New Blog.

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I told You so

Not gonna say "I told you so" but the only share going long is knr con (the one I analyzed a few days ago) 
This correction in Nifty & Sensex been crazy

Up for IPO

IPO is a way a Company uses money that it doesn't have (for bigger projects or expansion). In a way, it shifts its money from future to present, hoping it would have made enough money in the future to pay back the loan taken from it’s investors; and an investor shifts his money from present to future; like Government uses Bonds and Bills or an individual uses Loan for education or personal use like to buy a car, house, etc. 

Some of the IPOs that hit the street during the past one year generated more than 300% returns. 

The only thing to keep in mind is to make sure that the IPO you are investing (or trading) in is not coming public for share dilution or to get rid of it’s losses; because if the Company is taking additional capital to not grow or expand, then there will be no improvement in the value of stock and no ROE would be generated in the long or short run.

A Company’s prospectus is a legal declaration with transparency standards, with certain facts and statements included to ensure investors aren't misled in any way, should be read before investing.

Here is the list of IPOs that will be coming up this year. 

1.       Lodha Developers

2.       Snapdeal

3.       Jabong

4.       HomeShop18

5.       UTI MF

6.       Thyrocare 

7.       Lavasa

8.       Infibeam

9.       Amalgamated Bean Coffee (CCD/Cafe Coffee Day's parent company)

10.   IndiGo

Also, if anyone is comparing the IPOs of 2008 and 2010 with IPOs of this year, would be making a big mistake... as 2008 and 2010 were Bearish markets and 2014, luckily, is a Bullish market; therefore, very much capable of taking an IPO at a much higher peak and giving better returns for anyone who wants to book profit and get higher returns.
In a Bullish Market, Greed dominates; Fear dominates Bearish Markets. 
An investor is ready to think irrationally a little, ready to pay highe = increasing the value of a stock.

Lodha Developers

The developer has several firsts to its credit. Currently in the process of constructing the world’s tallest residential building (World One), a 117-storey tower in Lower Parel, Mumbai, Lodha also struck India’s costliest land deal when it bought a Mumbai plot for Rs 4,000 crore in 2010; in partnership with Donald Trump’s company.

The company is planning an IPO in which it may sell 10 percent stake for a cost of Rs 6,000 crore (USD 1 billion), Mint reported recently, even though the management denied any such plans were in the offing.

If it goes through, this should make Lodha India’s most valued firm at Rs 60,000 crore, eclipsing past DLF, which currently enjoys a market capitalization of about Rs 38,000 crore.

Lodha notched up sales of Rs 9,000 crore in FY13, Mint said quoting Bloomberg data, even as rival DLF’s sales stood at Rs 7,770 crore in the same year.
(I give this one 7/10 as it apparently, needs money for its project)


IndiGo

Budget airline carrier IndiGo, the only aviation company in the country that has stayed consistently profitable, plans an IPO worth up to Rs 2,400 crore (USD 400 million), Financial Express reported recently quoting sources.

The newspaper added that the carrier will likely be listed next year, subject to market conditions, even as merchant bankers had been appointed to manage the issue.

The company has defied market trends by consistently eking out profits in an industry that posted a cumulative loss of about Rs 7,800 crore (USD 1.3 billion) in FY14, according to aviation consultancy CAPA.

IndiGo held a 32 percent market share in the Indian aviation industry followed by rival national carriers Jet Airways (21.8 percent), Air India (18.3 percent), SpiceJet (17.9 percent), GoAir (9.5 percent) and regional airline AirCosta (0.8 percent), as per April 2014 figures.




Amalgamated Bean Coffee
Parent of the popular Café Coffee Day, Amalgamated Bean Coffee Trading Company is planning an IPO that will likely the coffee shop at about Rs 6,000 crore (USD 1 billion), Bloomberg recently reported quoting sources.

CCD, India’s largest coffee-shop chain, has 1,650 outlets, more than three times its competitors combined, and has 64 percent market share in the sector that grew at Rs 1,680 crore.

Italy’s Barista, UK’s Costa Coffee, US’ Starbucks and Australia’s Gloria Jean’s Coffee are competitors to CCD. 
(My take is the IPO is to settle it’s current losses and therefore is not a very lucrative investment.)
  


Infibeam 
Ahmedabad-based Infibeam, which runs a popular online-shopping portal is looking to list its shares in the next three quarters and has appointed merchant bankers for the same, the Economic Times reported recently.

The issue is expected to fetch Rs 500-600 crore, in a 20 percent dilution that values the firm at Rs 2,500-3,000 crore.

