Incorporated in 1943 as a regional bank in Maharashtra, RBL Bank Ltd. (formerly Ratnakar Bank)  is a Mumbai India based private sector bank offering range of banking products and services to large corporations, SMEs, agricultural customers, retail customers and development banking & financial inclusion (low income) customers.

As of March 31, 2015, RBL had 183 branches and 348 ATMs spread across 13 Indian states serving over 1.3 million customers.

RBL acquired certain Indian businesses of the Royal Bank of Scotland (RBS), including the RBS’s business banking, credit card and mortgage portfolio businesses, in 2014.

  • Company Promoters:
  • RBL is a professionally managed company and does not have an identifiable promoter in terms of the SEBI Regulations and the Companies Act, 2013. Consequently, it has no ‘promoter group’ nor any ‘group companies’ in terms of the SEBI Regulations.
  • Existing Investors – In recent years, RBL Bank has roped in major financial institutions and private equity leaders as investors through four rounds of funding. CDC Group, Asian Development Bank (ADB), World Bank arm International Finance Corporation (IFC), Norwest Venture Partners (NVP), Faering Capital India are among the biggest investors in the bank. CEO Vishwavir Ahuja owns 2.71% equity stake in the bank.

Current Market premium is Rs. 40/- to Rs. 44 /-

Name of Employee # Of Options Granted # Of Options Exercised # Of Options Outstanding Value (In Crores)
Vishwavir Ahuja 5,252,900 3,021,670 2,231,230 118.19
Rajeev Ahuja 3,502,900 1,927,670 1,575,230 78.82
Shanta Vallury 1,271,900 753,130 518,770 28.62
Naresh Karia 1,028,400 553,730 474,670 23.14
R Gurumurthy 1,852,250 1,071,065 781,185 41.68
Joginder Singh Rana 970,650 790,895 179,755 21.84
Andrew Gracias 1,851,650 820,495 1,031,155 41.66
Manoj Rawat 802,150 297,425 504,725 18.05
Satish Dhawan 646,650 389,195 257,455 14.55
Sandeep Thapliyal 796,100 586,700 209,400 17.91
Surinder Chawla 886,100 484,200 401,900 19.94
Sanjay Sharma 426,100 189,200 236,900 9.59
Harjeet Toor 951,100 352,700 598,400 21.40
Rana Vikram Anand 750,000 381,300 368,700 16.88
Sunny Uberai 460,500 186,500 274,000 10.36
Rajeev Dewal 225,500 20,000 205,500 5.07
Amareesh Gulati 700,500 150,000 550,500 15.76
Neeta Mukerji 650,000 0 650,000 14.63
Brijesh Mehra 1,000,000 0 1,000,000 22.50
Vinay Tripathi 54,000 20,260 33,740 1.22

Issue Details

Issuer: RBL Bank limited

Issue Type: 100% Book Built Issue IPO

Issue Open: Friday, Aug 19, 2016

Issue Close: Tuesday, Aug 23, 2016

Issue Size (Rs): Rs. 1,211.28 – 1,212.97 Cr. Face Value: Rs.10 per Equity Share

Price Band: Rs.224 – Rs.225 per Equity Share Bid Lot: 65 Equity share and multiple of thereof

Maximum Bid amount for Retail: Rs. 2 Lakhs Listing: BSE, NSE

Issue Size and Investor Category Allocation

Total Issue Size: 5,39,09,628 – 5,40,74,806 Equity Shares.

QIB: 50% of the Issue Size (2,69,54,813~ – 2,70,37,402^ Equity Shares)

Non Institutional Bidders:

15% of the issue size (80,86,445 – 81,11,221 Equity shares)

Retail Individual Bidders:

35% of the Offer (1,88,68,370 – 18,926,183 Equity shares)

BRLMs to the issue are Kotak Mahindra Capital Co. Ltd, Axis Capital Ltd., Citigroup Global Markets India Pvt. Ltd., Morgan Stanley India Co. Pvt. Ltd., HDFC Bank Ltd., ICICI Securities Ltd., IDFC Securities Ltd. IIFL Holdings Ltd. and SBI Capital Markets Ltd. Link Intime India Pvt. Ltd. is the registrar to the issue.

Objects of the Issue:

1.The Offer for Sale

RBL Bank will not receive any proceeds from the Offer for Sale.

2.The Fresh Issue

The proceeds from the fresh issue will be utilised towards the following objects:

Augment capital base to meet Bank’s future capital requirements ;

Enhance their visibility and brand name among existing and potential customers.;

General corporate purposes.

rbl bank

Key Highlights:

First bank IPO in a long time – It is first bank IPO in India after state-run Punjab & Sind Bank listed in 2010. Among private sector banks, the last IPO was of Yes Bank in July 2005.

NPAs – Despite the rapid growth in recent years, the bank has one of the lowest NPA levels in the industry. For FY2016, RBL Bank’s gross and net NPAs stood at 0.98% and 0.59%, respectively.

Capital Adequacy Ratio (CAR) –  As of 31 March 2016, RBL Bank’s Capital Adequacy Ratio (CAR) stood at 12.94% (comprising of 11.1% Tier 1 capital), comfortably meeting the Basel III capital requirements.

Key Operational and Financial Information:

Year ended March 31,




No. of Branches /extension counters




Total Advances (Net)




Total Assets




Total Deposits




CASA Ratio (%)*




Net Interest Margin (%)




Capital Adequacy Ratio (CAR) %#




Cost to Income Ratio (%)~




Net Profit




Gross NPA %(% of Gross Advances)




Net NPA% (% of Net Advances)




Return on Asset (%)^




Provision coverage (%)




CASA ratio is determined as the sum of demand deposits and saving deposits divided by total deposits.

