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Following Over Subscribed IPO, Resource Base to Acquire Black Range Metal Project

Black Range Acquisition

Following the completion of an initial public offering (IPO) and planned relisting on the Australian Securities Exchange, junior minerals company Resource Base will pursue an aggressive exploration campaign at the potential Black Range base metals property in northwest Victoria.

In February, Resource Base obtained a conditional right to purchase Black Range from its present owner, Navarre Minerals (ASX: NML). The firms reached a definitive agreement under which Navarre will dispose the non-core asset in exchange for $1.52 million in Resource Base shares upon listing.

A second tranche of 2.5 million shares will be awarded to Navarre upon the announcement of a JORC resource of 100,000 tonnes within five years, and a third 6 million share tranche will be issued upon the delivery of the project’s comprehensive feasibility study.

Eclipse Prospect

After the acquisition is completed, Resource Base will conduct exploration, pre-feasibility studies, and bankable feasibility studies on the project to show the commercial viability of a mining operation.

The Eclipse opportunity, which sits in the Stavely corridor and is considered prospective for volcanic-hosted massive sulphide mineralisation, is Resource Base’s priority objective within the project.

The first two years as a public business will also include evaluating fresh exploration and acquisition prospects, as well as completing studies for near-term copper and gold production.

“The company will also consider further merger and acquisition activity where appropriate, with a view to growing the company and creating further value for shareholders.”

Company Profile

Resource Base Limited is a mineral exploration company focused on the acquisition and development of highly prospective exploration projects with demonstrated potential for scalable discoveries.

(Source: Small Caps)

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Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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IPO Watch

Dodla Dairy is trading at a premium of 28% above the issue price.

Bids for 38,80,64,950 shares were received, that was 45.62 times the offer size of 85,07,569 shares. The shares reserved for non-institutional investors were subscribed 73.26 times, while the quota reserved for qualified institutional buyers (QIBs) was subscribed 84.88 times. Retail individual investors (RIIs) received 11.33 times the number of shares offered.

Dodla Dairy Capacity

As of March 31, 2021, the dairy owner purchased an average of 1.03 million litres of raw milk per day (MLPD). It operates 13 production plants with a total installed capacity of 1.70 million metric tonnes per day. In addition, it operates two skimmed milk powder (SMP) facilities in Nellore and Vedasandur, with installed capacities of 15,000 and 10,000 kg per day, separately.

Dodla’s revenues increased by 16 percent yearly and its Ebitda increased by 12 percent annually between FY18 and FY20. During the same time period, profit after tax (PAT) declined by 6% yearly. In the first nine months of FY20, value products accounted for 24.68 percent of total sales, down from 27.18 percent in FY20.

Analyst View

However, the Ebitda margin for the nine-month period increased to 14.6% from 6.7% in FY20. Analysts predicted that the corporation would struggle to maintain such strong margins, which were achieved through cost-cutting initiatives. The management has also advocated for a return to normal margins.

Source: Economictimes

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Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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IPO Watch

NTPC is considering an initial public offering of its renewable energy division to obtain revenue for its green goals.

The National Thermal Power Corporation (NTPC) plans to build 60 GW of renewable energy capacity.By 2032, the country’s largest power generator wants to reduce its net energy efficiency by 10%.

NTPC Chairman and Managing Director  Gurdeep Singh at the virtual BloombergNEF Summit:-

We should not concentrate our efforts solely on one method of generating financing. We intend to go public with our fundraising efforts as soon as possible. Singh was speaking about obtaining funding for NTPC’s ambitious renewable energy objective, stressing that the business would add 7-8 GW of RE each year, which he said would not be a difficult undertaking. He exuded confidence that NTPC would surpass its aim of 60GW of renewable energy by 2032.

He also mentioned that blended finance might be utilised to fund the capacity expansion, as well as building assets and enlisting the help of other investors to accomplish green energy ambitions. In October of last year, state-owned NTPC formed NTPC Renewable Energy Ltd, a wholly-owned subsidiary for its renewable energy sector.

