Tag: SEBI Research Analyst

Schneider Electric Infra Ltd. – March 2026

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Investors,

Here is a message regarding Schneider Electric from JainMatrix Investments.

Report dated 27th Feb 2024

This report was published for Subscribers initially, and is released now for public viewing. The analysis, and the price target, are still valid.

  • CMP: ₹ 582
  • Mid Cap with Mkt Cap ₹ 14,000 crores, PE of 65 times
  • Industry: Power Sector, Equipment and Services
  • BUY with a target price of ₹ 903 by May 2026, a gain of 55%

Summary

  • Why SEIL:  SEIL makes power and energy management products, for industrial consumers. It includes transformers, medium voltage switchgear and relays, and further they digitally enhance network monitoring, consumption and tracking. Their mission is to be digital partner for Sustainability and Efficiency.
  • Why Now: 1) SEIL is undergoing a turnaround from loss making to profitable. The debt and valuations appear high, but as recovery continues, improvements will justify the current price levels 2) India’s power consumption is growing, and so is demand for SEIL’s products and services, as they provide for energy savings, optimization and better asset management 3) SEIL focus is on digitizing and decarbonizing the energy landscape. It should be seen in this Green light.  
  • Key risks: The key risks are 1) Complex structure of SEIL and SEF in India 2) High R&D is required to keep business robust 2) High Debt to Equity and high current valuations 3) Growth by M&A are high risk 4) Competition is present and may intensify 5) Demand – clients must be ready to pay a premium.
  • Opinion: BUY with a target price of ₹ 903 by May 2026, a gain of 55%.

Here is an investment research report on Schneider Electric Infrastructure Ltd (SEIL).

SEIL – Description and Profile

  • Schneider Electric (SEIL) is an energy management firm engaged in design, manufacture, build, and servicing of products and systems for electricity distribution in India and internationally.
  • SEIL’s FY23 Revenues were ₹ 1,777 cr., EBITDA ₹ 167.7 cr. and Profits ₹ 124 cr. These have grown 3%, 22% and 31% over the last 7 years. SEIL has 1,655 permanent employees and workers.
  • It has 4 mfg. facilities: Vadodara (2 units), Kolkata (1) and Chennai (1) and 21 offices in India.
  • SEIL has origins of a demerged transmission and dist. business unit of Alstom T&D India (formerly known as Areva T&D India) listed on the BSE and NSE in Mar’12.
  • SEIL now focuses on mfg of advanced products for electricity, distribution including products transformers, medium voltage switchgear, relays, and automation equipment. These are for industries like electrical energy, water, mariner, oil and gas, mine mineral and metal, construction sector.
  • Parent and Group firms: Schneider Electric Industries SAS of France (SEF) is the holding company, and it has two subsidiaries Schneider Electric IT Business India Pvt. Ltd. (SEITIB), and Schneider Electric India Pvt. Ltd. (SEIPL).
  • SEIPL and Temasek Holdings acquired the E&A business of L&T for ₹ 14,000 cr. in 2020 which offers a wide range of electrical products – switchgears, electrical systems, automation solutions, energy mgt. systems & metering solutions. SEIPL got 5,000 employees, and had revenue ₹12,349 cr. in FY23.
  • SEF has grown significantly through inorganic route i.e. acquisition it has acquired around 60 companies across world including from India, and these are given below in Fig 1.

Fig 1 – Acquired Indian firms

  • SEF is a French MNC founded in 1836 that specializes in digital automation and energy management. It’s a Fortune 500 company, publicly traded on the Euronext Exchange, and is a component of the Euro Stoxx 50 index. In FY 2022, SE posted revenues of €34.2 b (₹3.04 lakh cr.) and profits of €3.53 B (₹ 31k cr.) with total number of employees at 162,339.
  • Currently, SEF group has 30 factories in India, this is the company’s third-largest market and the largest talent hub with 37,000 employees. India is also the R&D hub for the group with 6,000 employees working on R&D projects to build solutions locally for India and the world. India is also among the four hubs of innovation for the company along with the US, France, and China.
  • SEIL Leaders: Udai Singh (MD-CEO), Namrata Kaul (Chairperson) and Preeti Gupta (CFO).
  • SEIL shareholding pattern: Promoter group 75%, FII 1.85 %, DII 2.26 % and Retail 20.88 %. See Fig 4d.

Business Model, News and Updates of SEIL

  • Schneider Electric SE has lined up investments of ₹ 3,200 cr. by 2026 to increase its India footprint. These will expand the operations in 9 states adding 1.2 m. sq.ft. and help make India a global mfg. hub.
  • Schneider Electric is reportedly preparing to relist its Indian subsidiary SEIPL. It had been delisted previously, and relisting was pending the result of litigation.