Infibeam, which, according to ET, recently broke even, competes with larger rivals such as homegrown Flipkart and Snapdeal and international giant Amazon in India’s fledgling e-commerce industry.

Among other firms that are considering coming out with an IPO include Flipkart, Snapdeal and Jabong while HomeShop18 has filed documents to list on the New York Stock Exchange.




Lavasa
The real estate arm of construction firm HCC has already filed IPO documents with Securities and Exchange Board of India for an issue that will raise Rs 750 crore for the firm.

This is the second time the company is looking to list its shares, after an aborted attempt in 2010 due to poor market conditions existing back then.

Lavasa, which is developing an integrated hill city near Pune, will offer some discounts on its pricing to retail investors, according to documents filed with the regulator.

Axis Capital, Kotak Mahindra Capital and ICICI Securities are bankers to the issue.
  

Thyrocare
Diagnostics labs Thyrocare is expected to launch its IPO in February 2015, in a 25 percent stake sale that will value the firm at about Rs 2,000 crore, according to a report in the Business Standard.

Private equity firms CX Partners and Norwest Venture Partners had picked up 30 percent stake (at Rs 188 crore) and 10 percent stake (at Rs 120 crore) in Thyrocare, respectively, in the years 2010 and 2012, according to the newspaper.

If CX chooses to exit its entire stake via the share sale, it could fetch it returns up to three times in about five years.

Thyrocare has revenues of Rs 160 crore and competes with SRL, Metropolis and Dr Lal Path Labs in the diagnostic market that is slated to grow to Rs 20,000 crore by 2015, even though most of the market is cornered by unorganized players.




UTI MF 

India’s fifth-largest mutual fund shop (by assets under management) by may be looking to list its shares, in a deal that may value that asset management company at Rs 4,000 crore.

 A report in the Financial Express claimed that the asset manager, which was once looking to list its shares in 2008 (later postponed) could provide a partial exit to public sector entities SBI, Punjab National Bank, Bank of Baroda and Life Insurance Corporation that own 18.5 percent each in the AMC.

Deals carried out in the past suggest fund companies are valued at about 6 percent of AUM for equity assets and 3 percent for debt assets.

In total, UTI MF managed Rs 79,441 crore of assets at the end of the June quarter, AMFI data showed, with HDFC MF, ICICI MF, Reliance MF and Birla Sun Life MF leading the way.

  

Also read:

Investopedia: Interpreting IPO Prospectus Report

________________________________________________________________________________

Disclaimer: Opinions are entirely personal and Investors are requested to take the advice of a qualified Investment Advisor before making any investment.

Investment Tip

KNR Constructions

CMP: Rs. 227.30

COMPANY OVERVIEW:

KNR is a multi domain infrastructure development organization with more than 2 decades of experience and executes the construction of technically complex and high value projects across segments such as

Express ways

National Highways

State Highways & Rural Roads

Flyovers

Bridges and Viaducts

Irrigation Projects

Urban Development - Civic amenities

Commercial and Residential Projects

KNR Construct is in the Construction & Contracting - Civil sector. The current market capitalisation stands at Rs 640.09 crore. The company has reported a standalone sales of Rs 265.56 crore and a Net Profit of Rs 28.01 crore for the quarter ended Mar 2014.

SHARE PERFORMANCE TO SECTOR INDEX:

(Source: EquityMaster)

FINANCIAL ANALYSIS:

According to the results of the quarter-ended June 30, 2014, Company has generated total income from operations worth 2365 Million in Q1 FY 2015 as against 2077 million within the same quarter, last year; therefore, making a growth of 14%.

EBITDA for Q1 FY 2015 is 311 million as against 287 million in Q1 FY 2014; thereby growth of 8%.

The Other Income has increased by 61% to 28.5 million Q1 FY 2015 as against Q1 FY 2014’s 17.7 million.

Interest Cost is down by 21% and Depreciation is lower in Q1 FY 2015. Profit before Tax grew by 26% to 167 million from 124 million in Q1 FY 2014; and PAT grew by 78% to 198 million as against 111 million, last year.

STATUS OF ORDER BOOK:

• In news on 21st Aug: KNR Constructions awarded Rs 68.37Crore order by Government of Karnataka towards "Construction of ROB with approach at Railway Km 316/200-300, road Chainage 7+695 on Davanagere - Channagiri road and at Railway Km 60/600-700 on road Chainage 42+214 on Ramdurga - Badami road" to be completed within 24 months.

