Daily Commodity Research Report – 23rd April 2019

MARKET RECAP                                                                   Key Market Data Points After a long weekend, the domestic started yesterday’s session on a pessimistic note amid the on-going nervousness for the results of elections 2019. As the day progressed, selling intensified which forced the benchmarks to close with colossal loss. The index Nifty lost more than 150 points to close below 11600 mark. Meanwhile, the Nifty Bank index too remained under pressure and ended with a loss of more than 500 points. Right from the beginning of the session, market breadth remained strongly in the favour of declining counters. On the sectoral front, except NIFTY IT (+0.44%) all the other group indices closed in red. From the losers, NIFTY REALTY (-2.48%) and NIFTY PSU BANK (-2.45%) stocks remained under limelight. From the F&O space, DHFL (-11.94%), PCJEWELLER (-11.29%) and IBULHSGFIN (-9.21%) were the biggest losers. MARKET OUTLOOK Nifty Daily Chart:    Since last week, we have been stating about booking profits at higher levels in long positions. In line with the same we witnessed strong profit booking in the markets on the back of overbought conditions. The index Nifty yesterday underwent a major move on the downside which was in line with the expectation. However, this kind of magnitude was not expected. Now, at this juncture, the index is trading just above the previous decisive support level of 11550. If this support is held then we might witness a relief rally going ahead. In such scenario, 11700 – 11730 would act as strong resistance in the coming sessions. In case of further downside, breach of 11550 on closing basis might bring the markets into the ‘Sell on Rise’ mode. We continue to advice traders to avoid overleveraged positions and maintain strict stop loss.   Disclaimer)

ISSUE HIGHLIGHTS Issue Size of approximately 61,55,814 shares which consists of offer for sale of 29,00,000 shares by promoter & promoter group and fresh issue of approximately 32,55,814 shares (at upper price band). Proceeds from the issue shall be utilised towards : A) Repayment of borrowing – 20.5 Cr. B) Early redemption of 9.8% FRCPS – 11.5 Cr  C) Long term working capital – 20 Cr. Shareholding Pattern COMPANY HIGHLIGHTS Neogen Chemicals Ltd is a 27 year old company specialising in Bromine based compounds and Inorganic Lithium Salts. The company was founded by Mr H T Kanani, a chemical engineer from IIT Mumbai. Over the years Neogen have expanded its product portfolio and presently manufactures extensive range of specialty chemicals having application in various industries. As on September 30, 2018, Neogen have manufactured an aggregate of 187 products comprising 170 organic chemicals and 17 inorganic chemicals. Specialty organic chemical compounds find use in application industries such as pharmaceutical, agrochemical, flavour, fragrance and electronic-chemical. Neogen’s product offering in inorganic chemical segment primarily comprises Lithium Compounds. The Lithium Compounds manufactured are used in eco-friendly Vapour Absorption Machines (VAM) for cooling air/water/process equipment and find application in industries such as heating ventilation, air-conditioning (HVAC), refrigeration, construction chemicals, pharmaceutical and specialty polymer. Neogen is presently, developing a green-field manufacturing unit in Dahej SEZ, in Gujarat and are also proposing to expand operations in Karakhadi, Vadodara.  Peer Comparison (FY 18) Rs. in Cr. Manufacturing Facilities and Capacity Utilisation Valuation Company’s operations are relatively on a much smaller scale in comparison to its listed players. Having regard to the issue size and its scale of operations, we would like to see FY20 earnings trajectory and growth prospects of Neogen for recommendation. Disclaimer: This document has been prepared by IndiaNivesh Securities Limited (“INSL”), for use by the recipient as information only and is not for circulation or public distribution. INSL includes subsidiaries, group and associate companies, promoters, employees and affiliates. INSL researches, aggregates and faithfully reproduces information available in public domain and other sources, considered to be reliable and makes them available for the recipient, though its accuracy or completeness has not been verified by INSL independently and cannot be guaranteed. The third party research material included in this document does not represent the views of INSL and/or its officers, employees and the recipient must exercise independent judgement with regard to such content. 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The research analysts of INSL have adhered to the code of conduct under Regulation 24 (2) of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is based on technical and derivative analysis center on studying charts of a stock’s price movement, outstanding positions and trading volume, as opposed to focusing on a company’s fundamentals and, as such, may not match with a report on a company’s fundamentals. Nothing in this document constitutes investment, legal, accounting and/or tax advice or a representation that any investment or strategy is suitable or appropriate to recipients’ specific circumstances. INSL does not accept any responsibility or whatever nature for the information, assurances, statements and opinion given, made available or expressed herein or for any omission or for any liability arising from the use of this document. Opinions expressed are our current opinions as of the date appearing on this document only. 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This report is based / focused on fundamentals of the Company and forward-looking statements as such, may not match with a report on a company’s technical analysis reportEach of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Dharmesh KantFollowing table contains the disclosure of interest in order to adhere to utmost transparency in the matter:   INSL, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. 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