CAR for Fiscal 2014, 2015 and 2016 is computed as per Basel III framework.

Cost to Income Ratio is computed as the percentage of operating expenses to net total income which is defined as the sum of interest income and other income less interest expense.

Return on Asset is arrived as a percentage of Net profit to Average Total Assets (from Average Balance Sheet).

Return on Equity & Assets

(Rs in Cr or othewise stated)

Year ended March 31,




Net profit




Average Total Assets (“ATS”)




Average Shareholders’ Equity^




Return on Equity (%)




Return on Assets (%)




Average Shareholders’ equity as a % of ATS




Dividend payout ratio (%)




Average of month end balances of Share capital and reserves; Return on equity =(net profit to average shareholders’ equity); Return on assets =(net profit to average assets); Dividend payout ratio -(Excluding Corporate Dividend Tax)

Invest in your Child’s Dreams: Best Investments for your Child’s Education


  • The company has received a number of awards and recognitions including In 2016 – “Best Corporate Payment Project” by The Asian Banker Achievement Awards (Technology Innovation Awards);
  • In 2016 – MasterCard Innovation Awards for the debit card program
  • In 2015 – “Best Bank Overall (Small)” and “Best Bank (Quality of Assets)” by Business Today – KPMG Best Bank Survey;
  • In 2015 & 2014 -“The Best Bank – Priority Sector Lending (Private Sector)” by Dun & Bradstreet Banking Awards;
  • In 2014 – “Global Growth Company” by the World Economic Forum;
  • In 2015,2014 & 2013 – “The Fastest Growing Small Bank” by Business World Magna Awards – PwC Best Bank Survey; and
  • In 2015, 2014, 2013 & 2012 – “India’s Best Bank (Growth) in the Mid-Sized Bank segment” by Business Today – KPMG Best Bank Survey.
  • Client focused approach to business resulting in growing brand recognition.
  • Robust multi-channel distribution system.
  • Partnership, investment and acquisitions that expand their reach in rural markets.
  • Growing net interest and net-interest income (Grown at a CAGR of 44.71% for the past four fiscal years.)


Its success depends largely upon its management team and skilled personnel and its ability to manage attrition as well as to attract and retain personnel And they are involved in certain legal and other proceedings in India and may face certain liabilities as a result of the same.
RBL has issued preferential shares to the members violating SEBI norms. It paid over Rs. 47 Lakh to SEBI as a penalty.


Its business is vulnerable to interest rate and Investment related risks.

Volatility in interest rate, Value of Investments and other market conditions could adversely affect its net interest margin.

Margins are low and inconsistent in the last few Years.

Their recent growth may not be indicative of their future performance and they may not be able to continue or improve their recent performance levels.

Valuation – For FY2016, RBL Bank’s diluted EPS was INR9.43. At INR225 per share, RBL Bank IPO is priced at a P/E ratio of 23.9 while the P/B (Price to book value) ratio is at 2.44.

Investment Stretagy

Low Risk – Low Return

Current Market premium is Rs. 40/- to Rs. 44 /-


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.

GST Bill impact on sector and stocks wise ( Positive and Negative ) : Nomura

Here is a sector-wise snapshot excerpted from a recent Nomura report on GST on how the bill is likely to impact various sectors and stocks.


Largely positive for demand as it will lead to 10-17% fall in vehicle prices, assuming 18% GST rate.

Margin benefits to accrue for tractors as they can claim set-off against taxes paid on input. Organised battery and other spares segment would become more cost competitive and gain market share.

Stock Impact: Positive for Maruti Suzuki, Hero MotoCorp, Exide, Amara Raja, Eicher Motor, Mahindra & Mahindra, Bajaj Auto. Negative for Ashok Leyland


We view implementation of the GST at a standard rate of 17-18% as positive for stocks in the household and personal care space as the effective tax rate reduces by around 200-500 basis points (bps), apart from reducing warehousing and logistical requirements. We expect companies to absorb these benefits and one should see a one-time margin expansion for companies having a leadership position or a presence in niche and underpenetrated categories.

However, certain negative elements do exist in the terms of working capital for retailers, and additional tax rates for jewellery manufacturers and cigarette manufacturers is negative for companies in that space.

Stock Impact: Positive for Hindustan Unilever, Emami, Godrej Consumer. Negative for Titan, Bata, ITC


The GST would lead to the elimination of the CST and inter-state VAT arbitrage possibilities. This will lead to consolidation of warehouses and increased efficiencies in the logistics chain. Overall we expect significant reduction in logistics costs across the value chain. 3PL/4PL logistics service providers are expected to gain market share on improved margins as a result of lower trucking costs.

Stock Impact: Positive for Container Corporation of India, Adani SEZ, Gujarat Pipav Port (positive in longer term)


Clarity on works contract taxation is the key benefit for companies like L&T involved in the EPC space. This is expected to eliminate litigation and multiple and varying taxes across states. Further, GST eliminates the need to distinguish between sales and services, a cause of many litigations.

Stock Impact: Positive for Larsen & Toubro (L&T)


GST will benefit consumer durables companies more from the improved logistics and the shift from unorganised to organised. Direct benefits of up to 200-300bps in cost savings may also occur as a result of GST subsuming state and central taxes as well as availability of full input tax credit on service tax pay-outs on advertising. However, we expect that a significant portion of the direct benefits will be passed on the end consumer due to a highly competitive market.