• With top 5 Road Projects worth 809 Crores and Irrigation Projects worth 65 Crores, their total Order-Book quotes itself at 1202 Crores as on 30th June 2014.

POSITIVES:

•   YoY quarterly Sales increased by 15% and profit by 78%.
•   The QoQ and YoY interest cost has come down. May indicate that the company has reduced the debt further as their Debt to Equity ratio is 0.13 as on June 30, 2014 as against 0.17 as on March 31, 2014.
• In news on 21st Aug: KNR Constructions awarded Rs 68.37Crore order by Government of Karnataka towards "Construction of ROB with approach at Railway Km 316/200-300, road Chainage 7+695 on Davanagere - Channagiri road and at Railway Km 60/600-700 on road Chainage 42+214 on Ramdurga - Badami road" to be completed within 24 months.
• Their strengths are finishing projects before the schedule to earn bonus, own construction equipment, management oversight, good control over cost to make profits.

VALUATIONS:

The Current Market Price of the company is 227. Thus when one looks at the EPS of 21.68 for FY 13-14, the current PE is 10.4 which is very attractive compared to the overall Industry PE of over 20. For Q1 of FY 14-15, KNR had a quarterly EPS of Rs 7.04. Even assuming there is no growth, the annualized EPS works out to Rs 28.16. This translates to a forward PE of 8.06 which is very good indeed.

Given the strong growth, good order book and high standards of project completion, this is one of our top picks in the Infrastructure space which is now witnessing a turnaround. We recommend this stock with a Price Target of Rs 450.

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Disclaimer: The stock may not find a place in client portfolios. Investors are requested to take the advice of a qualified Investment Advisor before making any investment

NSE Certifications

NSE's NCMP Level 1
2014
Been awarded National Stock Exchange (NSE)'s Certified Market Professional certificate.

National Stock Exchange (NISM)

Currency Derivatives

2014

Derivatives as a Risk Management Tool
Currency Markets, Currency Futures
Strategies using Currency Futures & options to Hedge
Trading Underlying vs Trading Single Stock Futures
Understanding Hedging, Speculation & Arbitrage
NSE's Currency Trading Segment

National Stock Exchange (NCFM)

Derivatives

2014

Introduction to Derivatives
Understanding Interest Rates and Stock Indices
Future Contracts, Mechanism and Pricing Forward Contracts
Futures Terminology
Trading Underlying vs Trading Single Stock Futures
Understanding Beta, Black Scholes Merton Model, The Greeks
Option Contracts, Mechansims, Pricing & Applications
Trading & Accounting of Derivatives Contract

http://www.nseindia.com/content/ncfm/course_DMDM.pdf

National Stock Exchange (NCFM)

Investment Analysis and Portfolio Management

2014

FINANCIAL MARKETS
FIXED INCOME SECURITIES
CAPITAL MARKET EFFICIENCY
FINANCIAL ANALYSIS AND VALUATION
MODERN PORTFOLIO THEORY
VALUATION OF DERIVATIVES
INVESTMENT MANAGEMENT

http://www.nseindia.com/content/ncfm/course_iapm.pdf

National Stock Exchange (NCFM)

Capital Markets

2014 – 2014

An Overview of the Indian Securities Market
Key Indicators of Securities Market, Market Capitalisation
Reforms in Indian Securities Markets
Trading Membership
Trading
Clearing and Settlement
Legal Framework
Fundamental Valuation Concepts

http://www.nseindia.com/content/ncfm/course_CMDM.pdf

Coca Cola VS Pepsi?

I would personally choose Coke anyday. 

Not cuz it's Buffet's favourite of the 2.. but cuz it's not a sugary-saccharine reminder of fake movie-lines.

1.       PepsiCo might look like a better investment than Coca-Cola, with higher dividends of $2.62 than Coca-Cola's $1.22 a share. To note: Their yields match at 2.9%.

2.       52-week price range of Pepsi Co is wider $77-$90 than Coca Cola’s 36-42 (Double the difference). This wide difference shows us the volatility and elasticity of PepsiCo and how it can easily reverse the bullish trend.

3.       Unlike Coca-Cola, which has a heavier presence in global markets (Emerging Markets like China and India means it is well diversified), PepsiCo is overly exposed to the US market. PepsiCo although is better brand diversified, as it can claim a better portfolio than Coca-Cola.
Widely known Lay’s and Doritos, non carbonated drink like Lipton Tea, Gatorade and Quaker Oats.

