IPO Review Rating matrix Rating : Unrated Issue Details Issue Details Issue Opens 14-Sep-16 Issue Closes 16-Sep-16 Fresh Issue () 129-13 Price Band ( ) 25-27 Bid Multiples (no of shares) 7 No. of Shares on Offer (lacs) 62.3-63. QIB (%) 5. Non-Institutional (%) 15. Retail (%) 35. Objects of the Issue The object of the net proceeds of the fresh issue is to purchase plant & machinery ( 8 crore) and to meet its working capital requirement ( 35 crore) Shareholding Pattern Pre-Offer Post-Offer Promoters & Promoter Group 1. 7.6 Public. 29.4 *Assuming issue price of 27 Financial Summary FY13 FY14 FY15 FY16 Total Revenues 346.1 41.6 425.9 52.6 EBITDA 44. 51. 61. 82.8 EBITDA Margins 12.7 12.7 14.3 16.5 PAT 4.8 13.3 21.6 26. EPS 2.2 6.2 1.1 12.1 Valuation Summary (at 27; upper price band) FY13 FY14 FY15 FY16 P/E 92.4 33.5 2.6 17.1 EV/EBITDA 12.4 1.9 9.4 6.7 P/BV 5.7 4.9 3.9 3.2 Research Analyst Nishit Zota nishit.zota@icicisecurities.com Vidrum Mehta vidrum.mehta@icicisecurities.com Rear axle player; rare offering! September 13, 216 GNA Axles (GNA) was established in 1993. The company is among the leading manufacturers of rear axles shafts used in on-highway & offhighway vehicular segments in India. Apart from rear axle shaft (accounts for 85% of revenue), it also manufactures other shafts (6% of revenue) & spindles (9% of revenue). The company has two manufacturing facilities both located in Punjab with a total annual capacity of 2.3 million (mn) rear axle shafts,.4 mn other shafts and.3 mn spindles. In terms of revenue bifurcation, as of FY16, domestic: export mix was at 45: 55, respectively. Over the years, GNA has focused more on the export market where its revenue contribution has increased from 35% in FY12 to 55% in FY16. The company exports rear axle shafts globally with North America, Europe accounting for 45%, 33% of its export revenue, respectively. GNA has a strong relationship with some global OEMs & tier-1 suppliers. It plans to raise ~ 13 crore, of which 8 crore would be used for purchasing new plant & machinery & 35 crore for its working capital requirement. Over FY12-16, revenue, EBITDA, PAT registered a CAGR of 6%, 12%, 11%, respectively. On the balance sheet front, as of FY16, its net debt to equity was at.8x with RoE & RoCE at 18.8% & 22.6%, respectively. Key investment rationale Leading axle shafts player; with long term customer relationship GNA manufactures a diverse range of rear axle shafts, other shafts & spindles for the on-highway segment, i.e. for LCVs, MCVs & HCVs & other transport vehicles like buses. It also manufactures rear axle shafts & other shafts for the off-highway segment, i.e. for agricultural tractors and machinery, forestry & construction equipments, electric carts & other specialty vehicles used in mining and defence sectors. GNA has a large variety of rear axle shafts with the capacity to manufacture axle shafts of up to 165 kg input weight. Its customers include global OEMs and tier-1 suppliers like Dana Ltd, John Deere, Kubota Corporation & Meritor HVS AB, as well as leading Indian OEMs and tier-1 suppliers like Claas India Pvt Ltd, TAFE, International Tractors, M&M, Automotive Axles (AAL), Escorts, Axles India. At present, M&M (8% of revenue), John Deere & AAL account for ~7% of revenue each. As of FY16, revenue from its top 5 & 1 clients accounted for 57% & 74% of its overall revenue, respectively. Key Risk & Concerns GNA Axles Price band 25-27 Slowdown in automotive demand, especially CV segment GNA s business is heavily dependent on the domestic automotive sector, particularly the commercial vehicle market that is cyclical in nature. The sales of axle shafts & spindles are directly related to production of commercial vehicles. Further, any slowdown in CV volumes in North America & European market, where it has significant exports could also impacts its financial performance. Further, as many other OEMs manufacture rear axle shaft in-house or through captive associates or JV, going forward, if any of its key customers decide to increase their captive manufacturing of components, GNA s business may get impacted. Fairly valued; priced at 17x on FY16 diluted EPS of 12.1 At the upper price band of 27, the stock is available at 17x on FY16 post issue diluted EPS of 12.1. We believe GNA has a decent business model (strong customer base & diversified revenue) and financial performance. However, we believe the company is fairly valued at the IPO price.
