Commodity Supercycles.

Hit the 're-tweet' & help us educate more investors.

A micro thread 🧵👇

Krsnna Diagnostics IPO notes: 'Let's do Good' ❓

Hit the 'retweet' & help us educate more investors

A thread 🧵👇

#IPOwithJST

1/ Basics about the IPO

Issue Dates: 4 - 6 August
Issue Size: ₹ 1,211 Crore (400crs Fresh Issue & 811crs OFS)
Mcap at the upper band: 2994crs
Price Band: ₹ 933 - 954
Retail Quota: 10%

Promoter stake to go from 32% to 27% post IPO.

2/ About the company.

Krsnaa Diagnostics provides technology-enabled services such as imaging (including radiology), pathology/clinical laboratory, and teleradiology

to public and private hospitals, medical colleges and community health centres across India.

3/ They focus on the public-private partnership (“PPP”) diagnostics segment and have the largest presence in the diagnostic PPP segment.

Contracts are typical of long-term in nature.

Won 77.6% of all tenders since inception & have thus deployed 1823 diagnostic centers.

4/ Operational performance indicators

A thread on the snippets (paragraphs & quotes) from the book ‘Why We Sleep’ by Matthew Walker 💤

One third of our lives, better read about it.

This thread will be updated as I read further & further.

1/ “Two-thirds of adults throughout all developed nations fail to obtain the recommended eight hours of nightly sleep.”

Imagine if you don’t have that rare ‘short sleep’ genes 🧬 that allows you to do will less than 5 hours of sleep 🛌.

2/ It’s going to get ugly.

3/ Pandemic.

4/ Why to learn about sleep.

What if I told you to submit your PhD report by the 1st year of your BTech in engineering.

That’s what people do when they try to find multi-baggers in their 1st business cycle.

The Business Model of Indian Hospitals Simplified.

“We are blessed to be living in a country where the cost of healthcare is the lowest in the world.” ~Dr. Devi Shetty, Narayana Health

A thread 🧵👇

1/ In the Indian healthcare delivery market; the pharmaceuticals market is 20% of the pie. While Hospitals market is 3x that of theirs.

Big opportunity size, however, is it investment-worthy? Let's see.

2/ Before we get into the details:

Do brush up on the different abbreviations associated with the Hospitals & the Pharmaceuticals industry in General, for example ALOS, ARPOB, NABH, etc.

Inpatient (IPD): Need to get hospitalized
Outpatient (OPD): No need to get hospitalized

3/ The hospitals are of basically 3 types:

Primary: For OPD only (no beds), sends to below hospitals for further treatment

Secondary: IPD & OPD in medium-sized general hospitals

Tertiary: Can treat all complex ailments & huge in size, Major listed companies are focused here.

4/ Hospitals can also be classified based on Ownership & management:

Here, the listed companies either are in private or manage hospitals owned by others (Asset light business, due to the very high land prices in metro cities)

Windlas Biotech IPO notes 💊

'What's in a name? that which we call a rose by any other name would smell as sweet' ~Shakespeare

Hit the 'retweet' & help us educate more investors

A thread 🧵👇

#IPOwithJST

1/ Basics about the IPO 👇

Incorporated in 2001

Fresh Issue of 165crs (50 for capex | 48 for Working capital | 20 for debt payment) + OFS of 237crs (Partially by promoter & PE Tano selling out as the fund tenure is up)

~ Total raise of 402crs

2/ About the company (Not a Biotech company)

A Contract manufacturer for formulation cos. (204 in total) for Indian markets & a small domestic OTC biz

3279 products, 4 plants with 700cr tablets/capsules capacity

Emphasis on chronic (60% of rev) & complex generics (70% of rev)

3/ History

Revenues:
FY11 - 100cr 👉 FY14 - 200cr 👉 FY21 - 400cr

Growth is similar to the Indian pharmaceutical sector, not gaining any market share even after increasing products.

Customers include Pfizer, Sanofi India, Eris, Cadila, etc.

4/ Competition: No Moat

400+ organized & 15000 unorganized players in the same space: 2% market share

Some of the things that can drive consolidation: Customers preferring better compliance

However, a single customer usually has 35-40 contract manufacturers for products.

A classic early sign of a commodity cycle.

Mining industry nonfarm payrolls near historical lows.

This happened in early 1970s & 2000s.
Both marked the onset of a commodities bull market.

Labor & capital constraints are the amplifiers of bull market in resource stocks.

👇👇👇

Energy & soft commodities are obviously not mining related.

See below the nonfarm payrolls for oil & gas extraction which is also at historical lows.

To recall:

The green agenda hasn’t even started.

The decline in agricultural workers look even more severe.

To be fair, this is not a domestic problem.
We’re are experiencing similar issues worldwide.

This pandemic has truly magnified a long-term trend of labor reduction and under investments in the commodities space.

Resource companies have been facing a deep recession for some time now with not enough workers willing to enter this industry.

On top of it:

Government policies seem to be discouraging folks from return to the labor market.

People continue to leave the labor force like never before.

Monthly RSI of the long term chart of the Commodity index suggests that it is in no mood to stall any time soon. But do keep in mind that intermittent pullbacks/consolidation is not ruled out so those would be times to keep patience

https://t.co/uGJ3nCavuX

#Commodities #CRB

#copper
I keep seeing this Wood-Mackenzie chart in every copper presentation. I started my career in 1994 when the market was about 10Mt and Sumitomo embarked on a massive attempted copper market squeeze.

#copper
There are copper projects out there, of course, and they are all raising capital and advancing feasibility studies. But I strongly contend that there are not enough and they cannot be built in time to meet expected demand.

#copper
10 years of below trend copper exploration has consequences.
My very strong view is the only way out of this situation is for the copper price to go to a level where demand is substituted or destroyed.

#copper
Speaking to a copper concentrates trader yesterday and a Chinese smelter just paid a Treatment Charge of $10 for a spot parcel. (TC's are the allowance that miners pay smelters to turn conc into metal.) Historic average is closer to $70.

#copper
Only way the smelter can make money on a $10 TC is if the copper price goes up - this smelter clearly gambling on that!

#ThomsonReutersCommodityIndex Need a weekly close above 222 for a BO and bigger rally to resume in #commodities

@nishkumar1977 #commodities Nishant, have a look at return by this fund ;) #mutualfunds #iciciprudential