We will be back by 1st Jan, 2008 with a bigger , better interface to post solid information about market and interact with my readers !!!
till then ....
WISH YOU A VERY HAPPY & PROSPEROUS NEW YEAR !!!
December 27, 2007
December 15, 2007
Grey market premium - Dec IPO
eClerx Services 270 to 315 60 to 65
BGR Energy 425 to 480 375 to 380
Transformers & Rectifiers 425 to 465 280 to 290
Brigade Enterprises 351 to 390 100 to 110
Jyothy Lab. 690 215 to 220
Burnpur Cement Ltd. 12 5 to 6
BGR Energy 425 to 480 375 to 380
Transformers & Rectifiers 425 to 465 280 to 290
Brigade Enterprises 351 to 390 100 to 110
Jyothy Lab. 690 215 to 220
Burnpur Cement Ltd. 12 5 to 6
Short term stocks
- Ambica Agar Aroma - cmp 22 - tgt 55 (2 months)
- Rishabh Digha ltd - cmp 20 - tgt 45 (1 month)
- Frontier Information & technology - cmp 6 - tgt 25 ( 2 months)
Stocks Accumulation - Medium term
- Power Finance Corporation
- ICICI Bank
- HDFC Bank
- RCap
- Yes Bank
- Centurion Bank
- Bank of Baroda
December 10, 2007
Stock calls -10/12/2007
1. Prefer Media & Entertainment stocks for a period of 12- 18 months, such as
a) Adlabs
b) PVR
c) WWIL
d) Inox
e) UTV
f) Balaji Telefilms
g) Network 18
2. REL can see an upside of 10-15% on account of Reliance power IPO hitting the market in Jan
3. GMR is coming out with power IPO.This will have positive effect on GMR infra.
GMR has also forayed into SEZ and ports.In short term,stock may correct as it has run up
from 180 levels.Stay invested and reap rewards in form of value unlocking.
4. TATA STEEL is looking good for medium term.Short term,this stock might correct 7-10%.
Buy on dips for medium term target of 985-995
5. ALOK INDUSTRIESThis stock is range bound b/w72-80.
Stock has potential to cross 100,keep target of 110 and stay invested.
Infrastructure arm of ALOK is trigger point and also reason of stock appreciation(value unlocking).
6. IFCI -125-133 short term target -Hold IFCI for 18-24 months.Our price target is 280-325.If Goldman Sachs takes controlling stake,target is revised to 640-700.
7. ITC-This stock will be star performer of Year 2008.We expect demerger news and we are very bullish on ITC,especially its retail model -E-choupal.
Stay invested,one year target of 270-285.Better if you hold for 2 years.
a) Adlabs
b) PVR
c) WWIL
d) Inox
e) UTV
f) Balaji Telefilms
g) Network 18
2. REL can see an upside of 10-15% on account of Reliance power IPO hitting the market in Jan
3. GMR is coming out with power IPO.This will have positive effect on GMR infra.
GMR has also forayed into SEZ and ports.In short term,stock may correct as it has run up
from 180 levels.Stay invested and reap rewards in form of value unlocking.
4. TATA STEEL is looking good for medium term.Short term,this stock might correct 7-10%.
Buy on dips for medium term target of 985-995
5. ALOK INDUSTRIESThis stock is range bound b/w72-80.
Stock has potential to cross 100,keep target of 110 and stay invested.
Infrastructure arm of ALOK is trigger point and also reason of stock appreciation(value unlocking).
6. IFCI -125-133 short term target -Hold IFCI for 18-24 months.Our price target is 280-325.If Goldman Sachs takes controlling stake,target is revised to 640-700.
7. ITC-This stock will be star performer of Year 2008.We expect demerger news and we are very bullish on ITC,especially its retail model -E-choupal.
Stay invested,one year target of 270-285.Better if you hold for 2 years.
3 ways to stay on top of stock market
With stock markets oscillating wildly, the bigger concern for investors is to protect their investments over the downturn, rather than clock aggressive growth during the upturn.
Protecting your investments in a falling market is easier said than done. It involves taking on that precise quantum of risk that can spur your investments in a rising market and cut losses in a falling market.
While this sounds very difficult (and it is, even the best fund managers often struggle in striking this sweet balance between risk and return), we have not one, but three ways for you to stay on top of stock market volatility.
1. Good old balanced funds
Balanced funds, if you still remember them, are asset allocation investments. They invest across equity and debt markets (minimum 65% of assets in equities), which leaves them well placed to serve three objectives:
Shift across asset classes based on the best available investment opportunities.
Use the debt component intelligently to de-risk the equity portfolio during volatility in equity markets.
Book profits in equities regularly which again de-risks the equity portfolio by capping the level.
Like balanced funds, monthly income plans (MIPs), offer a similar investment proposition, although to a lesser extent. Since MIPs usually invest 15%-25% of assets in equities they are suited for investors with low-to-medium risk appetite.
In a falling market, when being fully invested in equities can prove perilous, a balanced fund with a 35% debt component might just be what the doctored ordered.
2. Investing through SIPs
Unlike balanced funds, which are usually ignored, SIPs have been widely adopted by investors. The reasons are not far to seek. Investing Rs 500-1,000 every month is a lot easier on the wallet than investing (a minimum of) Rs 5,000 lump sum.
By investing smaller amounts at regular intervals, you can reduce the average cost of your mutual fund investments over a market cycle. This is possible because when markets are volatile, SIPs activated during that period lower the overall average cost of purchase.
So investors who have opted for the SIP route welcome the volatility in stock markets and look forward to more of it going forward.
3. Always stay diversified
When markets are on the rise and everything appears hunky dory, that's when investors are most prone to make mistakes. That is the time when various high risk investments like thematic/sector funds are spawned.
Since a rising tide lifts all boats, most fund houses are quick to respond to a rally by launching high risk investments like thematic funds which they otherwise would not have launched.
Taking on higher risk pays rich dividends in a rising market, which explains why investors are prepared to risk their monies in a thematic fund that they would otherwise not have done.
Don't believe us? Compare the number of investors who invested in technology/software funds in 1999-2000 (before the tech crash) with those who invested in them in 2000-2002 (after the crash). Once the tech crash had set in, technology funds were the most reviled investments.
On the other hand, investors who were invested in well-diversified equity funds were relatively better off in the face of market volatility.
We see a similar situation emerging at present. Investors are going all out to invest in infrastructure funds ignoring the higher risk and the fact that they are in the midst of a stock market rally which enables such funds to generate above-average returns.
If the markets were to correct sharply, themes like infrastructure could be the hardest hit making investors in thematic funds wish that they had invested in diversified equity funds instead.
source: rediff.com
Protecting your investments in a falling market is easier said than done. It involves taking on that precise quantum of risk that can spur your investments in a rising market and cut losses in a falling market.
While this sounds very difficult (and it is, even the best fund managers often struggle in striking this sweet balance between risk and return), we have not one, but three ways for you to stay on top of stock market volatility.
1. Good old balanced funds
Balanced funds, if you still remember them, are asset allocation investments. They invest across equity and debt markets (minimum 65% of assets in equities), which leaves them well placed to serve three objectives:
Shift across asset classes based on the best available investment opportunities.
Use the debt component intelligently to de-risk the equity portfolio during volatility in equity markets.
Book profits in equities regularly which again de-risks the equity portfolio by capping the level.
Like balanced funds, monthly income plans (MIPs), offer a similar investment proposition, although to a lesser extent. Since MIPs usually invest 15%-25% of assets in equities they are suited for investors with low-to-medium risk appetite.
In a falling market, when being fully invested in equities can prove perilous, a balanced fund with a 35% debt component might just be what the doctored ordered.
2. Investing through SIPs
Unlike balanced funds, which are usually ignored, SIPs have been widely adopted by investors. The reasons are not far to seek. Investing Rs 500-1,000 every month is a lot easier on the wallet than investing (a minimum of) Rs 5,000 lump sum.
By investing smaller amounts at regular intervals, you can reduce the average cost of your mutual fund investments over a market cycle. This is possible because when markets are volatile, SIPs activated during that period lower the overall average cost of purchase.
So investors who have opted for the SIP route welcome the volatility in stock markets and look forward to more of it going forward.
3. Always stay diversified
When markets are on the rise and everything appears hunky dory, that's when investors are most prone to make mistakes. That is the time when various high risk investments like thematic/sector funds are spawned.
Since a rising tide lifts all boats, most fund houses are quick to respond to a rally by launching high risk investments like thematic funds which they otherwise would not have launched.
Taking on higher risk pays rich dividends in a rising market, which explains why investors are prepared to risk their monies in a thematic fund that they would otherwise not have done.
Don't believe us? Compare the number of investors who invested in technology/software funds in 1999-2000 (before the tech crash) with those who invested in them in 2000-2002 (after the crash). Once the tech crash had set in, technology funds were the most reviled investments.
On the other hand, investors who were invested in well-diversified equity funds were relatively better off in the face of market volatility.
We see a similar situation emerging at present. Investors are going all out to invest in infrastructure funds ignoring the higher risk and the fact that they are in the midst of a stock market rally which enables such funds to generate above-average returns.
If the markets were to correct sharply, themes like infrastructure could be the hardest hit making investors in thematic funds wish that they had invested in diversified equity funds instead.
source: rediff.com
8 reasons why stock market traders lose money
Many people think trading is the simplest way of making money in the stock market. Far from it; I believe it is the easiest way of losing money. There is an old Wall Street adage, that "the easiest way of making a small fortune in the markets is having a large fortune."
I discuss below eight ways of undisciplined trading which lead to losses. Guard against them, or the market will wipe you out. I am qualified to speak on this subject because I was myself an undisciplined trader for a long time and the market hammered me into line and forced me to change my approach.
1. Trading during the first half-hour of the session
The first half-hour of the trading day is driven by emotion, affected by overnight movements in the global markets, and hangover of the previous day's trading. Also, this is the period used by the market to entice novice traders into taking a position which might be contrary to the real trend which emerges only later in the day.
Most experienced traders simply watch the markets for the first half of the day for intraday patterns and any subsequent trading breakouts.
2. Failing to hear the market's message
Personally, I try to hear the message of the markets and then try to confirm it with the charts. During the trading day, I like to watch if the market is able to hold certain levels or not.
I like to go long around the end of the day if supported by patterns, and if the prices are consistently holding on to higher levels. I like to go short if the market is giving up higher levels, unable to sustain them and the patterns support a down move of the market.
This technique is called tape watching and all full-time traders practice it in some shape or form. If the markets are choppy and oscillate within a small range, then the market's message is to keep out.
Hearing the message of the market can be particularly important in times of significant news. The market generally reacts in a fashion contrary to most peoples' expectation. Let us consider two recent Indian events of significance.
One was the Gujarat earthquake that took place on 26 January 2001 and the other the 13 December 2001 terrorist attack on the Indian parliament. Both these events appeared catastrophic at first glance. TV channels suggested that the earthquake would devastate the country's economy because Gujarat has the largest number of investors and their confidence would be shattered, making the stock market plunge.
Tragic as both the events were, the market reacted in a different way to each by the end of the day. In both cases the markets plunged around 170 points when it opened, in both cases it tried to recover and while it managed a full recovery in the case of the Gujarat earthquake, it could not do so in the Parliament attack case.
The market was proven correct on both counts. The Gujarat earthquake actually held the possibility of boosting the economy as reconstruction had to be taken up, and also because most of the big installations, including the Jamnagar Refinery, escaped damage. In the case of the attack on parliament, although traders assessed that terrorist attacks were nothing new in the country but the market did not recover because it could see some kind of military build-up ahead from both India and Pakistan. And markets hate war and uncertainty.