Company Profile

NTPC Ltd is an Indian state-owned electric utility company. It is the largest power producer in India and supplies a significant amount of the nation’s total needs. The company primarily generates revenue through the sale of electricity to state-owned Indian power distribution companies from its stations throughout the country. NTPC also brings in a significant amount of revenue through its consultancy wing, which provides engineering and project management services to the utility industry. While the vast majority of its facilities use coal and gas fuel sources, NTPC has also increased its capacity through renewable energy sources, such as hydroelectric, solar, and thermal power, and plans to continue this trend going forward.

Source: – Economictimes

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Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Exxaro Tiles receives approval from the Sebi to launch an initial public offering

According to a Sebi update issued on Monday, Exxaro Tiles, which filed preliminary IPO papers with the regulator in March, has received the regulator’s comments. The Sebi’s comments are required for public offerings such as initial public offerings (IPOs), follow-on public offerings (FPOs), and rights issues.
According to the DRHP, the Gujarat-based business may seek a pre-IPO sale of up to 22 lakh equity shares for cash consideration in conjunction with the merchant banker. The pre-IPO transaction will result in a reduction in the volume of equity shares issued compared to the new issuance.
The company expects to raise Rs 150-160 crore from the IPO, according to market sources. The funds from the new issue will be used to repay or prepay debt, support working capital needs, and for other general company reasons.
About Exxaro
Exxaro Tiles, founded by Mukeshkumar Patel, Dineshbhai Patel, Rameshbhai Patel, and Kirankumar Patel, specialises in the production and distributing of vitrified tiles, which are primarily utilised for flooring solutions in the domestic and industrial sectors. It presently has a dealer network of approximately 2,000 people spread over 27 states.

Source:- Economictimes

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Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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IPO Watch

SEBI has put the IPOs of GoAir and Aditya Birla MF on hold.

According to Sebi’s most recent reports on the status of offer documents filed for public fund-raising, its observations on Aditya Birla MF’s offer document were “held in suspension.” Sebi cited the same grounds for rejecting GoAir’s IPO. If a firm or its group companies are the subject of a regulatory enquiry, Sebi normally holds off on giving its approval to a fund-raising strategy.

Sebi is reviewing GoAir’s group firm Bombay Dyeing for financial irregularities and fraud linked to a contract between Bombay Dyeing and SCAL Services, according to the IPO paperwork. An investigation began when one of Bombay Dyeing’s shareholders filed a complaint. GoAir filed a draught prospectus with the Sebi in May to fundraise Rs 3,600 crore.

Two of Aditya Birla MF’s sponsors, Aditya Birla Capital and the Indian branch of Sun Life Group of Canada, planned to offer 3.9 crore shares of the business to cut their joint interest by around 13.5 percent.

Sebi is apparently looking into a series of transactions between Aditya Birla Finance, a fund house’s group firm that has filed for an IPO, and CG Power’s backers, the Thapar family. The agreements were made in 2016.

Source: economictimes

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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IPO Watch

Since its IPO, shares of Aussie Broadband (ASX:ABB) have increased by about 50%.

The corporation is likely to outperform its FY21 prospectus prediction. In its brochure, Aussie Broadband indicated that its standardised EBITDA for FY21 would be $12.3 million. The costs associated with the company’s first public offering are excluded from normalised EBITDA (IPO).

Aussie Broadband now estimates standardised EBITDA for the entire year to be between $17 million and $20 million, following two upgrades — one in the half-year report and the other in late May. This might put you 63 percent ahead of the prospectus.

Significantly higher rates of growth in the retail and business areas, as well as good cost control and marketing rebates, are credited with the improvements. One potential flaw in that estimate is that it only thinks Victoria’s May snap lockout will last one week, when it was later extended for a second week. Due to increased broadband consumption, Aussie Broadband’s costs tend to rise during certain times. It’s unclear how much of an impact this will have on the company’s full-year EBITDA.

About Aussie Broadband

Aussie Broadband Ltd is a telecommunications company. It provides NBN subscription plans and bundles to residential homes, small businesses, not-for-profits, corporate/enterprise and managed service providers. The company services all states and territories in Australia.

Source: MSN

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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IPO Watch

ASX welcomed three new IPOs

“With a total identifiable 1.1 million ounce JORC Mineral Wealth platform and 100% ownership of the area’s only gold mill, our goals are to illustrate the actual capabilities of this property package and maximise lengthy business value,” stated managing director Alexander Scanlon.

