Thursday, January 19, 2017

Yes bank beats estimate in q3


Yes Bank has posted a 31 per cent rise in net profit at Rs. 883 crore for the third quarter ended December 2016 due to lower provisions for bad loans and higher interest income.

The private sector lender had reported a net profit of Rs. 676 crore in the same quarter of the previous fiscal 2015-16.

Total income has increased to Rs. 5,230 crore for the quarter ended December 2016, from Rs. 4,122 crore for the same quarter a year ago.

The bank had  earned an interest of Rs. 4,232 crore during the December quarter of the current fiscal, up 25 per cent, from Rs. 3,376 crore in the corresponding October-December quarter of 2015-16.

Axis bank's net down in q3, NII up

Axis bank has posted a net profit of Rs. 579.57 cr for the quarter ended December 31, 2016 as compared to Rs. 2175.3 cr. for the quarter ended December 31, 2015. 

The total income has increased from Rs. 12531 cr for the quarter ended December 31, 2015 to Rs. 14501 cr for the quarter ended December 31, 2016.

Net interest income during the quarter grew by 4.1 percent to Rs 4,334 crore compared with Rs 4,162 crore in year-ago period, with loan growth of 10 percent at Rs 3.47 lakh crore as of December 2016.

The result were announced after market hours, the stock will react to the numbers in tomorrow's trading.

Nasdaq closes at magic number

Nasdaq was up by 17 points and closed at 5555. 

Wednesday, January 18, 2017

DSP Merrill Lynch's worst IPO : Unity Infraprojects

In 2006 DSP Merrill Lynch managed Unity Infraprojects IPO. The issue was made at Rs 675 a share.

The stock is now trading at Rs 9. In 2010, there was stock split. The Rs 10 FV stock was split to Rs 2 FV. If adjusted to the stock split, the stock is worth Rs 45, down Rs 630 or 93% . This is apart from opportunity cost.

IPO Analysis : BSE Limited - Invest for listing gains.


ISSUE DETAILS:

Issue opens / closes on
23-01 /25-01-2017
Promoters
Professionally managed
Business
Stock exchange

ISSUE SIZE
OFS of  15,427,197 EQUITY SHARES  
FACE VALUE
Rs 2
PRICE BAND
Rs 805-806
LISTINGS
Bse, Nse
BRLMs
Edelweiss, Axis Capital, Jefferies,Nomura, Motilal Oswal,SBI caps, SMC capital
REGISTRAR
Karvy

Strengths :

a) Strong brand recognition with a track record of innovation.

b) Diversified and integrated business model and active relationship with market participants.

c) State-of-the-art infrastructure and technology.

d) Financial strength and diversified sources of revenue.

Risks:

1. Highly regulated - exchanges are highly regulated to protect the interest of retail investors.

2. Conflicts of interest. Valuation creation for shareholders at whose cost?

3. Competition- Faces stiff competition from NSE / others.

          Financials:
                                                   (Rs in crores)


30-09-2016
31-03-2016
31-03-2015
Capital
10.74
10.74
10.74
Revenue
274
516
439
Net profit
86.1
131.9
75.6
EPS
15.79
24.16
13.86

Average RNOW in the last 3 years is 5%.


Valuation and recommendations:

BSE is one of the oldest exchange in Asia. First stock exchange to be listed. The offer is made at 27 PE, on FY earnings. Though valuation little bit stretched, there will be listing gains.

Invest for listing gains.

Cinema halls are missing : Shree Ashtavinayak and Pyramid Saimira

The above two companies collected funds from the primary market in the year 2006. Shree Ashtavinayak issued shares at Rs 160 and Pyramid at Rs 100 a piece. 

Both the company's shares are suspended from trading, since they have not complied with the listing agreement guidelines.

The first one was lead managed by Allianz Securities and the second one by Keynote Corporate.

Plethico Pharmaceuticals - ten years on, still searching for right medicine

Plethico Pharmaceuticals entered the primary market in 2006.The IPO price was Rs 300 a share. Anand Rathi Securities were the sole lead manager to the offer. The stock is now trading around Rs 8, down Rs 292 from its IPO price.

In the last 10 add years, neither any bonus offer nor stock split.

JustDial : the only IPO of 2013 to trade below offer price

Four IPO were hit the market in 2013. Out of these only Justdial is trading below offer price. 

sl.no   name of comapany        ipo price         CMP

1.        Power grid                         90                  198

2.        Justdial                             530                 367

3.        Repco                                172                660

4.        V Mart                               210                 476       

UDAY : BJP ruled state defaults

 Ujwal Discom Assurance Yojana (UDAY) was introduced as a scheme that would nurse State-owned power distribution companies back to health. Now, however, doubts are rising about whether States are using the scheme as another window to pile up fresh debt.

