.

And it wasn't just cars that were impacted, motorcycle sales were down 31% year on year because of the same reason. 

SIAM officials said that the auto industry was hoping for a boost in sales due to the festive season, but was left severely disappointed because of this shortage. These are actually the lowest numbers in the past 7 years for passengers vehicles, 11 years for 2-wheelers and 19 years for 3 wheelers!

Foreign Investment

Foreign portfolio investors (FPIs) have been net sellers in the Indian stock market so far this month. As per data from NSDL, they've sold stocks worth Rs 8,879 crores in the first 12 days of December. 

This, after being net sellers worth Rs 2,521 crores in November as well, kind of explains the performance of the Nifty and Sensex over the past 6 weeks or so. The headline indexes are down ~6% from the peak they saw in late October.

Experts interviewed by Moneycontrol believe fear of the Omicron variant, and also of rising inflation around the world could keep markets subdued for a while. In the US, the largest market in the world, inflation came in at a 39 year high at 6.8%, making investors think more about the possibility of the US Federal Reserve raising interest rates and tightening monetary policy soon.

IPO

MedPlus IPO
Pills spilling out of bottle

In these pandemic times, it makes perfect sense that healthcare and related companies would want to raise some money. And that’s what’s happening here. Medplus Health Services Limited is all set for an IPO!

Medplus is looking to raise Rs 1,400 crores from the public via a mix of a fresh issue of shares and an offer for sale component as well.

But first, let's see what the company is all about:

Medplus is India’s second-largest retail pharmacy chain, in terms of revenue and number of stores. The company was founded in 2006 by Gangadi Madhukar Reddy, who still runs it as MD & CEO.
His focus has always been on scaling up the store network - the company started with 48 initial stores in Hyderabad and has since grown to a network of over 2,000 stores across Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Odisha, West Bengal and Maharashtra.

Amongst organized pharma retailers, Medplus apparently has  30% share in Chennai, 29% in Bengaluru, 30% in Hyderabad and 22% in Kolkata, which are its key markets. In fact, Medplus was the first pharma player to offer an omnichannel experience when they started focusing on online sales in 2019-20.

The Numbers

Medplus did Rs 3,070 crores in revenue in FY21 vs Rs 2,870 crores in FY20. Net profit grew much more though, up from just under Rs 2 crores in FY20 to Rs 63 crores in FY21.
And in the first half of the current financial year, they’ve already made more profit than the last two financial years combined - Rs 66 crores from April-Sep’21!

The company is looking to raise Rs 1,400 crores via the IPO.

Of this, ~Rs 800 crores will be an offer for sale, meaning the proceeds will go to existing shareholders who are selling some of their holdings.

The remaining Rs 600 crores will be via a fresh issue of shares, and this money will go to the company, which wants to use it to supplement the working capital needs of one of its subsidiaries. And also the usual ‘general corporate purposes’.

The offer opens for subscription today, valuing the company at Rs 9,500 crores at the upper price band of Rs 796 per share.

Disclaimer: this is not investment advice and must not be used as the basis of any investment decisions. Please do your own research before making any investments.
 

On a Lighter Note

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