Stock Impact: Positive for Voltas, Havells, Crompton Greaves


We think that the GST is largely mixed to marginally negative for ecommerce companies given 1) it could lead to significant increase in compliance cost especially for companies with a larger seller base and 2) a possible deterrent for smaller sellers to list on the platform given higher WC requirements for sellers and tax deduction at source. For ecommerce companies, we see offsets from 1) reduced working capital requirements, 2) lesser paperwork during transfer of goods interstate and 3) likely reduction in logistics costs from their ability to leverage the hub-and-spoke model more effectively.



Key petroleum products like petroleum crude, natural gas, motor spirit, high speed diesel and ATF have been kept out of the GST regime. For other products, clarity is still awaited. Due to dual indirect tax mechanism, compliance costs are likely to increase.

Stock Impact: Neutral. Do not foresee any meaningful change on oil & gas companies


We expect overall tax incidence on cement sector to decline post GST implementation. Also, the cement sector will also benefit from an expected decline in logistic costs, in our view. While we expect cement companies to pass on the benefits, given that cement demand and plant utilisation levels are picking up, cement companies may retain some of the benefits.

Stock Impact: Positive for most companies

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GST will be negative for WTG manufactures like Suzlon and InoxWind as pressure on developer margins and IRRs may eventually force reduction in WTG prices and hence realizations. The extent of the impact may be up to 10-13% in terms of lower realization. However, in case WTG components make their way into the exemption list, the impact of the GST is largely nullified.

Stock Impact: Negative for Suzlon, Inox Wind


Exclusion of ‘sale of electricity’ from the purview of the GST would potentially raise the cost of coalfired electricity & renewable energy for Discoms. Profitability of IPPs selling via medium/long-term PPAs is unlikely to be dented as the cost escalation would likely be a pass- through on account of the ‘change in law’.

Stock Impact: Positive for CESC. Negative for JSW Energy


We expect the GST rollout to have a negative impact on the sector as this is likely to increase the indirect tax burden. Our analysis based on a simplified model and assuming 18% GST rate suggests indirect taxes paid by Pharma companies can increase by 60% and MRP (end price to consumer) can go up by 4%. If Pharma companies are to absorb this price inflation, the domestic formulations EBITDA margins could see an impact of almost 20%.

Stock Impact: Negative for Alkem, Glaxo Pharma

Dilip Buildcon Limited IPO Review

Market rating of 40/100 implies a High risk high return. Investors can Avoid, however active risk seekers can try.

Current Market premium is Rs. 17/- to Rs.19 /-

Dilip Buildcon: Building roads

Incorporated in 2006, Dilip Buildcon Ltd is Bhopal, MP based Engineering, Procurement and Construction (EPC) contractor focused on road projects in India.

Company’s core business is undertaking construction projects across India in the roads and irrigation sectors. Dilip Buildcon is specialize in constructing state and national highways, city roads, culverts and bridges. Company is expanded into the irrigation and urban development businesses.

In last 5 years Dilip Buildcon completed the construction of 51 road projects in the states of Madhya Pradesh, Gujarat, Himachal Pradesh, Rajasthan and Maharashtra with an length of 5,858.49 lane kms. Company is owner of the one of the largest fleets of construction equipment in India with over 6,604 vehicles. Company is also one of the largest employer in construction sector with around 18,000 employees.

Issue Detail:

Issue Open: Aug 1, 2016 – Aug 3, 2016

Issue Type: Book Built Issue IPO

Issue Size: Rs 430.00 Cr

Face Value: Rs 10 Per Equity Share

Issue Price: Rs. 214 – Rs. 219 Per Equity Share

Market Lot: 65 Shares

Listing At: BSE, NSE

How shares may get allotted ?

50% shares may be allotted in QIB, 15% in HNI and 35% in retail category.

The Promoters:

Dilip Suryavanshi,
Seema Suryavanshi,
Devendra Jain &
Suryavanshi Family Trust.

Dilip Suryavanshi and Devendra Jain will be selling 1,136,364 shares in Dilip Buildcon IPO while BanyanTree Growth Capital will sell 7,954,545 shares. Following the IPO, BanyanTree Growth Capital’s stake in the company will fall to 2.95%. BanyanTree Growth Capital made its investment in February and March 2012.

Lead Managers :

Axis Capital Limited ,JM financials, PNB Investment Services & IIFL Holdings Limited

Registrar to IPO

Link Intime India Private Ltd  ,Mumbai

Objects of the Issue:

Prepayment or scheduled repayment of a portion of term loans (around Rs 202.38 crore), availed by the company;

To meet working capital requirements; (around Rs 200 crore)and

General corporate purposes.

The company will not receive any proceeds from the offer for sale.

The businesses of the company are spread across 2 major segments; the construction segment and infrastructure development. The construction business undertakes projects across India in the roads and irrigation sectors. Here, DBL specializes in constructing state and national highways, city roads, culverts and bridges. Under infrastructure development business, DBL undertakes building, operation and development of road projects on a Built Operate Transfer (BOT) basis with a focus on annuity projects.

As of March 31, 2016, the company has an order book of Rs 10800 crore, consisting of 50 third party road EPC projects (70% of total order book), 6 of its own road BOT projects (15%), 3 irrigation projects (7%), 1 mining project (1%), 1 cable-stayed bridge project (5%) and 3 urban development projects (3%).

Over FY12-16, DBLs order book multiplied 4 times owing to strong business development activities. The higher order book has been followed by strong execution with consolidated revenue and operating profit recording a CAGR of around 38% and 39% respectively during FY12-16 period. The Government contracts account for 76.27% of the total order book as on March 31. 2016.

