RITES Ltd IPO Review

RITES Ltd. are a wholly owned Government Company, a Miniratna (Category –I) Schedule ‘A’ Public Sector Enterprise and a leading player in the transport consultancy and engineering sector in India and the only company having diversified services and geographical reach in this field under one roof.(Source: IRR Report). Based on Public Enterprise Survey 2015 – 2016

RITES Ltd. Company is ranked no. 1 based on net profit and dividend declared in Industrial Development and Technical Consultancy Services sector (Source: IRR Report) .

RITES Ltd. have an experience spanning 44 years and have undertaken projects in over 55 countries including Asia, Africa, Latin America, South America and Middle East regions. RITES Ltd. are the only export arm of Indian Railways for providing rolling stock overseas (other than Thailand, Malaysia and Indonesia). RITES Ltd. are a multidisciplinary engineering and consultancy organization providing diversified and comprehensive array of services from concept to commissioning in all facets of transport infrastructure and related technologies.

RITES Ltd. have significant presence as a transport infrastructure consultancy organization in the railway sector. However, RITES Ltd. also provide consultancy services across other infrastructure and energy market sectors including urban transport, roads and highways, ports, inland waterways, airports, institutional buildings, ropeways, power procurement and renewable energy. RITES Ltd. have, over the years, served various public sector undertakings, government agencies and instrumentalities and large private sector corporations, both in India and abroad.

RITES Ltd. were incorporated by the Ministry of Railways, Government of India (“MoR”) and have the benefit of being associated with the Indian Railways, which is the fourth longest rail network in the world (Source: IRR Report ).

RITES-Limited-1Since its inception in 1974, RITES Ltd. have evolved from its origins of providing transport infrastructure consultancy and quality assurance services and have developed expertise in Design, engineering and consultancy services in transport infrastructure sector with focus on railways, urban transport, roads and highways, ports, inland waterways, airports and ropeways;

Leasing, export, maintenance and rehabilitation of locomotives and rolling stock;
 
Undertaking turnkey projects on engineering, procurement and construction basis for railway line, track doubling, 3rd line, railway electrification, up gradation works for railway transport systems and workshops,railway stations, and construction of institutional/ residential/ commercial buildings, both with or without equity participation; and
Wagon manufacturing, renewable energy generation and power procurement for Indian Railways through our collaborations by way of joint venture arrangements, subsidiaries or consortium arrangements.

 

RITES-Limited-2

In India, its clients include various central and state government ministries, departments, instrumentalities as well as local government bodies and public sector undertakings.These include Indian Railways,NTPC, Dedicated Freight Corridor Corporation of India Limited,High Speed Rail Corporation of India Limited, Public Works Department,DMRC, Steel Authority of India Limited, Rashtriya Ispat Nigam Limited, Hindustan Petroleum Corporation Limited, Bharat Coking Coal Limited, Metro Link Express for Gandhinagar and Ahmedabad (MEGA) Company Limited,Indian Port Rail Corporation Limited, Airports Authority of India, among others. We also engage with various large private sector corporations including L&T Metro Rail (Hyderabad) Limited, Kanti Bijlee Utpadan Nigam Limited(KBUNL), Cimmco Limited,Titagrah Wagons Limited, Snowmex Engineers Limited, Unity Infraprojects Limited, Rajdeep Buildcon PrivateLimited, Mahalsa Constructions Private Limited, Marymatha Constructions Limited,AFCON Infrastructure Limited, INCAP, ARK Services, MNEC Consultants Private Limited, Indian Geotechnical Services Limited,Geokno India Private Limited and NATRIP Implementation Society among others.

RITES Ltd IPO Dates & Price Band:

  • IPO Open: 20-June-2018
  • IPO Close: 22-June-2018
  • IPO Size: Approx Rs.466 Crore (Approx)
  • Face Value: Rs.10 Per Equity Share
  • Price Band: Rs.180 to 185 Per Share
  • Listing on: BSE & NSE
  • Retail Portion: 35%
  • Equity: 2,52,00,000 Shares
  • Discount: Rs.6 (Retail & Employees)

Market Lot:

  • Shares: Apply for 80 Shares (Minimum Lot Size)
  • Amount: Rs.14,800 (For HNI & QIB)
  • Amount: Rs.14,320 (For RII & EMP)

Allotment & Listing:

  • Basis of Allotment: 28-June-2018
  • Refunds: 29-June-2018
  • Credit to demat accounts: 02-July-2018
  • Listing: 03-July-2018

Lead Managers:

1. Elara Capital (India) Private
2. IDBI Capital Market Services Limited
3. IDFC Bank Limited
4. SBI Capital Markets Limited
4 book running lead managers handled 31 Public issues during last 3 years and out of which  10 issues closed below the offer price on listing day.

Registrar to the IPO:

Link Intime India Private Ltd

The Offer and the Objects

This IPO is part of Government’s disinvestment plan.

The government wants to divest 12.6 percent of its stake in the company.

The IPO comprises an offer for sale (OFS) of 2.52 crore shares.

Competitive Strengths

Comprehensive range of consultancy services and a diversified sector portfolio in the transport infrastructure space

Large order book with strong and diversified clientele base across sectors

Technical expertise and business divisions with specialized domain knowledge

Experienced management personnel and technically qualified team

Strong and consistent financial performance supported by robust internal control and risk management system

Preferred consultancy organization of the Government of India including the Indian Railways

Strategies

Leverage our experience and continue to build on our core competencies in transport infrastructure sector

Strengthen our EPC/Turnkey business

Expand our international operations

Expand our operations in the power procurement and renewable energy sector through our subsidiary, Railway Energy Management Company Limited, which is the only entity mandated for procurement of power from third parties and for captive renewable energy generation, for the Indian Railways

Overview of Indian Infrastructure Industry

GoI has been very proactive and has brought in a variety of measures to step up public investments – which include substantial increase in budgetary outlays in high – impact sectors, push for private sector investments, building institutional capacity through establishment of new infrastructure PSUs, and intensive implementation follow – up for completion of projects. This is reflected in the strong growth of the infrastructure sector since 2002. The sectoral investments over the last 3 five year plans are shown in the table below.

infrastucture
trend

Positive

The standalone order book of Rs 4818.68 crore end March 2018 included 353 ongoing projects of over Rs 1 crore each. Around 53% of the orders are from consultancy services, 3% from leasing services, 14% from overseas customers and around 30% is from turnkey construction projects. Of the total contracts on hand, 77% are from Central and state governments and the rest from others. The order book comprises a highest value export order of Rs 680 crore from Srilankan Railways for supply of locomotives.

Most of the local and global clients are Central government, state governments, national governments, governmental instrumentalities, corporations, authorities and PSUs and large private organisations. There has been no incidence of any bad debts or non-recovery of dues.

As per the Planning Commission, railways will see an investment of around Rs 4.9 trillion in the 13th Five_year Plan ending in March 2022 (FY 2022) compared with Rs 2.4 trillion in the 12th plan that ended in FY 2017. A significant increase in investments will boost the order book and earnings.

The asset-light business model is useful to make handsome gains.

More than 65% of the revenues come from sale of services and around 25% from sale of products and rest from others.

Hindustan Aeronautics Limited IPO Review and Current GMP

Negative

There are outstanding legal and tax proceedings involving the Company. Any adverse decision in such proceedings may expose us to liabilities or penalties and may adversely affect its business, financial condition, results of operations, cash flows and future prospects.

RITES Ltd. depend on the Ministry of Railways, GoI (“MoR”), central/state governments and central/state PSUs fora significant portion of contracts on its order book which are awarded on a nomination basis. There is no assurance that future contracts will be awarded to us on nomination basis by these clients. This may result in an adverse effect on its business growth, financial condition and results of operations.

RITES Ltd. depend on the MoR for a significant portion of its business including equipment, technical staff etc. Any changes in the government policies or decisions by the MoR may result in an adverse effect on its business growth, financial condition and results of operations.