Exhibit 1: Key Financials Total Revenues 393.4 346.1 41.6 425.9 52.6 EBITDA 51.7 44. 51. 61. 82.8 EBITDA Margins (%) 13.2 12.7 12.7 14.3 16.5 PAT 16.9 4.8 13.3 21.6 26. Diluted EPS 7.9 2.2 6.2 1.1 12.1 RoE 22.9 6.1 14.5 19.1 18.8 RoCE 26.9 16.9 16.5 15.7 22.6 Page 2
About the company Exhibit 2: Product display of axle shaft for multi utility vehicles by GNA GNA Axles (GNA) is among the leading manufacturers of rear axle shafts for on-highway (LCV, MCV, HCV & other transport vehicles such as buses) and off-highway (agricultural tractors and machinery, forestry and construction equipment, electric carts and other specialty vehicles used in mining and defence sectors). Exhibit 3: Axles shafts for commercial vehicles Exhibit 4: Spindles for commercial vehicles Exhibit 5: Product display of spindles for specialty vehicles by GNA Page 3
An axle is a part of the transmission assembly of an automobile. The main purpose of an axle is to bear the weight of the vehicle and also maintain the position of wheels relative to each other and to the vehicle body. Axles can either be live-axles or non-driving axles. In an automobile, live axles help in transmitting the power from engine on to wheels via the drive shaft. Generally, in commercial vehicles and agricultural tractors, the rear axle acts as the live-axle while the front axle acts as the non-drive axle. The rear axle shaft is a part of the rear axle assembly and helps in transmitting the driving torque to the wheels. GNA was established in 1993 and manufacture and supplies a diverse range of rear axle shafts, other shafts and spindles. The company s promoter & management team have significant experience in the auto ancillary industry. Jasvinder Singh Seehra, Ranbir Singh & Gurdeep Singh are the promoters of the company with an average, of ~28 years experience in engineering and auto component sector. Executive Chairman, Rachhpall Singh, and Managing Director, Gursaran Singh, have been involved in the automotive component industry since 197. GNA manufactures a large variety of rear axle shafts and has the capacity to manufacture rear axle shafts of up to 165 kg input weight. GNA has an inhouse engineering department and conducts R&D activities in each of its product divisions enabling it to innovate and develop new products and processes. The company has two manufacturing plants both in Punjab (Hoshiarpur & Kapurthala district). As of FY16, GNA has a total annual manufacturing capacity of 2.3 million rear axle shafts (utilisation level at 8%),.4 million other shafts (utilisation level at 66%) and.3 million spindles (utilisation level at 56%). We believe that, on an average, the company s blended realisation for rear axle shafts was at ~ 2,3 per rear axle shaft, ~ 1,2 per other shaft and ~ 2,55 per spindle. In terms of product wise revenue bifurcation, as of FY16, rear axle shafts accounted for 85% revenue, other shafts accounted for 6% revenue while spindles accounted for the remaining 9% of revenue. Further, the domestic: export mix was at 45: 55, respectively. Its key domestic customers include M&M (accounts for 8.3% of overall revenue), Automotive Axles (7.1% of revenue) and John Deere (6.9% of revenue). Over the years, the company has focused more on the export market, where its revenue contribution has increased from 35% in FY12 to 55% in FY16. The company exports rear axle shafts across the world with North America & Europe accounting for 45% & 33% of its export revenue, respectively. Other geographies, Asia Pacific & the South American region account for 18% & 3% of export revenue, respectively. A marginal ~1% of export revenue is derived from Australia. GNA has a well diversified customer base across geographies. It has supplied over 1.84 million units of axle shafts in FY16 and over 7.89 million units in the preceding five fiscals and serviced various customers in India and across different geographies including the US, Mexico, Brazil, UK, Sweden, Germany, Spain, France, Italy, Turkey, China and Japan. It has a strong and established relationship with its customers. Certain domestic customers like M&M have been its customers since 1995. The company has also been supplying axles to some of its overseas customers for more than a decade. Its customers include global OEMs and tier-1 suppliers like Dana (US, Mexico and Brazil), John Deere (Spain and US), Kubota Corporation (Japan) & Meritor HVS AB (Sweden, Italy, Brazil, US), as well as to leading Page 4