DBL is considered as the largest client of HPCL, BPCL & IOC for sourcing bitumen.

The company has current portfolio of completed 12 projects of which only one is on toll basis, 3 on annuity basis, 3 are currently being undertaken on hybrid annuity basis model and balance projects are on annuity plus toll basis. DBL has invested over Rs 370 crore as equity in operational projects and earns an annual annuity income to the tune of Rs 207 crore and collects toll over Rs 20 crore annually. BOT projects accounted for only 14.65% of total order book as of March 31, 2016.

Dilip Buillcon IPO

The company has completed of over 36 EPC and 11 BOT projects in last five years and is currently pre-qualified to bid for BOT projects and EPC projects with a contract value of up to Rs 2140 crore & Rs 1250 crore respectively. The significant increase in pre-qualifications has helped DBL to increase its target market size and maintain the growth momentum of its order book.

DBL maintains a modern equipment fleet of 7,345 vehicles and other construction equipment from some of the world’s leading suppliers such as Schwing Stettar, Metso, Wirtgen and Vogele.


Strong revenue growth of 58% CAGR  in last 5 years till FY15.

Excellent execution track record through strong operating systems and controls

Strong financial performance and credit profile

Awarding of road construction projects under EPC basis by the Government is likely to pick up significant pace going forward. Over the next five years, National Highway Authority of India (NHAI) is expected to award more than 22,500 km of projects through EPC route, as BOT projects are losing favour.

Overall investments in road projects is expected to grow by 2 times to Rs 86000 crore during FY 2016-FY 2020 as compared to FY 2010-FY 2015.

State governments are also increasingly focusing on improving state roads and thus whole pie of awards of orders will increase going forward.

Further, NHAI’s focus on ensuring 80% availability of land for EPC contracts at time of award will facilitate faster execution.

DBL generates one of the highest operating margins and has the highest Return on Equity (ROEs) of around 20% among the comparable peers. This is primarily attributable to high usage of technology, geographic clustering of projects, bulk procurement at competitive prices and usage of modern equipment. On average, the EBITDA margins stand at close to 22% levels which are higher than many other players in the listed space.

The company has a healthy track record of early completion of projects and has received an early completion bonus to the tune of over Rs 220 crore in the last four years.


Margins are on declined mode year on year. Profits for FY12,FY13,FY14,FY15 are 9.1%,12.5%,7.7%,3.2%

There are outstanding criminal proceedings pending against the company, its promoters, directors and employees.

MP (DBL’s home state) earlier used to account 80% of total order execution 5 years back. DBL has already expanded in 12 states across the country and currently is executing over 64 projects in different states. But MP still accounts for 40% of its total order.

DBL is required to pay over Rs 650 as equity commitment over the 3 years for 6 under construction projects, which has to be met through internal accruals. Any inability to improve its cash flow generation hereon may put pressure on balance-sheet and funding of equity will be difficult through accruals.

The company had negative cash flows from operations in FY’16, mainly owing to consistent rise in working capital requirement and interest cost (due to ballooning of loans). Higher-than-industry receivable and inventory days (126 days) result in industry-leading cash conversion cycle.

The advantage derived from the higher operating margin of more than 22% is lost due to higher interest costs, which accounts for more than 10% of top line as compared to around 1-3% of its competitors.

The company’s consolidated debt stands at Rs 3221 crore as of 31 March 2016. Consolidated debt equity ratio stands at around 3.2 times as on that date.


The company has (on a consolidated basis) reported turnover and net profit of Rs. 1926.87 cr. / Rs. 241.29 cr. (FY13), Rs. 2401.59 cr. /Rs. 185.69 cr. (FY14), Rs. 2768.51 cr. / Rs. 87.66 cr. (FY15) and Rs. 4348.98 cr. / Rs. 196.66 cr. (FY16).

Thus although its top line has shown improvement, its net declined for FY14 and FY15. This is attributed to higher expenses for financial cost and provisions for depreciations due to investments in equipments in FY14 and FY 15.

Its finance cost increased from Rs. 115.36 crore in FY 13 to Rs. 514.21 crore for FY16. Similarly its depreciation provisions stood higher from RS. 75.60 crore for FY13 to Rs. 284.13 crore for FY16. As the company will repay its high cost debt, it is expecting major savings in finance cost. For last five fiscals it has reported 36.3% CAGR in top lines and 32.5% in EBITDA. If we attribute the latest earnings on the fully diluted equity post IPO then asking price is at a P/E of around 15 which is just at or around same level compared to its peers.


At higher price band of Rs 219, DBL is being offered at a P/E of around 15.2 times its FY’16 earnings. Comparable companies like KNR Constructions, PNC Infra, J Kumar Infra and MBL Infra are trading at P/E range of 6.4 to 17 times their FY 2016 consolidated adjusted EPS.

Investment Stretagy

Market rating of 40/100 implies a High risk high return. Investors can Avoid, however active risk seekers can try.

Current Market premium is Rs. 17/- to Rs.19 /-


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.

Advanced Enzyme Technologies IPO Review

India’s biggest enzyme company Advanced Enzyme Technologies Ltd IPO will be opened on 20th July, 2016. Advanced Enzyme Technologies is planning to raise 412 Cr with this IPO. Issue price of this IPO is fixed in the range of Rs 880 to Rs 896. Let’s explore and try to find out an answer that Advanced Enzyme Technologies Ltd IPO is worth for investment or not.