RITES Ltd. current order book may not necessarily translate into future income in its entirety or could be delayed. Some of its current orders may be modified, cancelled, delayed, put on hold or not fully paid for by its clients, which could adversely affect its business reputation, which could have a material adverse effect on its business, financial condition, results of operations and future prospects. negative

RITES Ltd. face certain competitive pressures from the existing competitors and new entrants in both public and private sector. Increased competition and aggressive bidding by such competitors is expected to make its ability to procure business in future more uncertain which may adversely affect its business, financial condition and results of operations.

RITES Ltd. are dependent on the line of credit provided by the GoI and other funding agencies provided to countries that we operate in. In the event there is any change in the policies of the GoI or the funding agencies or the countries utilization of line of credit or the line of credit is withdrawn or reduced, its business and operations may be adversely affected.

The GoI has significant influence over its actions which may restrict its ability to manage its business. Any change in GoI policy could have a material adverse effect on its financial condition and results of operations. Further, announcements by the GoI relating to increased salary and allowances for government and public sector employees will increase its expenses and may adversely affect its financial condition in the years of implementation.

RITES Ltd. enter into joint ventures and consortium arrangements for completion of its projects which may expose us to additional liabilities on account of its partners failure or underperformance and any premature termination of which, may adversely affect its business, reputation, financial condition and results of operations.

Financials

Date Total Revenue Total Expenses Profit after Tax
9M FY 2018 Rs. 1,061.1 Rs. 669.4 Rs. 239.0
FY 2017 Rs. 1,563.7 Rs. 1,044.7 Rs. 353.3
FY 2016 Rs. 1,226.7 Rs. 773.2 Rs. 280.0
FY 2015 Rs. 1,159.1 Rs. 691.8 Rs. 314.0
FY 2014 Rs. 1,223.5 Rs. 835.8 Rs. 258.8
FY 2013 Rs. 1,083.1 Rs. 753.5 Rs. 238.1
**(All Figures in Rs. Crores)

 Valuations

  • Earnings Per Share (EPS): Rs. 17.64
  • Price/Earnings (P/E) ratio: Rs. 10.20 – Rs. 10.48
  • Return on Net Worth (RONW): 17.28%
  • Net Asset Value (NAV): Rs. 102.06

Grey Market Trend

As on 19 June 2018 GMP INR 32, Kostak INR 400

Disclaimer: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here.

SBI Small & Midcap Fund to reopen for investments via SIP mode

The SBI Small & Midcap Fund, which was suspended for new investments in October 2015, will reopen for fresh subscriptions through the systematic investment plan (SIP) mode from May 16. It will be called SBI Smallcap Fund and have an investment cap of ₹25,000 per month and per PAN card.

SBI
It is the first fund to reopen for fresh subscriptions after many smallcap funds had put restrictions on inflows because of rising inflows, higher valuations and lower investment opportunities. It was closed for a subscription since it had a capacity constraint of ₹750 crore on its assets under management. 

Download the Factsheet

Download (PDF, 149KB)

Following the introduction of new rules by the Securities and Exchange Board of India (Sebi) for rationalisation of mutual fund schemes, the fund will now fall in the smallcap category. The erstwhile SBI Small & Midcap Fund had emerged from the acquisition of the Daiwa Industry Leaders Fund by SBI in November 2013.

Download the current portfolio

Download (PDF, 84KB)

As per the new rules, a small cap fund can buy stocks beyond 251st stock in terms of market capitalisation. Prior to this, the scheme could buy small-cap stocks only beyond 401st stock in terms of market capitalisation. “These new norms give us 150 more stocks to choose from with higher market capitalisation and hence and we are in the final process of taking internal approvals for opening the scheme for SIPs only.

Download the Fund managers Factsheet

Download (PDF, 100KB)

The fund, with assets of ₹770 crore, is managed by R Srinivasan and is among the best performing smallcap funds. In the past one year, it generated returns of 35.2 per cent, compared to the category average of 17.75 per cent. In the past five years, the fund returned an annualised 36 per cent, compared to the category average of 31.58 per cent. Investors have been flocking to mid-cap and small-cap schemes in the past three years owing to higher returns from such schemes. Several funds in these categories have placed restrictions on inflows because the available stocks are limited and liquidity is low. Reliance Small Cap Fund, L&T Emerging Business Fund, DSP Blackrock Small Cap Fund and Mirae Asset Emerging Bluechip Fund are some funds which have put restrictions on fresh lumpsum investments and SIP inflows into their schemes.

Mutual Fund Investment are Subjected to Market Risks, Read all Scheme Related Document Carefully.

Disclaimer: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here.

10 things I have learned about investing

Following these simple yet indispensable investment insights can save you a lot of regret and sleepless nights.

You don’t make money by watching TV:

There are many business-news channels now which claim that they help you make money. Ever wondered why they never advertise the track record of the recommendations they make? Or why they only seem to talk about the winning recommendations and not the losing ones? Or why they seem to talk about ‘global cues’ driving the stock market all the time?

Most of the business news TV is best for understanding things in retrospect. In fact, when the business TV wallahs don’t have a reason for what is driving the stock market, they say, ‘global cues’. Also, the short-term orientation of TV channels will essentially make your broker, and not you, rich.

You don’t make money by reading newspapers either:

All the business newspapers these days have a strong personal-finance as well as a stock-market section. But a lot of the analysis on offer is full of hindsight bias, i.e., they come up with nice explanations of things after they have already happened. Further, newspaper reporters can get analysts to say things that fit in with the headline that has already been thought of. Analysts are more than happy saying these things in order to see their name in the newspapers. And it is worth remembering that newspapers have space to fill. So they will write stuff even if the situation doesn’t demand it.

Kirang Gandhi

SIPs work best over the long term:

If you were to ask a typical fund manager about how long one should stay invested in an SIP, the answer usually is three to five years. Honestly, I think that is too low a number. I started my first SIP in December 2005. And more than ten years later, I am actually seeing the benefit of having invested for so long. Also, it is worth remembering that SIPs over the long term are about a regular investing habit which gives reasonable returns than the possibility of fabulous returns that one might earn by choosing the right stock. This is an important distinction that needs to be made.

EMI VS SIP ( Be controlled or take control )

Don’t chase fund managers:

I did this during the 2007-2008 period and lost a lot of money doing it. I think it’s best to stick to investing in good large and mid-cap funds which have had a good track record over a long period of time, instead of chasing the hottest fund managers on the block. The funds with the best returns in the short term (one to three years) keep changing, and there is no way you can predict the next big thing on the block; the point being, investing should be boring. If it is giving you an adrenaline rush, you are not doing the right things.

Endowment policies are not investment policies:

Endowment policies sold by insurance companies are a very popular form of investing as well as saving tax. One reason for this is because they are deemed to be safe. But have you ever asked how much return these policies actually give? If I can be slightly technical here, what is the internal rate of return of an average endowment policy in which an individual invests for a period of 20 years? You will be surprised to know that such data are not available. But from what I understand about these things, endowment policies give a lower rate of return than inflation. So why bother? Endowment policies are essentially a cheap way for the government to raise money, given that most of these policies end up investing the money raised in government bonds. That is all there is to it. If you want to finance the government, please do so, but there are better ways of earning a return on your investment.

LIC Jeevan Labh Plan : Reviews/Features/Return Sheet

What are ULIPs? I am still trying to understand:

ULIPs are unit-linked investment plans, essentially investment plans which come with some insurance. The trouble is if they are investment plans, why are there no past returns of these policies available anywhere? But what are ULIPs? I have put this question to many people, but I am yet to receive an answer. What is the best-performing ULIP over the last five years? No one has been able to give me that answer. This is not surprising, given how complicated the structure of an average ULIP is. Hence, if you want to invest indirectly in equity, it is best to stick to mutual funds.

Sensex/Nifty forecasts are largely bogus:

Towards the end of every year or even around Diwali, all broking houses come up with their Sensex/Nifty forecasts for the next year. Usually, these are positive and expect the index to go up. At the same time, they are largely wrong. You can Google and check. Hence, treat them as entertainment but don’t take them seriously. Stock brokerages bring out such forecasts because it is an easy way to get some presence in the media. Both TV and newspapers, for some reason I don’t understand, are suckers for Sensex as well as Nifty forecasts.