Fig 2a – Product Offerings – EcoStruxure™

  • As a major focus area, the energy management firm has set a target to become net-zero in its operations by 2030, and achieve an end-to-end carbon neutral value chain by 2040.
  • SEIL runs its energy management programs through a subscription model. Fig 2a showcases the EcoStruxure™Architecture with product offerings, interlinked analytics and app service offerings.
  • SEIL launched EcoCare service membership in India. This service provides an exclusive level of access to industry and critical facilities; buildings the system expertise and empowers businesses to achieve higher performance, resilience, safety, and environmental sustainability goals across their entire equipment lifecycle. EcoCare minimizes downtime with faster response time to on-site intervention and 24/7 remote monitoring and alarming. It reduces planned downtime through a condition-based maintenance approach, enabling dynamic maintenance scheduling. Extend asset lifecycle and avoid carbon emissions, contributing to the organization’s sustainability goals.
  • Preeti Gupta was appointed Group CFO. She has 20 yrs. workex in FMCG, Consulting & Industrials.
  • SEIL and Arcelor Mittal have announced strategic partnership to develop advanced training faculties and programs in smart mfg., to equip young individuals with skills for future of mfg. and automation.
  • Siemens is offering similar products as SEIL.
  • The key Business segments for SEIL are – Fig 2b – Key Business Segments

The entire equity research report is available as a PDF, please feel free to download. Also register for free alerts from JainMatrix Investments, by adding your email on the top right panel here.

JainMatrix Investments_Schneider Electric_Feb24Download

Suggestions, Disclaimer and Notes

  • The target price assumption is a PE of 80 times. The industry average PE is reported as 81 times. Due to the recent return to profitability, the PE discovery for SEIL is unfolding currently.
  • Investors new to our service may look at our OFFERINGS, and sign up using the PRICING AND PAYMENT OPTIONS link, to grow their Direct Equity portfolios.
  • This document has been prepared by JainMatrix Investments Bangalore (JMI), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JMI. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JMI has not independently verified the accuracy or completeness of the same.
  • Punit Jain (Research Analyst) had no stake ownership or financial interests in SEIL or any group company as of 27/02/2024. As of today 07/12/2024, Punit Jain discloses that he has been a shareholder of SEIL since 21/03/2024 (<1% stake).
  • Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from a RIA Registered Investment Advisor. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
  • Punit Jain is a registered Research Analyst under SEBI (Research Analysts) Regulations, 2014. Registration granted by SEBI, and certification from NISM in no way guarantee performance of the RA or provide any assurance of returns to investors. JM has been publishing equity research reports since Nov 2012. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com. Name of the RA as registered with SEBI – Punit Jain, SEBI Registration No. INH200002747. Logos/brand name –

Wealth Building and Retirement – the Four Bucket Approach

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Summary:

The transition from your Working Life and Career to Retirement can be quite demanding. The challenges in this phase extend from psychological to financial and social. In this note, we focus on the financial challenges. The Equity Investor can use the Four Bucket Approach detailed here to think though the changes and plan for Retirement.

Introduction

Retirement is an important goal of work life, for the equity investor. The image of a relaxed day schedule, no monetary pressures and more time for your favorite hobbies, seems so attractive. In early career, it seems so far away, time wise, that planning for Retirement seems like a waste of time. However as we hurtle through our ever busier careers, it comes closer, and planning for it becomes more important. The suggestion I make is that Retirement should be incorporated in your financial plan from an early stage in your career. To do this, we present the Four Buckets Approach to Retirement as it offers a simple yet powerful framework to plan your financials. Do take advantage of this in your planning.

Wealth Management for Mid-Career: The 3-Buckets Strategy

In the age bracket of 30-55, mid-career working professionals and businesspersons need to convert savings into wealth. They need to plan for the rainy day, as well as fight inflation, to meet financial goals.

For them, the bridge between today’s pay check and tomorrow’s financial freedom is built on two pillars: growth and safeguards. The most effective way to manage this is through a “Buckets Strategy,” which classifies your money according to when and what you need it for. By splitting your investment portfolio into three separate buckets, you can allocate funds and leverage the power of compounding as well as plan for shorter term needs, under various market scenarios. See – Fig 1 – Three Essential Buckets.

Bucket 1: The Emergency Fund (EF)

Time Horizon: Present to 6 months. Purpose: To cover 6 months of normal living expenses, which acts as a financial safety cushion, so that any emergencies like job loss, sudden expenses or medical issues are planned for, so we get time to react and recover from these.

Where to Invest:

  • Savings Accounts: The ultimate tool for instant access. It keeps your money safe and ready for withdrawal at any ATM, branch or online banking.
  • Liquid Mutual Funds: low-risk option that offers better returns than savings accounts with easy access to funds.
  • Short-Term FDs: Ideal for guaranteed, predictable growth. They give fixed returns with a locked interest rate over a fixed time. Tax impact is more compared to liquid MFs.

Allocation Ratios: Here the household and personal expenses for 6 months will be the EF budget.