In both these cases what helped the cause of the traders were the charts. If the charts say that the market is acting in a certain way, go ahead and accept it. The market is right all the time. This is probably even truer than the more common wisdom about the customer being the king. If you can accept the market as king, you will end up as a very rich trader, indeed.
Herein lies one reason why people who think they are very educated and smart often get trashed by the market because this market doesn't care who you are and it's certainly not there to help you. So expect no mercy from it; in fact, think of it as something that is there to take away your money, unless you take steps to protect yourself.
3. Ignoring which phase the market is in
It is important to know what phase the market is in -- whether it's in a trending or a trading phase. In a trending phase, you go and buy/sell breakouts, but in a trading phase you buy weakness and sell strength.
Traders who do not understand the mood of the market often end up using the wrong indicators in the wrong market conditions. This is an area where humility comes in. Trading in the market is like blind man walking with the help of a stick.
You need to be extremely flexible in changing positions and in trying to develop a feel for the market. This feel is then backed by the various technical indicators in confirming the phase of the market. Undisciplined traders, driven by their ego, often ignore the phase the market is in.
4. Failing to reduce position size when warranted
Traders should be flexible in reducing their position size whenever the market is not giving clear signals. For example, if you take an average position of 3,000 shares in Nifty futures, you should be ready to reduce it to 1,000 shares.
This can happen either when trading counter trend or when the market is not displaying a strong trend. Your exposure to the market should depend on the market's mood at any given point in the market. You should book partial profits as soon as the trade starts earning two to three times the average risk taken.
5. Failing to treat every trade as just another trade
Undisciplined traders often think that a particular situation is sure to give profits and sometimes take risk several times their normal level. This can lead to a heavy drawdown as such situations often do not work out.
Every trade is just another trade and only normal profits should be expected every time. Supernormal profits are a bonus when they -- rarely! -- occur but should not be expected. The risk should not be increased unless your account equity grows enough to service that risk.
6. Over-eagerness in booking profits
Profits in any trading account are often skewed to only a few trades. Traders should not be over-eager to book profits so long the market is acting right. Most traders tend to book profits too early in order to enjoy the winning feeling, thereby letting go substantial trends even when they have got a good entry into the market.
If at all, profit booking should be done in stages, always keeping some position open to take advantage of the rest of the move. Remember trading should consist of small profits, small losses, and big profits. Big losses are what must be avoided. The purpose of trading should be to get a position substantially into money, and then maintain trailing stop losses to protect profits.
Most trading is breakeven trading. Accounts sizes and income from trading are enhanced only when you make eight to ten times your risk. If you can make this happens once a month or even once in two months, you would be fine. The important point here is to not get shaken by the daily noise of the market and to see the market through to its logical target.
Remember, most money is made not by brilliant entries but by sitting on profitable positions long enough. It's boring to do nothing once a position is taken but the maturity of a trader is known not by the number of trades he makes but the amount of time he sits on profitable trades and hence the quantum of profits that he generates.
7. Trading for emotional highs
Trading is an expensive place to get emotional excitement or to be treated as an adventure sport. Traders need to keep a high degree of emotional balance to trade successfully. If you are stressed because of some unrelated events, there is no need to add trading stress to it. Trading should be avoided in periods of high emotional stress.
8. Failing to realise that trading decisions are not about consensus building
Our training since childhood often hampers the behaviour necessary for successful trading. We are always taught that whenever we take a decision, we should consult a number of people, and then do what the majority thinks is right. The truth of this market is that it never does what the majority thinks it will do.
Trading is a loner's job. Traders should not talk to a lot of people during trading hours. They can talk to experienced traders after market hours but more on methodology than on what the other trader thinks about the market.
If a trader has to ask someone else about his trade then he should not be in it. Traders should constantly try to improve their trading skills and by trading skills I mean not only charting skills but also position sizing and money management skills. Successful traders recognise that money cannot be made equally easily all the time in the market. They back off for a while if the market is too volatile or choppy.
source:rediff.com
I discuss below eight ways of undisciplined trading which lead to losses. Guard against them, or the market will wipe you out. I am qualified to speak on this subject because I was myself an undisciplined trader for a long time and the market hammered me into line and forced me to change my approach.
1. Trading during the first half-hour of the session
The first half-hour of the trading day is driven by emotion, affected by overnight movements in the global markets, and hangover of the previous day's trading. Also, this is the period used by the market to entice novice traders into taking a position which might be contrary to the real trend which emerges only later in the day.
Most experienced traders simply watch the markets for the first half of the day for intraday patterns and any subsequent trading breakouts.
2. Failing to hear the market's message
Personally, I try to hear the message of the markets and then try to confirm it with the charts. During the trading day, I like to watch if the market is able to hold certain levels or not.
I like to go long around the end of the day if supported by patterns, and if the prices are consistently holding on to higher levels. I like to go short if the market is giving up higher levels, unable to sustain them and the patterns support a down move of the market.
This technique is called tape watching and all full-time traders practice it in some shape or form. If the markets are choppy and oscillate within a small range, then the market's message is to keep out.
Hearing the message of the market can be particularly important in times of significant news. The market generally reacts in a fashion contrary to most peoples' expectation. Let us consider two recent Indian events of significance.
One was the Gujarat earthquake that took place on 26 January 2001 and the other the 13 December 2001 terrorist attack on the Indian parliament. Both these events appeared catastrophic at first glance. TV channels suggested that the earthquake would devastate the country's economy because Gujarat has the largest number of investors and their confidence would be shattered, making the stock market plunge.
Tragic as both the events were, the market reacted in a different way to each by the end of the day. In both cases the markets plunged around 170 points when it opened, in both cases it tried to recover and while it managed a full recovery in the case of the Gujarat earthquake, it could not do so in the Parliament attack case.
The market was proven correct on both counts. The Gujarat earthquake actually held the possibility of boosting the economy as reconstruction had to be taken up, and also because most of the big installations, including the Jamnagar Refinery, escaped damage. In the case of the attack on parliament, although traders assessed that terrorist attacks were nothing new in the country but the market did not recover because it could see some kind of military build-up ahead from both India and Pakistan. And markets hate war and uncertainty.
In both these cases what helped the cause of the traders were the charts. If the charts say that the market is acting in a certain way, go ahead and accept it. The market is right all the time. This is probably even truer than the more common wisdom about the customer being the king. If you can accept the market as king, you will end up as a very rich trader, indeed.
Herein lies one reason why people who think they are very educated and smart often get trashed by the market because this market doesn't care who you are and it's certainly not there to help you. So expect no mercy from it; in fact, think of it as something that is there to take away your money, unless you take steps to protect yourself.
3. Ignoring which phase the market is in
It is important to know what phase the market is in -- whether it's in a trending or a trading phase. In a trending phase, you go and buy/sell breakouts, but in a trading phase you buy weakness and sell strength.
Traders who do not understand the mood of the market often end up using the wrong indicators in the wrong market conditions. This is an area where humility comes in. Trading in the market is like blind man walking with the help of a stick.
You need to be extremely flexible in changing positions and in trying to develop a feel for the market. This feel is then backed by the various technical indicators in confirming the phase of the market. Undisciplined traders, driven by their ego, often ignore the phase the market is in.
4. Failing to reduce position size when warranted
Traders should be flexible in reducing their position size whenever the market is not giving clear signals. For example, if you take an average position of 3,000 shares in Nifty futures, you should be ready to reduce it to 1,000 shares.
This can happen either when trading counter trend or when the market is not displaying a strong trend. Your exposure to the market should depend on the market's mood at any given point in the market. You should book partial profits as soon as the trade starts earning two to three times the average risk taken.
5. Failing to treat every trade as just another trade
Undisciplined traders often think that a particular situation is sure to give profits and sometimes take risk several times their normal level. This can lead to a heavy drawdown as such situations often do not work out.
Every trade is just another trade and only normal profits should be expected every time. Supernormal profits are a bonus when they -- rarely! -- occur but should not be expected. The risk should not be increased unless your account equity grows enough to service that risk.
6. Over-eagerness in booking profits
Profits in any trading account are often skewed to only a few trades. Traders should not be over-eager to book profits so long the market is acting right. Most traders tend to book profits too early in order to enjoy the winning feeling, thereby letting go substantial trends even when they have got a good entry into the market.
If at all, profit booking should be done in stages, always keeping some position open to take advantage of the rest of the move. Remember trading should consist of small profits, small losses, and big profits. Big losses are what must be avoided. The purpose of trading should be to get a position substantially into money, and then maintain trailing stop losses to protect profits.
Most trading is breakeven trading. Accounts sizes and income from trading are enhanced only when you make eight to ten times your risk. If you can make this happens once a month or even once in two months, you would be fine. The important point here is to not get shaken by the daily noise of the market and to see the market through to its logical target.
Remember, most money is made not by brilliant entries but by sitting on profitable positions long enough. It's boring to do nothing once a position is taken but the maturity of a trader is known not by the number of trades he makes but the amount of time he sits on profitable trades and hence the quantum of profits that he generates.
7. Trading for emotional highs
Trading is an expensive place to get emotional excitement or to be treated as an adventure sport. Traders need to keep a high degree of emotional balance to trade successfully. If you are stressed because of some unrelated events, there is no need to add trading stress to it. Trading should be avoided in periods of high emotional stress.
8. Failing to realise that trading decisions are not about consensus building
Our training since childhood often hampers the behaviour necessary for successful trading. We are always taught that whenever we take a decision, we should consult a number of people, and then do what the majority thinks is right. The truth of this market is that it never does what the majority thinks it will do.
Trading is a loner's job. Traders should not talk to a lot of people during trading hours. They can talk to experienced traders after market hours but more on methodology than on what the other trader thinks about the market.
If a trader has to ask someone else about his trade then he should not be in it. Traders should constantly try to improve their trading skills and by trading skills I mean not only charting skills but also position sizing and money management skills. Successful traders recognise that money cannot be made equally easily all the time in the market. They back off for a while if the market is too volatile or choppy.
source:rediff.com
November 26, 2007
JYOTHY LABORATORIES LIMITED - IPO PROSPECTS
JLL- Subcribe for Short to Medium term!!!
Issue Period November 22, 2007 to November 27, 2007
Face Value Rs. 5/-
Price Range Rs 620 TO Rs 690
Min Lot 10 Shares
Grade Good
Recommendation Subcribe
Company Info
Jyothy Laboratories has opened for subscription with an initial public offering (IPO) of 44.30 lakh shares of Rs 5 each at a price band between Rs 620 and Rs 690 per equity share.
The company will raise Rs 274 at lower price band and Rs 305.6 crore at higher end of price band. The issue will close on November 27, 2007.
Jyothy Laboratories (JLL) is an FMCG company making a range of branded products, including fabric whiteners, mosquito repellents, dish-washing soaps, soaps and incense. Its key brands are Ujala, Maxo, Exo, Jeeva and Maya.
Investment summary
Ujala is a well-known brand of fabric whitener, with dominant market share of approximately 72% in the category
a)Local presence and wide distribution reach
b)Targets the rural market
c)Entering into new joint-venture initiatives
Risks and concerns
a)Heavily depend on two biggest brands, Ujala and Maxo which contribute 43.6% and 35.4% of its total sales respectively (as on 30 June 2007).
b)Dependence on outsourced production through third parties. Any disputes or disagreements may affect their business.
c)The company is susceptible to seasonal variations in demand for its products.