Don’t buy a home unless you want to live in it or have black money:

Much is made about excellent returns from property. The trouble is there are no reliable numbers going around. It’s only people talking from experience. But when people calculate property returns, they do not take a lot of expenses into account. Also, when people talk about property returns they talk about big numbers: ‘I bought this for `20 lakh but sold it for a crore.’ This feels like a huge return, but it doesn’t exactly take into account the time factor as well as loads of expenses and other headaches that come with owning property. Further, these days there are other risks like the builder disappearing or not giving possession for a very long time. This leads to a situation where individuals end up paying both EMI as well as rent. Also, property returns have been negative in many parts of the country over the last few years. And given the current price levels, I don’t think buying a home is the best way to invest currently.

Real estate rental yield is below one percent

Gurus are good fun:

In my earlier avatar as a journalist, one widely followed stock-market guru told a closed gathering of investors that Sensex would touch 50,000 level in six to seven years. He said it very confidently. Confident stock-market gurus make for good newspaper copy. I wrote about it and the story was splashed on the front page of the newspaper I worked for. It was October 2007. Nearly nine years later, the Sensex is at half of the predicted level. The point is that gurus might be good. They might have the ability to predict things in advance. But then, why would they give their insight to the media, and in the process, you, dear reader, for free? Remember this, next time you see a guru making a prediction.

Low interest rates on loans also mean low interest rates on your fixed deposits:

This is something that many people don’t seem to understand. People want low interest rates on their loans, but they are not happy with low-interest rates on their deposits. Banks fund loans by raising fixed deposits. They can’t cut interest rates on their loans unless they cut interest rates on their deposits. It’s as simple as that. Nevertheless, I wonder why people can’t seem to understand this basic point.

 

By Vivek Kaul

ICICI Sec. IPO Review and the list of anchor investors

ICICI Sec. is a leading technology-based securities firm in India that offers a wide range of financial services including brokerage, financial product distribution and investment banking and focuses on both retail and institutional clients. It has been the largest equity broker in India since fiscal 2014 by brokerage revenue and active customers in equities on the National Stock Exchange, powered by its significant retail brokerage business, which accounted for 90.5% of the revenue from its brokerage business (excluding income earned on our funds used in the brokerage business) in fiscal 2017.

ICICI Securities Raises Rs 1,718 Crore From Anchor Investors.

Download (PDF, 1.85MB)

 

ICICI-Securities-IPO

Its retail brokerage and distribution businesses are supported by its nationwide network, consisting of over 200 of its own branches, over 2,600 branches of ICICI Bank through which its electronic brokerage platform is marketed and over 4,600 sub-brokers, authorized persons, independent financial associates and independent associates as at September 30, 2017.

ICICI Sec. is empanelled with a large cross-section of institutional clients.

IPO Dates & Price Band:

  • IPO Open: 22-March-2018
  • IPO Close: 26-March-2018
  • IPO Size: Approx Rs.4017 Crore (Approx)
  • Face Value: Rs.5 Per Equity Share
  • Price Band: Rs.519 to 520 Per Share
  • Listing on: BSE & NSE
  • Retail Portion: 10%
  • Equity: 77,249,508 Shares

Market Lot:

  • Shares: Apply for 28 Shares (Minimum Lot Size)
  • Amount: Rs.14,560

Allotment & Listing:

  • Basis of Allotment: 2-April-2018
  • Refunds: 3-April-2018
  • Credit to demat accounts: 4-April-2018
  • Listing: 5-April-2018

The promoters:

ICICI Bank Ltd.

Lead Managers:

DSP Merrill Lynch Limited

Citigroup Global Markets India Private Limited

CLSA India Private Limited

Edelweiss Financial Services Limited

IIFL Holdings Limited

SBI Capital Markets Limited

Object of the issue:

The objects of the Offer for the Company are to achieve the benefit of listing the Equity Shares on the Stock Exchanges and for the sale of Equity Shares by the Promoter Selling Shareholder. Further, the Company expects that the listing of Equity Shares will enhance its visibility and brand image and provide liquidity to its existing shareholders.

i3
i5

Our Strengths

Largest Equity Broker in India Powered by Our Proprietary Technology Platform.

Natural Beneficiary of Fundamental Transformation in the Indian Savings Environment.

Strong and Growing Distribution Business with an “OpenSource” Distribution Model.

Superior Customer Experience through Product and Technology Innovation.

Strategic Component of the ICICI Ecosystem.

Strong Financial Performance with Significant Operating Efficiency.

Experienced Senior Management Team.

i8Our Strategies

Strengthen its Leadership Position in the Brokerage Business.

Continue Investing in Technology and Innovation.

Strategically Expand its Financial Product Distribution Business Through Cross-Selling.

Leverage its Leadership in Equity Capital Markets to Strengthen its Financial Advisory Businesses.

Diversify its Revenue Streams and Continue Reducing Revenue Volatility.

Future Supply Chain Solutions Ltd IPO Review

Negative

Some of its Directors, its Promoter and certain Group Companies are involved in certain legal and other proceedings.

i1

General economic and market conditions in India and globally could have a material adverse effect on its business, financial condition, cash flows, results of operations and prospects.

ICICI Sec. rely heavily on its relationship with ICICI Bank for many aspects of its business, and its dependence on ICICI Bank leaves us vulnerable to changes in its relationship.

The operation of its businesses is highly dependent on information technology, and ICICI Sec. are subject to risks arising from any failure of, or inadequacies in, its IT systems.

ICICI Sec. rely on its brokerage business for a substantial share of its revenue and profitability. Any reduction in its brokerage fees could have a material adverse effect on its business, financial condition, cash flows, results of operations and prospects.

ICICI Sec. is subject to extensive statutory and regulatory requirements and supervision, which have a material influence on, and consequences for, its business operations.

ICICI Sec. may fail to detect money laundering and other illegal or improper activities in its business operations on a timely basis.

There are operational risks associated with the financial services industry which, if realised, may have a material adverse effect on its business, financial condition, cash flows, results of operations and prospects.

ICICI Sec. faces intense competition in its businesses, which may limit its growth and prospects.

ICICI Sec. may not be able to sustain its growth or expand its customer base.

ICICI Sec. faces certain other risks related to its distribution business, which accounts for a significant portion of its revenue and profitability.

ICICI Sec. face various risks due to its reliance on third-party intermediaries, contractors and service providers.

ICICI Sec. face various risks in relation to its investment banking business.

ICICI Sec. may incur losses on its treasury and trading business from market volatility or its investment strategies.

Its Promoter, ICICI Bank, and some of its Directors and related entities may be subject to conflicts of interest because they compete against us and have interests in companies which are in the same line of business as us.

Credit risks in our day-to-day operations, including in its investment portfolio, may expose us to significant losses.

ICICI Sec. have experienced negative cash flows in the prior years.

Cash Flow

i2Financial

Its profit after tax was INR 717.5 million, INR 891.9 million, INR 2,938.7 million, INR 2,387.2 million, INR 3,385.9 million and INR 2,460.5 million in fiscals 2013, 2014, 2015, 2016 and 2017 and the six months ended September 30, 2017, respectively, and its return on equity has exceeded 30.0% for each measured period since fiscal 2013. For fiscal 2017, our return on equity was 69.2%.

Comparison of Listed Peers

i4Valuations

Annualised EPS works out to Rs 10.48 for the year ended March 2017. At the upper end of the price band, shares will trade at 49.6 times its earnings.

High valuations despite less capital intensive business.

Grey market premium

Current GMP is Rs.6/-, and  Kostak is Rs.300/- (sellers)

 

DISCLAIMER

No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here

Hindustan Aeronautics Limited IPO Review and Current GMP

Hindustan Aeronautic is engaged in manufacturing, development, design, repair and servicing of products like helicopters, aero-engines, aero space structures, aircraft and many more. Hindustan Aeronautic India has the unique products portfolio and the operations have names like Bangalore Complex, MiG Complex, Helicopter Complex, Accessories Complex, and Design Complex and they have over 11 production division with 11 R&D centers in India.