Jharkhand, the first state to sign up for the UDAY scheme, is a case in point. On December 6, 2015, Union Power Minister Piyush Goyal thanked the BJP-ruled State for taking the lead, tweeting: “24x7 power is not far.”

The State raised a loan and cleared historic dues of ₹5,553 crore, accumulated between 2001 and September 2015 — paying ₹4,770 crore to statutory generation utility Damodar Valley Corporation (DVC) and ₹783 crore to Coal India.

A year later, however, Jharkhand has piled up ₹1,300 crore in fresh dues to DVC and ₹32 crore to Coal India. It has simply stopped paying dues to DVC for the purchase of roughly 700 MW a day. 

( inputs from BL)

Rights Offer : Orient Paper & Industries - Avoid

Issue Details:

Rights offer opens on 25-01 and closes on 09-02-2017.

ISSUE OF 73,16,742 EQUITY SHARES OF FACE VALUE Rs 1 EACH.

FOR CASH AT A PRICE OF Rs 68 INCLUDING A PREMIUM OF Rs 67 PER RIGHTS EQUITY SHARE.

THE RATIO : 1 RIGHTS EQUITY SHARE FOR 28 FULLY PAID-UP EQUITY SHARES HELD.
The stock is currently trading around Rs 77. After the Rights offer the equity will enlarge by 25%. As of now paper stocks are not fancied in the exchanges. 

The company's profitability is inconsistent. Avoid the offer.

IPO Analysis : MADHAV COPPER LIMITED - Aggressively priced - Avoid.



ISSUE DETAILS:

Issue opens / closes on
23-01 /27-01-2017
Promoters
NILESH PATEL, ROHIT CHAUHAN & DIVYA MONPARA
Business
Mfrs of enamelled, copper rod profile and poly-wrap submersible winding wires

ISSUE SIZE
5,53,600 equity shares
FACE VALUE
Rs 10
PRICE BAND
Rs 71
LISTINGS
NSE - Emerge
BRLMs
Pantomath Capital
REGISTRAR
BigShare

Tuesday, January 17, 2017

TCS positioned in Winner's Circle.

Tata Consultancy Services Ltd has informed Exchanges regarding a Press Release dated January 17, 2017 titled "TCS Positioned in 'Winner's Circle' by HfS Research in Digital Marketing Operations".

BSE IPO price band announced

BSE has priced its IPO in the range of Rs 805-806, the issue opens on 23-01-2017.

Rich are becoming super rich

The world’s 10 biggest corporations together had revenue greater than that of the poorest 180 countries combined in 2015-16, says a new report by Oxfam.

Total global wealth has reached a staggering $255 trillion. Since 2015, more than half of this wealth has been in the hands of the richest 1 per cent of people. At the very top, this year’s data finds that collectively the richest eight individuals have a net wealth of $426 billion, which is the same as the net wealth of the bottom half of humanity,” says the report, adding that “By any measure, we are living in the age of the super-rich, a second ‘gilded age’ in which a glittering surface masks social problems and corruption.

IPO News : SIS gets regulator's nod

The Security and Intelligence Services has received SEBI’s go ahead to raise an estimated Rs 500 crore through an initial public offerings.

Monday, January 16, 2017

RIL's q3 numbers subdued

RIL has posted a net profit after tax of Rs. 7506 cr for the quarter ended December 31, 2016 as compared to Rs. 7245 cr for the quarter ended December 31, 2015. 

The total Income has increased from Rs. 74953 cr for the quarter ended December 31, 2015 to Rs. 86925 cr for the quarter ended December 31, 2016.

Results were announced after trading hours. The stock will react to the numbers in tomorrow's trading. In today's trading it closed at Rs 1077, down Rs 13.

Forthcoming IPO : HOUSING AND URBAN DEVELOPMENT CORPORATION LIMITED

ISSUE DETAILS:




Promoters
Govt of India
Business
Loans for homes,urban infra

ISSUE SIZE
20,0019,000 equity shares
FACE VALUE
Rs 10
PRICE BAND
-
LISTINGS
BSE, NSE
BRLMs
IDBI Capital, SBI Caps, Nomura Financial, ICICI Securities
REGISTRAR
-

Sunday, January 15, 2017

Page Industries : 3900% appreciation in 10 years.