Valuations attractive in comparison to the peer group
At the issue price of Rs 620-690, JLL commands an inexpensive P/E (on relative basis) of 18.6x-20.7x based on FY07 EPS of Rs 33.3. The price/book ratio of 3.4x at Rs 690 is also at steep discount to peers. The company is well-placed for healthy growth, given its well-established brand equity, leadership in the fabric whitener segment and strategic alliances.
Premium on Listing - 50-60%
Issue Period November 22, 2007 to November 27, 2007
Face Value Rs. 5/-
Price Range Rs 620 TO Rs 690
Min Lot 10 Shares
Grade Good
Recommendation Subcribe
Company Info
Jyothy Laboratories has opened for subscription with an initial public offering (IPO) of 44.30 lakh shares of Rs 5 each at a price band between Rs 620 and Rs 690 per equity share.
The company will raise Rs 274 at lower price band and Rs 305.6 crore at higher end of price band. The issue will close on November 27, 2007.
Jyothy Laboratories (JLL) is an FMCG company making a range of branded products, including fabric whiteners, mosquito repellents, dish-washing soaps, soaps and incense. Its key brands are Ujala, Maxo, Exo, Jeeva and Maya.
Investment summary
Ujala is a well-known brand of fabric whitener, with dominant market share of approximately 72% in the category
a)Local presence and wide distribution reach
b)Targets the rural market
c)Entering into new joint-venture initiatives
Risks and concerns
a)Heavily depend on two biggest brands, Ujala and Maxo which contribute 43.6% and 35.4% of its total sales respectively (as on 30 June 2007).
b)Dependence on outsourced production through third parties. Any disputes or disagreements may affect their business.
c)The company is susceptible to seasonal variations in demand for its products.
Valuations attractive in comparison to the peer group
At the issue price of Rs 620-690, JLL commands an inexpensive P/E (on relative basis) of 18.6x-20.7x based on FY07 EPS of Rs 33.3. The price/book ratio of 3.4x at Rs 690 is also at steep discount to peers. The company is well-placed for healthy growth, given its well-established brand equity, leadership in the fabric whitener segment and strategic alliances.
Premium on Listing - 50-60%
November 17, 2007
WWIL - BUY till next DIWALI !!!
Buy Wire & Wireless limited @ cmp 45.40 for more than 100% returns by next year diwali.
NSECODE WWILCMP-45.30
Target1-89
Target2-119
Buy and forget WWIL
watch your wealth soar by 150% in next 12 months.CMP WWIL 56.75.
WWIL has negative EPS.Traded volumes of WWIL has increased by 80% over past 10-12 days.
This is turnaround story.Financials of the company will improve after two quarters.Year 2008 will be the year for media and entertainment stocks.Fiis,HNis & QIB will race to buy media and entertainment stocks.
Expect PE placment in these stocks.TV18,Balaji Tele,Zee News,TV Today,Adlabs,WWIL,Dishtv,Inox,PVR,UTV,GBN,ENIL are the few stocks which will be center of attraction.Big upmove in these stocks is expected.
What are the fundamentals?
Burgeoning middle class family(400-450 million)in India have more spending power.Higher salary,70% population below 38 yr of age throws up once in life time opportunity for enterprenuers in media/entertainment sector.Companies are ready to tap this opportunity.As an investor are you ready to tap this opportunity? Again we are the first analyst in India to write about this sector.Invest with strategy and take advantage of first mover.
Study the basic fundamentals and see the unseen.
NSECODE WWILCMP-45.30
Target1-89
Target2-119
Buy and forget WWIL
watch your wealth soar by 150% in next 12 months.CMP WWIL 56.75.
WWIL has negative EPS.Traded volumes of WWIL has increased by 80% over past 10-12 days.
This is turnaround story.Financials of the company will improve after two quarters.Year 2008 will be the year for media and entertainment stocks.Fiis,HNis & QIB will race to buy media and entertainment stocks.
Expect PE placment in these stocks.TV18,Balaji Tele,Zee News,TV Today,Adlabs,WWIL,Dishtv,Inox,PVR,UTV,GBN,ENIL are the few stocks which will be center of attraction.Big upmove in these stocks is expected.
What are the fundamentals?
Burgeoning middle class family(400-450 million)in India have more spending power.Higher salary,70% population below 38 yr of age throws up once in life time opportunity for enterprenuers in media/entertainment sector.Companies are ready to tap this opportunity.As an investor are you ready to tap this opportunity? Again we are the first analyst in India to write about this sector.Invest with strategy and take advantage of first mover.
Study the basic fundamentals and see the unseen.
Why is Essar Steel buzzing?
Essar Steel is stuck in circuit, for the second time consecutively, said analysts. It is up 54% in the last one week and there has been quite a rally in the stock, reports CNBC-TV18
There are a few positives that could be pushing the stock upward. The steel cycle is going robust and prices are expected to go up at the beginning of next year. There could be a price increase of about USD 25-40 in the first quarter of next year.
Essar Steel has great plans of expansion. Its capacities could go up from 5-9 million tonne by June 2009. The shares are to be delisted soon. The promoters hold around 87% of the shares. They had made an offer for the remaining 12.97% of the shares. The discovered price was at Rs 48 per share and now it is at Rs 70. They got the requisite amount and the shares will be delisted in the near future.
On a PE basis, with the run up, it is trading 11.7 times on an FY08 basis and 15-16 times on a trailing basis versus Tata Steel, which is trading at 9% or nine times FY08 basis and JSW Steel, which is closing thereabouts at just about nine times FY08 basis.
2007-11-16 16:00:09 Source : moneycontrol
There are a few positives that could be pushing the stock upward. The steel cycle is going robust and prices are expected to go up at the beginning of next year. There could be a price increase of about USD 25-40 in the first quarter of next year.
Essar Steel has great plans of expansion. Its capacities could go up from 5-9 million tonne by June 2009. The shares are to be delisted soon. The promoters hold around 87% of the shares. They had made an offer for the remaining 12.97% of the shares. The discovered price was at Rs 48 per share and now it is at Rs 70. They got the requisite amount and the shares will be delisted in the near future.
On a PE basis, with the run up, it is trading 11.7 times on an FY08 basis and 15-16 times on a trailing basis versus Tata Steel, which is trading at 9% or nine times FY08 basis and JSW Steel, which is closing thereabouts at just about nine times FY08 basis.
2007-11-16 16:00:09 Source : moneycontrol
EDELWEISS CAPITAL LIMITED -IPO Prospects
EDL - Subcribe for Short to Medium term!!!
Issue Period November 15, 2007 to November 20, 2007
Face Value Rs. 5/-
Price Range Rs 725 TO Rs 825
Min Lot 8 Shares
Grade Very Good
Recommendation Subcribe
Company Info
Edelweiss Capital, a diversified financial services company, has opened for subscription with its initial public offering (IPO) of 8,386,147 equity shares of Rs 5 each for cash, at a price to be decided through a 100% book building process.
The issue will close close on November 20, 2007. The price band is between Rs 725 and Rs 825 per equity share of face value Rs 5.
Valuation
Investment positives
Scaling up the investment banking business
During FY07, the income from investment banking grew by 2.6x to Rs 697.5 million. Going ahead we believe Edelweiss has lot of room to scale up considering the huge opportunity in the I-Banking space.
Other business segments to scale-up
Other business segments like insurance broking and asset management are too small compared to investment banking and institutional broking businesses. With the management’s focus to grow its asset management and general insurance businesses, fee income will get a boost.
Investment Concerns
High dependence on capital market
About 58% of the company’s income comes from institutional broking and investment banking businesses, followed by 31% from treasury operations. Thus, any downturn faced by the securities market would impact profitability of the company.
Non-capital market business too small for sustenance
Other business segments like insurance broking and asset management are comparatively smaller than institutional broking and investment banking businesses. With any downturn in the capital market, the company’s income streams will be impacted, and asset management and insurance broking won’t be able to support revenue growth.
Valuation–wise, the shares are offered at a competitive price compared to peers. With an established platform in institutional broking, increasing opportunities in investment banking and presence in high growth business segments like insurance and asset management.
Premium on Listing - 80 -100%*
Issue Period November 15, 2007 to November 20, 2007
Face Value Rs. 5/-
Price Range Rs 725 TO Rs 825
Min Lot 8 Shares
Grade Very Good
Recommendation Subcribe
Company Info
Edelweiss Capital, a diversified financial services company, has opened for subscription with its initial public offering (IPO) of 8,386,147 equity shares of Rs 5 each for cash, at a price to be decided through a 100% book building process.
The issue will close close on November 20, 2007. The price band is between Rs 725 and Rs 825 per equity share of face value Rs 5.
Valuation
Investment positives
Scaling up the investment banking business
During FY07, the income from investment banking grew by 2.6x to Rs 697.5 million. Going ahead we believe Edelweiss has lot of room to scale up considering the huge opportunity in the I-Banking space.
Other business segments to scale-up
Other business segments like insurance broking and asset management are too small compared to investment banking and institutional broking businesses. With the management’s focus to grow its asset management and general insurance businesses, fee income will get a boost.
Investment Concerns
High dependence on capital market
About 58% of the company’s income comes from institutional broking and investment banking businesses, followed by 31% from treasury operations. Thus, any downturn faced by the securities market would impact profitability of the company.
Non-capital market business too small for sustenance
Other business segments like insurance broking and asset management are comparatively smaller than institutional broking and investment banking businesses. With any downturn in the capital market, the company’s income streams will be impacted, and asset management and insurance broking won’t be able to support revenue growth.
Valuation–wise, the shares are offered at a competitive price compared to peers. With an established platform in institutional broking, increasing opportunities in investment banking and presence in high growth business segments like insurance and asset management.
Premium on Listing - 80 -100%*
November 16, 2007
Indian Govt may sell PSU stock
The government should take advantage of the current momentum in the stock market to sell shares in the already listed PSUs at a good premium. There are many PSUs such as the NTPC where the government has a large holding, and more equity can be divested without inviting any controversy.
The appetite for shares of PSUs with convincing growth potential is very strong, government ownership notwithstanding. That the 43-scrip BSEPSU index outperformed the sensex recently bears that out. Besides, the price returns on shares of newly listed power PSUs — Power Finance Corporation and Power Grid — have already served to whet demand for shares of other public enterprises. For starters, the government should consider further divestment in PSUs such as MMTC, NMDC, Neyveli Lignite, National Aluminium, SAIL and Hindustan Copper.
Most of these PSUs are 85%-99% owned by the government. Besides yielding good returns for the government, follow-on offers from listed PSUs would also increase the floating stock of these companies and thereby improve liquidity and reduce volatility in price movement. Much of the sharp rise in stock prices over the past two months could be a case of too much money chasing too few shares. At least, that can be said of MMTC and NMDC.
The MMTC share price rose by almost Rs 2,000 every day over the past one month. That this is due to lack of sufficient floating stock is borne out by the fact that only 0.67% shares (or 3.34 lakh shares) of MMTC and 1.62% (21.35 lakh shares) of NMDC are held by institutional and retail investors. The sale of shares can help the government to raise resources for various social sector projects. Of course, there could be some cases where the company too needs to raise funds for its expansion, and there the government will have to ride piggyback on a public offer from the company.
The strategy for each company can be considered individually. However, the government as a promoter must move decisively to benefit from the good valuations and also share with the public the wealth created by PSUs
The appetite for shares of PSUs with convincing growth potential is very strong, government ownership notwithstanding. That the 43-scrip BSEPSU index outperformed the sensex recently bears that out. Besides, the price returns on shares of newly listed power PSUs — Power Finance Corporation and Power Grid — have already served to whet demand for shares of other public enterprises. For starters, the government should consider further divestment in PSUs such as MMTC, NMDC, Neyveli Lignite, National Aluminium, SAIL and Hindustan Copper.
