Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

The Phoenix Mills - Potential fund infusion may usher in growth - ICICI Securities

Posted On: 2020-12-01 22:12:15 (Time Zone: Arizona, USA)

The Phoenix Mills (PHNX) has informed exchanges that the listed entity along with few of its SPVs has signed a non-binding term sheet with GIC Private Equity (PE) for the formation of a retail-led mixed-use platform. The assets include PHNX's Mumbai (Kurla) and Pune malls and Mumbai (Kurla) offices having a total leasable area of 3.36msf (2.33msf of malls and 1.03msf of offices) that generated FY20 NOI of Rs3.7bn. The indicative pre-money EV for these assets is Rs56-57bn or an equity value of Rs40-41bn (debt of Rs16bn as of Mar-20). This implies a cap rate of 6.6% at pre-Covid rentals which is commendable given 50% waiver in FY21E mall rentals. GIC PE has the option to initially acquire an equity stake of 26% in these SPVs and increase it to 35% in another 12 months which implies a potential equity investment of Rs10-13bn. We retain our BUY rating with a revised SoTP based target price of Rs804/share (earlier Rs780) as we roll forward to FY22E NAV.

- Potential fund infusion may usher in growth: The indicate pre-money EV for the potential transaction of Rs56-57bn (Isec EV of Rs42bn) implies a cap rate of 6.6% (6.1% for malls and 8.5% for offices) based on combined pre-Covid FY20 Net Operating Income (NOI) of Rs3.7bn. In our view, this is commendable considering that ready Grade A office assets in India command a cap rate of ~8% and is similar to the cap rate of 6.3% which PHNX achieved for the platform deal signed with CPPIB in April 2017. GIC PE may invest between Rs10-13bn in PHNX's SPVs (pre-money equity value of Rs40-41bn) which may further strengthen PHNX's balance sheet as it has cash reserves of Rs18.5bn as of Sep-20.

- Festive season sees surge in consumption: While Q2FY21 consumption was at 40-55% of previous year levels, consumption has picked up in Q3FY21 with the first four weeks of Nov-20 seeing consumption rising to 87% of the same period last year driven by increase in mall operating hours, resumption of F&B and onset of festive season. ~93% of PHNX's total area across malls is now operational. While rental waivers may result in PHNX incurring a 50% rental loss of Rs5.0bn in FY21E, the company expects rentals to revert back to 90% minimum guarantee from Q1FY22 as consumption stabilises.

- Estimated rental income CAGR of 13% over FY20-25E: At a portfolio level, PHNX will have ~11msf operational mall space by FY23-24E (6.9msf currently operational including Palassio, Lucknow). After accounting for COVID-19 induced revenue loss of Rs5.0bn in FY21, we expect PHNX to achieve a 13% rental income CAGR (ex-CAM) at a portfolio level over FY20-25E which may result in PHNX clocking over Rs19bn of rental income in FY25E vs. ~Rs10bn in FY20. Of the Rs19.2bn of estimated gross rental income in FY25E, PHNX share is ~75% or Rs14.4bn.

Shares of The Phoenix Mills Ltd was last trading in BSE at Rs.689.5 as compared to the previous close of Rs. 682.55. The total number of shares traded during the day was 14607 in over 1545 trades.

The stock hit an intraday high of Rs. 703.05 and intraday low of 671.95. The net turnover during the day was Rs. 10109141.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

IPO Review - Indian Railway Finance Corporation (IRFC) - ICICI Direct

HCL Technologies - Q3FY21 First Cut - ICICI Direct

Logistics Sector Update - Indian Railways - getting aggressive - HDFC Securities

Indigo Paints - IPO view - YES SECURITIES

Infosys - Near-term margins will likely come under pressure - ICICI Securities

CESC - 7% dividend yield + higher ESG rating - ICICI Securities

South Indian Bank - Unveils vision 2024; targets RoA / RoE of 1% / 13% by 2024 - ICICI Securities

Maintain BUY on Infosys - Growth certainty on explosive deal wins - HDFC Securities

Maintain ADD on Wipro - Growth acceleration - HDFC Securities

Consumer Durables - Q3FY21 Results Preview - HDFC Securities

Q3FY21 Company Update - Filatex India - ICICI Direct

Q3FY21 Result Update - Wipro Ltd - ICICI Direct

Q3FY21 Result Update - CESC - ICICI Direct

Monthly Inflation - December 2020 - ICICI Direct

Q3FY21 Result Update - Infosys - ICICI Direct

Banks Q3FY21 Results Preview - Scope for optimism beyond a tepid 3Q - HDFC Securities

Consumer Discretionary Companies - Q3FY21 Results Preview Report - HDFC Securities

Pharma Sector Update - Ample catalysts to sustain luster - HDFC Securities

Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research on IIP data

Infosys - Q3FY21 First Cut - ICICI Direct

Wipro - Q3FY21 First Cut - ICICI Direct

HDFC Securities - Real Estate Q3FY21 Results Preview - Has COVID triggered a new cycle?

Industrials Q3FY21 Results Preview - Normalisation done, growth awaited - HDFC Securities

FMCG & Alco Bev - Q3FY21 Results Preview - HDFC Securities

Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research on December 2020 CPI Data

Cement & Building Materials (Tiles) - Results Preview - Robust Performance on Improved Volume - Reliance Securities

Automobile & Auto Ancillary - Results Preview - Strong Results on Healthy Volume Performance in 3QFY21 - Reliance Securities

Q3FY21 Result Update - Tata Consultancy Services - ICICI Direct

Q3FY21 Result Preview - Real Estate & Infrastructure - ICICI Direct

Q3FY21 Result Update - Avenue Supermarts - ICICI Direct

Q3FY21 Result Preview - Metals & Mining - ICICI Direct

Insurance and Capital Markets Companies Q3FY21 Results Preview - Stronger earnings expected across sectors - HDFC Securities

Capri Global Capital - Getting back to normalcy - ICICI Securities

Avenue Supermarts - Fast recovery; there are speed breakers though - ICICI Securities

Tata Consultancy Services - Steady state growth / margins are yet to be seen! - ICICI Securities

Q3FY21 Result Preview - FMCG - ICICI Direct

Cement Sector - Q3FY21 Results Preview - HDFC Securities

Avenue Supermart Q3FY21 Results - Views of YES SECURITIES

The Phoenix Mills - Festive season ushers in consumption revival - ICICI Securities

Quant Pick - Zee Entertainment - ICICI Direct

Q3FY21 Result Preview - Auto and auto ancillary - ICICI Direct

Q3FY21 Result Preview - Capital Goods & Power - ICICI Direct

Q3FY21 Result Preview - Consumer Discretionary - ICICI Direct

Q3FY21 Result Preview - Banking & Financial Services - ICICI Direct

Q3FY21 Result Preview - Cement - ICICI Direct

Stock Tales - Esab India - ICICI Direct

TCS - Q3FY21 First Cut - ICICI Direct

NHPC - Receivables decline; pending issues cleared - ICICI Securities

ICICI Securities - Telecom - Bharti Airtel to outperform yet again...

Cement - Yet another strong quarter; upgrades to continue - ICICI Securities

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020