The ‘Great Dollar Recession’ – Yash Dave

If you are currently living in this world, you are going to be one of the lucky ones to witness a long due recession, which is going to disrupt our normal life.

USD is the biggest bubble of centuries.

If we compare the value of one ounce of gold to USD in 1947 Vs 2018 and looking at National debt of more than $ 20 trilltion, all I can say is,

‘The world is sitting on an active volcano and the surprising thing is we know we are in trouble but, we are doing nothing’

I guess the efficient market hypothesis is of no use and has questionable viability in cases like these.

One cannot ignore the slow but latent political shift of power from US to China. With economic slowdown it has been delayed, but sooner or later this economic shift has to happen where I feel there will be a lot of friction (even war is a possibility) . With the US leadership which has rather turned unpredictable, countries are looking for a change in economic superpower, a country that would lead the world rather sustainability. Our world needs a new leader.

Today there are enough buyers of Dollar denominated debt, hence it feels like a joyous free ride for the once holding US dollars. The tide may turn overnight and you shall find yourselves miles beneath the sea drowning with no man made help what so ever.

I am reasonably sure that once this tectonic shift in country leadership takes place, dollar will be worth less and the bubble shall burst.

What’s more worrisome is slugfest which would happen to dollar reserves of central banks across globe once the dollar recession takes over.

This can happen tomorrow, or may be 5, 10 or even 15 years down the line & I warn you this recession will be worse than any recession humans have seen collectively in their lifespan.

Bigger than :

#The #Great #Depression

#Dotcom #bubble

#Subprime #crisis

May be, I am speculating too much here but it’s a big possibility that the world might head towards a globally accepted common currency !

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. Any reader taking decisions based on any information published here does so entirely at own risk. Above information is based on information available as on date coupled with market perceptions. Author has no plans to invest in this offer.

DHFL a repeat of PCJ & Vakrangee ?

Two isolated events involving DHFL created fear mongering in the debt markets, which were already in a tizzy after the IL&FS default last week. Below are some details of what transpired with DHFL:

Event No.1 : Earlier this week, DHFL tried to raise INR7bn through commercial papers and the bond market subscribers gave them a rate of 9.5%. Since this was much higher than DHFL’s previous borrowing rate of 8.2% and there was no pressing need for the funds, DHFL treasury rejected the offer and shelved the CP issuance. This was misread by some participants as bond market’s reluctance to lend.

Event No.2 : While this is not directly related to DHFL, a particular mutual fund wanted to liquidate DHFL NCDs within a short time frame. Since the bond markets were already rattled by IL&FS default, the fire sale attracted buyers only at yield of 11%. This again got misread as bond market’s reluctance to buy DHFL paper.

DHFL’s liquidity situation for next 6 months

Receivables from customer EMIs = Rs 120bn.

Payables to debt markets & banks = Rs 150bn

Cash & Liquid Investments in hand = Rs 100bn

As per the above figures mentioned in the concall, it looks like there a large positive gap and no liquidity issue. In fact the management has suggested that it received the largest chunk under CLSS from NHB earlier this week. Based on this, the share price fall looks like an equity market event rather than debt market event.

Debt market is a place where perception can create crisis, when none actually exists !

DHFLs mortgage business continues to be in fine fettle.

Note : Most of the points mentioned above were discussed in one or the other calls hosted by the DHFL management yesterday.

I personally am of the opinion that DHFL should be bought into at current market price around Rs 350.

The management has clearly intimated in the con-call that DHFL has no exposure to IL&FS group of companies and hence yesterdays downfall can be conferred to market rumours and panic selling.

DISCLAIMER I : 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. Any reader taking decisions based on any information published here does so entirely at own risk. Above information is based on information available as on date coupled with market perceptions. Author has no plans to invest in this offer.
DISCLAIMER II : Notwithstanding any opinions my views are speculative in nature which bares me to be a guarantor of 100 % accuracy with regards to future trend prediction & pricing targets.
Disclaimer III : I can be 100% wrong. The investment stance on this stock is still not clear and after PCJ & Vakrangee saga, it’s difficult to rely on the word of management which states that nothing is wrong with the company. An investor should not deviate from one’s own investment strategy. One may invest (depending of the financial situation) 5% of the investable surplus for such speculative events at their own discretion.