Most of these PSUs are 85%-99% owned by the government. Besides yielding good returns for the government, follow-on offers from listed PSUs would also increase the floating stock of these companies and thereby improve liquidity and reduce volatility in price movement. Much of the sharp rise in stock prices over the past two months could be a case of too much money chasing too few shares. At least, that can be said of MMTC and NMDC.
The MMTC share price rose by almost Rs 2,000 every day over the past one month. That this is due to lack of sufficient floating stock is borne out by the fact that only 0.67% shares (or 3.34 lakh shares) of MMTC and 1.62% (21.35 lakh shares) of NMDC are held by institutional and retail investors. The sale of shares can help the government to raise resources for various social sector projects. Of course, there could be some cases where the company too needs to raise funds for its expansion, and there the government will have to ride piggyback on a public offer from the company.
The strategy for each company can be considered individually. However, the government as a promoter must move decisively to benefit from the good valuations and also share with the public the wealth created by PSUs
NTPC - BUY BUY BUY
The country's largest power generating company NTPC has entered into a joint venture (JV) agreement with Indian Railways to set up a 1,000 MW power plant in Nabinagar in Bihar at a cost of Rs 1,605 crore.A joint venture company - Bharatiya Rail Bijlee Company - would be set up for the purpose with NTPC having 74% stake and the Railways having 26% stake.
NTPC would put in Rs 1,188 crore of capital and the Railways would invest Rs 417 crore in the Nabinagar plant. The plant is expected to commence operations after 30 months from receipt of approval of investment by both parties, which is likely to come by December-end. As per the Cabinet approval, 90% of the power from Nabinagar plant will be supplied to railways and 10% to others and this will primarily be a captive power plant for the Railways.
The average cost of generation from this plant will be Rs 2.13 per unit. The railways expects to save up to Rs 600 crore annually after paying wheeling and transmission charges, reducing operating expenses by 1-2%. The average annual requirement of the Railways is 2,000 MW.The Railways, at present, spends about Rs 5,700 crore a year towards electrical energy for traction and non-traction purposes.
NTPC would put in Rs 1,188 crore of capital and the Railways would invest Rs 417 crore in the Nabinagar plant. The plant is expected to commence operations after 30 months from receipt of approval of investment by both parties, which is likely to come by December-end. As per the Cabinet approval, 90% of the power from Nabinagar plant will be supplied to railways and 10% to others and this will primarily be a captive power plant for the Railways.
The average cost of generation from this plant will be Rs 2.13 per unit. The railways expects to save up to Rs 600 crore annually after paying wheeling and transmission charges, reducing operating expenses by 1-2%. The average annual requirement of the Railways is 2,000 MW.The Railways, at present, spends about Rs 5,700 crore a year towards electrical energy for traction and non-traction purposes.
The government may infuse about Rs 10,000 crore as equity capital in nationalised banks in addition to an identical amount in the country's largest le
The government may infuse about Rs 10,000 crore as equity capital in nationalised banks in addition to an identical amount in the country's largest lender, State Bank of India (SBI).
Nationalised banks with the government holding closer to the floor of 51 per cent are likely to receive the capital infusion support.
"About Rs 10,000 crore will be enough to infuse capital in public sector banks (other than SBI) as only some of them are closer to the threshold limit of 51 per cent," a government official said.
According to an internal estimate, ten nationalised banks with less than 60 per cent government stake would have to raise Rs 14,700 crore of equity to meet the additional capital requirements for growth as well as to meet more stringent capital allocation under the revised Basel-II norms.
Bank of Baroda would have to meet the new Basel-II capital norms from March 2008 and the others from March 2009 onwards.
SBI would be raising Rs 16,700 crore through a rights issue in early 2008.
The government, which owns a controlling 59.73 per cent stake in the bank, would invest Rs 10,000 crore via the rights issue to maintain its stake in the bank at the current level, the government official said.
SBI would receive another Rs 6,700 crore if all its non-government shareholders subscribe to their entitlements in the rights issue.
"The Union Cabinet is likely to take up the rights issue proposal at its meeting next week," the official said, adding that "the government may issue tradeable bonds worth Rs 10,000 crore to SBI to subscribe to the rights issue."
Out of the total banking business in the country, the share of all public sector banks is 74 per cent, while SBI and its seven associate banks command about 25 per cent share.
BEST INVESTMENT PICKS IN PSU BANK STOCKS :
Punjab National Bank -- Target -- 750 +
Canara Bank -- Target -- 375 +
Bank Of Baroda -- Target -- 485 +
Some Small Cap PSU Banks :
Indian Overseas Bank -- Target -- 185 +
Bank Of Maharashtra -- Target -- 110 +Dena Bank -- Target -- 105 +
Nationalised banks with the government holding closer to the floor of 51 per cent are likely to receive the capital infusion support.
"About Rs 10,000 crore will be enough to infuse capital in public sector banks (other than SBI) as only some of them are closer to the threshold limit of 51 per cent," a government official said.
According to an internal estimate, ten nationalised banks with less than 60 per cent government stake would have to raise Rs 14,700 crore of equity to meet the additional capital requirements for growth as well as to meet more stringent capital allocation under the revised Basel-II norms.
Bank of Baroda would have to meet the new Basel-II capital norms from March 2008 and the others from March 2009 onwards.
SBI would be raising Rs 16,700 crore through a rights issue in early 2008.
The government, which owns a controlling 59.73 per cent stake in the bank, would invest Rs 10,000 crore via the rights issue to maintain its stake in the bank at the current level, the government official said.
SBI would receive another Rs 6,700 crore if all its non-government shareholders subscribe to their entitlements in the rights issue.
"The Union Cabinet is likely to take up the rights issue proposal at its meeting next week," the official said, adding that "the government may issue tradeable bonds worth Rs 10,000 crore to SBI to subscribe to the rights issue."
Out of the total banking business in the country, the share of all public sector banks is 74 per cent, while SBI and its seven associate banks command about 25 per cent share.
BEST INVESTMENT PICKS IN PSU BANK STOCKS :
Punjab National Bank -- Target -- 750 +
Canara Bank -- Target -- 375 +
Bank Of Baroda -- Target -- 485 +
Some Small Cap PSU Banks :
Indian Overseas Bank -- Target -- 185 +
Bank Of Maharashtra -- Target -- 110 +Dena Bank -- Target -- 105 +
Grey Market premium for IPO's - Nov /Dec
Reliance Power 054 to 056
Mundra Port & SEZ 500 to 525
Empee Distilleries 160 to 165
Edelweiss 800 to 825
Varun Ind. 042 to 045
Religare Enterprises 325 to 350
Barak Valley 017 to 019
Rathi Bars 003 to 004
Allied Computers 014 to 016
SVPCL 003 to 005
November 12, 2007
Diwali Picks
Creating Reservoirs for next Diwali!!!
Sno Stocks CMP Targets
1 Bharat Forge 349 395
2 Guj Apollo 279 350
3 IDBI 153 195
4 MIC Electronics 517 725
5 Orbit Corp 658 1000+
6 Patel Engg. 725 1000+
Sno Stocks CMP Targets
1 Bharat Forge 349 395
2 Guj Apollo 279 350
3 IDBI 153 195
4 MIC Electronics 517 725
5 Orbit Corp 658 1000+
6 Patel Engg. 725 1000+
November 5, 2007
Mundra Port - IPO Prospects
MPSEZ - Apply for 3 yrs time frame !
Issue Date :Nov 1- Nov 7
Issue Price :400 Rs - 440 Rs
Min. Order Quantity :15 Shares
Grade :Good
Recommendation :Subscribe
Mundra Port and Special Economic Zone, developer and operator of the Mundra Port, one of the leading non-captive private sector ports in India based on volume of cargo during fiscal 2007 is open for subscription with its initial public offering (IPO) of 40,250,000 equity shares of Rs 10 each for cash, at a price to be decided through a 100% book building process.
Investment summary
1. Port located at strategic natural location.
2. Well positioned to cater northern interiors of India.
3. Access to major modes of transport.
4. 15,665 acres of land bank with infrastructure in place to develop a port.
5. Fiscal advantages of a developing a SEZ.
Risks and concerns
1. Highly regulated sector.
2. Huge capital investment and long gestation projects.
3. Major revenue stream through few clients.
Strong volume growth to drive earnings growth
MPSEZL, a multi product SEZ, is well positioned to serve northern regions of landlocked India. With approximately 50% of the country’s commodity trade arising from the region, MPSEZL is well poised to garner robust growth. At the price band of Rs400-440 the stock would be trading at PE of 85.1x - 93.6x at its FY07 post issue diluted EPS of Rs4.8.
Over the last three years, the company registered a CAGR of 51.2% in its topline. We expect the company to maintain the growth rate and operating margins in future. We recommend to Subscribe the issue
Recommendation
Mundra Port and SEZ is the developer and operator of the Mundra Port, one of the leading non-captive private sector ports in India based on volume of cargo during fiscal 2007. MPSEZ is one of the first portbased multi-product SEZs in India. Also its locational advantage with a presence in the northwest coast of India and its connectivity by rail, road and pipeline to the transportation network of India would make the product delivery reasonable and efficient.
Also the company has a huge land bank for development following its mergers with ACL, MSEZ and APL which would lead to higher volumes of cargo in the port and various growth opportunities for the company. On the valuations side the company seems to be reasonably priced due to the lack of listed peers of the company. We recommend our investors to Subscribe to the issue
Issue Date :Nov 1- Nov 7
Issue Price :400 Rs - 440 Rs
Min. Order Quantity :15 Shares
Grade :Good
Recommendation :Subscribe
Mundra Port and Special Economic Zone, developer and operator of the Mundra Port, one of the leading non-captive private sector ports in India based on volume of cargo during fiscal 2007 is open for subscription with its initial public offering (IPO) of 40,250,000 equity shares of Rs 10 each for cash, at a price to be decided through a 100% book building process.
Investment summary
1. Port located at strategic natural location.
2. Well positioned to cater northern interiors of India.
3. Access to major modes of transport.
4. 15,665 acres of land bank with infrastructure in place to develop a port.
5. Fiscal advantages of a developing a SEZ.
Risks and concerns
1. Highly regulated sector.
2. Huge capital investment and long gestation projects.
3. Major revenue stream through few clients.
Strong volume growth to drive earnings growth
MPSEZL, a multi product SEZ, is well positioned to serve northern regions of landlocked India. With approximately 50% of the country’s commodity trade arising from the region, MPSEZL is well poised to garner robust growth. At the price band of Rs400-440 the stock would be trading at PE of 85.1x - 93.6x at its FY07 post issue diluted EPS of Rs4.8.
Over the last three years, the company registered a CAGR of 51.2% in its topline. We expect the company to maintain the growth rate and operating margins in future. We recommend to Subscribe the issue
Recommendation
Mundra Port and SEZ is the developer and operator of the Mundra Port, one of the leading non-captive private sector ports in India based on volume of cargo during fiscal 2007. MPSEZ is one of the first portbased multi-product SEZs in India. Also its locational advantage with a presence in the northwest coast of India and its connectivity by rail, road and pipeline to the transportation network of India would make the product delivery reasonable and efficient.
Also the company has a huge land bank for development following its mergers with ACL, MSEZ and APL which would lead to higher volumes of cargo in the port and various growth opportunities for the company. On the valuations side the company seems to be reasonably priced due to the lack of listed peers of the company. We recommend our investors to Subscribe to the issue
EMPEE DISTILLERIES LIMITED - IPO Prospects
EDL- Get ready for takover!!!