Bucket 3: Retirement Focused Investments

Time Horizon: Period till Retirement. Purpose: To build an asset that matures by retirement, beats inflation (high-growth investments plus compounding), and includes retirement tax-saving features.

Where to Invest:

  • EPF / PPF: These are government-backed schemes with guaranteed, tax-free returns.
  • National Pension System (NPS) and other Pension schemes: Pension policies and NPS provide a low-cost retirement plan with asset growth. These may have equity and debt options. There are tax benefits on investment as well as on maturity.
  • Safe Direct Equity and Equity Mutual Funds: Generally targeting Blue Chip firms, these provide safety and growth. Assets must be spread in a number of companies. These help capture long-term market growth. Nifty and Sensex ETFs is also a good option.
  • Life Insurance (Endowment) Policies: They offer life insurance along with disciplined, regular long-term savings for future needs.

Allocation Ratios:

  • A common, actionable rule of thumb for retirement is a target corpus of 15 times your annual gross income by the time you retire. This can be reviewed every 5 years, so that the retirement target stays aligned with career growth.

Bucket 2: Intermediate Wealth Assets  

Time Horizon: 6 months – 20 years /period till retirement. Purpose: To fund medium to long term goals as well as general wealth building. Goals can include buying a home, car, or planning for major family events, etc. This balances growth with capital protection through a mix of assets.

Where to Invest:

  • Debt Mutual Funds: These focus on fixed-income securities to provide stable and predictable growth with better post-tax returns than FDs. These provide steady returns with relative stability.
  • Long-Term Equity: Direct Investing in listed companies help you benefit from business growth. Investments can be aligned with risk profile. Aggressive equity investments are possible here. Also investment can be in Equity Mutual Funds, where professional managers handle your assets.
  • Top of Form
  • Bottom of Form
  • Gold & Silver: Act as a safety asset to protect from geopolitics, inflation or currency weakness.

Allocation Ratio Options:

  1. All savings available after EF and Retirement allocations should be used for Intermediate Wealth Asset building.
  2. A 60:40 ratio: Thetraditional allocation has been 60% equity and 40% debt. This has to be periodically rebalanced.
  3. With the rise of Gold and Silver, we suggest a 10% allocation to them. The ratio can be 60:30:10%.
  4. A dynamic allocation approach: With(100 – Age) allocated to equity, rest to Debt and Gold/silver.
    • Age 30 → 70% equity, 30% to debt + G/S
    • Age 50 → 50% equity, 50% debt + G/S
    • Age 40 → 60% equity, 40% debt + G/S

Wealth Management in Retirement: The 4-Bucket Strategy

Lifespans have increased. Life expectancy in India has shown significant rise, reaching 70–72.5 years in 2022–23, up from 49 years in the 1970s. So we have to plan for a longer retirement period, even as inflation and healthcare costs rise.

After you progress from a working career to Retirement, the focus changes from primarily asset growth to primarily capital protection and encashing your assets for retirement income. The goal is to ensure your retirement funds support you and your family for your lifespans, even as markets go up and down.

Retirement:

The salary or business income disappears and has to be replaced with cash income from available assets.

Your Retirement Focused Investments are encashable on retirement and may also convert into annuity funds. The investor’s other Intermediate Wealth Assets also need to be repurposed post Retirement.

The 4-Bucket Approach helps to protect your assets while still allowing some growth to beat inflation during a long retirement. See Fig 2 – The Four Bucket Retirement Approach.

Bucket 1: The Emergency Fund

Time Horizon: 2 Years. Purpose: The Emergency Fund needs increase as it should provide for around 2 years of expenses. This provides better safety and peace of mind.

Where to Invest:

  • Savings Accounts: For instant access to money when needed.
  • FDs: Stable investments that provide predictable cash flow with low risk.
  • Liquid / Debt Mutual Funds: Low-risk option with slightly better returns and easy withdrawal.

Allocation Ratios: Here the household and personal expenses for 2 years will be the EF budget.

Bucket 2: Cash Generating Assets

Time Horizon: 2–10 Years. Purpose: On retirement, many assets built till now need to be closed, encashed or converted into Cash Generating Assets. These assets helps meet regular monthly expenses and lifestyle costs during early retirement by providing steady income with low risk.

Where to Invest:

  • Pension Annuity: LIC, insurance plans and PF can convert into pension annuities.
  • Dividend – Equity: Blue-chip stocks and MFs that provide regular dividend income; REITs and INVITs.
  • Dividend Debt Funds: Offer steady income with lower risk than equity.
  • Equity assets and debt MFs: A Systematic Withdrawal Plan (SWP) on existing equity assets and debt MFs helps encash these assets. Even as the core portfolio grows, one can generate monthly income.
  • Real Estate Rental Property: Generates regular monthly rental income and adds stability.

Allocation Ratio:

  • The allocation starting point has to be the monthly cash requirements in retirement.
  • Working backwards from this, the Cash Generating Assets need to fulfil this requirement.
  • Pension annuities, dividend paying assets and rental property can be accurately predicted.
  • The SWP can be increased to meet any gaps. In case of surplus, the cash may be reinvested in Dividend-Paying Equity and Debt assets.