Their major domestic customers are Indian Air Force, Indian Army, Indian Navy, Indian Coast Guard, Indian Space Research Organisation, Defence Research & Development Organisation, Ordnance Factory Board, ,Border Security Force, Oil & Natural Gas Cooperation of India, Govt. of Karnataka, Govt. of Jharkhand, Govt. of Maharashtra, Geological Survey of India, Bharat Heavy Electricals Ltd. They export their products in France, USA, Mauritius, Israel, Ecuador, Namibia, Nepal, Russia, UK, Oman, Malaysia, Thailand, Germany and Vietnam. The company received “Excellent” rating from Government of India from 2002 to 2016.

Hindustan Aeronautics is ‘Navratna’ company since June 2007 and the largest DPSU in India. It is the 39th largest aerospace company in the world in terms of revenue. The company was also awarded Raksha Mantri’s Award for excellence in performance under institutional category in FY 2008, FY 2010, FY 2011, FY 2013 and FY 2016.

386_Para_hawk-i

IPO Dates & Price Band:

  • IPO Open: 16-March-2018
  • IPO Close: 20-March-2018
  • IPO Size: Approx Rs. 4482 Crore (Approx)
  • Face Value: Rs.10 Per Equity Share
  • Price Band: Rs.1214 to 1240 Per Share
  • Listing on: BSE & NSE
  • Retail Portion: 35%
  • Equity: 34,107,525 Shares
  • Discount:  Rs.25 for Retail & Employee

Market Lot:

  • Shares: Apply for 12 Shares (Minimum Lot Size)
  • Amount: Rs.14,580 (For Retail & Employee)
  • Amount: Rs.14,880 (For QIB & HNI)

IPO Allotment & Listing:

  • Basis of Allotment: 26-March-2018
  • Refunds: 27-March-2018
  • Credit to demat accounts: 27-March-2018
  • Listing: 28-March-2018

The promoters:

The President of India

Acting through the Department of Defence Production Ministry of Defence.

 Lead Managers:

SBI Capital Markets Ltd
Axis Capital Ltd

Registrar to the IPO:

Karvy Computershare Pvt Ltd.

387_Para_alh civil 3

111

Outlook of the Indian Aerospace and Defence Sector

India has the third largest military in the world and is the sixth largest spender in Defence. India is also one of the largest importers of conventional defence equipment and spends approximately 30% of its total defence budget on capital acquisitions. 60% of Indian’s defence – related requirements are currently met through imports.

In addition, the ‘ Make in India ’initiative by the Government is focusing its efforts on increasing indigenous defence manufacturing with the aim of becoming self – reliant.

The opening up of the defence sector for private sector participation is helping foreign OEMs to enter into strategic partnerships with Indian companies and leverage opportunities in the domestic market as well as global markets.

India’s focus on indigenous manufacturing in the defence sector has yielded certain benefits as the MoD over the last two years unveiled several products manufactured in India including the LCA Tejas, the composites sonar dome, a portable elemedicine system for the armed forces, penetration – cum – blast and thermobaric ammunition specifically designed for the Arjun tanks, the Varunastra heavyweight torpedo manufactured with 95% locally sourced parts and medium-range surface-to-air missiles. The Defence Acquisition Council under the MoD cleared defence sector transactions with a value of more than 820 billion under the buy and Make (Indian) and Buy Indian categories. These transactions include the procurement of Light Combat Aircraft, T-90 tanks, mini UAVs and light combat helicopters.

121Our Strengths

India has the third largest military in the world and is the 6th largest spender in the defence sector.

60% of total defence requirements of India as on today is met from imports. Hindustan Aeronautics is poised to gain under the ‘Buy and Make (Indian)’ procurement category. The company has all the necessary capabilities and technology (including licensed technology) to capture maximum relevant defence budget spend going ahead.

Long credible history of research, design and development, manufacturing and maintenance, repair and overhaul (“MRO”) services.

Setting up a goal: First step to Financial Planning ( Video )

Established track record in offering product lifecycle support extending to periods beyond four decades.

Indian armed forces plan to procure more than 1000 rotary wing aircrafts and will revamp their fleet in next 10-20 years.

Strong design and development capabilities.

Leadership position in the Indian aeronautical industry and strong GoI support.

Diversified product portfolio.

Strong financial track record.

Experienced management team and operating team.

141

Our Strategies

Expand its operations through partnerships or collaboration.

Diversify through expansion in new growth areas.

Diversify further into the civil aircraft segment for both manufacturing and servicing opportunities.

Develop in-house capabilities to design and develop specialized products including aero – engines.

Leverage Existing Cost Advantage.

Developing Human Capital.

Enhancing customer satisfaction.

Optimising operations towards becoming a lead integrator of aircraft platforms.

151

Negative

There are outstanding legal and tax proceedings involving its Company. Any adverse decision in such proceedings may expose us to liabilities or penalties and may adversely affect its business, financial condition, results of operations and cash flows.

Hindustan Aeronautics depend heavily on MoD contracts. A decline or reprioritisation of funding in the Indian defence budget, that of customers including the Indian Army, Indian Air Force and Indian Navy (the “Indian Defence Services”), Indian Coast Guard, Border Security Force, Central Reserve Police Force and Paramilitary forces or delays in the budget process could adversely affect its ability to grow or maintain its sales, earnings, and cash flow.

As a result of national securities concerns,certain information in relation to its business and operations is classified as ‘secret and confidential’ pursuant to which we have not disclosed such information in this RHP nor provided such information to the BRLMs and other intermediaries and advisors involved in the Offer.

The MoD contracts are not always fully funded at inception and are subject to termination. Its inability to fund such contracts at the time of inception or any termination could have a material adverse effect on its financial condition and results of operations.

Its Company is not in compliance with certain provisions of the Companies Act and/or SEBI Listing Regulations in relation to terms of reference of the Audit Committee and the Nomination and Remuneration Committee.

Ongoing disclosure of information in relation to its Company after the listing of the Equity Shares on the Stock Exchanges may be limited and may not be in compliance with the SEBI Listing Regulations and other applicable laws.

The GoI has significant influence over its actions which may restrict its ability to manage its business. Any change in GoI policy could have a material adverse effect on its financial condition and results of operations.

EMI VS SIP ( Be controlled or take control )

Its current order book may not necessarily translate into future income in its entirety. Some of its current orders or requests for a proposal which we have received may be modified, cancelled, delayed, put on hold or not fully paid for by its customers, which could adversely affect its results of operations.

Hindustan Aeronautics is involved in a dispute with the Ministry of Defence of Ecuador relating to their termination of an agreement with us relating to the supply of helicopters to the Ecuadorean Air Force. Its revenue and exports may be adversely affected as a result.

Hindustan Aeronautics also operate in evolving markets, which makes it difficult to evaluate its business and future prospects.

Its earnings and margins may vary based on the mix of its contracts and programs, its performance, and its ability to control costs.

Its business could be materially adversely affected if any default of its causes an aircraft or helicopter accident.

ALH Dhruv Helicopters supplied to the Ecuadorean Air Force were involved in accidents, and The Ecuadorean Ministry of Defence has designated the company as a defaulting contractor and has barred it from bidding for future contracts. This can affect the future exports and company’s ability to bid outside India.

The aircraft such as MiG-21 variants, MiG-27 and the Su-30 MKI, as well as engines and other accessories, and repair and overhaul services for these aircraft that are manufactured in India are done through transfer of technology from Russian OEMs as well as pursuant to inter-governmental agreements with Russia. The United States, the United Nations Security Council and other jurisdictions and organizations have implemented comprehensive economic sanctions targeting Russia in recent years. This can have an adverse impact relating to the supply and support from Russian OEMs for the aircraft that Hindustan Aeronautic manufacture under transfer of technology with such OEMs.

Valuation

On the performance front, Hindustan Aeronautic has (on a consolidated basis) posted turnover/net profits of Rs. 17362.00 cr. / Rs. 994.10 cr. (FY15), Rs. 18754.80 cr. / Rs. 2004.30 cr. (FY16) and Rs. 19596.90 cr. / RS. 2624.70 cr. (FY17). For the first half of the current fiscal, it has earned a net profit of Rs. 391 cr. on a turnover of Rs. 5665.90 cr.