Issue Date :Nov 1- Nov 6
Issue Price :350 Rs - 400 Rs
Min. Order Quantity :15 Shares
Grade :Average
Recommendation :Subscribe
Company Info
Manufacturing of Indian-made foreign liquor (IMFL). Their Manufacturing unit Facilities are in
1) Mevaloorkuppam, in Tamil Nadu,
2) NIDA, Palakkad district, in Kerala.
Kerla and Tamilnadu are government controlled markets. In both the cases the company works through the government agencies and solely a price taker and heavily dependent on government policy
Objective of the Issue
1) Entry in AP & Karnataka market by setting up a 60 kilo litres per day (KLPD) grain-based distillery unit at Nellore district in AP.
2) Setting up blending and bottling IMFL plant (having a capacity of 0.70 lakh cases per month) at Nellore district in AP
3) Setting up a 7.5 MW bio-mass power plant and expansion of its existing distillery plant by increasing capacity from 3.20 lakh cases to 5 lakh cases per month. (Capacity utilization of 100%).
4) Increasing the capacity of its ENA plant from 20KLPD to 70 KLPD.
5) Relocation of unit to Karnataka.
6) Developing 2 lakh sq.ft residential space in Mevalorkuppam in Tamilnadu.
Valuation
The company is valued at around 41 to 47 times its FY07 earnings.
Taking into account the entry into new markets and windmill power generation though on a small scale will gradually add value to the company. Company may further get carbon credits which we are not discounting as on date.
The real estate foray will be the real bonus in the times to come. The company seems serious about this business and if it goes through there will be a phenomenal rise in bottomline in FY2010. The profit per square foot is estimated at Rs 2000.
The company looks good as a takeover target for UB group.
Issue Date :Nov 1- Nov 6
Issue Price :350 Rs - 400 Rs
Min. Order Quantity :15 Shares
Grade :Average
Recommendation :Subscribe
Company Info
Manufacturing of Indian-made foreign liquor (IMFL). Their Manufacturing unit Facilities are in
1) Mevaloorkuppam, in Tamil Nadu,
2) NIDA, Palakkad district, in Kerala.
Kerla and Tamilnadu are government controlled markets. In both the cases the company works through the government agencies and solely a price taker and heavily dependent on government policy
Objective of the Issue
1) Entry in AP & Karnataka market by setting up a 60 kilo litres per day (KLPD) grain-based distillery unit at Nellore district in AP.
2) Setting up blending and bottling IMFL plant (having a capacity of 0.70 lakh cases per month) at Nellore district in AP
3) Setting up a 7.5 MW bio-mass power plant and expansion of its existing distillery plant by increasing capacity from 3.20 lakh cases to 5 lakh cases per month. (Capacity utilization of 100%).
4) Increasing the capacity of its ENA plant from 20KLPD to 70 KLPD.
5) Relocation of unit to Karnataka.
6) Developing 2 lakh sq.ft residential space in Mevalorkuppam in Tamilnadu.
Valuation
The company is valued at around 41 to 47 times its FY07 earnings.
Taking into account the entry into new markets and windmill power generation though on a small scale will gradually add value to the company. Company may further get carbon credits which we are not discounting as on date.
The real estate foray will be the real bonus in the times to come. The company seems serious about this business and if it goes through there will be a phenomenal rise in bottomline in FY2010. The profit per square foot is estimated at Rs 2000.
The company looks good as a takeover target for UB group.
October 31, 2007
Religare Enterprises Limited - IPO prospects
REL- Good but Chances are slim!!!
Issue Date :Oct 29- Nov 1
Issue Price :160 Rs - 185 Rs
Min. Order Quantity :35 Shares
Grade :Good
Recommendation :Subscribe
Company Info
Religare Enterprises, a financial services company, is entering the capital markets with its initial public offering (IPO) of 7,576102 equity shares of Rs 10 each for cash, at a price to be decided through a 100% book building process. The issue will open on October 29, 2007 and will close on November 1, 2007. The price band has been fixed between Rs 160 to Rs 185 per equity share.
The company is promoted by the promoters of Ranbaxy Laboratories and the issue has been graded by ICRA and assigned the IPO Grade 3 on a five point scale. The equity shares of the company, offered through this IPO, are proposed to be listed on NSE and BSE.
Comments
I don’t think Rs 185 makes it too expensive; they should go on to do Rs 10 earning next year, something close to that, sub-Rs 20 PE multiple this year’s earnings, I think it will fly. It will be hugely oversubscribed and I don’t think people will get too much subscription but this one is an easy one. It has come in at good price point and I think it is fairly compelling story to sell
Premium on Listing : 100%
Chances are slim as it highly over subscribed!!! (better apply for Mundra Port IPO ....for better allocations)
Issue Date :Oct 29- Nov 1
Issue Price :160 Rs - 185 Rs
Min. Order Quantity :35 Shares
Grade :Good
Recommendation :Subscribe
Company Info
Religare Enterprises, a financial services company, is entering the capital markets with its initial public offering (IPO) of 7,576102 equity shares of Rs 10 each for cash, at a price to be decided through a 100% book building process. The issue will open on October 29, 2007 and will close on November 1, 2007. The price band has been fixed between Rs 160 to Rs 185 per equity share.
The company is promoted by the promoters of Ranbaxy Laboratories and the issue has been graded by ICRA and assigned the IPO Grade 3 on a five point scale. The equity shares of the company, offered through this IPO, are proposed to be listed on NSE and BSE.
Comments
I don’t think Rs 185 makes it too expensive; they should go on to do Rs 10 earning next year, something close to that, sub-Rs 20 PE multiple this year’s earnings, I think it will fly. It will be hugely oversubscribed and I don’t think people will get too much subscription but this one is an easy one. It has come in at good price point and I think it is fairly compelling story to sell
Premium on Listing : 100%
Chances are slim as it highly over subscribed!!! (better apply for Mundra Port IPO ....for better allocations)
BARAK VALLEY CEMENTS LIMITED - IPO prospects
BVCL- Avoid & Look out for better options!!!
Issue Date :Oct 29- Nov 1
Issue Price :37 Rs - 42 Rs
Min. Order Quantity :150 Shares
Grade :Average
Recommendation :Skip
Company Info
Barak Valley Cements is entering the capital market on 29th October, 07 with a public issue of 56.60 lakh equity shares of Rs.10 each in the band of Rs.37 to Rs.42 per share. At the upper band of Rs.42, issue size would be close to Rs.24 crores
The company, presently has cement manufacturing capacity of 760 TPD, of which 460 TPD is manufactured by the company and 300 TPD by its wholly owned subsidiary, Cement International Ltd. Inspite of having such a low level of activity, the company has three wholly owned subsidiaries viz. Badarpur Energy, setting up a 6 MW bio mass based power plant, Cement International is making 300 TPD of cement and Meghalaya Minerals & Mines supplying limestone for cement making.
Valuation
EPS may hover below Rs.10, as paid-up equity is also increasing by about 25%. Presently, many larger cement companies are ruling at a PE multiple of 5 to 6, and this issue, at upper band at Rs.42 is made at a PER of close to 5. Also, low capacity and high equity base would always be a dampner for the share price to rise.
Keeping these issues in mind, BVCL is fairly priced for this mediocre cement company which is posting profits largely due to various exemptions and benefits. Go for secondary market plays, if you are too keen to hold a mini cement or a small size cement company.
Premium on Listing : Will touch 100 in 5-6 months (based on the rally in Cement sector)
Issue Date :Oct 29- Nov 1
Issue Price :37 Rs - 42 Rs
Min. Order Quantity :150 Shares
Grade :Average
Recommendation :Skip
Company Info
Barak Valley Cements is entering the capital market on 29th October, 07 with a public issue of 56.60 lakh equity shares of Rs.10 each in the band of Rs.37 to Rs.42 per share. At the upper band of Rs.42, issue size would be close to Rs.24 crores
The company, presently has cement manufacturing capacity of 760 TPD, of which 460 TPD is manufactured by the company and 300 TPD by its wholly owned subsidiary, Cement International Ltd. Inspite of having such a low level of activity, the company has three wholly owned subsidiaries viz. Badarpur Energy, setting up a 6 MW bio mass based power plant, Cement International is making 300 TPD of cement and Meghalaya Minerals & Mines supplying limestone for cement making.
Valuation
EPS may hover below Rs.10, as paid-up equity is also increasing by about 25%. Presently, many larger cement companies are ruling at a PE multiple of 5 to 6, and this issue, at upper band at Rs.42 is made at a PER of close to 5. Also, low capacity and high equity base would always be a dampner for the share price to rise.
Keeping these issues in mind, BVCL is fairly priced for this mediocre cement company which is posting profits largely due to various exemptions and benefits. Go for secondary market plays, if you are too keen to hold a mini cement or a small size cement company.
Premium on Listing : Will touch 100 in 5-6 months (based on the rally in Cement sector)
October 25, 2007
SVPCL LTD - IPO prospects
SVPCL- Avoid !!!
Issue Date :Oct 22- Oct 26
Issue Price :40 Rs - 45 Rs
Min. Order Quantity :125 Shares
Grade :Average
Recommendation :Skip
Company Info
SVPCL, a leading paper products manufacturer in South India, proposed to enter markets with a public issue of Rs 34.50 crore through a 100 per cent book-building process. The issue opens on October 22 and closes on October 26. The price band is fixed at Rs 40-45 per equity share of Rs 10 each.
The company plans to use the net proceeds from the issue to expand its existing manufacturing facilities in Hyderabad, Vijayawada and Visakhapatnam, to set up marketing infrastructure in 10 identified locations in the country, to enhance its long-term working capital requirements and to meet expenses of the issue.
Other than the IPO, the company will raise its finance required by internal accruals. Out of the Rs 34.50-crore public issue, 50 per cent is allotted to Qualified Institutional Buyers, 15 per cent to non-institutional investors and the remaining 35 per cent to retail.
Valuation
SL is offering it’s shares at a price band of Rs.40 - Rs.45 at a P/E multiple of 13 & 15 respectively. The issue looks to be fully priced with not much room left for new investors. Last year, another company (from the same industry) i.e. Blue Bird India Limited, had come out with an issue of the same P/E as that of SL & is currently trading at a P/E of 7 with turnover being more than that of SL.
Currently, the capacity that SL has is under-utilized & SL is still looking for expansion & that too in the same region (viz. south India). There are other companies (peer group) which have better turnover than SL & valuations of which are more attractive than SL. Hence, we give an “Ignore" rating to the issue.
Premium on listing - Rs 2- Rs 5
Issue Date :Oct 22- Oct 26
Issue Price :40 Rs - 45 Rs
Min. Order Quantity :125 Shares
Grade :Average
Recommendation :Skip
Company Info
SVPCL, a leading paper products manufacturer in South India, proposed to enter markets with a public issue of Rs 34.50 crore through a 100 per cent book-building process. The issue opens on October 22 and closes on October 26. The price band is fixed at Rs 40-45 per equity share of Rs 10 each.
The company plans to use the net proceeds from the issue to expand its existing manufacturing facilities in Hyderabad, Vijayawada and Visakhapatnam, to set up marketing infrastructure in 10 identified locations in the country, to enhance its long-term working capital requirements and to meet expenses of the issue.
Other than the IPO, the company will raise its finance required by internal accruals. Out of the Rs 34.50-crore public issue, 50 per cent is allotted to Qualified Institutional Buyers, 15 per cent to non-institutional investors and the remaining 35 per cent to retail.