Advanced Enzyme Technologies Ltd is engaged in research, development, manufacturing and marketing of Healthcare, Nutrition and Bio-processing products. Advance Enzyme operates in two primary business verticals namely Healthcare & Nutrition (human and animal) and Bio-Processing (food and non-food).

The company is engaged in the research and development, manufacturing and marketing of over 400 proprietary products developed from 60 indigenous enzymes. Having more than two decades of fermentation experience in the production of enzymes, it ranks among the top 15 global companies in terms of enzyme sales and has the second highest market share domestically, next only to the world’s largest enzyme company Novozymes. 

It offers products to its global clientele of more than 700 customers spanning presence across 50 countries worldwide.

Objects of the Issue:

The Offer consists of a Fresh Issue by the company and an Offer for Sale by the Selling Shareholders.

Prepayment / repayment of certain loans availed by its fully-owned subsidiary Advanced Enzymes USA.

Exit route for existing investors

General Corporate purpose

Company Promoters:

1. Mr. Chandrakant Laxminarayan Rathi
2. Mr. Vasant Laxminarayan Rathi

Major shareholders in Advanced Enzyme
Name of shareholder Equity Shares Percentage (%)
Vasant Laxminarayan Rathi 7,480,900 34.37
Chandrakant Rathi Innovations and Projects Private Limited 4,295,400 19.73
Atharva Green Ecotech LLP 2,492,940 11.45
Vasant and Prabha Rathi Generation Trust 1,500,000 6.89
Pradip Bhailal Shah 750,800 3.45
Kotak India Venture Fund I 679,900 3.12
Mukund Madhusudan Kabra 381,100 1.75
Kishor Laxminarayan Rathi 343,200 1.58
Kotak India Venture (Offshore) Fund 336,600 1.55
Rachana Rathi 325,000 1.49
Total 21,765,600 100.00


On performance front, the company has (on consolidated basis) posted turnover of Rs. 220.42 cr, Rs. 239.45 cr. Rs. 223.11 cr. Rs. 293.76 cr. and net profit of Rs. 49.22 cr., Rs. 20.09 cr., Rs. 50.10 cr., Rs  78.44 cr. for FY 13, FY 14, FY 15 and FY 16 respectively.

Thus is has posted CAGR of 14.4% for top lines and CAGR of 24.1% for bottom lines for these years despite troubled fiscal 2014.


Advanced enzyme

Moreover, Advanced Enzume has a diversified customer base which includes Sanofi India, Cipla, Ipca Laboratories, Alkem Laboratories, and Emcure Pharmaceuticals. Its top 10 customers accounted for 41.4% of its consolidated revenues in FY2016 while geographical reach or dependence for business is also fairly diversified with 54.94% of revenue coming from USA, 36.44% from India, 3.84% from Europe, 3.63% from Rest of Asia, and 1.15% from other geographies in the latest FY.


The Company has 13 patents registered in its name and applications for registration of 4 patents are pending

The Company has very good R&D team consist of over 55 scientists, microbiologists, engineers, food technologists and biotechnologists.

Diversified product range and wide customer base.

Advanced Enzyme Technologies Ltd is 2nd largest enzyme company of India.

First IPO in enzyme segment


There are certain criminal matter against non executive and nominee director Mr. Kunisetty Venkata Ramakrishna of the company. Failure in this proceeding may have adverse impact on reputation of company.

There are significantly dependent on its foreign subsidiaries especially in North America for the sale and marketing of most of its products in these regions.

They have not entered into any long term or definitive agreement of its customers.

Is historical revenues have been significantly dependent on sales of its top five product groups.

Any reduction in demand or sell of these products will adversely impact on business.


Upper end pricing of the IPO values Advanced Enzyme at 24.9 times its consolidated earnings per share (EPS) of INR36.03 in FY2016. At 880 per share, the PE ratio drops to 24.4. Advanced Enzyme has no listed peers. The company has no listed peer in India while global enzymes leader Novozymes trades at a PE ratio of 35.5.

If we attribute the last earnings on post IPO equity then the asking price is at a P/E of 25 plus. As per RHP there is no listed peer for this company to compare with and this is being the first mover IPO in enzymes which are specialty chemicals for healthcare. Thus one may compare it with pharma sector that commands composite P/E of around 32.


Reasonable pricing makes this IPO a worthy bet for short to medium term. ( MARKET PREMIUM JUMPED TO 385-390 )


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

L&T Infotech Ltd IPO review

Low valuations, but lower growth too

Incorporated in 1996, Larsen & Toubro Infotech, a subsidiary of Larsen & Toubro Ltd is Mumbai, India based IT Solutions & Services Company.

L&T Infotech is ranked 6th largest IT company in India in terms of export revenues and among top 20 IT service provider in the world. The services offered by L&T Infotech includes application development, maintenance and outsourcing, enterprise solutions, infrastructure management services, testing, digital solutions and platform-based solutions.

Issue Details :

Issue Opens On: Monday July 11th, 2016

Issue Closes On: Wednesday July 14th, 2016

Issue Type:100% Book Building

Issue Price Band: Rs.705–Rs.710 per share

Discount: Rs.10 to Retail Category Only

Face Value Per Share: Rs.1

Minimum Bid Lot: 20 Equity Shares and in multiples of 20 equity shares thereafter

Minimum Order Value: Rs.13,900 to Rs.14,000 (after discount)

Issue Size: Rs.1,225 crore

Proposed Listing: Bombay Stock Exchange and National Stock Exchange

Lead Managers: Citigroup Global Markets India Private Limited, Kotak Mahindra Capital Company Limited and ICICI Securities Limited

Registrar: Link Intime India Private Limited


The public offering is purely an offer for sale with the parent firm Larsen and Toubro Ltd looking to divest about 10.3% of its stake in the company.