Bucket 3: Intermediate Growth Assets

Time Horizon: 2–20 Years. Purpose: Assets need to grow and fund the retirement period, protect from inflation and refill Buckets 1 and 2 over time while keeping risk moderate. Non rental Real Estate may be sold and proceeds reinvested in rental property or equity / MF assets.

Where to Invest:

  • Balanced Advantage Funds: Balance equity and debt MFs based on market conditions.
  • Large-Cap Direct Equity and MFs: Stable companies for steady growth.
  • Real Estate Appreciation Asset: Land or Commercial property can be considered these assets can be considered for liquidation in order to generate capital and cash.

Allocation Ratio: Here the allocation can be similar to Mid-Career Bucket 2: Intermediate Wealth Assets 

Bucket 4: Retirement Home, Will and Assets Planning for the Family

Time Horizon: 2-20 Years Purpose: The career home and location may change to a retirement home in a new location. The Will and Assets Planning are required to bring clarity and certainty to the process.

Activities:

  • Invest in, buy or rent a Retirement Home: Post retirement or in old age, there may be a plan to shift home to near the children, to the native place or to a retirement home
  • Sale of Real estate – some assets may need to be liquidated as per the plan
  • Update your wills, discuss with family – about assets and businesses: it’s time to prepare or update your will so that your assets will be inherited by your family as per your plan. Both husband and wife need to have their own wills. Businesses too need to have a succession plan
  • Endowments for social causes: If possible, you may decide on a few endowments for social causes like education, NGOs or religious trusts

Allocation: All your assets must be accounted for in your will. Beneficiaries should be broadly aligned with the laws, to avoid disputes later. Further discussing this with family at the time of making a will helps to handle friction and disagreements at this stage.   

Conclusion

Disclaimers and Disclosures

This document has been prepared by JMI, and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. This report should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JMI has not independently verified the accuracy or completeness of the same. Neither JMI nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Investment in the securities market are subject to market risks. Read all the related documents carefully before investing. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from a RIA Registered Investment Advisor or lawyer. Registration granted by SEBI to JMI, and certification from NISM in no way guarantee the performance of the Research Analyst or provide any assurance of returns to investors.

JMI has been an equity investment adviser commercially since Nov 2012, and a SEBI certified and registered since 2016, under SEBI (Research Analysts) Regulations. Any questions should be directed to punit.jain@jainmatrix.com. Name of the RA as registered with SEBI – Punit Jain, SEBI Registration No. INH200002747. Logo/brand names –

Artificial Intelligence needs to be applied with skill and compassion

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On Feb 14th 2026, here is a message of Compassion.

We have heard of this, AI needs to be applied with skill and compassion. It sounds right; perhaps you are nodding in agreement at this idea.

AI is part of the software industry. And the software industry has always worked in 3 areas for Industry and the economy –

  1. The Firm needs to Sell more
  2. Improve communication within and outside firms and
  3. Improve productivity & speed, and lower costs.

With AI all I will say is that all these 3 will accelerate and happen faster. The experts, creators and AI product development teams know much more than me of how this will happen.

From the perspectives of AI users, it needs to be applied with skill and compassion.

Skill

The skill part we already are aware. There’s a lot of skilling involved.

We have to understand the tools, ready products and services available for B2C and B2B situations, latest versions, free v/s paid. Use cases, Use cases in my industry, working with AI on my processes, etc. Prompt engineering. AI Training.

This is required across industries, but perhaps focused on the office worker everywhere.

Compassion

The part that I feel we haven’t given enough thought to is – AI with compassion.

Where is the compassion in AI implementation? Are there any guardrails for AI products or services? Anything that developers, implementers and CEOs should not do? Nothing, as far as I know, as long as you do everything legal. (I have heard of the EU AI Act, with 7 Prohibited AI Practices. I don’t think it takes forward ‘compassion’ much.)

I suggest a guardrail for AI developers, implementers and all managers.

AI should not cause job losses.

This rule encompasses compassion. The enemy is not the office worker whose job has to be ruthlessly cut. The enemy is productivity. Let’s do everything faster and better.

Let whoever is working and in jobs or business do everything faster and better. New companies can hire new employees. But at least, current employees should not lose jobs due to AI. Anywhere. Enterprises should not try to cut staff, or attack their vendors. Consulting companies should not do layoffs of their employees due to AI. Project managers need to maintain or grow teams. The future of office workers should not be in question.  

There has been no such rule in the past. However we are already in new territory with AI. We have to make new rules along the way to ensure AI is beneficial.

How is this rule to be implemented? Every CEO and manager implementing  AI in his firm should note his office staff numbers, and not cut. Neither his own nor his vendors. Govt. staff should not be cut. Software jobs should not be cut.

