Kalamandir Sai Silk IPO

Kalamandir is coming up with IPO. This is first from any saree retailer.

Issue Open: Feb 11, 2013 - Feb 13, 2013
Issue Type: 100% Book Built Issue IPO
Issue Size: Equity Shares of Rs. 10
Issue Size: Rs. 89.00 Crore
Face Value: Rs. 10 Per Equity Share
Issue Price: Rs. 70 - Rs. 75 Per Equity Share
Market Lot: 200 Shares
Minimum Order Quantity: 200 Shares
Listing At: BSE, NSE

This is the first IPO with the 'safety net' scheme introduced by SEBI, the investor is safe. 
 Kalamandir's has goodwill and impresive credential.

Very good analysis by Dilip Davda

http://www.chittorgarh.com/ipo/ipo_review.asp?a=110

Futures OR Options

Futures:
ReCap from previous posts.
In the First Episode :
A Futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price.An Option is a contract, which gives the buyer the right, but not the obligation to buy or sell shares of the underlying security at a specific price on or before a specific date.
The primary Difference between options and futures is that options give the holder the right to buy or sell the underlying asset at expiration, while the holder of a futures contract is obligated to fulfill the terms of his/her contract.
Underlying: A stock (Say RPL) or Index (Say Nifty)
Certain Date: Settlement Date of the Month for which Position is taken. Generally we trade in Current Month and Settlement Date is last Thursday of the Month.
Interpretation ...
Say Today I buy RPL future For Rs 230 when current market Price for RPL in cash market is 225.
This means on Settlement date:(31 jan for this month) if RPL is @ Rs 230(future price) its no Profit no Loss for me, and if its 250(settlement price) I gain Rs 20 but I loose Rs 20 if its 210.

So same way, seller of the future contract gains the amount I loose or looses the Amount I gain.

Benefit: Unlimited Profits Posssible, Leverage I get....
Drawback: Unlimted Loss Possible

Now Lets Talk about Options:
An Option is a contract, which gives the buyer the right, but not the obligation to buy or sell shares of the underlying security at a specific price on or before a specific date.

Options can be call option or put option where you get the right to buy or sell specified quantity of the underlying security.

Buyer has to pay a premium to get the rights to buy or sell. Seller of options is also called writer who is obliged to perform according to option terms.

There are many factors which affects the price of an option.
1. Underlying value of the security.
2. Time remaining till the expiry. Options generally decay near the expiry because price of the underlying becomes more predictable and less probabilistic and volatile.
3. All the other information which affects the underlying security like interest rates, divident payouts, liquidity, historical prices, support zones etc.

Underlying : Lets say Nifty Index
You bought a Nifty call option for the strike price of 2800. On expiration the Nifty is at 2850. You will recieve 50*50 which is the lot size for Nifty = Rs 2500. If you have already paid a premium of Rs 20 then you profit remains 30*50 which is Rs 1500. Also you have to factor in the brokerage both for buy and sell. There is mini nifty available with lot size of 20. If the Nifty at expiry is below 2800 you dont get any thing and you loose premium + brokerage.

Other articles on derivatives.
Derivatives Basics

Y Derivatives?

V-mart Retail IPO Analysis

V-mart retail IPO is open for subscription. Link to the company website. www.vmart.co.in/

This article on money control gives a good analysis for V-mart IPO.

http://www.moneycontrol.com/news/ipo-issues-open/will-v-mart-retail-be-differentv2-(vishal)-retail_816663.html#toptag

Hindu business line has a little different take.

http://www.thehindubusinessline.com/features/investment-world/stock-insight/vmart-retail-ipo-invest-at-cutoff/article4372731.ece?homepage=true

Affordable housing in Bangalore - II

Many affordable housing projects are recently launched

1. Provident Sunworth

This is a 59 acres project off Mysore road, near NICE junction. Close to esteemed educational institutions, hospitals, industrial hubs, entertainment zones and tech parks. Sunworth, through NICE road, is well connected to Electronic City, Bannerghatta Road and Tumkur Road. Sunworth is located just 19 kms from City Railway Station. Sunworth offers optimally designed apartments: 2 BHK of 883 sqft and 3 BHK of 1082 sqft. It has multiple clubhouses, swimming pools, children’s play area and many more life style amenities.