The company is offering a special discount of Rs. 10 per share to retail investors.


On performance front, the company has (on a consolidated basis) posted turnover of Rs. 3873.54 cr., Rs. 4837.18 cr., Rs. 5069.54 cr. and Rs. 6143.02 cr. and net profits of Rs. 561.61 cr., Rs. 996.41 cr., Rs. 768.53 cr. and Rs. 922.18 cr. for the fiscal 2013, 2014, 2015 and 2016 respectively. For the fiscal 2014 it has other one time income of Rs. 300.24 cr.

Latest earnings shows EPS of Rs. 54.30 and thus asking price is at a P/E of around 12 plus that augurs well as industry composite P/E is around 19. Thus offer price appears to be reasonable. Management is confident of doubling its revenue in next three years.


In terms of geographies covered, L&T Infotech derives the largest chunk of its revenue from North America at 69.4% followed by Europe at 17.2%. Asia Pacific accounts for only 2.2% while the remaining 6.2% of the revenue is contributed by rest of the world.

Post the restructuring of its engineering business which the parent hived off into a separate company, L&T Infotech has employee strength of 21,073. Around 52.5% of these employees are working onsite while 47.5% have offsite assignments.

L&T Infotech is India’s Sixth largest IT services firm by revenue draws majority of its revenue from Banking, Financial Services and Insurance (BFSI, 47percent – 26.3 percent BFS, 20.7 percent insurance), followed by energy & process (12.7 percent), CPG, retail & pharma (9.3 percent), automotive and aerospace (6.8 percent), media & entertainment (6.2 percent) and hi-tech & consumer electronics (5.2 percent). Digital services accounted for 11.1 percent of revenue in FY16.


NASSCOM has ranked L&T Infotech as sixth largest company in India in terms of export revenue. Company has accounted more than 68% of its revenue through the North America which is one of the biggest importers of Indian IT services

Strong revenue growth of 20% CAGR in last 5 years.

Good profit over 15% in last couple of years.

Extensive portfolio of IT services and solutions

Strong management culture, focus on emerging technologies

Company has been working to expand its operations in new geographical areas including Australia, Singapore, Japan, South Africa, India, Germany, France, Nordic region and the Middle East.

L&T Infotech is a part of one of the biggest diversified industry in India. Being a part of L&T Group whose business ranges from hydrocarbons, aerospace, automotive, heavy engineering and oil and gases etc. company gets benefited from insight experience of the businesses that operates in these verticals.


There are outstanding criminal proceedings pending against the company, its promoters and one of its directors.

Company revenues are highly dependent on clients primarily located in North America and Europe.

Since most of the company’s revenue comes from export, company is exposed to exchange rate fluctuations which could negatively impact our business, financial condition and results of operations.

L&T Infotech will not be enjoying the proceeds of the present issue as this being an offer for sale, the entire sale amount of around Rs 1,200 crore will go the parent L&T.

Exchange rate fluctuations in various currencies.

Restrictive immigration reforms in the US may have a substantial impact on business model and practices.

Concentration risk: Largest client alone contributed 14.9 per cent of firm’s revenue in FY16.


Low valuations, but lower growth too

Current Market premium @ Rs. 62/- to Rs.67/-

L&T Infotech Comparison With Peers

Tata Consultancy Services Limited ( TCS ) per share  FV 1,  EPS 123.15 , PE 19.94x

Infosys  per share  FV 5,  EPS 58.73 , PE 19.96x

Wipro  per share  FV 2,  EPS 35.99 , PE 15.73x

HCL Technologies per share  FV 5,  EPS 43.74 , PE 16.41x

Tech Mahindra per share  FV 5,  EPS 32.12 , PE 15.83x

Hexaware Technologies   per share  FV 5,  EPS 13.06 , PE 17.21x

Mindtree per share  FV 5,  EPS 35.95 , PE 18.48x

L & T  Infotech Limited  per share  FV 1,  EPS 56.13 , PE 12.6x

Industry P/E ratio: Average: 19.35x

Conclusion : Reasonable pricing makes this IPO a worthy bet for medium to long term. ( MARKET PREMIUM IS 62-67 ONLY )


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

Mahanagar Gas IPO review

Incorporated in May 1995, Mahanagar Gas Limited (MGL) is an equal stake joint venture between Indian gas transmission player GAIL and British Gas (BG Group) plc. Both parties hold 45% stake each while the government of Maharashtra holds 10% ownership. Since BG Group has been taken over by Royal Dutch Shell, the latter now has the ultimate ownership of the stake BGAPH (BG Asia-Pacific Holdings Pte. Limited) owns in Mahanagar Gas.

MGL is presently the sole authorized distributor of compressed natural gas (CNG) and piped natural gas (PNG) in Mumbai, its adjoining areas and the Raigad district in Maharashtra. Mahanagar Gas’ monopoly in the distribution business is valid until 2020 for Mumbai, until 2030 for the Adjoining Areas and until 2040 for the Raigad district. Furthermore, this exclusivity is extendable in blocks of 10 years as per the government regulations.