Is HDFC AMC worth the chatters ? – Yash Dave

HDFC AMC is a joint venture between HDFC and Standard Life Investments Limited. They offer a large suite of savings and investment products across asset classes.
As of March 31, 2018, they offered 133 schemes that were classified into 27 equity-oriented schemes, 98 debt schemes and 3 liquid schemes, and 5 other schemes (including exchange-traded schemes and funds of fund schemes). This diversified product mix provides them with the flexibility to operate successfully across various market cycles, cater to a wide range of customers, from individuals to institutions, address, market fluctuations, reduce concentration risk in a particular asset class and work with diverse sets of distribution partners which helps them expand their reach.

IPO ISSUE DETAILS
IPO opening date: 25-July-2018
IPO closure date: 27-July-2018

Face Value: Rs 5 per share

Issue price band: Rs 1,095 to Rs Rs 1,100 per share

Issue size: 2,800 Crores

IPO Lot size: 13 shares and 13 shares, there-off

Minimum investment: Rs 14,300 on higher price band

STRENGTHS :

1. Consistent market leader in Indian Mutual Fund industry.

2. Trusted brand with strong parentage.

3. Superior and diversified product mix.

4. Most profitable asset management company in India in terms of net profits since Fiscal 2013.

5. Experienced and stable management and investment teams.

KEY STRATEGIES :

  1. Maintain strong investment performance.
  2. Expand its reach and distribution channels.
  3. Enhance product portfolio.
  4. Invest in digital platforms to establish leadership in the growing digital.

FACTORS FAVOURING INVESTMENT

  1. Revenue growth of 19% CAGR in the last 5 years.
  2. Profitability growth of 19% CAGR in the last 5 years. It earned margins of over 38% in FY2018.
  3. Second largest player based on AUM in mutual fund industry. Long-tenure systematic investment plans (SIP) of more than 10 years form about 77% of the company’s SIP book indicating high asset visibility and profitability. HDFC AMC’s wide distribution network of 209 branches and more than 65,000 distributors across India gives it an edge especially when it comes to gaining investors.

MAJOR RISKS :

  1. Its historical growth rates may not be indicative of its future growth and if they do not manage its growth effectively, its financial performance could be adversely affected.
  2. They rely on third-party service providers in several areas of its operations and may not have full control over the services provided by them to us or to its customers.
  3. The mutual fund business in India may be adversely affected by changes to the present favourable tax regime.

  4. Its operations are dependent on the performance of the Indian economy and securities market.

FINANCIALS :

In FY2018 EPS of Rs 35 and on an upper price band of Rs 1,100, P/E works out to be 40x.
On last 3 years average EPS of Rs 30.56, P/E works out to be 35.9x.

This means company is asking for a higher price band Rs 1,100 where P/E would be in the range of 31x to 36x.

There are listed peers like Reliance Nippon AMC which are trading at P/E of 26x, hence the price band of Rs 1,100 at P/E of 40x to 44x is over priced.

CONCLUSION

HDFC AMC at 40 PE with 40%+ ROE for last 15 years and expected growth rate of 15-20% for next 10 years, with high quality management, 50%+ dividend Payout Ratio, Strong distribution network seems to be a build to last business and with a float of just 2300 Crores. I strongly believe that the profits of next 10 years of HDFC AMC would be more than the total Profit pool of Top 5 asset management companies today.

DISCLAIMER I : 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. Any reader taking decisions based on any information published here does so entirely at own risk. Above information is based on information available as on date coupled with market perceptions. Author has no plans to invest in this offer.
DISCLAIMER II : Notwithstanding any opinions my views are speculative in nature which bares me to be a guarantor of 100 % accuracy with regards to future trend prediction & pricing targets.

