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NEW DELHI: Unlike a regular three-day affair, the offer period for the initial public offering (IPO) of SBI Cards & Payment Services (SBI Card) will span four trading days.

The IPO will be open for subscription from March 2 to 5.

Under normal circumstances, an IPO is open for subscription for a minimum period of three and a maximum of 10 working days under certain circumstances.

The Rs 10,352 crore SBI Card IPO ((including a fresh issue of Rs 500 crore) will be India’s fifth biggest issuances after Coal India (Rs 15,100 crore), Reliance Power (Rs 11,563 crore), GIC RE (Rs 11,370 crore), ONGC (Rs 10,543 crore).

The Coal India issue was open for four days. The biggest issue was sold from October 18 to 20, 2010, for qualified institutional bidders, and from October 18 to 21 for retail and HNI investors.

With SBI as its parent and 35 per cent of the issue reserved for retail investors, the SBI Card issue is expected to see huge demand. This has led iBankers to seek an extra day to ensure that retail investors get to file their applications on time and no extension is required.

“To ensure smooth conduct of the application process and accommodate retail investors from remote locations, we, on behalf of the promoter and company, requested the market regulator to give one more day so that exchanges can accept all applications up to 5 pm on the fourth day, exchange personnel need not work late on closing day and it becomes a win-win situation for everyone,” representatives of the book running lead managers (BRLM) told ETMarkets.com.

Generally, retail and HNI investors take cue from QIB subscription, which closes by 3:30 pm and retail and HNI applications keep coming in till late on the last day.

In the case of SBI Card IPO, the portion reserved for retail investors is worth around Rs 3,200 crore.

If the retail quota is fully subscribed, based on the lot size of 19 equity shares, 22.5 lakh forms would be needed for one-time subscription.

“Considering the initial feedback on demand and investor interest, we are expecting a huge number of applications as was witnessed in all the successful mega IPOs in the past,” the BRLM representative said.

Under normal circumstances, an IPO is kept open for a minimum of three days, which can then get extended by at least three more working days if the issuer decides to revise the price band.

In case of force majeure (unforeseeable circumstances that prevent someone from fulfilling a contract), banking strike or similar circumstances, the issuer can extend the bidding period for a minimum of three working days.

On receiving strong bids, the issuer can even close the offer period for QIBs a day prior to closing date.

In the SBI Card IPO, about 1.31 crore shares have been reserved for investors, who were State Bank of India shareholders as on February 20. They can apply in both retail and shareholders categories if the application amount falls within the limit of Rs 2 lakh.

The SBI arm has fixed the IPO price band in the Rs 750-755 range. The IPO, which will include the issue of Rs 500 crore worth fresh shares and an offer for sale (OFS) of up to 13.05 crore shares, may fetch about Rs 10,350 crore at the upper limit of the price range.

Source: Ipo Search Results

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ET Intelligence Group: SBI Cards & Payment Services (SBI Cards), a credit card subsidiary of SBI will raise Rs 500 crore through fresh issue of shares and up to Rs 9,854 crore through offer for sale of existing shares. After the IPO, SBI’s shareholding will fall to 70 per cent from 74 per cent and that of CA Rover Holdings will reduce to 16 per cent from 26 per cent. Given its dominant position in the domestic credit cards market and strong parentage of SBI, the company is well-positioned to take advantage of the rising trend of digital payments. Investors with a longterm horizon and wanting an exposure to growing consumerism may consider the IPO.

BUSINESS AND FINANCIALS
The company is the largest pure play credit card issuer in India. Considering the card services of banks, it is the second largest after HDFC Bank. With 10 million cards in force and Rs 98,500 crore in card spends in the nine months to December 2019, SBI Cards had 18 per cent market share. Nearly half the cards are issued using distribution channels of SBI and other banks while the remaining are through its customer acquisition network across 145 Indian cities.

Credit card spends in the country increased by 32 per cent annually to Rs 6.1 trillion between FY15 and FY19 according to RBI and CRISIL following rising awareness of digital payments. The proportion of digital transactions increased to 62 per cent in FY19 from 25 per cent in FY14. These factors augur well for SBI Cards.