Issue Detail :

Issue Open: Jun 21, 2016 – Jun 23, 2016
Issue Type: Book Built Issue IPO
Issue Size: Rs.939 crores on lower price band
Face Value: Rs 10 Per Equity Share

Minimum Investment: Rs.14735/- on higher price band
Issue Price: Rs. 380 – Rs. 421 Per Equity Share
Market Lot: 35 Shares
Minimum Order Quantity: 35 Shares
Listing At: BSE/NSE

Lead Mangers: Kotak Mahindra capital and Citi group group global markets

Promoters :

GAIL (India) Limited; and

BG Asia Pacific Holdings Pte. Limited

Objects of the Issue:

To achieve the benefits of listing the Equity Shares on the Stock Exchanges.


Company Financials:

The company posted profit of Rs.225.5 crores for the year ended Mar-11 and profit of Rs. 301 crores for the year ended Mar-2015.

The company generated revenue of Rs. 1073.56 crores for the year ended Mar-11 and Rs.2135.63 crores for the year ended Mar-15.

For last three fiscals it has been posted an average EPS of Rs. 34.05 (basic) and Rs. 30.89 (diluted). Thus the asking price is at a P/E of 12.3 on the equity as on 31.03.16 and if we consider current equity with FY 16 earnings, then the asking price is at a P/E of 13.4 plus which is justified compared to composite industry P/E of 30 plus. Peers have the lowest P/E of 17 and the highest P/E of 44 as stated in RHP.

Both the promoters i.e. GAIL and BG Asia are selling equal quantity of 12347250 shares to dilute around 25% of the post issue paid up equity capital. With this IPO the company is trying to mobilize Rs. 938.39 cr. / 1,039.64 cr. based on the lower and upper price band. BRLM to the offer are Citigroup Global Markets India Pvt Ltd and Kotak Mahindra Capital Company Ltd. Link Intime India Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on BSE and NSE.

Ujjivan Financial Services IPO review


The Company is in virtual monopolistic business with steady growth and bright prospects ahead.

Good profits of over 14% in FY15

Strong financial performance with consistent growth and profitability

Well positioned in Mumbai metro.

Cost effective availability of domestic natural Gas.

Promoters with strong national and multinational experience.

Infrastructure exclusively and established infrastructure network.


The majority of its total revenue is attributable to its CNG business. Any  decrease in volume of CNG sold by them may have an adverse effect on its buisness,financial condition and cash flows.

If alternative fuels become more cost effective, or a fuel of choice to its customers, its business result of operations and cash flows and could be adversely affected.

Any increase in the cost price of natural gas or any reduction in the allocation amount of natural gas may have an adverse effect on its business, result of operation and cash flows.

The price of domestic natural Gas and RLNG (Regasified Liquefied Natural Gas ) We purchase is denominated in U.S Dollars,while the selling price is in Indian Rupees.

Thyrocare Technologies IPO review


Mahanagar Gas commands 30% premium in grey market ( i.e. Rs.129/- )

Grey market operators are offering investors up to Rs 550 per share of Mahangar Gas, compared to its price band of Rs 380 to Rs 421.

It offers IPO at a justified pricing and thus is worth considering for medium to long term rewards.


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.


Invest in your Child’s Dreams: Best Investments for your Child’s Education

College tuition and associated education costs rise 10-15% annually. If you have young children, the price you’ll pay for their education could be significantly higher than today’s prices. Currently, a Domestic 2 Year Full-Time MBA costs roughly ₹12-16 lacs, In 5 years, the cost is likely to touch ₹20-25 lacs.

The percentage of people getting a post graduate degree is merely 12% versus graduate degree of 72%, which is much lower for individuals who grew up in a low income household than individuals who grew up in non-low income household. These means only a lucky child can get an opportunity of getting higher education.

Due to increased Inflation, Competition & Lifestyle Inflation affecting the cost of children’s education there is a rise in demand for both the parents to work and earn such living. All the families are under increasing strain and disadvantaged families are strained to limits as they have fewer resources to invest in early development. The without resources like “parent coaching” in the busy life attract private coaching costs nearly ₹70,000-₹1, 00,000 p.a in addition to the academic costs.

Despite this cost escalation, you’ll want your children to have the option to go to the college of their choice. So how do you save enough money for college and still achieve your other goals?


Be an Early Bird

Starting savings early will not only be able to amass a larger sum, but the money will also gain from the power of compounding. E.g., Suresh Gupta, A Delhi based finance professional having a child aged 8 months started investing in an SIP of ₹ 9,000 for duration plan of 18 years in an equity fund that gives 15 per cent return for getting a target corpus of ₹1 cr. For such individuals like Suresh, Equity based Mutual Funds are more preferred than opting for balanced MF’s. If you have a higher risk appetite than your equity investment can be as high as 75% and rest in Fixed Deposits, PPF, Tax Free Bonds etc.

Play it safe in the Short Term:

If you have a short time horizon(<5years) you will have to opt for safer investments which means being risk averse. These investments include recurring deposits, debt investments, PPF etc. Though these investments offer guarantee returns with safety of capital but also provide less returns. E.g., Vimal Singh, A Mumbai based Salaried person having a child aged 15 years have to invest more than ₹50,000 in SIP for the period of 2-3 years to fulfill his child aspiration of studying for a MBA Course costing ₹20-25 lacs. A mid-incomed person cannot afford to put ₹50,000/month aside & ignore his household costs. Hence, the child has to either quit studying for post-graduation or has to take assistance from bank in the form of an educational loan.

