Union Budget 2014 ~ Will Sensex continue to Humour as Jaitley does not!

Have a look at our first impression posted  after our FM ‘s Union Budget Address and during market hours

Union Budget 2014 ~ Will Sensex continue to Humour as Jaitley does not!

Think he missed a great opportunity to provide us with the ‘Naya Soch’ of the new NDA Government

His Speech stated quite a few challenges and objectives like tackling Black Monies,raising Tax to GDP ratio,lowering Inflation and Fiscal Deficit % but stopped short of spelling out the specifics of solving these

Having just 45 days after NDA was elected he has opted for the easier option of simply following the UPA budget process and numbers too that the UPA FM Mr Chidambaram laid out in his Interim Budget in February 2014….whether it be Disinvestment or Tax Receipts or Fiscal Deficit Control Targets…made right noises but was tokenism in a few areas like social expenditure…thankfully nothing really adverse or anti poor though direct tax incentives are not really cause for any celebration

Sensex had quite a roller coaster ride today as to be expected….opening stable & pre budget speech at 25514 in the morning then sliding before noon over 300 points to 25117 from yesterday closing of 25445 during the budget speech before strongly racing away by over 700 points to 25920 …over 400 points previous day closing post budget speech only to reverse all the gains and close at 25373,down 72 points  from previous day closing

Will the Sensex continue to Humor us in the near term despite not an iota of Humor in the FM’s Speech !? …sense is that any correction will be a hiccup on the onward march towards 30000 on the back of increased FII Net Infows & Big Corporate Infra spending  

I see some clear big winners in the Infrastructure Space across the Board from Shipping to Power to SEZs to Real Estate to Highway Road Construction Companies and Pipeline Companies

 

 

Edelweiss at 52 Week High Levels of Rs 60+ ~ What is Broking!?

Edelweiss at 52 Week High Levels of Rs 60+ ~ What is Broking!?  ….BSE showed over 8 lakh shares volume today and price stability at @ Rs 61

Edelweiss ~ A Royal Flower in the Swiss Alps or a Lovely Classic Song from The Sound of Music or just another Indian Broking & Financial Firm !?

It’s a No Brainer that Heady Market Day spells  great times for Broking Firms or Groups

Edelweiss has seen a High of Rs 1600 + in 2007 on a FV Rs 5 share….then came a split to FV Rs 1 in 2010 and a 1:1 Bonus Issue  in August 2010….so the high gets adjusted to Rs 160+

First many Employees,including Excustive Director Himanshu Kaji took the ESOP at Rs 33 in April 2014….then last week on June 12,2014 Rakesh Jhunjhunwala picked up One Crore Shares at Rs 55 in a BSE Deal with Greater Pacific Capital (GPC) Mauritius I & III LLC selling off and exiting completely now their eight and a half year stake after a part exit in 2010

Promoters Rashesh  Shah & Others held 37.15% of the Equity of Rs 76.90 crs held by nearly 131000 Shareholders at March 31,2014….of this Promoter holding 5.66 % are pledged or encumbered (2.10% of Total Equity)

FIIs held 22.58% of the Equity on March 31,2014.This needs to be adjusted for the GPC Mauritius Sale in June 2014…However in a May 17,2014 Meeting the Board has approved FII holding cap to be increased from 28% to 40% 

Here are the FY 14 Results….Consolidated Topline  was Rs 2534 crs with Bottomline at Rs 220 crs….EPS was Rs 2.86.Networth was Rs 2729 crs with Reserves at Rs 2657 crs and Investment in Company’s Own Shares deducted from Share Capital & Premium….this Investment is through Rs 160.81 crs lend to Employees Trusts which has been used to buy Shares for later alottment under ESOP…The Book Value is Rs 35.5

Relative Valuations at Share Price of Rs 61 give a PE of 21 and a PBV of 1.7

In April the  board approved a buyback from the Open Market upto Rs 45/share and an aggregate of Rs 145 crs….This Buy Back commenced on May 5,2014

The Own Capital Employed at March 31,2014 was Rs 2729 crs  with most of it deployed in Credit Activity that included Retail Finance

Segmentation is into 4 Revenue Streams ~ Credit incl Retail Finance most of it in Housing Finance,Commodities,Financial Markets including Asset Management & Life Insurance….Most of the Revenues ,Rs 1885 crs to be specific ,are from Capital or Fund Based Business….Finance Costs were Rs 1540 crs in FY 14 read more

Had Mooted LIC IPO a year ago on this blog !

Uday Kotak is all over the papers today in a pre budget meeting suggesting that LIC should be listed

He’s not saying anything original or new here

😆 …I’ve been saying this for years and even made it the butt of an April 1 Fool blog post last year !

Grand Daddy LIC to come out with a Patriotic Par IPO and List shortly !

Monday, April 1st, 2013

Reproducing it below ! …had even made it read plausible with actual financial and other stats !

“Grand Daddy LIC to come out with an IPO and List shortly ! 