For last three fiscals, it has posted an average EPS of Rs. 54 and an average RoNW of 17.67%. Hindustan Aeronautic’s last three fiscal’s EPS stands at Rs. 73 (FY17), Rs. 42 (FY16) and Rs. 21 (FY15). PAT margins for these fiscals were 14%, 12%, and 6% respectively. It has posted CAGR of 9% for revenues, 62% CAGR in PAT for last three fiscals. The issue is priced at a P/BV of 3.46 on the basis of its NAV of Rs. 358 as on 30.09.17.

It has no listed peers to compare with. Hindustan Aeronautic’s sale to Indian Defense Services accounts for nearly 92% (on an average) of its revenues. According to management, first-half results cannot be annualized to compare as it always does better in the second half due to billings only on delivery of products. However, if we annualize latest earnings and attribute it on its paid-up equity then asking price is at a P/E of 53, but if we consider FY 17earnings, then P/E comes to 17.

Grey Market premium

Current GMP is Rs. 4/- and Kostak is Rs. NIL

 

Only LIC policyholders money can save this IPO.

 

DISCLAIMER

No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here

 

Bandhan Bank IPO Review and the list of anchor investors

Bandhan Bank (BB) is a commercial bank focused on serving underbanked and underpenetrated markets in India. It has a banking license that permits it to provide banking services pan-India across customer segments. BB currently offers a variety of asset and liability products and services designed for micro banking and general banking, as well as other banking products and services to generate non-interest income.

Its strength lies in microfinance, including a network of 2,022 doorstep service centers (“DSCs”) and 6.77 million micro loan customers that BFSL transferred to it, which it has grown to 2,546 DSCs and over 9.47 million microloan customers as of September 30, 2017.With the network of 2,546 doorstep service centers (DSCs) and 9.47 million microloan customers, the bank has strong very hold in microfinance. Bandhan bank has 864 bank branches and 386 ATMs serving over 1.87 million general banking customers. Banks distribution network is strong in East and Northeast India, with West Bengal, Assam and Bihar.

Bandhan Bank Raises Rs 1,342 Crore From Anchor Investors.

List of Anchor Investors

Download (PDF, 412KB)

IPO Dates & Price Band:

  • IPO Open: 15-March-2018
  • IPO Close: 19-March-2018
  • IPO Size: Approx Rs. 4470 Crore (Approx)
  • Face Value: Rs. 10 Per Equity Share
  • Price Band: Rs.370 to 375 Per Share
  • Listing on: BSE & NSE
  • Retail Portion: 35%
  • Equity: 119,280,494 Shares

Market Lot:

  • Shares: Apply for 40 Shares (Minimum Lot Size)
  • Amount: Rs.15,000

Allotment & Listing:

  • Basis of Allotment: 22-March-2018
  • Refunds: 23-March-2018
  • Credit to demat accounts: 26-March-2018
  • Listing: 27-March-2018

The promoters:

Bandhan Financial Holdings Limited,
Bandhan Financial Services Limited,
Financial Inclusion Trust And North east Financial Inclusion Trust.

Lead Managers:

Kotak Mahindra Capital
Company Limited
Axis Capital Limited
Goldman Sachs (India)
Securities Private Limited
JM Financial Institutional Securities Limited
P. Morgan India Private Limited

Registrar:

Karvy Computershare Private Limited

bandhanbank

Main objects of the issue are:

In terms of the RBI New Bank Licensing Guidelines, the Equity Shares of Bank are required to get listed on the stock exchanges within three years from the date of commencement of business of its Bank, i.e., on or before August 22, 2018. In light of the above, since the Bank is required to get listed on the stock exchanges on or before August 22, 2018, the Bank is undertaking this Issue.  The objects of the Fresh Issue are to augment the Bank’s Tier-I capital base to meet the Bank’s future capital requirements.

0

1

2Strategy

Maintain focus on micro lending while expanding further into other retail and SME lending.

Continue to strengthen its liability franchise.

Boost share of non-interest income.

Enhance its digital platform to improve customer acquisition and retention and reduce costs.

Enhance retail banking systems and procedures to improve efficiency.

Strengths

Operating Model Focused on Serving Underbanked and Underpenetrated Markets.

Consistent Track Record of Growing a Quality Asset and Liability Franchise.

Extensive, Low-Cost Distribution Network.

Customer-Centric Approach.

Consistent Financial Performance and Robust Capital Base.

An experienced and professional team, backed by strong independent board.

2Positive

Focus on the underpenetrated region and new products to ensure loan book growth of more than 23 percent over FY18-20.

The net interest margins (NIMs) of the bank was strong at 9.86%, return on equity (RoE) of 25.55% and return on assets (ROA) of 4.07% (each on an annualized basis) in the nine months ended December 2017 compared with 10.34%, 27.88% and 4.39% in the nine months ended December 2016. The bank has maintained good asset quality amidst challenging macro environment. The gross NPAs stood at 1.67% and the net NPA at 0.80% at end December 2017.

The bank has grown quality asset base over the various phase of development. Its gross loan book has grown from and Rs 7768.79 crore as on 23 August 2015 to Rs 15578.44 crore end March 2016 to Rs 24364.39 crore end December 2017, while customers have increased from 6.77 million to 11.99 million. Deposits base have jumped to Rs 25293.96 crore with CASA ratio of 33.2% and retail deposits ratio of 85.1% end December 2017. The growth in low-cost liability business has led to a reduction in the cost of funding, allowing the bank to lower the lending interest rates while maintaining profitable spreads and further grow the portfolio and capture market share.

The bank’s distribution network is relatively low cost, which in particular is a result of “hub and spoke” model of using DSCs and associated bank branches, as well as focus on tech initiatives. This low-cost model is demonstrated by operating cost-to-income ratio was 35.38% for the nine months ended December 2017 and 36.31% for FY2017.

Overall earnings profile looks comfortable, with premium valuations expected to remain.

The issue seems richly priced, but the bank has a unique business model.

5

Negative

Limited operating history and its fast-growing and rapidly evolving business make it difficult to evaluate its business and future operating results on the basis of its past performance, and its future results may not meet or exceed its past performance.

BB cannot effectively compare its financial statements for Fiscal Years 2015, 2016 and 2017 due to irregular terms of duration.

If BB is unable to manage the growth associated with the expansion of its branches, ATMs, and DSCs effectively, its financial, accounting, administrative and technology infrastructure, as well as its business and reputation could be adversely affected.

A substantial portion of its operations is located in East and Northeast India, making us vulnerable to risks associated with having geographically concentrated operations.

Business comprises both traditional general banking activities and modern micro banking activities that expose its business overall to the risks faced by each sector, which may negatively impact its performance.

BB derive a substantial portion of its interest income from advances that are due within one year, and a significant reduction in these short-term advances may result in a corresponding decrease in its interest income.

New India Assurance IPO Review and Current GMP

Microcredit lending has its own unique risks and, as a result, BB may experience increased levels of non-performing loans and related provisions and write-offs that negatively impact its results of operations.

BB rely primarily on deposits as a low-cost means of funding its loan portfolio and there is no guarantee that we will be able to source sufficient deposits or alternative funding to support its business.

An increase in its portfolio of non-performing assets may materially and adversely affect its business and results of operations.

BB may face risks associated with its large number of branches and widespread network of operations which may adversely affect its business, financial condition and results of operations.

Its business and financial results could be impacted materially by adverse results of legal proceedings.

BB does not own the premises at which its Registered and Corporate Office, branches, ATMs, DSCs and other office premises are located.

Comparison with PEERS

6813Valuation

Bandhan Bank’s EPS for 9M of FY2018 on post-issue equity works out to Rs 10.7. At the price band of Rs 370 to Rs 375, P/E works out to 34.6 to 35.0 times.

Post-issue book value of Bandhan Bank works out to Rs 75.6 at the issue price of 370 and Rs 76.0 at the issue price of Rs 375. P/BV works out to 4.9X and P/Adj BV is at 5.0X at the upper price band.

Among the comparable banks, RBL Bank is trading at P/BV (on 9M FY2018 BV) of 3.0X, AU Small Finance Bank is trading at P/BV of 8.4X, Yes Bank is trading at P/BV of 2.8X, IndusInd Bank is trading at P/BV of 4.4X.