If we enter this new AI territory with compassion, the technology does not turn against our own people. It turns into a very useful tool of productivity.

The objective of AI now becomes, how do we use it to do the same work faster and better. Make the firm earn better revenues and more profits. Better quality of data. Better programming. Generate more creative content using AI tools. For government, improve compliance, coverage and benefits implementation. Let people do the same work in less time. And every worker and industry should benefit from the gains.

I’m not sure how this can be really implemented. I invite comments and thoughts by stakeholders. But it should.

Can we actually do ourselves a favour and be Compassionate as we roll out AI?

Warm regards,

Punit Jain, JainMatrix Investments

JainMatrix announcement

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As an Indian investor, you need to safeguard your portfolio and investment expenses. You should only engage with certified and approved advisers, mutual funds, research analysts and market intermediaries.

One initiative by SEBI is the creation of @valid UPI IDs to help investors identify genuine and approved parties, and make payments to them through proper channels.

JainMatrix Investments is a SEBI registered Research Analyst, and it announces that it has got its @valid UPI ID, this may be used to make all payments to us in terms of fees.

It is jainmatrix.ra@valididfc

See public news article regarding this

SEBI mandates exclusive ‘@valid’ UPI handles – MSN.com

SEBI Check tool to verify handles – SEBI website

Buy a JainMatrix subscription, for your Direct Equity investing, see PRICING AND PAYMENT OPTIONS

Warm regards, and safe investing

Punit Jain

Tata Capital IPO – Emerging Player

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  • IPO is open from 06-08th Oct, at ₹ 310-326/share
  • Large Cap. of mkt cap ₹ 1,38,000 cr.
  • Sector: NBFC – Shadow Bank
  • The IPO is to raise ₹ 15,500 cr.
  • It will be the #4 largest IPO of the Indian markets, after Hyundai India, LIC and Paytm
  • Opinion: BUY with a 2-year perspective

In this note, we look closely at Tata Capital Ltd (TCL) which is opening for its IPO this week.

IPO Details

  • To raise ₹ 15,500 cr. – Fresh Issue, 21 cr. shares (₹ 6,846 cr.) and Offer for Sale, 26.58 cr. (₹ 8,665 cr.)
  • IPO Applicants can bid for a minimum of one lot of 46 shares, and in multiples of this.
  • Reasons and Objects of the Issue: 1) TCL was classified as an Upper Layer NBFC by RBI. It was required to IPO by Sept’25 as per these regulations 2) Tata Sons, the promoter of TCL will sell part of their stake in the Offer for Sale 3) TCL will utilize the proceeds from the Fresh Issue to augment their Tier – I capital base, to meet requirements of onward lending, and growth of the business 4) a portion of the proceeds from the Fresh Issue will be used towards meeting Offer Expenses.
  • The IPO share quotas will be QIBs: NIIs: Retail is 50:15:35. (Qualified and Non-Institutional Investors)
  • The unofficial/ grey market premium of TCL is ₹ 13/share today thus about 4% over the IPO price.
  • IPO shares allotment is by Thu, Oct 9th, and Listing Date is Mon, Oct 13, 2025.

Tata Capital Introduction

  • TCL is the flagship financial services firm of the Tata Group, a subsidiary of Tata Sons Pvt. Ltd., and is a NBFC. RBI classified it as a Upper Layer – Non-deposit taking NBFC – ICC Investment and Credit Company.
  • TCL operates across areas of business like: Commercial Finance, Consumer Loans, Wealth Services & distribution, and marketing of Tata Cards. It provides this to retail, corporate and institutional customers.
  • It 3 key subsidiaries are Tata Capital Housing Finance Ltd., Tata Securities Ltd. and Tata Capital Pte. Ltd.
  • Tata Capital Pte. incorporated in Singapore, operates fund management and proprietary investments business, directly and through its eight subsidiaries, including Tata Capital Advisors Pte. Ltd.
  • TCL is being put together as the Finance & Capital flagship of the Tata group. Tata Motors Finance Ltd., formerly part of Tata Motors, is merging with TCL. This was sanctioned by the National Company Law Tribunal, Mumbai by an order in May’25. TCL’s 3 key subsidiaries also have JVs, subsidiaries and partners. This complex organization may merge and simplify over a few years.
  • Thus a lot of opportunities exist for TCL to grow its loans and product sales, aligning with Tata group companies and their customers in India.
  • Management – Saurabh Agrawal Ch’man (Non-ED), Rajiv Sabharwal MD & CEO and Rakesh Bhatia CFO.

Comparison of Financial Parameters  

We analyse the key ratios and financial data for TCL with 2 peers. See table and analyses below.