2. SJR Primecorp Parkway Homes

Parkway Homes' 9.5 acre enclave (further extendable) is  G+15 floor towers with 1, 2, and 3 BHK apartments.

Location quoted as Off Sarjapur road is almost in close proximity to Electronic City just close to HSR and Mico Bosch where other projects like SJR trillium is launched.

Amenities>  Indoor Badminton Court, Basketball Half Court, Swimming Pool, Paddle Pool, Convenience Store, Children's Play Area, Cycles, Cycling Track, Squash Court, Tennis Court, Gym, Billiards, Library.

Features>
•  9.5 acres (further extendable) of serene tranquility
•  Horizontal distance between blocks as much as building height

3. Brigade Value Housing
Properties are going to launched in 4 locations

 4 locations—in the North, East, West and South of Bangalore:
North : Devanahalli
East : KR Puram (Whitefield belt)
West : Mysore Road, near Kengeri
South : Kanakapura Road, near Art of Living

These will be launched in 6-12 months

4. Bhartiya City
They have lauched Nikoo homes near Hebbal on Thanisandra main road . First phase is sold our and second phase is launched
This is a 125 acres  township.
The integrated township will host a high end hotel, hospital, school, entertainment & shopping facilities apart from offices.

Bull Call Spread : Options Strategy

Bull Call Spread is the strategy you can use to profit from moderate rise in profit of underlying security.

What you do here is that you buy  1 Call Option and also sell a higher value Put Option

Example lets say current value of nifty is 5000 and lot size is 50. If the nifty call option is available for Rs 70 for the strike price of 5000 and sell call option position of 5200 for Rs 40.

Net money taken initially would be 70-40 = Rs 30*50.

A person will profit if Nifty stays between 5070 and 5160.

Maximum profit will be Difference in strike price - Amount paid = 200-30 = 170*50

Maximum loss will be amount paid = Rs 30*50.

ON the expiry if nifty is at 5120 then first contract will give profit of 120*50 = 6000 and second contract will become worth less = 40*50 = 2000, so the net profit will be 4000.

Both the contract should have same lot size and should expire in the same series.

This strategy was buying ans selling Call Options if the same thing is done with Put options then it is called Bull Put Spread.

CRR Cut by China..India might follow

China has cut CRR ( Cash Reserve Ratio) because of the falling Manufacturing Purchasing Manager's Index to 32 month low.

India's RBI is increasing the interest continously but the market doesn't want or another rate hike so RBI following China's foot step might cut the Cash Reserve Ratio.

This bores well for banks because it will release money into the system which otherwise doesn't give any interest.

Live Nifty Options Prices

Live prices

GMR Infrastructure Q3 net profit at Rs171.10 mn

Details at

http://www.indiainfoline.com/Markets/News/GMR-Infrastructure-Q3-net-profit-at-Rs171.10-mn/5078567648

Good Article on GMR Infra

Wanted to share the journey of GMR post libralization

http://www.mydigitalfc.com/companies/first-fly-over-rainbow-035

China Interest Rate Increase

China's central bank raised interest rates to fight inflation. Benchmark Deposit Rate stands at 3% and lending rate at 6.06%

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

GMR Infra Updates

GMR Infra has put the international power portfolio for sale. Intergen which operates power plants in US,Australia was bought by GMR in 2008 where it paid around 960 million dollars for 50% stake.

GMR is building number of power plants in India and also has a barged mounted plant.

Recently DIAL t3 terminal got opened which is build by GMR Infra. They are also planning to invest around $ 400 million for Male airport.

All its projects are long gestation and this stock can give returns in long term though slowly. Once the investment phase is over P/E ratio will improve and stock price will rise. Holding for atleast 2 years will give good returns

SJVN subscribed 1.83 times

The Initial Public Offering (IPO) of SJVN Limited which opened for subscription on April 29, 2010 will be closed today on Monday - May 3, 2010.


The IPO has received subscription of 1.83 times with total bids for 758380250 equity shares against the offer of 415000000 equity shares.