Wilson Asset Management Strategic Value (ASX:WAR)

This is the eighth LIC handled by Wilson and the second to list since COVID-19, following Salter Brothers’ listing earlier this month. It will, according to Wilson, benefit from the ability that the market has mispriced.

WAM Strategic Value seeks to produce exceptional risk-adjusted returns from a portfolio predominantly comprised of discounted asset opportunities identified utilising the established market-driven investment process we have created over the last two decades,” the company said in a statement to shareholders on Friday.

Camplify (ASX:CHL)

Campervan and motorhome renting community focused on the Australia and UK markets, completed the trio of new ASX IPOs that debuted today. Camplify went public after raising $11.5 million and reporting that its initial public offering (IPO) was almost four times oversubscribed, with customers being urged to acquire shares in the IPO and strongly supporting it. It is also supported by Apollo Tourism and Leisure (ASX:ATL), one of the ASX’s few other caravan specialists, who invested in the company in 2017 and now has a 17.8% share.

Source: MSN

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Marqeta’s $1.2 Billion IPO: What to Know

Financial technology companies in particular have garnered significant investor interest this year, perhaps pushing more startups to gopublic. Two other payments-related companies, Flywire FLYW and Paymentus PAY recently went to market. Flywire’s stock jumped about 46% and Paymentus’ went up about 36% on their first day of trading.

Marqeta has scaled quickly, fueled by the growth of financial technology, e-commerce, and the gig economy. But its future is anything but certain.

Marqeta’s clients include familiar tech names like Square SQ, AffirmAFRM, Uber UBER, DoorDash DASH, and Instacart. These companies use Marqeta’s platform to build payment experiences for their own customers or streamline business payments.

What’s Behind Marqeta’s Strong Revenue Growth

Most of Marqeta’s revenue comes from transaction fees, so processing volume is the name of the game. Marqeta has benefited from the accelerated shift to e-commerce and digital payments brought on by COVID-19. The company’s total processing volume reached roughly $60 billion in 2020, up from $21.7 billion the year before, according to the Marqeta’s SEC filing. The momentum has continued into 2021; Marqeta says its platform processed $24 billion in the first quarter.

With the boost in processing volume, Marqeta brought in $290.3 million in revenue in 2020, more than double its 2019 revenue.

While the past year has been sweet for Marqeta in terms of revenue growth, we have to look at the numbers with a grain of salt because they may not be indicative of the future. COVID-19 has impacted consumer spending patterns, boosting online purchases and demand for delivery services and contactless payments. While the need for virtual payment processing and card issuing may continue to trend upward, the dramatic shift seen during the pandemic will likely subside.

Despite the boost in revenue over the past year, Marqeta isn’t yet profitable. The company has shown a decline in net losses in recent years but still lost $47.7 million in 2020.

Marqeta expects to incur losses for the foreseeable future as the company continues to invest in its growth. Ultimately, the future is uncertain. And Marqeta acknowledges in its SEC filing that it may never achieve or sustain profitability.

Marqeta Has a Dependency Problem

Marqeta’s growth over the past year has mirrored the performance of its customers, particularly payments processing company Square, which generates most of Marqeta’s revenue. Square was responsible for 70% of Marqeta’s net revenue in 2020. That percentage rose to 73% for first-quarter 2021.

Square’s rapid growth during the pandemic has been a boon for Marqeta, but Morningstar senior equity analyst Brett Horn sees risk in customer concentration: “This tends to be mainly a growth issue, as customers have leverage to demand better pricing.”

The current term of Marqeta’s agreement with Square for Square Card expires in December 2024, and the current term of their agreement with Square for Cash App expires in March 2024. There is no guarantee that the relationship will continue on the same terms.

Losing revenue from Square, whether from Square’s poor performance or a severance of the relationship, would also have an adverse effect on Marqeta’s business.

Market Tailwinds Can Benefit Marqeta and Competitors

Horn and equity analyst Michael Miller believe there are significant opportunities for companies like Marqeta to draft off the secular trend toward electronic payments, which would act as a tailwind to card payment volumes. Euromonitor International, a market research firm, projects electronic payments will represent 46% of the total global transaction volume by 2025, up from 31% in 2017.