……and the great news is that the IPO will be at Patriotic Par to reward the Indian Population ~ The Share Capital is only Rs 100 crs currently and held by the Central Government ~ A Mega Issue is in the Pipeline that will be a Mega Wealth Creator for all Shareholders

Look at it’s Financial Muscle !  as per it’s FY 12 Annual Report

Total Income of  over Rs 3 lakh crs  => US $ 55 billion ~ of which nearly half adds to float after Agent Commission ,Employee Salaries and Policy Claims on Maturity,Death or Surrender

Total Investments of  @ Rs 13.5 lakh crs => US $ 250 billion

Over 1.2 million active agents !

LIC will file a Prospectus soon with SEBI ~ FIIs will not be allowed to subscribe in the IPO

The Market Capitalisation of LIC  is expected to be the aggregate of the Market Capitalisation of the TOP 10 Companies ! ~ TCS,Infosys,Reliance,ONGC……

Cant wait to lick this par issue ! “

Grand Daddy LIC to come out with a Patriotic Par IPO and List shortly !

What a Blogpost to set in the new Financial Year 13 !

Grand Daddy LIC to come out with an IPO and List shortly ! 

……and the great news is that the IPO will be at Patriotic Par to reward the Indian Population ~ The Share Capital is only Rs 100 crs currently and held by the Central Government ~ A Mega Issue is in the Pipeline that will be a Mega Wealth Creator for all Shareholders

Look at it’s Financial Muscle !  as per it’s FY 12 Annual Report

Total Income of  over Rs 3 lakh crs  => US $ 55 billion ~ of which nearly half adds to float after Agent Commission ,Employee Salaries and Policy Claims on Maturity,Death or Surrender

Total Investments of  @ Rs 13.5 lakh crs => US $ 250 billion

Over 1.2 million active agents !

LIC will file a Prospectus soon with SEBI ~ FIIs will not be allowed to subscribe in the IPO

The Market Capitalisation of LIC  is expected to be the aggregate of the Market Capitalisation of the TOP 10 Companies ! ~ TCS,Infosys,Reliance,ONGC……

Cant wait to lick this par issue !

Ask yourself this ~ Did it really matter to me here in India who won the USA Presidency ? ~ am I better or worse off!?

Ask yourself this ~ Did it really matter to me here in India who won the USA Presidency ? ~ am I better or worse off !? ~does it affect my health,my family,my job or business,my wealth….my stocks ! ? ~ am I really going to advice to get out of Indian IT Space !?

On US Foreign Political or Economic Policy Issues,neither Obama nor Mitt Romney would dare to effect any changes that will affect US Interests

Happy for Obama that he won as incumbent…..and his anti India IT outsourcing stance ,am told by Indian IT Insiders is only a local  appeasement tactic to protect American Jobs,as they really have little choice in the matter as of date ~ call it Catch 22 ~ they want to protect American Jobs but in a leveraged economy and a recessionary environment the economics simply don’t work out  not to outsource ~ having said this the cap on H-1B Visa for highly skilled foreign workers has been dropped by USA from 195000 in 2001 to just 85000 this year ~ Indian IT Companies get round this hurdle by rationalising the team numbers on a project,local US Hiring and doing more work on the Project out of India…of course they have been accused of other ways too !

David Bier,an US immigration policy analyst,wrote in Forbes earlier this Year that Foreign Highly Skilled workers on H -1B Visas create jobs not take them ~ in support,he quoted a 2009 finding by the National Foundation for  American Policy that for every H-1B Visa request it co-related with five new jobs at major firms and more than seven new jobs at firms with less than 5000 employees   !

Though  Indian IT may not be a great Investment Theme that it was in the 1990s and earlier part of the 21st Century when all IT majors,except for  Satyam, were simply great multi bagger pickings !, the IT Story is far from ebbing and I’m not going to advice Clients to move out of this space totally ~or even switch from TCS to Infosys like CLSA thinks should be done !

Make no Mistake,Obama will continue to bully India on both fronts and,I daresay, we shall continue to acquiesce quickly without serious debate justifying US entry on grounds of aiding GDP Growth and creating millions of jobs  and upgrading our Infrastructure with latest technology !  ~ We need to be cautious that while USA promotes their Interests aggressively,they will as they need to survive and recover from a faltering and highly leveraged economy,we need to safeguard our interests ~ I genuinely fear this is not happening  ~ we are opening out more US exposure in Insurance,Retail,Defence,Aviation,Agriculture,Banking,Higher Education,Automobiles and allied sectors without the rigors of  an intelligent debate without premediated bias or prejudice on the long term implications of this read more

India is ‘Bandh’ today but Stock Markets are ‘Chalu’ !…Pun intended !

To Protest against the Congress led UPA Government’s recent decision to Hike Prices of Petroleum Products, the Opposition parties led by BJP and even joined by some UPA parties ! had announced a Bharat Bandh today….Political leaders are courting arrest…there is disruption in Road,Rail and Air Transport across the Nation….In Mumbai,Autos and Taxis are off the road….schools are closed…banks have closed shutters as have many establishments….many offices have declared an off day

There is a demand for rollback of this price rise….yesterday,our FM,Pranab Mukherjee asserted that there would be no rollback   

So India is officially Open but practically ‘Bandh’ today but Stock Markets are ‘Chalu’ !…Pun fully intended !….though they were less ‘Chalu’ today as Sensex and the Nifty closed down just 20 points and 1 point respectively at 17441 and 5246 

Cheers !