Valuation
SL is offering it’s shares at a price band of Rs.40 - Rs.45 at a P/E multiple of 13 & 15 respectively. The issue looks to be fully priced with not much room left for new investors. Last year, another company (from the same industry) i.e. Blue Bird India Limited, had come out with an issue of the same P/E as that of SL & is currently trading at a P/E of 7 with turnover being more than that of SL.
Currently, the capacity that SL has is under-utilized & SL is still looking for expansion & that too in the same region (viz. south India). There are other companies (peer group) which have better turnover than SL & valuations of which are more attractive than SL. Hence, we give an “Ignore" rating to the issue.
Premium on listing - Rs 2- Rs 5
October 22, 2007
BUY Tata Power @ cmp
Face value is Rs 10 and CMP is Rs. 976.65 - Here are some factors which forces us to recommend this stock
The management of Tata Power in a presentation in September 2007 stated that they expect power generation capacity to grow five times in the next five years. The company is already implementing a project with a capacity of 5,763MW and another project of 4,700 MW is also planned. Therefore we expect 10,313MW to be installed by FY13 against our earlier estimate of 9,413MW.
Thanks to its integration across the chain. In addition to its acquisition of a strategic stake in Indonesian coal mines, the Ministry of Coal has allocated coal mines in India to this company. Given the higher visibility of its implementation of power projects and backward integration in coal production, the company seems to be in a better place at the current level.
The management clearly indicated in its presentation that they may raise funds if required. According to their presentation, they need $1.4 billion for all their expansions by FY12 and they will get $600 million through internal accruals and $310 million by preferential allotment to Tata Sons. The remaining may be raised through debt. At least for the next 12 months, the fund raising is not required.
On the valuation front, at the CMP of Rs 1090, the scrip is trading at 30x of its FY07 earning. In the long run, with increased capacity and integrated across the chain, the topline and bottomline are expected to improve. Hence, we recommend investors to buy the scrip at the current level
10 Good stocks to BUY
10 GOOD stocks worth buying
In the long run, stockmarkets reflect the real economy. In the short run, they seem to have a life of their own. The factory worker who buys Tiger biscuits for his school-going daughter, or the call-centre employee who uses his first salary to make a deposit on his motorcycle, are not informed by the Nifty. But their purchase decisions determine the health of fast-moving consumer goods companies and packaging suppliers, of trucking companies and gear manufacturers.
The sentiment in the stockmarket is driven not just by the sentiment in the economy but also various other factors. These factors are now increasingly globally controlled, rather than locally. So while markets flew over the last few years on increased buying by foreign investors, this same phenomenon is lending it increased volatility now.
Such downturns in the market can deepen or correct, they can last a week or a year. But they do throw up opportunities to buy good stocks cheap. Our own take is that this correction may be deep, but will not last long. An economy growing at nine per cent annually is going to find willing investors on an on-going basis.
Outlook Money crunched the numbers of companies in the 'A' and 'B1' lists of the Bombay Stock Exchange (a total of 925 companies). We looked for companies that exhibited consistent profit growth over the last four years. As a next step, we sifted down to companies that showed a net profit growth of at least 25 per cent, year-on-year (y-o-y), in results reported for Q3, FY07. Then, based on BSE closing prices on 7 March 2007, we zeroed in on companies that were available for less than 25 times earnings.
Such companies offer a price earning to growth of one or less, reasonable by any norm. Despite our exacting standards, we ended up with 112 companies - an indication of how much entrepreneurial activity is going on in India, as well as of the upside when markets recover. From this list, we culled out 10 companies, across five sectors, which show consistent growth, steady or improving profit margins, and low discounting. Take your pick!
Information technology
1. Geodesic Information Systems
It is a software solutions company formed in 1999. Geodesic concentrates on software in the communications space. Its product 'Mundu Messenger' is a universal instant messaging service that facilitates collaboration across a host of Internet platforms, such as AIM, Google Talk, ICQ, MSN and Yahoo.
The company, which also offers software development in verticals such as publishing, banking, retail and healthcare, has attracted substantial overseas investment and now 51 per cent of its equity is held by foreign institutional investors.
2. NIIT Technologies
It is the software solutions business, which was formed when the old NIIT split into two. Over the last year, it has demonstrated its willingness to make acquisitions to complement its organic growth; as a result, it is able to offer a mix of near-shore and off-shore IT solutions from operations in North America, Europe, Asia Pacific and Australia. The company has alliances with global IT majors, including Computer Associates, IBM, Microsoft, Oracle and SAP.
3. Zenith Infotech
Focuses on banking solutions and infrastructure management. As a product and solutions company, it has a high (and growing) profit margin - for the last quarter, the operating profit was 56 per cent of the turnover. The company's banking solutions business now has over 100 customers, with its Banc724 software product either implemented or being implemented in over 3,500 branches.
This large installed base helps steady the revenue stream, thanks to the demand for maintenance services. The SAAZ infrastructure management product has more than 140 customers.
Banking and financial services (BFSI)
4. Mahindra & Mahindra Financial Services (MMFSL) A subsidiary of the leading tractor and utility vehicles company, it began as a vehicle-financing arm of the parent. As the company expanded into semi-rural and rural areas, it became apparent that there was a latent demand for a whole host of financial services that were not being met in these areas.
Accordingly, MMFSL now distributes mutual funds, and offers financial advisory services through its network of branches, which numbered 398 as on 31 December 2006. In its core area of vehicle finance, the company has extended business to finance for used commercial vehicles.
Infrastructure
5. Kalpataru Power Transmission
One of the leading companies in the field of turnkey projects for EHV transmission lines up to 800 KV in India and abroad. It has emerged as a leading player in erecting high voltage transmission towers and lines.
Aside from India, where power generation and transmission has got to be an on-going infrastructural priority, the company has worked on projects through Asia, Africa, and as far afield as Australia and Latin America.
With an order book of over Rs 2,100 crore, the company has achieved a run rate of Rs 1,000 crore (Rs 10 billion) per annum. In the last reported quarter, the turnover was up 82 per cent y-o-y, and EPS 96 per cent.
6. Bharat Heavy Electricals
The largest engineering and manufacturing enterprise in India in the energy-related infrastructure sector today. The company manufactures over 180 products under 30 major product groups and caters to core sectors of the Indian economy like power generation and transmission, transportation, telecommunication and renewable energy.
Though government owned, Bhel has shown the ability to respond to a buoyant market, both in India, and in the world, with projects implemented in 60 countries, ranging from the US to New Zealand.
Automobiles
7. FAG Bearings India
A member company of the German FAG group, it is a leading player in the Indian bearings industry. The company manufactures a wide range of bearings across sectors - auto companies, railways, mechanical and electrical engineering industries. The parent company has identified FAG India as a sourcing base - this along with the growth of the Indian economy should help maintain buoyancy in the company's operations. It is currently growing at over 50 per cent, y-o-y.
8. Phoenix Lamps
Specialises in automobile lamps sold under the Halonix brand name, though it has an extensive offering of over 500 different lighting products, including halogen lamps for general lighting and Compact Fluorescent Lamps. Last year, the private equity firm, Actis, bought out the promoters, who owned 40 per cent of the company, at Rs 152 per share with plans to aggressively invest in growth. Currently available at 12.83 times earnings, Phoenix's profits grew 46 per cent y-o-y in the last quarter.
FMCG
9. Ruchi Soya Industries
It is the flagship company of the Ruchi Group of Industries and has come to occupy substantial shelf space in edible oils and soya foods across the country.
The Nutrela brand, which it owns, is the market leader in this space - with soya nuggets, granules, cooking oils, and soya flour. The company also manufactures and sells vanaspati and specialty fats to the bakery industry. Besides, Ruchi Soya is the largest exporter of soya meal and lecithin from India.
Pharmaceuticals
10. Elder Pharmaceuticals
Now holds the 31st position in India's pharmaceutical industry (ORG-IMS). Relatively young, at 16 years, it is currently ranked the third-fastest growing Indian pharma business - which threw the company up in our search. In a sector that has been relatively quiet, Elder racked up a 36 per cent annual profit growth in the last quarter.
It has entered into a slew of licensing arrangements to manufacture and distribute products of international majors, while also building up an export market in some 37 countries.
In the long run, stockmarkets reflect the real economy. In the short run, they seem to have a life of their own. The factory worker who buys Tiger biscuits for his school-going daughter, or the call-centre employee who uses his first salary to make a deposit on his motorcycle, are not informed by the Nifty. But their purchase decisions determine the health of fast-moving consumer goods companies and packaging suppliers, of trucking companies and gear manufacturers.
The sentiment in the stockmarket is driven not just by the sentiment in the economy but also various other factors. These factors are now increasingly globally controlled, rather than locally. So while markets flew over the last few years on increased buying by foreign investors, this same phenomenon is lending it increased volatility now.
Such downturns in the market can deepen or correct, they can last a week or a year. But they do throw up opportunities to buy good stocks cheap. Our own take is that this correction may be deep, but will not last long. An economy growing at nine per cent annually is going to find willing investors on an on-going basis.
Outlook Money crunched the numbers of companies in the 'A' and 'B1' lists of the Bombay Stock Exchange (a total of 925 companies). We looked for companies that exhibited consistent profit growth over the last four years. As a next step, we sifted down to companies that showed a net profit growth of at least 25 per cent, year-on-year (y-o-y), in results reported for Q3, FY07. Then, based on BSE closing prices on 7 March 2007, we zeroed in on companies that were available for less than 25 times earnings.
Such companies offer a price earning to growth of one or less, reasonable by any norm. Despite our exacting standards, we ended up with 112 companies - an indication of how much entrepreneurial activity is going on in India, as well as of the upside when markets recover. From this list, we culled out 10 companies, across five sectors, which show consistent growth, steady or improving profit margins, and low discounting. Take your pick!
Information technology
1. Geodesic Information Systems
It is a software solutions company formed in 1999. Geodesic concentrates on software in the communications space. Its product 'Mundu Messenger' is a universal instant messaging service that facilitates collaboration across a host of Internet platforms, such as AIM, Google Talk, ICQ, MSN and Yahoo.
The company, which also offers software development in verticals such as publishing, banking, retail and healthcare, has attracted substantial overseas investment and now 51 per cent of its equity is held by foreign institutional investors.
2. NIIT Technologies
It is the software solutions business, which was formed when the old NIIT split into two. Over the last year, it has demonstrated its willingness to make acquisitions to complement its organic growth; as a result, it is able to offer a mix of near-shore and off-shore IT solutions from operations in North America, Europe, Asia Pacific and Australia. The company has alliances with global IT majors, including Computer Associates, IBM, Microsoft, Oracle and SAP.
3. Zenith Infotech
Focuses on banking solutions and infrastructure management. As a product and solutions company, it has a high (and growing) profit margin - for the last quarter, the operating profit was 56 per cent of the turnover. The company's banking solutions business now has over 100 customers, with its Banc724 software product either implemented or being implemented in over 3,500 branches.
This large installed base helps steady the revenue stream, thanks to the demand for maintenance services. The SAAZ infrastructure management product has more than 140 customers.
Banking and financial services (BFSI)
4. Mahindra & Mahindra Financial Services (MMFSL) A subsidiary of the leading tractor and utility vehicles company, it began as a vehicle-financing arm of the parent. As the company expanded into semi-rural and rural areas, it became apparent that there was a latent demand for a whole host of financial services that were not being met in these areas.
Accordingly, MMFSL now distributes mutual funds, and offers financial advisory services through its network of branches, which numbered 398 as on 31 December 2006. In its core area of vehicle finance, the company has extended business to finance for used commercial vehicles.