Fig 1 Benchmarking                         Annual data is for FY25/ TCL data is as per RHP

  • By assets, BFL is the largest of the three, next is TCL and smallest is LTF. Valuation wise, BFL is most expensive and LTF the cheapest. TCL is between the two. The pricing appears aggressive.
  • TCL leads on 3-year Sales growth, while profit growth is highest for LTF. EBITDA margins are highest for TCL but it is low on Profit margins, while BFL is best here. On gross and net NPA, BFL leads. TCL is low on Net NPA. Cost of Funds is higher for TCL. It leads on ROCE but BFL leads on ROE. TCL is weak on Capital Adequacy.

It will take 1-2 years for ongoing mergers to be complete at TCL and key ratios in Fig 1 to stabilize, while BFL and LTF are established well set firms with clear strategies.

Industry Notes

  • Recently RBI has released a circular regarding 15 NBFCs in Upper Layer classification under Scale Based Regulations. NBFCs have witnessed significant growth in size and interconnectedness in recent years.
  • An RBI UL NBFC is a systemically important firm identified by the RBI for higher regulatory scrutiny.
  • As per a CRISIL Report, TCL is the third largest diversified NBFC in India. These are in order of loan book
    • 1) Bajaj Finance 2) Shriram Finance 3) Tata Capital 4) Cholamandalam Investment
    • 5) Aditya Birla Capital 6) HDB Financial 7) L&T Finance 8) Sundaram Finance
  • HDFC Ltd which was the largest NBFC, a Housing Finance firm, merged with HDFC Bank last year. Conversely group company HDB Financial was listed this year. Several groups are slowly consolidating their financial firms under the Bank umbrella, such as ICICI Bank, Axis Bank and IDFC First Bank.

SWOT Analysis

Strengths

  • As the #3 diversified NBFC in India today TCL already has a good size and diversified loan book.
  • The Tata brand stands for high ethics, sustainable operations and of late focus and aggressive growth.
  • The NBFC structure provides the flexibility for fast growth, partnerships and JVs for TCL.

Weaknesses

  • The other financial services firms of Tata group are Tata Asset Management, Tata MF, Tata AIG, Tata AIA Life and Tata Invest. Corp. are subsidiaries of Tata Sons, they may not become part of TCL.
  • TCL is a complex group with an ongoing merger and reorganization. It may take some time to stabilize.
  • As a non-deposit taking NBFC, TCL will face a higher cost of funds raised as wholesale deposits.
  • For several years, the Tata group struggled to set up the Finance arms, its only taken shape recently.

Opportunities

  • The Tata Group is a diversified conglomerate, with 29 listed and 100s of group companies. There exists opportunity for TCL to align with these firms and their customers to provide loans and financial services.
  • Wealth management and new categories such as Gold loans hold potential. From just Tata Motors loans, TCL will expand to provide loans across OEMs, and this can be a large business.

Threats

  • Competition – Bajaj Finance as the leader in the NBFCs has shown high growth rates and return ratios.
  • Other firms in the industry have strong sector focus such as Commercial Vehicles or housing loans.
  • Banks are free to compete in all sectors as NBFCs and also have lower cost of funds.

Conclusion

  • TCL has priced its IPO aggressively. While pricing is close to BFL on P/B, it is a far smaller firm by loan book. Also TCL is taking shape now, and it will be 1-2 years by the time its mergers and new divisions are complete, and performance ratios stabilize.
  • Opinion: BUY with a 2-year perspective

Disclaimers and Disclosures

  • Punit Jain discloses that he has no shareholding in TCL. He does have shareholding in BFL (<1%) since 2003. Similarly, JainMatrix Investments Bangalore (JMI) and its promoters/ employees have no shareholding in TCL, and no known material conflict of interest as on date of publication of this report. This document has been prepared by JMI, and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JMI. This report should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JMI has not independently verified the accuracy or completeness of the same. Neither JMI nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Investment in the securities market are subject to market risks. Read all the related documents carefully before investing. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an RIA – Registered Investment Advisor.
  • JMI has been an equity investment adviser commercially since Nov 2012, and a SEBI certified and registered since 2016, under SEBI (Research Analysts) Regulations. Registration granted by SEBI, and certification from NISM in no way guarantee the performance of the Research Analyst or provide any assurance of returns to investors. Any questions should be directed to punit.jain@jainmatrix.com. Name of the RA as registered with SEBI – Punit Jain, SEBI Registration No. INH200002747. Logos / brand name –

IPOs of Subsidiaries of Listed firms – are Safer and Create Value

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20th July 2025

Summary

This article investigates a trend in Indian markets — listing of subsidiaries by Corporates that are large conglomerates and sector leaders. Who really benefits from these listings? Are they a source of genuine value creation? To understand this, we map the data on subsidiary IPOs by reputed Indian Corporates between Jul’23 and Jul’25. Building on our earlier analysis, which focused on a few prominent examples, we now expand the scope to 10 IPOs across diverse industries. This deeper dive presents more robust insights into the value creation effects of these IPOs for the Corporates, their shareholders, and IPO investors.