4.       Considering Pepsi Co’s high exposure in Russia and having received its maximum growth from Russia & Brazil, it is a risky pick at the present situation of the chill between U.S.-Russian ties; therefore it could create new uncertainty.

(Source: http://www.beveragedaily.com/Manufacturers/Stop-Food-From-The-USA!-Russian-nationalists-target-Coke-Pepsi)

5.       Coke outsources it’s business unlike Pepsi Co. Pepsi Co, therefore has some negative correlation to commodity prices, which is, if commodity prices rise, then Pepsi suffers.

6.       Coca Cola knows how to adapt, It made a diet version of it’s classic and has been consistent. Instead of moving from Carbonated to Healthy Drinks to Snacks.

7.       Coca-Cola is making the right move by partnering with Green Mountain. In addition, Coca-Cola recently increased its stake in Green Mountain to 16%.

8.       Next five years, Coca-Cola's earnings are expected to grow at a CAGR of 6.70%, which is better than the growth of 6.05% seen in the last five years.

	COCA COLA	PEPSI
Market Cap (intraday)5:	184.73B	134.34B
Forward P/E (fye Dec 31, 2015)	18.76	18.12
PEG Ratio (5 yr expected)	3	2.71
Profitability
Profit Margin	18.22%	10.35%
Operating Margin	23.93%	15.22%
Management Effectiveness
Return on Assets	7.72%	8.27%
Return on Equity	25.78%	30.55%
DEBT
Total Debt/Equity (mrq):	116.77	140

            (Source: http://finance.yahoo.com/q/ks?s=PEP+Key+Statistics) 

Restless Iraq and Thirsty China

Jack & Jill went up the hill

to fetch a million oil barrels,

There broke a fight,

and oil rose its price,

That first them, their indices came tumbling after.

INDIA - The biggest loser!

Currency, that India had been stabilizing for more than 4 months, plummeted to it's 4-month low in one day; due to Iraq tensions that caused Oil prices to rise. Currency that had appreciated itself against ever-so-strong US Dollar could not walk through this chaos, bullet-proof.

(Source: www.seekingaplha.com)

Highly dependent on oil imports, India saw it’s INR and Indices fall the most in over 4 months due to the escalating violence in Iraq which sent crude oil prices to their 10-month high.
Possibly the only country amongst Emerging Markets (EEMs) that felt the tremor of Iraq’s unrest was India. Possibly the only country that kept pacing towards growth was China. Let us question (and answer) - Why..

(Source: www.seekingaplha.com)

So, how is China not affected by Iraq's unrest?

How is Turkey safe from geopolitical tensions in Iraq?

How is South Africa not affected?

How is Brazil untouched? 

(Source: www.etfscreen.com)

ETF Indices as follow:

MCHI- China

EZA - South Africa

EWZ - Brazil

EIDO- Indonesia

TUR - Turkey

INP & INDY - India

CHINA - Thirst is real!

China has been on a hoarding spree for more than half a decade now. Has already bought more than 600,000 barrels a day of surplus crude from January to April, saving itself against world "instability".

By the end of last year, China had collected 141 million barrels of strategic reserve capacity, China National Petroleum Corp said in an annual report released in January.
As China's thirst for crude grows, the International Energy Agency estimates, that by 2030, it will be the world's largest oil consumer, overtaking US.

So, how is China not as affected by the Turkey tensions when it's one of the biggest oil importers in the World?

Porbably becuase most of it's oil is imported by other countries than Iraq.. Saudi Arabia being it's largest crude oil supplier; and also Oman, the United Arab Emirates, Angola, Venezuela and Russia.

ALSO

China's markets' better performance is also the result of release of better than expected Factory production data, which rose 8.8 percent in May YTY, up from 8.7 percent in April. Retail sales increased 12.5 percent and January-May fixed-asset investment growth was little changed at 17.2 percent.

OTHER EEMs:
Why did South Africa and Brazil not tumble down the hill, like India?
Because they are not as highly dependent on oil imports as India, or even China. 

Turkey has been safe and Taner Yildiz, Energy minister of Turkey, has been balancing market sentiments in his country by assuring: “Latest developments in Iraq related to energy sector do not affect Turkey’s crude oil security supply."

Look how US Natural Resources Funds saw a long-time high after oil prices rose this Friday:-

IEO - iShares Dow Jones U.S. Oil & Gas Expl & Prod
IEZ - iShares Dow Jones U.S. Oil Equip & Svcs
USL - U.S. 12 Month Oil Fund
USO - US Oil Fund ETF
Chances are the defense sector would see a price hike too, in the near future, if the war-situation gets more tensed.