Indian OEMs & Tier-1 suppliers such as Claas India, TAFE, International Tractors, Escorts, Axles India, Automotive Axles and M&M. Exhibit 6: Revenue trend over past five years 6 5 4 3 2 1 52.6 393.4 41.6 425.9 346.1 Total Revenues Exhibit 7: Revenue mix (domestic & exports) 6 5 4 3 2 1 136.2 275. 143.3 25.8 117.3 257.2 228.7 258.2 22. 227.6 Domestic Export Exhibit 8: Export revenue mix (country wise bifurcation) South America 3% Australia 1% Asia Pacific 18% North America 45% Europe 33% Page 5
Exhibit 9: Product wise Revenue mix () 6 5 4 3 2 1 42 43 36 26 296 277 5 53 31 39 312 323 43 31 42 Rear Axles shafts Other shafts Spindles Exhibit 1: Product wise Installed capacity & utilisation levels (FY16) Million 2.5 2 1.5 1.5 2.3 8 66 56.3.4 Axles shafts Spindles Other shafts 1 9 8 7 6 5 4 3 2 1 Annual Installed Capacity (Units) Utilisation (%) Investment Rationale Leading axle shafts player with long term customer relationship GNA manufactures a diverse range of rear axle shafts, other shafts and spindles for the on-highway segment, i.e. for LCVs, MCVs & HCVs and other transport vehicles such as buses. It also manufactures rear axle shafts and other shafts for the off-highway segment, i.e. for agricultural tractors and machinery, forestry & construction equipment, electric carts & other specialty vehicles used in the mining and defence sectors. GNA has a large variety of rear axle shafts with the capacity to manufacture axle shafts of up to 165 kg input weight. Its customers include global OEMs and tier-1 suppliers like Dana Ltd, John Deere, Kubota Corporation & Meritor HVS AB, as well as leading Indian OEMs and tier-1 suppliers such as Claas India Pvt Ltd, TAFE, International Tractors, M&M, Automotive Axles (AAL) Escorts, Axles India. At present, M&M accounts for 8% of revenue while John Deere & AAL account for ~7% of revenue each. As of FY16, revenue from its top five & 1 clients account for 57% & 74% of its overall revenue, respectively. Page 6
Diversify product portfolio & expand customer base GNA will continue its focus on development of new products as well as expand its existing lines of products. For example, the company is currently developing products such as heavy axle shafts for off-highway segment. The company also intends to diversify its customer base. Contribution from top five overseas customers has declined from 91.3% in FY15 to 8.2% in FY16. Over the past two or three years, GNA has acquired new customers for different product segments (in FY16 it started supplying rear axle shafts for HCVs to Dana Australia; in FY15, it started supplying rear axle shafts for HCVs to Meritor HVS Australia, it started supplying rear axle shafts for LCVs to Dana Brazil, it started supplying rear axle shafts for tractors TAFE are among others. Focus on exports from India GNA believes that an export oriented strategy will continue to offer it business advantages. They intend to leverage the low cost advantages of manufacturing in India. GNA has seen an increasing trend in export sale over the past three to four years. The company has over the years focused more on export market. Its revenue share has increased gradually over the past three or four years. Export revenue contribution has increased from 35% in FY12 to 55% in FY16. The company exports rear axle shafts across the world with North America & Europe accounting for 45% & 33% of its export revenue, respectively. Other geographies, Asia Pacific and South America region account for 18% and 3% of export revenue, respectively. A marginal ~1% of export revenue is derived from Australia. Decent financial performance in the past GNA Axles has reported a decent financial performance in the past. During FY12-16, revenue, EBITDA and PAT registered a CAGR of 6%, 12%, 11%, respectively. The operating margin improved from 12.7% in FY13 to 16.5% in FY16. Similarly, PAT margins improved from 1.4% in FY13 to 5.2% in FY16. The return ratio has also improved significantly in the past, from RoE & RoCE of 6.1% & 16.9% in FY13 to 18.8% & 22.6% in FY16, respectively. GNA s debt is also at reasonable levels with debt as of FY16 at 18 crore, with net debt to equity at.8x. Also, in the past, it has generated free cash flows of ~ 7 crore in FY16, which is positive for the company. Page 7