Infrastructure
5. Kalpataru Power Transmission
One of the leading companies in the field of turnkey projects for EHV transmission lines up to 800 KV in India and abroad. It has emerged as a leading player in erecting high voltage transmission towers and lines.
Aside from India, where power generation and transmission has got to be an on-going infrastructural priority, the company has worked on projects through Asia, Africa, and as far afield as Australia and Latin America.
With an order book of over Rs 2,100 crore, the company has achieved a run rate of Rs 1,000 crore (Rs 10 billion) per annum. In the last reported quarter, the turnover was up 82 per cent y-o-y, and EPS 96 per cent.
6. Bharat Heavy Electricals
The largest engineering and manufacturing enterprise in India in the energy-related infrastructure sector today. The company manufactures over 180 products under 30 major product groups and caters to core sectors of the Indian economy like power generation and transmission, transportation, telecommunication and renewable energy.
Though government owned, Bhel has shown the ability to respond to a buoyant market, both in India, and in the world, with projects implemented in 60 countries, ranging from the US to New Zealand.
Automobiles
7. FAG Bearings India
A member company of the German FAG group, it is a leading player in the Indian bearings industry. The company manufactures a wide range of bearings across sectors - auto companies, railways, mechanical and electrical engineering industries. The parent company has identified FAG India as a sourcing base - this along with the growth of the Indian economy should help maintain buoyancy in the company's operations. It is currently growing at over 50 per cent, y-o-y.
8. Phoenix Lamps
Specialises in automobile lamps sold under the Halonix brand name, though it has an extensive offering of over 500 different lighting products, including halogen lamps for general lighting and Compact Fluorescent Lamps. Last year, the private equity firm, Actis, bought out the promoters, who owned 40 per cent of the company, at Rs 152 per share with plans to aggressively invest in growth. Currently available at 12.83 times earnings, Phoenix's profits grew 46 per cent y-o-y in the last quarter.
FMCG
9. Ruchi Soya Industries
It is the flagship company of the Ruchi Group of Industries and has come to occupy substantial shelf space in edible oils and soya foods across the country.
The Nutrela brand, which it owns, is the market leader in this space - with soya nuggets, granules, cooking oils, and soya flour. The company also manufactures and sells vanaspati and specialty fats to the bakery industry. Besides, Ruchi Soya is the largest exporter of soya meal and lecithin from India.
Pharmaceuticals
10. Elder Pharmaceuticals
Now holds the 31st position in India's pharmaceutical industry (ORG-IMS). Relatively young, at 16 years, it is currently ranked the third-fastest growing Indian pharma business - which threw the company up in our search. In a sector that has been relatively quiet, Elder racked up a 36 per cent annual profit growth in the last quarter.
It has entered into a slew of licensing arrangements to manufacture and distribute products of international majors, while also building up an export market in some 37 countries.
October 19, 2007
Rathi Bars - IPO Prospects
Rathi Bars Limited - Avoid and sit on cash!!!
Date :Oct 18- Oct 23
Issue Price :35 Rs
Min. Order Quantity :175 Shares
Grade :Average
Recommendation :Skip
Company Info
Iron and steel maker, Rathi Bars will raise Rs 25 crore through initial public offer (IPO) to fund its production capacity expansion plans. The shares with a face value of Rs 10 each would be issued at Rs 35, he said. The issue would open on 18 October and close on 23 October.
The company has earmarked an investment of Rs 35 crore for purchasing and upgrading its equipment and other expansion plans. “The public issue will fund the bulk of the expansion programme. The rest of the fund will come from internal accruals and debt market,”
Valuation
Date :Oct 18- Oct 23
Issue Price :35 Rs
Min. Order Quantity :175 Shares
Grade :Average
Recommendation :Skip
Company Info
Iron and steel maker, Rathi Bars will raise Rs 25 crore through initial public offer (IPO) to fund its production capacity expansion plans. The shares with a face value of Rs 10 each would be issued at Rs 35, he said. The issue would open on 18 October and close on 23 October.
The company has earmarked an investment of Rs 35 crore for purchasing and upgrading its equipment and other expansion plans. “The public issue will fund the bulk of the expansion programme. The rest of the fund will come from internal accruals and debt market,”
Valuation
Rathi bars is an average issue. The sector enjoys very low PE multiple of 5 to 6. Since company is already operating at its full capacity EPS for FY 08 and FY 09 is likely to remain at Rs 7 and present issue, discounts it, at a multiple of 5. Hence, not much upside is seen and such small issues, recently have been ruling at below its issue price.
Its better to avoid this IPO.People should wait for better scrips, which will be available in near term.
October 17, 2007
CEEEBI,CHIDU,REEDDY - Official terrorist of Stock Markets
Today market is down by 10%.We will buy at dips because its OPEN CHALLENGE that market will cross 20-21k in next 6-8 months.
CEEEBI,CHIDU,REEDDY -- have decided to oblige big FII players at cost of retail investors there is this rumour floating that HK based fund has shorted 1 crore nifty on friday at well known brokerage house and funds got badly stuck since market went up more than 300 points in nifty . so this move is to bail fund out .he has squared the trade now PC will come and issue clarification and everthing will be fine.
This is politics !!!!Yes official stock market terrorist !!!!!! this all credit goes to CEEBI chairman n CHIDDDDDDU,.Why they take such decision after mkt close, bcoz they can enjoy free fall next day. Yesterday FII were net seller of 3500 crore, this means they were knowing about this in advance.FIIS shorted in US market ( indian ADRS)
This has been happening time and again.. And this manipulation should stop.CEEBI chairman & Chiduuu should resign because this is not the first time ( and will not be last time) they have obliged and made way for FIIS.
Our msg-- Maintain calm and Pick R- stocks at dips,Pick Power,Infra,Telecom stocks.Dont panic at fall.. Technically 15600 is bottom.
SEBI should think of Improving Indian markets by implementing Pre market price discovery.
Dont sell in panic... 21k in next 6 months.
CEEEBI,CHIDU,REEDDY -- have decided to oblige big FII players at cost of retail investors there is this rumour floating that HK based fund has shorted 1 crore nifty on friday at well known brokerage house and funds got badly stuck since market went up more than 300 points in nifty . so this move is to bail fund out .he has squared the trade now PC will come and issue clarification and everthing will be fine.
This is politics !!!!Yes official stock market terrorist !!!!!! this all credit goes to CEEBI chairman n CHIDDDDDDU,.Why they take such decision after mkt close, bcoz they can enjoy free fall next day. Yesterday FII were net seller of 3500 crore, this means they were knowing about this in advance.FIIS shorted in US market ( indian ADRS)
This has been happening time and again.. And this manipulation should stop.CEEBI chairman & Chiduuu should resign because this is not the first time ( and will not be last time) they have obliged and made way for FIIS.
Our msg-- Maintain calm and Pick R- stocks at dips,Pick Power,Infra,Telecom stocks.Dont panic at fall.. Technically 15600 is bottom.
SEBI should think of Improving Indian markets by implementing Pre market price discovery.
Dont sell in panic... 21k in next 6 months.
October 16, 2007
Sensex @19K - Still waiting for a correction?
With the Sensex scaling 19000, subprime now seems to be a distant bad dream. However it was not too far ago when investors across the world were running helter skelter hearing subprime. It was then that the Fed like knight warriors came to the rescue by cutting the interest rates by 50 basis points. This action seems to have wiped all the subprime mess that has taken several years to build up. What did investors do in the meantime? A lot of people waited, waited and waited for the markets to correct even further. Nobody dared to enter the markets at 15000 levels or for that matter even at 14000 levels. At the same time several pundits were predicting the next big correction. Well the markets in the meantime zoomed across and in the process most people missed the boat like always. Well the markets have a very high probability of correcting now but the moot point here: More money is lost in waiting for corrections, anticipating corrections than in corrections itself.
Waiting for corrections to happen has been a reality of the markets and all market participants are guilty of such practices. I am not saying it’s a bad thing but that short-term corrections and sharp up moves are very difficult if not impossible to predict. How many people would have predicted the 600-point rally after the Fed rate cut? Charles Ellis’s Investors Anthology has a very apt quote which was part of weekly staff letter (1951) of David Babson & Company “It must be apparent to intelligent investors who if anyone possessed the ability to do so (read - forecast the immediate trend of stock prices) consistently and accurately, he would become a billionaire so quickly, he would not find it necessary to sell his stock market guesses to the general public”
There are both rumors and reports that the Sensex will touch 20000 soon and 25000 in the next 6-9 months. The logic is that if China can be valued at rich valuations of 45 plus why couldn’t the second fastest growing economy valued at 25 or for that matter 30. Sensex company’s earnings are predicted to be around Rs. 860 by end of the current year and Rs. 1000 by 2009. What would be the index levels with such earning levels? Your guess is as good as mine on this one.
So what should people do in such situations?
Firstly rebalance your asset allocation and have clear investment rules stating rules on when to buy and sell. If you are high on equity and have made sizeable profits, it means move into cash or debt as per your investment strategy. After a correction, when you are high on cash you can move back into equity. However if you are low on equity, then you should stagger new investments on every fall. Now what happens if there are no falls? No market could be insulated against falls and there will be falls along the way. I am not sure how looking at forward or trailing PEs could help perfectly estimate overvaluation or undervaluation. It could be an indicator along with several other parameters including volumes, technical data and F&O information. But these are not sacrosanct parameters and more often than not, their interpretation is wrong. And by the way if there are no falls then you can only stagger your investments unemotionally through regular investments in stocks and mutual funds.
Wait for the significant correction to happen. This essentially means timing the market and this is again a very difficult thing to do. How do you know what is the lowest level and how long should you wait? Is the rally post the correction a realistic one or is it just a dead cat bounce? There are several questions to be understood and answered here and how many people are gifted enough to consistently get this exercise right. Warren Buffet is often quoted in almost every second column but few people have the habit of being patient. Finally what does being patient mean? In a structural bull run, how patient can a person really be with the index conquering new heights and whether it is a wise strategy.
Our market currently faces three key Risks
An untoward event in the global situation due to subprime or any other possible theory has the potential to bring markets down.
Increasing Oil and Commodity Prices might exert an upward pressure on inflation and interest rates.
Domestic Political Situation leading to an early election might also cause nervousness in the markets. However this is the least crucial of all risks as our economy has gathered the momentum to clock high growth rates with any political party running its affair (except for if the Left comes to power which at least in the current scenario looks highly improbable.
Indian Investors will be surprised to know that there are a lot of US Money Market Funds that have invested in subprime debt. Also there are several other financial institutions that have huge exposures to subprime debt. According to a recent Bloomberg column, AIG, the world’s largest insurer and reinsurer, had almost around one third (33%) of its USD 104 billion networth invested in subprime related securities. And there are several such insurance companies with subprime exposure of 3 to 20% of its networth. What would happen if one of these institutions or some large hedge fund with huge subprime exposures collapse like the one we witnessed in August this year? Surely our markets will come down and decoupling that is a buzzword these days might seem like a joke.