Exploring investment Options for your child :

Exploring investment Options for your child

More than 4 lakh Pune flat buyers are victims of the builders

Investing in future child education is also gaining popularity these days. The plan can be established with one of the parents as the beneficiary and then transferred to the child after birth. These leads to more saving and longer time duration to appreciate. A couple married for 6 years before their first child is born has 33% longer time for their investments to appreciate. Otherwise, the parents can invest in Equity Mutual Funds which have delivered averaged annualized returns of 16.5% as compared to investing in traditional life insurance policies which offer low yields of 5-6%. 

Reviewing your performance of the funds in the portfolio is as important as Investing. An underperformance of fund can be rebalanced by replacing with a performing fund.

Example of Different Types Of Investments:

The investment of ₹2000/month for a period of 18 years in an traditional policy can grow till ₹7lacs with return of 5 to 6%, in a recurring deposit till ₹11 lacs with return of 9%, in a balanced fund till ₹15 lacs with return of 12% and in an Equity Fund at ₹22 lacs with return of 15%

Keeping in mind that financial plans are made to achieve such crucial goals in life. Hence the earlier you invest in your child education and the more systemized your financial plan is, the lesser financial burden you/child face in the long term.

“A child educated only at school is an uneducated child” – George Santayana


Only 3% of the total Market Capitalisation in India is held through Equity Mutual Funds, whereas direct holding of stocks by individuals is nearly 22% of the market (7 times more); contrary to the developed markets where retail investors tend to hold the stock through Mutual Funds.

People usually prefer to invest in both Equity and Debt (Balanced) Schemes due to high volatility in the stocks but such volatility erodes when investing in long term. Equities are a great compounding factor and with government encouraging more entrepreneurs, the Indian Economy is surely in a booming stage which will further attract more investments.

India’s Equity Mutual Fund Investors who have kept there Systematic Investment Plans (SIP’s) for more than two decades, with mere monthly investment of ₹2000 are worth millionaires now.

For Example, if an investor who has invested ₹2000/month in SIP for last two decades, these scheme would have peaked the actual investment value from ₹ 4,90,000 to the current valuation of ₹ 97,71,152 i.e., 20 times the actual value over 20 years.

Worst Retirement Mistakes and Remedies to improve them

Some of these schemes include Franklin India Prima, Franklin India Prima Plus, and Franklin India Blue chip from Franklin Templeton Asset Management Company (AMC); HDFC Capital Builder and HDFC Equity from HDFC AMC; Reliance Growth and Reliance Vision from Reliance Mutual Fund; and ICICI Prudential Multicap Fund from ICICI Prudential AMC. All these are 20-year-plus funds and have made handsome annualised returns of as high as 23 per cent for investors.

The below is a quick recap of how these schemes have developed & performed in the past two decades :

20 Years of creating wealth

Why buying Mutual funds is smarter way of investing rather than trading in stocks?

  • One of the main benefit a Mutual Fund provides is that you don’t have to pick stocks, track them, make sector and asset allocation. Because buying and selling stocks are best done by a professional fund manager. For example, a 60 year old company’s stock might not exist and maybe your father/uncle must have forgotten to track that stock. Therefore, in such situation a Mutual Fund saves the investors dragged portfolio returns by replacing it with new performing stock.

Critical Illness treatments now in Installment/EMI form will be a mode of relief

  • Short Term Capital Gains Tax is ignored when the Fund Manager is conducting the buy and sell of equities within a year in Mutual Funds while the same is applicable when purchasing and selling stocks over the stock market.
  • Diversification of Portfolio with investment of few thousands of rupees which will reduce the volatility of high risk stocks and will add convenience to the customer.
  • The need to make the market irrelevant as investing in regular frequency with both high and low points of the market will average the cost of investment.

Therefore to escape from periodic evaluation, rebalancing while achieving higher returns, Mutual Funds add as a secret ingredient to your investments.

More than 4 lakh Pune flat buyers are victims of the builders

Dream homes turn a nightmare for flat buyers in Pune


A simple analysis of the figures shows that complaints related to the real estate sector constitute almost 80 per cent of the complaints filed both with the state and the National DCGRF in the country.

RITESH Jain (name changed on request) had booked a 2BHK flat in an ongoing project of a prominent builder in Kharadi in 2014. Two years later, he is yet to get possession of his flat. “The agreement that I had signed with the builder had said I would get possession by the end of 2015. The builder keeps on assuring me that I will get the flat soon, but that soon seems to be far away,” he says.

Jain, who is paying a hefty house rent, is now thinking of taking legal measures against the builder.

Jain’s predicament reflects the situation faced by lakhs of people in the city who are made to run from pillar to post to get possession of their promised flats despite making payments on time.

Housing bubble in pune
80% of complaints with consumer forum relate to real estate sector

Source : Indian express

Consider this: in the last six years, the Pune District Consumer Grievance Redressal Forum (DCGRF) saw 2,943 cases being filed, of which 1,815 related to the housing sector. This year, of the 306 cases filed with the forum so far, 242 related to the housing sector.

Read also

Worst Retirement Mistakes and Remedies to improve them

While Pune’s real estate market is known for positive growth bucking the countrywide trend, problems, especially from the consumer side, have also seen a quantum jump. Delay in giving possession of tenements, failure to provide amenities and preventing formation of residents’ welfare society are some of the common complaints from consumers.

The figures from the consumer forum, activists say, do not even represent one per cent of the whole problem. Vijay Sagar, member of the All India Grahak Panchayat, a consumer rights body, says that in Pune alone, there are more than 4,000 housing projects affecting more than the 4 lakh flat buyers. “As per the development control rules of the Pune Municipal Corporation (PMC), each flat can house five persons. So more than 20 lakh people are affected in such cases,” he says.


Dream homes turn a nightmare for flat buyers in Pune