Among the comparable NBFCs and leading microfinance lenders, Equitas Holding is trading at P/BV of 2.8X, Ujjivan Financial Services is trading at P/BV of 2.4X and Bharat Financial Inclusion is trading at P/BV of 5.6X.

Grey Market premium

Current GMP is Rs. 26 /- and Kostak is Rs. 800/-

 

DISCLAIMER

No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here.

Fact sheet of Women fund managers who have outperformed or Underperform over the long-term

Women still constitute only 8 percent of the total number of fund managers in the Indian mutual fund sector but have proved their mettle by delivering significant outperformance.

Altogether 24 women managers manage funds currently, either as primary or secondary managers or as heads of equity or fixed income, compared to 18 last year.

Cumulatively they manage assets worth Rs 3.065 trillion, which equals 15 percent of the total assets under management (AUM) for open-end funds.

The total AUM managed by the women managers has increased in absolute terms, compared to Rs. 2.32 trillion last year.But regarding a percentage of overall AUM, the number remained almost the same as last year.

The number of women in fund management in India has been gradually going up over the years, but the numbers tell us that we still have a long way to go. Many Asian countries have among the highest representation of women in the mutual fund industry.

womens day

61 percent of the AUM managed by women fund managers in India outperformed the benchmark/peer group average over the past one year, 81 percent over past three years, and 86 percent over the past five years, according to the Morningstar report.

Thus, over the long term, funds managed or overseen by women fund managers have delivered significant outperformance based approach. Depends on collective input from investment specialists closest to the source of investment information.

Some women fund manager’s ignored the noise around and proved that career progression isn’t dependent on the gender.

A look at some Women Fund Managers.

Mrs. Swati Anil Kulkarni ( Fund Manager at UTI Asset management.)

Biography

Mrs. Kulkarni is a B.Com (H), MBA (Finance). From Narsee Monjee Institute of Management Studies, Mumbai, CFA and a CAIIB. Prior to joining UTI Mutual Fund in 2004, she has worked with Reliance Industries Ltd.

Summary

Overall, performing about the same as the peer group composite. Nevertheless, over a long track record, the manager has, period by period, consistently managed to outperform the peer group.

Download (PDF, 100KB)

Ms. Roshi Jain ( Fund Manager at Franklin Templeton Asset management.)

Biography

Ms. Jain is a CFA, ACA and PGDM. Prior to joining Franklin Templeton Investments she has worked with Goldman Sachs, London,Goldman Sachs, Singapore, Wipro Ltd. and S. R. Batliboi & Co.

Summary

Overall, performing better than the peer group composite. Over a long track record, the manager has, period by period, consistently managed to outperform the peer group.

Download (PDF, 101KB)

Ms. Jahnvee Shah  ( Fund Manager at Reliance Asset management.)

Biography

Ms. Shah is a B.Sc and an MBA (Finance). Prior to joining Reliance Mutual Fund she has worked with Financial Express.

Summary

Overall, performing worse than the peer group composite. Over a fairly lengthy track record, the manager has underperformed the peer group.

Download (PDF, 96KB)

Ms. Bekxy Kuriakose  ( Fund Manager at Principal Asset management.)

Biography Ms. Kuriakose is a BA (Economics) from Delhi University and PGDM from IIM, Bangalore Prior to joining Principal MF she has worked with L&T MF, Reliance Life Insurance Co. Ltd ,SBI Mutual Fund and Tata Administrative Services.

Summary

Overall, performing about the same as the peer group composite. However, over a long track record, the manager has, period by period, consistently under formed the peer group.

Download (PDF, 102KB)

Ms.Priyanka Khandelwal ( Fund Manager at ICICI Prudential Asset management.)

Biography Ms. Khandelwal is Chartered Accountant and Company Secretary She has been Working with ICICI Prudential Mutual Fund Since October 2014.

Summary

There is an insufficient track record to make any judgment.

Download (PDF, 81KB)

Ms.Payal Kaipunjal ( Fund Manager at Reliance Prudential Asset management.)

Biography Ms. Kaipunjal is an MBA. Prior to joining Goldman Sachs she has worked with Benchmark AMC.

Summary

Overall, performing about the same as the peer group composite. However, over a long track record, the manager has underperformed the peer group.

Download (PDF, 101KB)

Ms.Nidhi Chawla ( Fund Manager at SBI Asset management )

Biography Ms. Chawla holds BBS degree and has also done MBE and CFA. She has over 4 years of experience in mutual fund industry. She is with SBI Mutual Fund since 2007.

Summary

Overall, performing worse than the peer group composite. Over a short track record, the manager has underperformed the peer group.

Download (PDF, 90KB)

Ms.Shalini Tibrewala  ( Fund Manager at JM Asset management.)

Biography Ms. Tibrewala is a B.Com (H), ACA and CS. She has been associated with JM Financials since 2003.

Summary

Overall, performing about the same as the peer group composite. However, over a long track record, the manager has underperformed the peer group.

Download (PDF, 108KB)

Ms.Sunaina da Cunha ( Fund Manager at Aditya Birla Sun Life Asset management.)

Biography Ms. Cunha is a B.Com (H) and MBA from FMS, Delhi. Prior to joining Birla Sun Life Asset Management Company, she has worked with Aditya Birla Management Corporation Ltd.

Summary

Overall, performing about the same as the peer group composite. Nevertheless, over a long track record, the manager has, period by period, consistently managed to outperform the peer group.

Download (PDF, 100KB)

Ms.Ranjana Gupta  ( Fund Manager at SBI Asset management.)

Biography

She is a Commerce graduate from Mumbai University Ms Ranjana joined SBIFMPL in 2008 as Fixed Income Dealer and has over 21 Years of experience in the capital market. prior to joining SBIFMPL, She was heading the broking activities at Twenty-first Century Shares and Securities Ltd from May 1995 to February 2008. She started her career as a dealer in 1995 with OTCEI.

Summary

Overall, performing about the same as the peer group composite. However, over a short track record, the manager has underperformed the peer group.

Download (PDF, 90KB)

What are the Reasons Behind Most Women not Having a Health Insurance Cover?

Ms.Sohini Andani ( Fund Manager at SBI Asset management.)

Biography

Ms. Andani is a Commerce Graduate and C.A. She has over 15 years of experience in financial services. Prior to this, she worked with ING Investment Management Pvt. Ltd., ASK Raymond James & Associates Pvt. Ltd., LKP Shares & Securities Ltd., Advani Share Broker Pvt. Ltd., CRISIL, and with K R Choksey Shares & Securities Pvt. Ltd.

Summary

Overall, performing better than the peer group composite. Over a fairly lengthy track record, the manager has outperformed the peer group.

Download (PDF, 96KB)

Ms.Meenakshi Dawar ( Fund Manager at Reliance Asset management.)

Biography Ms. Dawar is a B.Tech from IGIT New Delhi and PGDM from IIM Ahmedabad. Prior to joining Reliance AMC had worked with IDFC Mutual Fund. She has worked in institutional equities sales and research division on the sell side.

Summary

Overall, performing worse then the peer group composite. Over a fairly lengthy track record, the manager has underperformed the peer group.

Download (PDF, 96KB)

Ms.Khushboo Sharma ( Fund Manager at IDFC Asset management.)

Biography

Ms. Sharma is B.Tech, Post Graduate Diploma in Management (Finance) & CFA Level III Prior to Joining IDFC Mutual Fund she has worked with Franklin Templeton Asset Management India Pvt. Ltd. in Fixed Income Investment Management and Evaluating company Credit and Structured finance deals and has also worked in Thoughtworks Technologies India Pvt. Ltd. in Software Consulting.

Download (PDF, 82KB)

Gargi Bhattacharyya Banerjee ( Fund Manager at Shriram Asset management.)

Biography

Ms. Banerjee is Master of Business Management in Finance and Bachelor of Science with Economics (Hon) from University of Calcutta. Prior to joining Shriram Asset Management Co. Ltd she has worked with Zacks Research Pvt Ltd as Research Head and Shriram Insight Share Brokers Ltd.

Summary

Overall, performing worse then the peer group composite. Over a short track record, the manager has, period by period, over- and under-performed roughly equally.