Page Industries Limited located in Bangalore, India is the exclusive licensee of JOCKEY International Inc. for manufacture, distribution and marketing of the JOCKEY® brand in India, Sri Lanka, Bangladesh, Nepal and the UAE. Page Industries is also the exclusive licensee of Speedo International Ltd. for the manufacture, marketing and distribution of the Speedo brand in India.

The company came IPO in 2007 at a price of Rs 360.  In less than ten years the stock has appreciated more than 3900%.  The Rs 10 FV stock is now trading above Rs 14,000. The IPO was lead managed by IL&FS Investsmart Ltd. Apart from capital appreciation the company has been paying hand some dividends every year.

Hubtown : many avatars, investors clueless

Hubtown Limited, formerly known as Akruti City, came IPO in the name of Akruti Nirman in the year 2007 at a price of Rs 540. The IPO was lead managed by J.P.Morgan India Pvt. Ltd. and Enam Financial Consultants Pvt. Ltd.

The company has changed name twice. But nothing has changed to the fortunes of investors. Since coming IPO there is no split or bonus offer from the company. The ten rupee face value stock is currently trading around Rs 95. Down Rs 445. Plus ten year's opportunity cost. 

Saturday, January 14, 2017

CPSE ETF opens on 18-01-2017 - Invest

The second tranche of exchange-traded funds (ETF) based on top 10 listed state-run firms with an aim to raise up to Rs6,000 crore through divestment of government stakes in these firms.
The ETF will aim to raise at least Rs4,500 crore as a base issue size and will have a green-shoe option of another Rs1,500 crore. Under the scheme, all investors in the ETF will get a 5% upfront discount.
The underlying portfolio of the CPSE ETF will have companies including ONGC Ltd, Coal India Ltd, Indian Oil Corp. Ltd, Gail (India) Ltd, Power Finance Corp. Ltd, Rural Electrification Corp. Ltd, Container Corp.of India Ltd, Bharat Electronics Ltd, Oil India Ltd and Engineers India Ltd.
The CPSE ETF has grown at a CAGR of 14.42% and accumulated a value of Rs 14,507 crore. The units of the ETF are listed on NSE and BSE.
Minimum application Rs 5000 / in multiples thereof.
One can invest in the scheme for study appreciation.

IPO ANALYSIS:SUPERFINE KNITTERS LIMITED - Invest for listing gains



ISSUE DETAILS:

ISSUE OPENS / CLOSES ON

18-01 /24-01-2017
Promoters
AJIT KUMAR LAKRA, GITA LAKRA, VIVEK LAKRA AND AJIT KUMAR LAKRA (HUF)
Business
Manufacturers of  knitted apparels

ISSUE SIZE
34,00,000 equity shares
FACE VALUE
Rs 10
PRICE BAND
Rs 12
LISTINGS
BSE SME
BRLMs
GUINESS CORPORATE ADVISORS PRIVATE LIMITED
REGISTRAR
Cameo  Corp  Services

Yes Bank : Value creator

About 12 years ago the bank made its debut on the exchanges. The IPO was priced at Rs 45. It was lead managed by DSP Merrill Lynch  and Enam Financial Consultants. 

Yes bank is one of the IPO stock which has given maximum return on investment.

The stock is now trading around Rs 1320. The stock is a good buy at current level too.

Suzlon Energy : Failed promise, Misplaced optimism

Suzlon Energy's website says :

Established in 1995, today Suzlon Energy Ltd. is present in 19 countries across 6 continents. We are one of the leading renewable energy solutions providers in the world. We have installed around 15.5 GW of wind energy capacity globally. With a support network of over 8,000 employees of diverse nationalities, we house one of the largest in-house Research and Development (R&D) set-up with facilities in Germany, the Netherlands, Denmark and India.

Our forte is our end-to-end offering in wind and solar energy, which provides customers with everything from land acquisition to lifecycle asset management and design to construction. This gives our customers the advantage of maximum return with minimum effort. This has been a commitment that we have been living up to in the last 21 years of our operations.

Headquartered at Suzlon One Earth in Pune, we work towards the vision of powering a greener tomorrow by enabling sustainable social, economic and ecological development.

Reality check :

Suzlon Energy hit the primary market in Oct 2005, at a price of Rs 510 a share (FV Rs10).

It is more than 10 years, the stock is trading at Rs 15.In the year 2007, there was stock split, from Rs 10 FV to Rs 2 FV. If adjusted to stock split the stock is trading at Rs 75, down Rs 435.

The IPO was lead managed by JM Morgan Stanley Pvt. Ltd., Enam Financial Consultants Pvt. Ltd.