Subsidiary Listings over 2023-25

We identified 10 IPOs over the last 2 years, of subsidiaries of well known, listed, Corporates. We share the Market Capitalization data over this period (Jul’23 – Jul’25) at three key timelines – See Table 1:

  • Market Cap of the firm prior to listing of Subsidiary (5 days before IPO listing)
  • Post-listing of Subsidiary (30 calendar days after the listing day)
  • Current levels as on (15th July 2025) to uncover whether value is truly created so far.
Table 1 – Market Cap Data (click image to enlarge)

Some Findings:

Table 2 – Average Parameter Performance
  • The combined firms Market Cap one month Post Listing rose by 16%. In 9 of 10 cases, the combined firms market cap rose within 30 calendar days of the subsidiary IPO. See Table 2.
    • The highest post-listing rise was in Tata Motors + Tata Tech, with a combined gain of 33%.
    • Other notable increases include TVS Motor + TVS SCS: 26%
      • Federal Bank + Fed bank Financial: 20%
      • Bajaj Finance + Bajaj Housing Finance: 20%
    • This confirms a pattern: listing a subsidiary can unlock immediate shareholder value, especially when the market perceives the spinoff as a high-potential, distinct scalable business.
  • The average of gains & losses in the IPO subsidiary firms in the period from listing to today was 9%.
    • Only 4 out of 10 firms that IPO’d had positive gains as of today; remaining 6 had losses. Thus there are uncertain returns from IPOs, the firms appear to lose market cap after listing.
    • This is tough to generalize. It could be due to aggressive valuations. Or excess IPO demand.
  • The combined market caps of all the 10 firms (including subsidiaries) gained by an average of 34% in the period from Pre IPO to today. This is a very high number. Even benchmarked against the average Sensex gain of 16% in this period, the combined market caps gain is excellent.

Observations and Patterns

  • Value creation is visible in most Subsidiary listings, for the combined firms.
  • The Corporates often benefit despite initial volatility in market cap.
  • Combined value generally grows faster than Nifty or Sensex.

So, Who Really Gains from a Subsidiary Listing?

  • Corporates: The Parent company benefits from improved market visibility and simplification of the business. Valuation of the subsidiary is easier, and due to value unlocking, the Post-listing combined valuation has risen. Only in 2 of 10 cases, the combined valuation was flat Post listing of subsidiary.
  • Existing Shareholders of Corporates: Shareholders of Corporates don’t automatically benefit from the subsidiary IPO. To get gains, they have to invest additional capital in the subsidiary IPO. There is an IPO quota that helps parent company shareholders to get good allotment.
  • For Subsidiary IPO Investors: The reputation of the parent, coupled with listing of a firm with simpler business, sometimes from high potential sectors, has seen some of these IPOs do well. But with just 9% average gains as of today since listing, and with only 40% of the IPO firms positive today, investing in IPOs must be done carefully.

Conclusion: Value Unlocking, Risks and final thoughts

  • Subsidiary listings unlock value — the data supports this. For Corporates, it’s a clean move that sharpens focus and delivers a mkt. cap. growth. For investors, gains may depend on taking some action. Passive investors in the Corporate may experience short-term stagnation or dips. Active investors in the Corporate, and IPO participants, however may see faster capital appreciation.
  • The best strategy for Corporate shareholders is to actively invest in subsidiary IPOs in good offerings.
    • IPO investing in general is High Risk, but investing in the IPO of a listed company’s subsidiary is a much safer bet, due to past listed history, transparency and better available information.
    • The subsidiary being listed often has a simpler structure & business model, so is easier to value. 
  • As India’s capital markets mature, we observe that legacy structures of complex conglomerates morph and simplify by way of subsidiary IPOs. These may evolve into a strategic norm — not just for restructuring, but as a deliberate value creation mechanism. The IPO of a subsidiary may also be a regulatory requirement (eg. Bajaj Housing Finance, perhaps a few more) so its a compliance activity, not driven by market cap objectives.
  • Excess demand has returned to the IPO market, and so IPO investors need to expect over-subscription and high IPO valuations while evaluating IPO opportunities.
  • These are 10 recent IPOs, from widely different industries, offered at different valuations, we cannot generalize results with high confidence, every new IPO case could be a different situation.
  • Several cases have emerged of firms preferring to raise funds by QIP rather than debt – an aggressive move. This also may result in several equity dilutions in a short time period. Conservative and well run firms prefer to not dilute their Equity Share Capital for years, giving better ROE.