Horn sees competition between traditional players relying on scale and better pricing while newer upstarts like Marqeta try to win with services that better fit higher-growth areas. Industry growth creates room for new players, but Horn ultimately believes scale is the best form of long-term advantage in the space. This benefits existing players, like FIS and Fiserv, and gives them a window to replicate new offerings.

Miller said the rise of buy-now-pay-later offerings is another major trend in the card payments space. Such offerings allow consumers to pay for retail goods under an installment plan. “These firms are more prominent in Europe and Australia, but they’ve been investing heavily in the U.S. to gain market share,” Miller said. “That said, in my view, they have a difficult path to significant adoption in the U.S. since they don’t have a clear benefit over existing credit card products already available in the country.”

Marqeta already supports providers in this space, like Affirm and Klarna, and Marqeta’s global presence (the company is certified to operate in 36 countries) would allow it to take advantage of this growth outside of the United States.

Marqeta’s potential markets are growing and evolving, and it will have to grow and evolve with them. Profitability will take a back seat as the company pursues further growth and innovation.

 (Source: Morningstar)

Disclaimer

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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IPO Maximises Pexa’s Value but Link Fair Value Estimate Maintained

However, it appears Pexa will achieve an initial public offering, or IPO, enterprise value of AUD 3.3 billion, which is considerably higher than our prior AUD 2.20 billion valuation as of October 2020, and KKR’s now withdrawn AUD 3.10 billion enterprise value-based offer, made last week. It’s also 70% above the implied AUD 1.95 billion offered by the PEP/Carlyle Group Consortium in October 2020. Link’s board and executives have played their Pexa cards shrewdly to maximise value for Link shareholders which has significantly reduced the gap between Link’s share price and its fair value. All else equal, we’re indifferent as to whether this happens by selling the Pexa stake or via retaining the shareholding in a listed company. However, at the current market price of around AUD 5.20 per share, we still believe Link is materially undervalued.

We estimate Pexa has around AUD 150 million in cash, implying an equity value of AUD 1.52 billion for Link’s 44% shareholding at the IPO valuation. Media reports indicate Pexa will borrow AUD 300 million before its IPO and that most of Pexa’s cash will be returned to its existing shareholders. This implies around AUD 200 million in cash that will be attributable to Link, however, Link’s announcement indicates around AUD 150 million of this cash is likely to be reinvested into Pexa at the IPO to increase its shareholding to 47%. We expect the Pexa shares made available via the IPO will mainly come from the full sell-down of Morgan Stanley’s 40% shareholding in the company, with both Link and the Commonwealth Bank of Australia likely to increase their shareholdings.

The AUD 1.52 billion valuation of Link’s Pexa stake is a far better outcome than the AUD 1.14 billion we estimated Link would receive via a trade sale to KKR. However, unlike the KKR valuation, our IPO-based valuation excludes any deduction for capital gains tax. Quantifying the tax owed on the Pexa investment by Link is complicated under the IPO scenario because we expect Link will ultimately distribute its Pexa shareholding to Link shareholders via an in-specie distribution. We expect this option will enable retail shareholders to claim the 50% capital gains discount on their Pexa shares. However, we await the tax ruling on the Pexa shareholding and recommend Link shareholders seek independent taxation advice on this issue.

All else equal, Pexa’s AUD 3.3 billion enterprise value could increase our Link fair value by AUD 1.00 per share to AUD 7.90. However, due to the uncertainty regarding the details of the IPO, and particularly the tax implications for Link shareholders, we have maintained our fair value pending the release of additional information from both Link and Pexa. We also intend to reassess our Pexa valuation based on the IPO prospectus and management roadshow, and particularly the potential earnings upside from exploiting its data and overseas expansion.

We are also yet to determine the extent to which Pexa’s market value is incorporated into Link’s carrying value of the Pexa stake.

Link Administration Holdings Ltd Company Profile

Link provides administration services to the financial services sector in Australia and the U.K., predominantly in the share registry and investment fund sectors. The company is the largest provider of superannuation administration services and the second-largest provider of share registry services in Australia. Link acquired U.K.-based Capita Asset Services in 2017; this provides a range of administration services to financial services firms and comprises around 40% of group revenue. Link’s clients are usually contracted for between two and five years but are relatively sticky, which results in a high proportion of recurring revenue. The business model’s capital-light nature means cash conversion is relatively strong.

Source: Morningstar

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.