This is a classic case where in BRLMs failed to understand the business prospects of the company, at the time IPO. 

The Result : Investors taken for a good ride.


IPO ANALYSIS : BSE

BSE will launch its Rs 1,500-crore Initial Public Offering  on January 23. The trading in the shares will start in the first week of  Feb, 2017.

Awalt for detailed analysis.

Who is funding Republic tv, Rajeev Chandrashekar

Chandrasekhar originally became a Rajya Sabha member (first term, 2006-2012) with the support of JDS and BJP MLAs from the state. If the gossips on the power corridors are to be believed, lot of money changed hands then.
Can any independent candidate become a Rajya Sabha MP, without buying votes?
Rajeev Chandrasekhar, the then BPL company director / owner, had acquired land through Karnataka Industrial Areas Development Board to set up a plant at Dabaspet, but later sold it to private people without fulfilling the purpose for which it was purchased," he said during the debate on budget. Kumaraswamy,former CM says Chandrasekhar had bought 175 acres at the rate of Rs one lakh per acre, but sold it for Rs 1.30 crore per acre.

Thanks to Modi, RBI's credibility has gone for a six.

Employees of the Reserve Bank have taken strong exception to the recent measures involving the demonetisation of Rs 500 and Rs 1,000 notes, stating that the government “is impinging on the RBI’s autonomy and its statutory as well as operational jurisdiction. RBI's reputation as an credible organisation has gone for a six, thanks to Modi.

An appeal to the voters in poll the bound states

In few weeks, 5 states will go to polls. Team firstchoiceipo appeals to the voters to note the following.

Please VOTE against :

1. Dynasty politics.

2. Corruption, nepotism

3. Caste / creed / religion based politics.

4. Use of money and muscle power to garner votes.

5. Dishonest candidates.

If the candidates falls in any of the above category, please do not vote them. Think twice before you exercise your franchise. 

Let us build a clean INDIA.

Friday, January 13, 2017

Infy, TCS drag indices

Despite good show by IT majors in the Dec quarter, the stock prices of the above companies in today's trade are in reverse gear. This has dragged the benchmark indices to red. As of now Infy is down Rs 20 and TCS by Rs  80. NIFTY is down 12 points.

Inox wind : Gone with the wind

About 2 years ago Inox Wind Ltd hit the primary market at a price of Rs 325.The BRLMs were Axis Capital Limited, DSP Merrill Lynch Limited ,Edelweiss Financial Services Limited and YES Bank .

While analysing the IPO we observed the following:

                a. The company experienced negative cash flows in the immediate past.

b. Inox has limited operating history, which makes it difficult to evaluate the past performance and prospects.

c.  Operates in a very competitive industry.

d.  Top five customers contributed over 85% of the total income for the nine months ended December 31, 2014.

e.  If wind patterns at sites that we have previously identified as suitable for wind farm projects change, the business, financial condition / operations of the company could be adversely affected.

f.  Most of the company’s experience implementing projects is derived from projects which have implemented in the states of Rajasthan, Maharashtra and Gujarat.

g.  The company has high working capital requirements.

h. Debtors outstanding as of December 31, 2014, are at Rs 755 crores, which accounts for 42% of revenue for the same period.

i. Clash of interest - Promoter and the affiliates have certain interests that are similar to the company’s business.

j. The company is yet to place orders for majority of the items that they intend to purchase using the Net Proceeds of the Issue and the actual cost of such items may exceed the estimates.

l.  The Net Asset Value per Equity Share was Rs 20.99 and Rs 29.88.

 m. The cost of acquisition per Equity Share by our Promoter is just Rs 2.


 n. On June 12, 2013, the short-term rating for the banking facilities and commercial paper was downgraded by CRISIL Ratings from “CRISIL A1” to “CRISIL A2+”. In the “Rating Rationale” with respect to the downgrade, CRISIL cited deterioration in the liquidity over the past year because of an increase in the working capital requirements resulting from a large inflow of orders and CRISIL noted that our debtor days increased to 172 days as of March 31, 2013 from 43 days as of March 31, 2012. 


The offer is made around 30 PE, based on the latest EPS, which is exorbitant for a company which has very limited operational history and operates in an uncertain business segment.  The company will have Rs 200 crore plus equity, post IPO, the serving of such huge equity is next to impossible.

The average cost of acquisition of shares by promoters is just Rs 2, whereas the public offer is made at Rs 315-325, which reminds us the loot-maar IPOs of 2011. 

 Avoid the IPO.

From Rs 325, the stock price has come down to Rs 183.  Rs 142 has gone with the wind.