Download (PDF, 85KB)

Ms.Hetal P Shah ( Fund Manager at Baroda Pioneer Asset management.)

Biography

Ms. Hetal P. Shah is a B.Com, MBA, and JAIIB. Prior to joining Baroda AMC she has worked with Bank of India from may 1999.

Summary

Overall, performing about the same as the peer group composite. However, over a long track record, the manager has underperformed the peer group.

Download (PDF, 105KB)

Ms.Bharti Sawant ( Fund Manager at Mirae Asset management.)

Biography

Ms. Sawant is an M.S. Finance ( ICFAI Hyderabad ), CFA and B.Com. Prior to joining Mirae AMC in September 2013, She was associated with Sushil Finance Securities Pvt. Ltd., Latin Manharlal Securities Pvt. Ltd. and Kabu Shares and Stocking Pvt. Ltd. for Financial Analysis and Research.

Summary

Overall, performing about the same as the peer group composite. However, over a short track record, the manager has underperformed the peer group.

Download (PDF, 93KB)

Ms.Anju Chhajer ( Fund Manager at Reliance Asset management.)

Biography Ms. Chhajer is a B.Com (H) and a Chartered Accountant. Prior to joining Reliance Mutual Fund Ltd. as a fund manager, she has worked with National Insurance Company as a Money Maker Instruments and D.C Dharewa & Co.

Summary

Overall, performing about the same as the peer group composite. Nevertheless, over a long track record, the manager has outperformed the peer group.

Download (PDF, 103KB)

Mrs.Suman Prasad ( Fund Manager at Canara robeco Asset management.)

Biography Mrs. Prasad is B.Sc and PGDMS. She has been associated with Canara Robeco since 1996.

Summary

Overall, performing about the same as the peer group composite. Nevertheless, over a long track record, the manager has outperformed the peer group.

Download (PDF, 103KB)

Real estate rental yield is below one percent

Ms.Chandni Gupta ( Fund Manager at ICICI Prudential Asset management.)

Biography She holds B.E. degree in IT and CFA degree from CFA Institute, USA. She is working with ICICI since October 2012 as Fixed Income Dealer. Prior to that, she has worked with Morgan Stanley, HSBC Bank and Standard Chartered Mutual Fund.

Summary

Overall, performing about the same as the peer group composite. However, over a short track record, the manager has, period by period, over- and under-performed roughly equally.

Download (PDF, 101KB)

Ms.Uma Venkatraman  ( Fund Manager at IDBI Asset management.)

Biography Prior to joining IDBI Mutual Fund, she had worked with B&K Securities, ASK Raymond James, Morgan Keegan and UTI Mutual Fund.

Download (PDF, 79KB)

Ms.Pushpa Rai ( Fund Manager at Escorts Asset management.)

Biography

Ms. Pushpa Rai is a M.Com, MFM (Narsee Monjee Institute of Management Studies) Over 20 years of experience in the financial sector on both, fixed income products as well as equity markets. Previous assignments include Heading Debt funds and managing pension funds, surplus funds with IDBI Capital Market Services (March 2007 – Feb. 2010); Heading Debt and Equity Research at
Mata Securities (Sep 1995 – April 2006).

Download (PDF, 87KB)

Note : Past performance of fund does not guarantee the future returns.

DISCLAIMER

No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here.

Top 5 sectors to invest after budget allocation

There are all efforts in Union Budget 2018 to appease rural and EWS population but at the same time Government tried to maintain the fiscal discipline by keeping fiscal deficit target at 3.5% and 3.2% for FY18E and FY19E, respectively.

Although deficit targets are higher as compared to previous estimates but considering surge in prices of crude oil, these are respectable numbers.

Higher than estimated expenses and lower than expected revenue on account of lower GST collection and no spectrum auctions lead to miss on fiscal deficit targets.

Budget speech has talked about total expenses from all agencies at Rs.14 lac crore towards aiding rural economy/farmers’ income.

Here are the top 5 sectors to invest after budget allocation

Rural Spending:

This will have a far-reaching impact on growth rates of country and reduction of income gaps in society. Companies and sectors deriving the majority of revenues from the rural economy like 2 wheelers, FMCG Companies, fertilizer companies will benefit from the push to rural spending. Positive for HUL, Hero Motocorp, ITC, Godrej Agrovet to benefit from the move.

828c626dba2995cf20349c103c12ffbf

Infrastructure:

Budget 2018 continued to put a strong focus on infrastructure development, which is in line with the expectations. FM has allocated extra-budgetary support of Rs. 5.97 lakh crore v/s Rs. 3.96 lakh crore in the last budget for the infrastructure sector, which is encouraging as India needs a significant amount of investment in infrastructure due to growing needs.

Higher allocation in infrastructure segment will essentially expedite infrastructure development in the country, which in turn will aid many industries, i.e. metals, cement, building materials, etc.

How to choose the best mutual fund for your portfolio

Construction companies like KNR Construction, J Kumar, NCC to play infrastructure theme from the budget. Positive for cement companies like JK Cement and Sagar Cement to benefit from push to infra.

Healthcare:

Union budget has also proposed coverage of Rs. 5 Lac per household to total 10 Cr households for hospitalization. The move will benefit hospital chains like Apollo Hospitals and Narayana Hrudyalay.

It will also have a positive impact on companies like Thyrocare and Dr. Lal Path Labs. Insurance companies will also benefit because of insurance premium received towards coverage of families.

Affordable Housing:

Among other major initiatives budget has proposed the creation of affordable housing fund under NHB. This will benefit all affordable housing players like Mahindra Lifespace, Ashiana Housing, etc.

It will also have a positive impact on affordable housing financiers like Gruh Finance, DHFL, and Can Fin Homes.

Tyres:

Within tax proposals, the budget has proposed to increase customs duty on imported Truck and Bus Radials from 10-15 percent, which will benefit companies like Apollo Tyres and JK Tyres who have significant exposure towards truck tyres.

 

Disclaimer: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here.

Warren Buffett that may help you to create wealth in long-term

Warren Buffett’s quotes that can help you invest better in volatile times.

When stock markets turn volatile many investors find it difficult to stay the course. Some investors want to sell off and want to hoard their cash. Some prefer to start buying the stocks that are falling the most. But such knee-jerk reactions may not create wealth for you.

Here are five thoughts of Warren Buffett that may guide you in your investment actions in such volatile times.

1.It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Quality matters. Just because a company has fallen 20% from its 52 week high does not make it a great value buy. Do check the fundamentals of the company. Corrections in the market must be used to buy quality stocks for your long-term portfolio. Buying them at a fair price makes sense for long-term investors. Good businesses tend to compound their profits and reward the shareholders in the long term. Stick to companies that have exhibited decent business performance across business cycles.

111111

Picking up the micro-cap stocks with great potentials may not reward you if the stories do not materialize as expected. If you have a dud stock in your portfolio, use the spikes to get rid of it. Use the proceeds to buy fundamentally strong companies.

2. Be fearful when others are greedy and be greedy only when others are fearful.

Volatile markets make investors worry about the holdings. The sudden drop in their portfolio’s valuations, make them consider selling out. The same investors were looking for more opportunities when the markets were marching up.

Behavioural issues are a big influencing factor for the retail investors. The emotional swings force them to sell out when it is the time to load up more. Warren Buffett makes it clear that the valuations are attractive when no one is interested in stocks and the other way round.

3. Someone is sitting in the shade today because someone planted a tree long time ago.

This could be one of the ignored quotes of Warren Buffett. It speaks about the delayed gratification and how it impacts one’s future.

If you sow the seeds in the form of regular investments and let them compound over a long period of time, there is a fair chance that you will see the wealth being created.

4. Never ask a barber if you need a haircut.

If you buy the idea of long-term wealth creation and start investing regularly, wealth creation is not guaranteed. You have to stick to asset allocation, and you have to choose the right products that suit your needs.

While choosing your advisor to be sure that his interests are aligned with your interests.

5. No matter how great the talent or efforts, some things just take time. There are no shortcuts – Warren Buffett says. Follow the process and the let the time work for you. The results will be more likely to be in your favour. However, if you try to put your money on tips and get rich quick tricks then you may see some nasty surprises.