Exhibit 11: Revenue trend Exhibit 12: Profitability trend 6 5 4 393.4 346.1 41.6 425.9 52.6 3 25 2 16.9 21.6 26. 3 2 1 15 1 5 4.8 13.3 Total Revenues PAT Exhibit 13: EBITDA & PAT margins (%) trend Exhibit 14: Return ratios (RoE & RoCE) trend % 18 16 14 12 1 8 6 4 2 13.2 12.7 12.7 4.3 3.3 1.4 16.5 14.3 5.1 5.2 % 3 25 2 15 1 5 26.9 22.9 16.9 16.5 14.5 6.1 22.6 15.7 19.1 18.8 EBITDA Margins (%) PAT Margins (%) RoE RoCE Exhibit 15: Net debt/equity Exhibit 16: Free cash flow 2. 1 94.9 85.9 1.5 1..5 1. 1.3 1.2 1.1.8 8 6 4 2 5.3 4.7 7.2. Net Debt/Equity FCF Page 8
Key risk & concerns Slowdown in automotive sector particularly CV segment GNA s business is heavily dependent on the domestic automotive sector, particularly the commercial vehicle market. Sales of axle shaft & spindles are directly related to the production of commercial vehicle. Further, any slowdown in CV volumes in the North America & European market where it has significant exports could also impacts its financial performance. Even slower activity by its top five customers (Meritor HVS AB, Dana Ltd, Mahindra & Mahindra and John Deere, which account for 57% of revenue) could impact its performance. Concentration (product + client) risk Revenues from rear axle shaft currently account for 85% of revenue and seem to be the single product concentration risk. Any change in industry dynamics or change in technology/substitute may impact its product sale thereby impacting its overall performance. Further, GNA also has a client concentration risk, as sales to its top five clients account for 57% of its revenue while sales to its top 1 account for 74% of its revenue. Hence, its inability to diversify its concentration (product + client) risk may impact its performance, going forward. Foreign currency fluctuation risk Over the years, GNA has focused more on the export market. It has increased its share from 35% in FY12 to 55% in FY16. It supplies components to countries namely US, Sweden, Turkey, Brazil, Italy, Germany, Spain, Mexico, Japan, UK, France, China and Australia. We believe any adverse movement in the foreign currency may impact its performance. Steel prices (input cost) movement may impact its performance The primary raw material required for manufacturing GNA products is steel. Steel is procured locally from customer approved steel producers in the form of hot rolled bars & round corner squares. Its procurement of material grades of steel is done in accordance with specifications/standards provided by customers. The company has lower pricing power and may face a severe impact on its performance in case of adverse steel price movement. Common promoter group companies may give rise to conflict of interest GNA s promoters have interests in other companies viz. GNA Gears, GNA Udyog, Amarsons Automotives & Guru Nanak Transmission Punjab. The promoter group companies are authorised to carry out/engage in businesses similar to GNA Axles and serve the same customers. In one of the instances, GNA Axles and GNA Gears supply different components to a customer under the same agreement. In cases of conflict, there is no guarantee that promoters will not favour any of the promoter group companies or vice-versa. Page 9
Objects of issue The object of the net proceeds (~ 13 crore) of the fresh issue will be utilised for the purchase of plant & machinery, for meeting its working capital requirement and for general corporate purposes. Of the net proceeds, 8 crore would be used for the purchase of plant & machinery, which includes CNC machines, equipment for the forging shop, utility & power generator, testing equipments and others. GNA aims to purchase new machinery to expand its capacity & optimally utilise its existing capacity, which will help the company to meet the increase in demand over the next few years. Further, 35 crore would be used as its working capital requirement, which is for its smooth day-to-day operations. Valuations At the upper price band of 27, the stock is available at 17x on FY16 post issue diluted EPS of 12.1. We believe GNA has a decent business model (strong customer base & diversified revenue) and financial performance. However, we believe the company is also fairly valued at the IPO price. Page 1