Source:Moneycontrol.com
Waiting for corrections to happen has been a reality of the markets and all market participants are guilty of such practices. I am not saying it’s a bad thing but that short-term corrections and sharp up moves are very difficult if not impossible to predict. How many people would have predicted the 600-point rally after the Fed rate cut? Charles Ellis’s Investors Anthology has a very apt quote which was part of weekly staff letter (1951) of David Babson & Company “It must be apparent to intelligent investors who if anyone possessed the ability to do so (read - forecast the immediate trend of stock prices) consistently and accurately, he would become a billionaire so quickly, he would not find it necessary to sell his stock market guesses to the general public”
There are both rumors and reports that the Sensex will touch 20000 soon and 25000 in the next 6-9 months. The logic is that if China can be valued at rich valuations of 45 plus why couldn’t the second fastest growing economy valued at 25 or for that matter 30. Sensex company’s earnings are predicted to be around Rs. 860 by end of the current year and Rs. 1000 by 2009. What would be the index levels with such earning levels? Your guess is as good as mine on this one.
So what should people do in such situations?
Firstly rebalance your asset allocation and have clear investment rules stating rules on when to buy and sell. If you are high on equity and have made sizeable profits, it means move into cash or debt as per your investment strategy. After a correction, when you are high on cash you can move back into equity. However if you are low on equity, then you should stagger new investments on every fall. Now what happens if there are no falls? No market could be insulated against falls and there will be falls along the way. I am not sure how looking at forward or trailing PEs could help perfectly estimate overvaluation or undervaluation. It could be an indicator along with several other parameters including volumes, technical data and F&O information. But these are not sacrosanct parameters and more often than not, their interpretation is wrong. And by the way if there are no falls then you can only stagger your investments unemotionally through regular investments in stocks and mutual funds.
Wait for the significant correction to happen. This essentially means timing the market and this is again a very difficult thing to do. How do you know what is the lowest level and how long should you wait? Is the rally post the correction a realistic one or is it just a dead cat bounce? There are several questions to be understood and answered here and how many people are gifted enough to consistently get this exercise right. Warren Buffet is often quoted in almost every second column but few people have the habit of being patient. Finally what does being patient mean? In a structural bull run, how patient can a person really be with the index conquering new heights and whether it is a wise strategy.
Our market currently faces three key Risks
An untoward event in the global situation due to subprime or any other possible theory has the potential to bring markets down.
Increasing Oil and Commodity Prices might exert an upward pressure on inflation and interest rates.
Domestic Political Situation leading to an early election might also cause nervousness in the markets. However this is the least crucial of all risks as our economy has gathered the momentum to clock high growth rates with any political party running its affair (except for if the Left comes to power which at least in the current scenario looks highly improbable.
Indian Investors will be surprised to know that there are a lot of US Money Market Funds that have invested in subprime debt. Also there are several other financial institutions that have huge exposures to subprime debt. According to a recent Bloomberg column, AIG, the world’s largest insurer and reinsurer, had almost around one third (33%) of its USD 104 billion networth invested in subprime related securities. And there are several such insurance companies with subprime exposure of 3 to 20% of its networth. What would happen if one of these institutions or some large hedge fund with huge subprime exposures collapse like the one we witnessed in August this year? Surely our markets will come down and decoupling that is a buzzword these days might seem like a joke.
Source:Moneycontrol.com
Accumulate Power Grid - Long term
Create Wealth by Accumulating PGCIL
Investors can look at accumulating Power Grid at current price and at lower levels.It is the monopoly status of Power Grid, not many companies in India with such a fantastic network.
Its outlook and business is very good.After listing the price has doubled.Many retail investors have got very small allotment.So one can keep adding this stock now and at every fall.
I would say that one can buy upto 5-10% of portfoilio with Power grid and fair valuation of the stock you can expect to be around 80-90 levels.
Someone who missed IDFC,can buy this would be a very good stock for next few yrs with good upside and very negiligible risks.
Investors can look at accumulating Power Grid at current price and at lower levels.It is the monopoly status of Power Grid, not many companies in India with such a fantastic network.
Its outlook and business is very good.After listing the price has doubled.Many retail investors have got very small allotment.So one can keep adding this stock now and at every fall.
I would say that one can buy upto 5-10% of portfoilio with Power grid and fair valuation of the stock you can expect to be around 80-90 levels.
Someone who missed IDFC,can buy this would be a very good stock for next few yrs with good upside and very negiligible risks.
PSU PICKS
The navratna for India's biggest public sector companies is proving to be a fitting one. For, in the past one year, the government has become wealthier by over Rs 3,14,000 crore or $78 billion thanks to the appreciation in the stock prices of public sector undertakings and new listings. And that's not all, the government earned a cool Rs 16,000 crore as dividend from the 58 listed central PSUs last year alone.
There have been a number of star performers in the Government portfolio. The biggest contributor to GoI wealth has been NTPC. The market value of government holding in the power major is now $23 billion, which is an increase of $13 billion. Next in line is minerals and metals trader MMTC, which has contributed $11 billion to the rise in government's net worth. The once mired under a mountain of debt and steeped in losses Steel Authority of India (SAIL), is now one of the biggest wealth creators in the business.
The market capitalistion of the country's largest primary steel producer has more than doubled in last one year to nearly Rs 68,000 crore. This has created an additional wealth worth $10 billion for the government. Other big contributors include recently listed Power Grid Corporation, Bharat Heavy Electricals and State Bank of India and Power Finance Corporation.
Some PSU Stock Picks For Longterm :
Power Finance Corp (PFC) -- Target -- 265 +
Power Grid Corp -- Target -- 165 +
National thermal power corp ( NTPC ) -- Target -- 275 +
Power Trading Corp -- Target -- 130 +
There have been a number of star performers in the Government portfolio. The biggest contributor to GoI wealth has been NTPC. The market value of government holding in the power major is now $23 billion, which is an increase of $13 billion. Next in line is minerals and metals trader MMTC, which has contributed $11 billion to the rise in government's net worth. The once mired under a mountain of debt and steeped in losses Steel Authority of India (SAIL), is now one of the biggest wealth creators in the business.
The market capitalistion of the country's largest primary steel producer has more than doubled in last one year to nearly Rs 68,000 crore. This has created an additional wealth worth $10 billion for the government. Other big contributors include recently listed Power Grid Corporation, Bharat Heavy Electricals and State Bank of India and Power Finance Corporation.
Some PSU Stock Picks For Longterm :
Power Finance Corp (PFC) -- Target -- 265 +
Power Grid Corp -- Target -- 165 +
National thermal power corp ( NTPC ) -- Target -- 275 +
Power Trading Corp -- Target -- 130 +
October 10, 2007
Tips for 11/10/2007
- Focus on Power , Infrastructure , Cement & Engg. Sector in this fall
- Accumulate Tata Power & Rel. Energy on every correction
- 3i Infotech -expect a 30-40% increase in long run
- Indus Ind bank has the target of RS 100
- BUY Tata Steel at this level- expect Rs 1000 by end of this month
- Accumulate BALRAMPUR CHINNI - target 100 Rs
- Accumulate SBI Bank -expect Rs 3100 in next 12 months
- BHEL - next 6-7 months - target 3000 Rs
October 9, 2007
Buy @ Current levels
Long term Investors can BUY the following at current levels - though we are heading for some correction at this level
HCC - Hindustan Construction
HCC Long term charts are very good, fundamentally & technically strong company, If an Investor is not looking at short-term gyrations then Hindustan Construction could be a stock that would give you decent returns. If it were to cross Rs 170-174 range then it might even cross Rs 200 over the medium-term.
NTPC
If you look at the long-term charts, NTPC looks pretty good, you can still buy it at the current levels.
PFC
PFC was supposed to touch the technical target around Rs 245 or so and it went close to that and now it is on a correction mode - wait for it to consolidate and BUY & Accumulate in huge quantities
PTC
PTC requires more consolidation but for investments you may actually wait before you buy them right now
Rel. Energy
Reliance Energy is one stock in the power sector, which looks in a very strong uptrend and any correction in the stock is a great buying opportunity specially the level of Rs 1,065 would be a screaming buy
HCC - Hindustan Construction
HCC Long term charts are very good, fundamentally & technically strong company, If an Investor is not looking at short-term gyrations then Hindustan Construction could be a stock that would give you decent returns. If it were to cross Rs 170-174 range then it might even cross Rs 200 over the medium-term.
NTPC
If you look at the long-term charts, NTPC looks pretty good, you can still buy it at the current levels.
PFC
PFC was supposed to touch the technical target around Rs 245 or so and it went close to that and now it is on a correction mode - wait for it to consolidate and BUY & Accumulate in huge quantities
PTC
PTC requires more consolidation but for investments you may actually wait before you buy them right now
Rel. Energy
Reliance Energy is one stock in the power sector, which looks in a very strong uptrend and any correction in the stock is a great buying opportunity specially the level of Rs 1,065 would be a screaming buy
October 8, 2007
Focus - In Next few Months
Unlocking Value in coming months!!!
In coming days our focus should be on AUTO,HOTEL,CEMENT,Realty & IT stocks!!!!
Ofcourse Reliance pack,Infrastructure,Capital goods & power stocks will always be on our radar.
Watch magic in ACC,L&T,HDFC,ITC,ADITYA BIRLA NUVO in coming months.
HINT : Something similar to Reliance & Relenergy (Did we hear, some one say De merger/value unlocking???)
In coming days our focus should be on AUTO,HOTEL,CEMENT,Realty & IT stocks!!!!
Ofcourse Reliance pack,Infrastructure,Capital goods & power stocks will always be on our radar.
Watch magic in ACC,L&T,HDFC,ITC,ADITYA BIRLA NUVO in coming months.
HINT : Something similar to Reliance & Relenergy (Did we hear, some one say De merger/value unlocking???)
October 5, 2007
Power Grid to give over 50%, hold for long term: Experts
India’s principal power transmission company, Power Grid Corporation of India will list on the bourses with public issue shares on Friday, October 5, 2007.
Analysts told Moneycontrol.com that the stock may list above Rs 85 and advised to hold the stock for short term.
S P Tulsian of sptulsian.com said, "Power Grid Corporation is likely to list at Rs 85 on Friday. Buying is advised below Rs 80, while allottees are advised to hold the stock for 2-3 months."
According to R S Iyer of KR Choksey Securities, "The stock is expected to list at around Rs 85-90. It also could see three digit mark on the back of huge buying for long term. But for the time being, investors, who got allotment, can book profits above Rs 95."
"Power Grid may open at around Rs 82 and advised to hold for long term. It looks attractive with short to long term perspective as there is no major competitor to the company", said Manish Bhatt of Prabhudas Lilladher.
Arpit Agrawal, Head of Research, Arihant Capital Markets said, "Keeping in mind PGCIL’s monopoly in the transmission segments and the strong growth prospects, we believe investors should be invested in the company with a long term perspective."
Power Grid Corporation of India owns and operates most of India’s interstate and inter-regional electric power transmission system.
Source:Moneycontrol.com
Analysts told Moneycontrol.com that the stock may list above Rs 85 and advised to hold the stock for short term.
S P Tulsian of sptulsian.com said, "Power Grid Corporation is likely to list at Rs 85 on Friday. Buying is advised below Rs 80, while allottees are advised to hold the stock for 2-3 months."
According to R S Iyer of KR Choksey Securities, "The stock is expected to list at around Rs 85-90. It also could see three digit mark on the back of huge buying for long term. But for the time being, investors, who got allotment, can book profits above Rs 95."
"Power Grid may open at around Rs 82 and advised to hold for long term. It looks attractive with short to long term perspective as there is no major competitor to the company", said Manish Bhatt of Prabhudas Lilladher.
Arpit Agrawal, Head of Research, Arihant Capital Markets said, "Keeping in mind PGCIL’s monopoly in the transmission segments and the strong growth prospects, we believe investors should be invested in the company with a long term perspective."
Power Grid Corporation of India owns and operates most of India’s interstate and inter-regional electric power transmission system.
Source:Moneycontrol.com
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