Disclaimer

  • Punit Jain discloses that he has no shareholding in any of the firms mentioned in this article except Bajaj Finance (since April 2003, ownership <1%) and Bajaj Housing Finance (since Sept’24 IPO, ownership <1%), and these have been mentioned here only as one of the 10 samples/ examples chosen. He is also a telecom consumer with services from Bharti Airtel and Reliance Jio. Other than these, he has no financial interest or transactions, with any firms mentioned here or any group company. In addition, JMI and its promoters/ employees have no direct or financial interest in these companies, and no known material conflict of interest as on date of publication of this report, to the best of his knowledge.
  • This document has been prepared by JainMatrix Investments Bangalore (JMI), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JMI. This report should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JMI has not independently verified the accuracy or completeness of the same. Neither JMI nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Investment in the securities market are subject to market risks. Read all the related documents carefully before investing. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from a SEBI RIA Registered Investment Advisor. JMI has been an equity investment adviser commercially since Nov 2012, and a SEBI certified and registered since 2016, under SEBI (Research Analysts) Regulations. Registration granted by SEBI, and certification from NISM in no way guarantee the performance of the Research Analyst or provide any assurance of returns to investors.
  • Any questions should be directed to punit.jain@jainmatrix.com. Name of the RA as registered with SEBI – Punit Jain, SEBI Registration No. INH200002747. Logo/brand name –

Belrise Industries IPO – Strong as the Chassis

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  • Date: 21st May 2025
  • IPO is open from 21-23rd May, at ₹ 85-90/share
  • Mid Cap. of mkt cap ₹ 8,000 cr.
  • PE is 27 times.
  • Sector: Auto Components
  • The IPO to raise ₹ 2,150 cr.
  • Opinion: BUY with a 2-3 year perspective
  • See here, an automobile Chassis –

IPO highlights

  • IPO application dates: 21 – 23rd May’25, with Price Band of ₹ 85 – 90 per share, FV: ₹ 5. Lot Size: Investors can bid for a minimum of one lot of 166 shares, and in multiples of this.
  • IPO Size is ₹ 2,150 cr.; it’s entirely a Fresh Issue of shares, no OFS.
  • This IPO will expand the Equity Share Capital of Belrise as it is a Fresh Issue of shares.
  • Objects of Issue: 1) ₹ 1,618 cr. will be used repay or prepay certain borrowings, reducing its debt burden, currently D/E is 1.01 2) A portion will fund capital expenditure to expand and modernize its mfg. facilities, especially for EV and aluminium components. Some funds will support working capital needs, while 3) the rest will go toward general corporate purposes.
  • The IPO share quotas of QIBs: NIIs: Retail is 50:15:35. (Qualified, Non-Institutional Investors)
  • The unofficial/ grey market premium of HMI is ₹ 18/share over the IPO price.
  • IPO allotment is by 26th May, crediting shares/ refunds by 27th, and listing on BSE / NSE on May 28th.

Summary

  • Why Belrise Industries: The Indian auto sector is growing impressively and India is #1 in 2-wheelers and a leader in small cars globally. Belrise is one of India’s largest auto component suppliers, with a diversified portfolio spanning sheet metal, chassis, suspension, plastic/polymer, and EV systems. It has a 24% market share in metal parts of Indian 2W segment, and is #3 here. It caters to leading OEMs such as Bajaj, Hero, TVS, and Tata Motors. With 15 mfg. plants in India, it benefits from proximity to OEMs. Belrise has pivoted towards EV parts like battery packs and electric chassis assemblies, this positions it well for the next phase of auto growth in India and abroad.
  • Why now in IPO: The IPO is a fresh issue, and will help the firm repay debt and fund capex. At current valuations with PE of 27 times, it is reasonably priced among auto component peers, with significant upside potential as volumes scale in India and globally. Belrise is now focusing on CVs and 4W which provide higher volumes and revenue per vehicle.
  • Risks: 1) High dependence on a few OEM customers 2) RM price fluctuations can impact margins 3) Execution risk in scaling up EV and aluminium divisions 4) Supply chain disruptions or cost inflation 5) sector or economic downturn 6) Shift in OEM product design preferences 7) Regulatory risks around import-export policies and tariffs. 8) Location risk – 7/15 of plants are in Mah.
  • Opinion: BUY with a 2-3 year perspective.

Entire Report in PDF format:

JainMatrix Investments_ Belrise IPO_May_2025Download

Disclaimers and Disclosures

  • Punit Jain discloses that he has no shareholding in Belrise Industries Ltd., or any group company. In addition, JainMatrix Investments Bangalore (JMI) and its promoters/ employees have no direct or financial interest in this company, and no known material conflict of interest as on date of publication of this report. We may apply for the IPO through a stock broker in line with our recommendations.
  • This document has been prepared by JMI, and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JMI. This report should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JMI has not independently verified the accuracy or completeness of the same. Neither JMI nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein.
  • Investment in the securities market are subject to market risks. Read all the related documents carefully before investing. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from a RIA Registered Investment Advisor.
  •  JMI has been an equity investment adviser commercially since Nov 2012, and a SEBI certified and registered since 2016, under SEBI (Research Analysts) Regulations. Registration granted by SEBI, and certification from NISM in no way guarantee the performance of the Research Analyst or provide any assurance of returns to investors.
  • Any questions should be directed to punit.jain@jainmatrix.com. Name of the RA as registered with SEBI – Punit Jain, SEBI Registration No. INH200002747. Logos / brand name –