Equity SIP New Buzzword

SIP Systematic Investment Plan was already famous and proven in Mutual Fund context but now SIP has also come directly into Equity Stocks which is essentially Individual Stocks. 

Equity SIP is a new facility through which you can buy a script for a regular interval over a period of time for  specified amount or for a specified quantity.

Amount based Equity SIP

 Amount based Equity SIP is a SIP type wherein a fixed amount (or approximately the same) is invested in your desired scrip at each frequency

Quantity based Equity SIP 

Quantity based Equity SIP is a SIP type wherein a fixed quantity of shares of your desired scrip is purchased at each frequency.  

Currently few online brokers are providing this facility on select stocks. ICICI Direct is one of them.

Benefits of investing in Equity SIP are 

•     It is a disciplined investments approach
•     Accumulates wealth by investing smalls sums regularly
•     Spreads and averages your cost of purchase (by buying in both ups and downs)
•     Removes the risk of timing the market
•     Reduces the risk of market volatility
   

NTPC to gain if RIL-NTPC dispute heads for truce

Solicitor General recommended that NTPC be given gas at a concessional rate under a provision of the production sharing contract.

RIL can sell gas below market rate to government or government nominee so NTPC can get gas at $ 2.34 which was price quoted in 2004 tender.

NTPC is already working on the gujrat plants hoping to get the gas. Gas will be allotted to the plants which are expected to complete this year.

If NTPC gets price at lower rate this will improve profitability and secure gas for the plant in long term.

Might be good new for NTPC which is trading in a narrow range of 190-200 for past few months without any news trigger

Coal Block Development to get Boost

The Lok Sabha has cleared amendment of Mines and Minerals Development and Regulation Act (India) (MMDR) of 1957.

Currently coal blocks for PSU (public sector unit) and private sector companies are not allocated through bidding process. A screening committee approves the blocks. This will change and now there will be competitive bidding process.

PSUs are kept outside of bidding process like Coal India. Coal blocks will be developed faster as new players will pay premium based on bidding.

26 blocks are fully developed out of 206 allotted till now.

If private players get more blocks, power production will get a leg up and many companies planning to foray into coal based power plants will see interest in obtaining the coal block for captive purpose.

Blackstone invest in Moser Baer Power Project

Moser Baer India shares jumped 11% intraday closing 6.66% up.  Blackstone has invested 300 million dollar.

Moser baer is company involved with making cd/DVD/Blue ray disks. It is also in Solar power and Entertainment business . Now it is entering thermal power with plans to setup around 4000 MW in thermal and 1000 MW in solar.

Deepak Puri and Ratul Puri, who are the promoters of Moser Baer India Ltd has founded  Moserbaer Projects.

GMR Infra awake from Slumber

China Huaneng Group may be buying GMR infra stake in Intergen at about 1.4 Billion dollars. GMR Infra bought Intergen at 1.1billion dollars. Apart from making profit of 300 million dolllars GMR will use other money to reduce interest liability which was dragging the profits down.

Lower Intereset Outgo with higher revenue increase due to delhi airport t3 opening and restarting of barge mounted power plants are big plus.

Fund tie up for other airport and power projects will get a boost. If the deal goes through it will be a very big positive for GMR Infra.

Hopefully the bad days should be near soon and should start its upward climb.

Should be in a much better price by next quarter results.

GMR is up 4.5% in today's trade.

RIL Reliance Industries and Shale Gas

Shale gas is natural gas produced from shale. Shale gas has become an increasingly important source of natural gas in the United States over the past decade, and interest has spread to potential gas shales in Canada, Europe, Asia, and Australia. One analyst expects shale gas to supply as much as half the natural gas production in North America by 2020 [Source:Wikipedia.]


Illustration of Shale Gas


It's another fossil fuel boom in the making, although its cleaner-burning than coal, gas from shale still poses a severe threat to environmental security. Methods used for drilling that frees the gas requires the use of toxic chemicals that many fear could contaminate underground sources of drinking water that supply millions of people.



Reliance Industries believes that shale gas offers an exciting opportunity and that new drilling techniques are transforming the U.S. natural gas industry. Furthermore, the company estimates shale plays to contain in excess of 650 trillion cubic feet of natural gas.


Shale gas is emerging as a potential investment strategy, chiefly on the anticipated upsurge in demand for natural gas.


Natural gas is a clean energy source and is likely to replace coal.


Reliance has done 3 shale gas deals in 3 months.


20% stake in Carrizo's

40% stake in Atlas Energy's

45% stake in Eagle Ford Shale




Higher price of Shale gas is also attracting lot of interest and investment.



Shale gas investment will add profitability after 4-5 years but its an interesting space to watch out for in the coming years.

GMR Infra results Update.

 GMR Infra Q1 PAT up by 26% at Rs 28 cr


Revenue increased marginally but it was because barged mounted plant was getting shifted and its going to be running in fully capacity by August end.


This plant can contribute around 100 crore quarterly.


In 2 years operational capacity of power plants will go upto 2800 from 800 MW currently.

 Male airport to achive financial closure by September.



GM Rao said that debt ratio might increase more or stay same but not go down because many projects are in capital infusion phase.



According to some analyst Medium term target is 70 and stop loss is around 54.

DSP BlackRock Micro Cap Fund & DSP BlackRock Small & Mid Cap Fund

DSP BlackRock Micro Cap Fund / DSP BlackRock  Small & Mid Cap Fund



Sensex for past few months has been moving in a very narrow range. Small/Mid Cap and Micro caps is the area where we are seeing growth.


Its hard to cherry pick individual stock in this area. Also it is sometime subject to manipulation so swings are high.



For Small and Micro cap stocks I think its better to invest through mutual funds where they are focussed on it and manage the chrun properly.



MicroCap Fund was started as Closed Ended Fund but now has been made open ended fund and is open to subscription.



Till it was closed ended I was investing in Small and Mid Cap Fund but now I am also going to invest in MicroCap fund.



The investment objective of the scheme is to seek to generate long-term capital appreciation from a portfolio that is substantially constituted of equity and equity-related securities, which are not part of the top 300 companies by market capitalisation.



It is high risk fund for people for higher apetite for returns. There is only growth option in this fund.


In the YOD( 16th July), the BSE mid-cap and small-cap indices have outperformed the Sensex. The BSE mid-cap and small-cap grew 10.12% and 12.99%, respectively while the Sensex delivered returns of just 2.81%.



Investor should have basket of funds some from largecaps, some diversified and some from small and mid/micro cap category to not miss any rally in one category.




DSP Black Rock Micro Cap Fund, a new entrant has also claimed CRISIL Fund Rank 1, in the Small & Midcap category.




Diversified funds have given returns in the range of 5-10% but micro cap funds recently have given returns in the range of 30%


The highest return of 34% has been generated by DSP BlackRock Micro Cap Fund.The fund has invested around 94% in mid- and small-cap stocks and less than 1% into large-caps.

Investors can subscribed some amount in this fund