The company’s revenue and net profit doubled to Rs 7,286.8 crore and Rs 862.7 crore respectively between FY17 and FY19. In the nine months to December 2019, net profit crossed the FY19 level to reach Rs 1,161.2 crore while revenue was Rs 7,240.1 crore. Its return on equity (RoE) has remained above 28 per cent since FY17.

RISKS
Competition from prepaid instruments such as e-wallets and UPI service is rising though they are mainly used for small transactions and do not offer credit period or benefit of reward points unlike credit cards. In addition, SBI Cards has adopted technologies to offer virtual cards on various mobile platforms thereby improving its appeal to tech savvy young generation.

Economic slowdown affecting discretionary spend is another major risk. However, so far, the company has not experienced any slowdown in either card issuance or card spending.

VALUATION
Considering the equity after IPO and annualising the net profit in the nine-month to December 2019, the company demands price-earnings multiple (P/E) of nearly 46. It has no listed peers in India. A look at more mature markets such as the US reveals that American Express, which derives over half of the revenue from consumer services including credit cards, trades at a trailing P/E of around 17 with RoE of nearly 30 per cent. Another US company Capital One, which earns nearly two-third revenue from the card business, trades at a P/E of 9.2 and has an RoE of 10 per cent.

While SBI Cards’ valuation looks aggressive, it reflects the faster growth in the Indian market as well as the company’s growth momentum.

Source: Ipo Search Results

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Quick Take

Inari Medical (NARI) has filed to raise $100 million in an IPO of its common stock, according to an S-1 registration statement.

The firm develops and markets medical devices to treat patients with venous conditions.

NARI is growing rapidly and nearing breakeven. I’ll provide an update when we learn more about pricing and valuation from management.

Company & Technology

Irvine, California-based Inari was founded to develop two catheter-based thrombectomy FDA-approved devices to treat patients with deep vein thrombosis and pulmonary embolism.

Management is headed by President and CEO William Hoffman, who has been with the firm since 2015 and was previously CEO of Visualase, an MRI-guided laser company acquired by Medtronic.

Below is a brief overview video of Inari’s ClotTriever system:

Source: Inari Medical

The company’s primary offerings include:

Inari has received at least $54 million from investors including U.S. Venture Partners, Cooperatieve Gilde Healthcare, Versant Ventures, Milder Community Property Trust, and CVF.

Customer Acquisition

The company introduces its products to relevant practicing physicians through a dedicated, direct sales force of 63 reps as of December 31, 2019 and continues to add sales personnel.

Selling, G&A expenses as a percentage of total revenue have dropped as revenues have increased, as the figures below indicate:

Selling, G&A	Expenses vs. Revenue
Period	Percentage
2019	72.8%
2018	156.7%

Source: Company registration statement

The selling, G&A efficiency rate, defined as how many dollars of additional new revenue are generated by each dollar of selling, G&A spend, was 1.2x in the most recent reporting period.

Market & Competition

According to a 2016 market research report by MarketsandMarkets, the global market for thrombectomy devices is expected to reach $1.45 billion by 2022.

This represents a forecast CAGR of 6.7% from 2017 to 2022.

The main drivers for this expected growth are a growing number of minimally invasive procedures, an increasing target patient population, ample medical reimbursements and continuing technological innovation.

Major competitive vendors include:

• Stryker (SYK

• Medtronic (MDT)

• AngioDynamics

• Boston Scientific (BSX)

• Johnson & Johnson (JNJ)

• Terumo Corporation (OTCPK:TRUMF)

• Penumbra (PEN)

• Spectranetics

• Edwards Lifesciences (EW)

• Argon Medical Devices

• Teleflex (TFX)

Financial Performance

Inari’s recent financial results can be summarized as follows:

• Dramatic growth in topline revenue

• Similarly high growth in gross profit

• High and increasing gross margin

• Swing to operating profit

• Swing to negative cash flow from operations

Below are relevant financial metrics derived from the firm’s registration statement:

Total Revenue
Period	Total Revenue	% Variance vs. Prior
2019	$ 51,129,000	648.7%
2018	$ 6,829,000
Gross Profit (Loss)
Period	Gross Profit (Loss)	% Variance vs. Prior
2019	$ 45,218,000	715.0%
2018	$ 5,548,000
Gross Margin
Period	Gross Margin
2019	88.44%
2018	81.24%
Operating Profit (Loss)
Period	Operating Profit (Loss)	Operating Margin
2019	$ 801,000	1.6%
2018	$ (9,139,000)	-133.8%
Net Income (Loss)
Period	Net Income (Loss)
2019	$ (1,192,000)
2018	$ (10,153,000)
Cash Flow From Operations
Period	Cash Flow From Operations
2019	$ (4,935,902)
2018	$ 10,892,115

Source: Company registration statement

As of December 31, 2019, Inari had $23.6 million in cash and $29.5 million in total liabilities.