‘Ujjwal Bharat’: ABSL Resurgent India Fund – Series 6 Review

Governments across the world are growing more and more socialist and development oriented. In India too, We have noticed that whenever the government has gone about focusing upon a part of the economy or a specific area, there has been long-term development followed by strong market returns for companies operating in that space.

NFOIT and IT-enabled businesses saw a huge surge in 1990’s on the back of favorable govt policy environment and industry growth. 1st half of previous decade saw an emphasis on Infra development, and the 2nd part saw financials taking fore while consumption remained a consistent theme all through. With the new (present) government coming in, Manufacturing got the limelight in 2014 & onwards. All these themes have followed up with strong returns for their investors in the years following govt policy & push. Since its ascent to power, the present government has been reiterating its growth & development agenda through various initiatives and policy directives. Over the past couple of years, the narrative has been gradually shifting to a more grass-roots level financial inclusion & growth and a more sustainable policy environment for ensuring equitable development of the rural and urban economy.

CHARTNote: Past performance of fund does not guarantee the future returns.

Download the Fund Comparison of series 1 to 5

Download (PDF, 90KB)

ujwal bharat

High Govt. agenda

Earlier ABSL launched the ABSL Banking & Financial Services Fund in December 2013, and it proved to be the best performing fund in the pack since that time (generated 30% p.a. vs ~24% p.a. by Nifty Financial Services Index since inception). January 2015 ABSL was launching the ABSL Manufacturing Fund which has delivered 12.9% p.a. vs S&PBSE 500’s 9.4% p.a. As a fund house, other investment calls have also delivered similar performances and are quite visible in the performance of the close-ended series (Resurgent India & Emerging Leaders) where Fund house bet on Small & Midcap in one series and GST theme in another. Almost all series have delivered significant alpha (in range of 2% – 6% p.a.) while being true to mandate.

Aditya birla banking and financial services fund : Review

With a similar moment in the making for Rural Transformation, ‘Ujjwal Bharat’ is the new investment destination of choice. Fund house believes that this theme is a multi-year theme and a strong return generator too. With a power packed team of Satyabrata Mohanty & Milind Bafna (we all know the past few years of superlative performance of ABSL Advantage Fund & ABSL Pure Value Fund) under the aegis of Mahesh Patil.

With the recent tailwind of Union Budget 2018, the government has announced its intent of transforming farmlands of the country into the new Urban! Let’s take advantage of this opportunity.

Salient Features of the NFO:

  • A theme of the fund is geared to benefit from the most significant focus area of the government – Ujjwal Bharat; Huge infra spend & ambitious initiatives by the govt will trigger a cascading effect to a lot of focus areas as well as allied sectors.
  • Multiple structural drivers and tailwinds across sectors aligned to the Ujjwal Bharat story – Agri Inputs, Auto & Ancillaries, Consumer (Discretionary, Durables & Staples), Financials (Banking & NBFCs)
  • Distinctive portfolio strategy to find rerating opportunities across the value chain of the sectors identified.
  • A multi-year theme that will continue to benefit from the strong growth already witnessed by companies across the beneficiary sectors – higher ROE / EPS growth / Sales growth.
  • Complements current investor portfolios with a differentiated theme
  • Correction in markets have already brought valuations to reasonably fair levels across the board

model porfolioAs a fund house, ABSL believes that while there are so many growth drivers for these, will result in rerating for many theme related companies, the unique portfolio strategy of considering 2nd & 3rd order beneficiaries of rural growth for investment will deliver that extra punch in the returns. Sectors like Auto & Auto Ancillaries, Building Materials, Banks & NBFCs, Consumer Staples & Durables, & Agri Inputs are some of the key sectors, where fund house see these potential multi-bagger opportunities.

oppertunity

Scheme Name: Aditya Birla Sun Life Resurgent India Fund – Series 6

NFO open date: 21 February 2018

NFO close date: 07 March 2018

Scheme Type: A close-ended Diversified Equity Scheme ( 3 years and 6 months )

Scheme objective: The investment objective of the scheme is to provide capital appreciation by investing primarily in equity and equity-related securities that are likely to benefit from recove in the Indian economy.

The Scheme does not guarantee/indicate any returns. There can be no assurance that the schemes’ objectives will be achieved.

Scheme Benchmark: S&P BSE 500

Asset Allocation: Equity & Equity related securities: 80%-100% | Money Market & Debt instruments: 0-20%

The scheme may invest up to 20% of the net assets of the scheme in derivative instruments.

Fund Manager: Mr. Satyabrata Mohanty & Mr. Milind Bafna

Mr. Satyabrata Mohanty: Mr. Mohanty is a B.Com (H), Chartered Accountant and CFA. He has been part of Birla group since last 17 years. He has over 12
Years of experience in Finance and Research. He has handled responsibilities across Fund Management (Equity & Debt), Trading and Credit Research functions. Prior to joining BSLAMC, he has worked with Aditya Birla Management Corporation Ltd & joined ABG
as a Management Trainee.

Download the Factsheet of Mr. Satyabrata Mohanty

Download (PDF, 115KB)

Alpha Return:mohanty

Mr. Milind Bafna: Mr. Bafna is a B.E. (Chemical). Prior to joining Birla Sun Life AMC he has worked with Motilal Oswal Financial Services and Reliance
Industries Ltd.

Download the Factsheet of Mr. Milind Bafna

Download (PDF, 97KB)

Alpha Return:

milindHighlights:

Why India is in recovery phase?

Indian economy has turned the corner and is possibly out of the low growth high inflation cycle. The macro trend for the year FY16 has been encouraging with key macro indicators like Current Account Deficit (CAD), Inflation and Foreign Institutional Investor (FII) flows showing improvements.

The term emerging markets symbolizes innovation lead evolution of the marketplaces, India being the fastest growing among EMs becomes the best bet globally. The concern on re-allocation of capital from India to China has subsided post the crash in Chinese equity markets.

In fact, India stands tall as one of the strongest EMS in terms of flows, investor confidence, and performance. We can assign a decent probability to reverse inflows owing to India’s position among the EMs.

The global markets are slowly recovering, India too is set to deliver excellent growth in the medium to long term owing to strong, stable government, improving macros & supportive global sentiment. In addition to this institutionalization of finances by means of demonetization & implementation of GST is likely to result in better capacity utilization & improved earnings for Indian corporates.

India outlookPositive Macros & Key Growth Indicators:

Improving macros like improving PMI index, moderate commodity prices, lowering trade deficit, & govt target of attaining fiscal deficit of 3.2% indicate that the boom is underway.

With the implementation of GST, the tax advantage enjoyed by the unorganized sectors will be reduced significantly & cost of production will go down resulting in the better capacity utilization & growth of the formal economy.

The government has come up with numerous initiatives like ‘Make in India’, ‘Digital India’,‘Financial Inclusion’ etc. that have supported domestic growth as well.

Do Not Compare Yourself with Other Investors While Making Investment

Demonetization has institutionalized the finances further from here the implementation of GST is expected to result in better governance and higher revenue for the government; thus govt.spending in the economy is likely to increase.

Fund house believes in the current scenario; the 8 R’s would be driving the return from equities. Reflation trade taking a bit of set back getting flows back to India, Republicans providing checks and balance for Trumponomics, Remonetization of currency leading to normalization of growth, Rates getting transmitted into the system, Reform process to continue from the government, stability of the Rupee, hopefully a good Rainfall and most importantly Rebound in earnings. These 8 Rs would lead to the most import R which is Returns in the market.driver of ujwal

Risk factors:

Mutual Funds and securities investments are subject to market risks, and there can be no assurance or guarantee that the objectives of the Scheme will be achieved.

Investment in Mutual Fund Units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including the possible loss of principal.

The present scheme is not a guaranteed or assured return scheme.

RISK FACTORS ASSOCIATED WITH INVESTMENTS IN FIXED INCOME SECURITIES:

Price-Risk or Interest-Rate Risk, Credit Risk, Liquidity or Marketability Risk, Reinvestment Risk, Pre-payment Risk, Concentration Risk, etc…

Mutual Fund Investment are Subjected to Market Risks, Read all Scheme Related Document Carefully.

Disclaimer: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here.