Exhibit 17: Profit & Loss statement Income statement () Income Revenue from operations 393.4 346.1 41.6 425.9 52.6 Export Incentives 5.2 2.9 2.4 4.2 6. Other Income..1.2.6.4 Total Income 398.6 349. 44.2 43.6 58.9 Expenditure Raw Material expenses 269.2 233.8 273.7 278.5 317.5 Employee benefits 13.8 16.1 19.3 2.8 23.7 Other expenses 63.8 55.2 6.2 7.3 84.9 Total Expenditure 346.9 35.1 353.2 369.7 426.2 EBITDA 51.7 44. 51. 61. 82.8 Financial charges 11.5 12.7 15.2 17.3 16.3 Depreciation/amortisation 12.4 13.6 17.4 23. 27.2 PBT 27.8 17.6 18.5 2.7 39.3 Taxation 1.9 12.8 5.2 (.9) 13.4 PAT 16.9 4.8 13.3 21.6 26. Exhibit 18: Balance Sheet Balance Sheet () Equity Share Capital 15.2 15.2 15.2 15.2 15.2 Reserves & Surplus 58.5 63.4 76.4 97.6 123.1 Total Shareholders Funds 73.7 78.5 91.6 112.8 138.3 Long term borrowings 25.8 43.1 54.6 6.6 42.2 Deferred tax liability (net) 3.4 11.3 12.6 6. 3.7 Other long term liability - - 16.1 - - Total Non-current liabilities 29.2 54.4 83.3 66.6 45.9 Short term borrowings 46.8 57.4 58. 69.2 65.9 Trade Payables 93.7 18.2 122.4 147.8 163. Other current liabilities 15.1 14.5 25.8 27.8 28.6 Short term provisions 9. 4.9.8 2.3 4.8 Total current liabilities 164.6 185. 27. 247.1 262.3 Total Liabilities 267.5 317.9 381.9 426.5 446.5 Fixed Assets Tangible assets 88.1 17.6 145.1 159.3 147.3 Intangible assets - - - - Capital work-in-progress 7.2 28.9 24..4.1 Long term loans & advances 2.1 1.7 12.9 14.1 14.1 Non-current Investments - - - -. Other non-current assets - - -.2 2.2 Total non-current assets 97.4 138.2 182. 174. 163.6 Inventories 53.1 52.9 61.2 91.9 91.4 Trade receivables 84.8 86.6 111.3 121.9 162.1 Cash and bank balances.8 1.5.5.4.7 Short-term loans and advances 1.5 13.6 1.9 8.7 4.2 Other current assets 2.8 25. 24.9 29.6 24.6 Total Current assets 17. 179.6 199.9 252.5 282.9 Total Assets 267.5 317.9 381.9 426.5 446.5 Page 11
RATING RATIONALE ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock. Strong Buy: >15%/2% for large caps/midcaps, respectively, with high conviction; Buy: >1%/15% for large caps/midcaps, respectively; Hold: Up to +/-1%; Sell: -1% or more; Pankaj Pandey Head Research pankaj.pandey@icicisecurities.com ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai 4 93 research@icicidirect.com Page 12
ANALYST CERTIFICATION We /I, Nishit Zota MBA and Vidrum Mehta MBA, Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Terms & conditions and other disclosures: ICICI Securities Limited is a Sebi registered Research Analyst having registration no. INH99. ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. ICICI Securities is a wholly-owned subsidiary of ICICI Bank which is India s largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. ( associates ), the details in respect of which are available on www.icicibank.com. ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities. While we would endeavour to update the information herein on a reasonable basis, ICICI Securitiesis is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in circumstances where ICICI Securities might be acting in an advisory capacity to this company, or in certain other circumstances. This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice. ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months. ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction. ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned in the report in the past twelve months. ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts have any material conflict of interest at the time of publication of this report. It is confirmed that, Nishit Zota MBA and Vidrum Mehta MBA,, Research Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. ICICI Securities or its subsidiaries collectively or Research Analysts do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report. Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this report. It is confirmed that, Nishit Zota MBA and Vidrum Mehta MBA, Research Analysts do not serve as an officer, director or employee of the companies mentioned in the report. ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned in the report. We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Page 13