Free cash flow during the twelve months ended December 31, 2019, was a negative ($8.1 million).

IPO Details

Inari intends to raise $100 million in gross proceeds from an IPO of its common stock, although the final amount may differ.

Management says it will use the net proceeds from the IPO as follows:

to expand our commercial activities, including marketing personnel and programs; to fund product development, research activities, and clinical development activities; and the remainder for working capital and general corporate purposes.

Management’s presentation of the company roadshow is not yet available.

Listed bookrunners of the IPO are BofA Securities, Morgan Stanley, Canaccord Genuity and Wells Fargo Securities.

Commentary

Inari is seeking U.S. capital market funding to further commercialize its approved devices and continue research for development of new venous treatment devices.

The company’s financials show a firm that is growing revenue and gross profit rapidly and is just passing through operating breakeven.

Selling, G&A expenses as a percentage of total revenue have dropped significantly as sales have ramped; its sales & marketing efficiency rate is a still reasonable 1.2x.

The market opportunity for thrombectomy devices is moderately large but features significant competition.

The fact that NARI has grown so quickly in a crowded market means they have taken market share from some of the other players, so that is a positive sign.

Management’s valuation assumptions will be an important aspect of the desirability of the IPO.

I’ll provide a final opinion when we learn more details from management.

Expected IPO Pricing Date: To be announced.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

Source: Ipo Search Results

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Feb 23 (Reuters) – PolyPid Ltd:

* POLYPID ANNOUNCES INTENTION TO SUBMIT CONFIDENTIAL DRAFT REGISTRATION STATEMENT FOR PROPOSED U.S. INITIAL PUBLIC OFFERING

* TIMING, NUMBER OF ORDINARY SHARES TO BE OFFERED AND PRICE RANGE FOR PROPOSED OFFERING HAVE NOT YET BEEN DETERMINED Source text for Eikon: Further company coverage:

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Indian casual dining chain Barbeque Nation Hospitality has filed for an initial public offering (IPO). The Bengaluru-based firm, which operates 138 outlets across 78 cities in India, is estimated to raise Rs 1,000 to Rs 1,250 crore through the IPO.

Promoted by Chennai’s Sayaji Housekeeping Services (SHKSL) and private equity firm CX Partners, Barbeque Nation will offer up to 9.82 million equity shares, including fresh share issues worth Rs 275 crore, the firm declared in its draft red herring prospectus. While up to 50 per cent of the shares will be available for allocation to qualified institutional investors, 35 per cent and 15 per cent will be available for retail investors and non-institutional bidders, respectively.

Shares from all its key owners — SHKSL (owns 45.09 per cent), CX Partners’ Tamara (21.71 per cent), Pace Private Limited (11.37 per cent), Kuyum Dhanani (4.64 per cent) and Rakesh Jhunjhulwala-backed Alchemy India (2.05 per cent) will be on offer. While IIFL Securities, Axis Capital and SBI Capital are among the book running lead managers.

According to the firm, the proceeds from the IPO will be used to bring down its debt and in general corporate purposes. Its consolidated debt is pegged at Rs 225 crore. It plans to list its shares at the BSE and the NSE.

Incorporated in 2006 as Sanchi Hotels in Indore, the firm got its present name two years later and moved its headquarters to Bangaluru in 2014.

Of its 138 outlets, 72 are located in metro cities, 21 in tier-I and 39 and six in tier-II and tier-III cities repectively, with South India being its largest market. It also operates seven stores in the UAE, Oman and Malaysia.

Source: Ipo Search Results

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Trusted News Since 1995

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Sunday, February 16, 2020

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Yunhong International Announces Pricing of Upsized $60 Million Initial Public Offering

Source: Initial Public Offering Search Results