$ 32.4 BILLION BANK RECAPITALIZATION, A BOON OR A BANE ? – Yash Dave

47629616

Problems in the banking sector have long been debated. Banks have been reeling with stressed books. Gross NPA’s today account for Rs 7.7 trillion, excluding the ones under restructuring. Progressively the situation was only getting worsened as according to the recent RBI data released stated that, even after the implementation of IBC, aggressive provisioning, careful lending & prudent operations the Bank NPA’s have grown by 143% in Indian nationalized banks while the credit growth is at its 60 year low of 5.1% in FY17.Capture

A big reform in this sector was long overdue. Its a different question of competency of Indian banks. The stakeholders & Citizens of India were raising questions on the governments inability to recapitalize Indian PSB’s as there was enough fiscal pressure on governments own FY 17-18 fiscal target of 3.2% after successive farm loan wavier in Indian states. Where we stand :w_m2m_bank

India’s cabinet ministry today approved a $32.43 billion plan on to recapitalize its state banks over the next two years, in a bid by Prime Minister Narendra Modi to tackle a major drag on the economy that has frustrated his attempts to boost growth.Screenshot_20171024-183145

Modi’s government has tried to respond by stepping up public spending, but the slowdown has stressed its finances, making it imperative for private investment to pick up the slack. GOI has struggled to revive private investment because state-owned banks, which provide much of the credit in the economy, are saddled with a mountain of bad debt that has crimped their ability to offer new credit.

Finance ministry today indicated that a slew of reforms are yet to come in this sector to vandalize for proper use of this recapitalized money. Perhaps banks would now have funds to comply with Basel III norms which will kick in from March 2019.Screenshot_20171024-183240

Whether there will be a fiscal stress on the economy due to balance of payments deficit depends on the nature of Bond issued. Whether it is a boon or a bane can be substantiated only after a well drafted policy roadmap for this sector. Perhaps government should take required actions towards curing the disease & not just it’s symptom.

Questions that remain unanswered are :

  • What would be coupon rate of the recapitalization bonds to be issued.
  • Who will be the issuer of bond (GOI, consortium of banks or them individually)
  • Whether banks learn a lesson to curtail bad lending or does it become a bad habit of the banks as the government always comes to their rescue.

Cochin Shipyard Ltd. Should you subscribe ?

ABOUT THE SECTOR :- Global seaborne trade increased by 2.1% to 10,048 million tonnes in 2015. Dry bulk cargo comprised the largest share at 54%. Developing economies( which includes India) accounted for the largest share of seaborne trade, in volume terms, at an estimated 60%. 

ABOUT THE COMPANY :- CS is the largest public sector shipyard in India & perhaps the only profitable shipyard. It caters to clients engaged in the defence sector  and clients engaged in the commercial sector worldwide. In addition to shipbuilding and ship repair, it also offers marine engineering training. As of January 31, 2017, it has  two docks .Dock number one  is primarily used for ship repair  and Dock number two, is primarily used for shipbuilding transfer. 

FINANCIALS :-

Basic EPS for 2014-15 Rs. 6.12

Basic EPS for 2015-16 Rs. 25.75

Basic EPS for  2016-17 Rs. 27.56

The  Company has posted profits continuously in the last five Fiscals. Its total revenues and PAT has increased in Fiscal 2016 at a CAGR of 9.25% and 16.47%, respectively.

Additionally, it has  continuously delivered positive RoE margins over the last four Fiscals.

CS  paid dividends to its shareholders at rates of 15%, 15%, 15%, 15% and 76.50% in Fiscals 2012, 2013, 2014, 2015 and 2016. It has  strong liquidity position in terms of total cash of Rs 21,191.54 million as of January 31, 2017.

Cochin Shipyard has about 2000 crores of its of cash and equivalents on its books. It is deploying most of this money and a large chunk of its IPO proceeds (Rs 672.5 crores) for the construction of a dry dock and a ship repair facility. This combined amount at about 2700 crores is 35 times its five year average annual operating cash flows. If this bet goes awry, the company stands to a lose great deal. 

The shipbuilding sector is in poor shape with many of Cochin’s private sector listed peers such as Reliance Defence, ABG Shipyard and Bharati Defence and Engineering struggling to stay afloat. A cyclical revival when the new facilities go live will give investors a substantial payoff but this may not materialise. The projects themselves, as is common with government works can get delayed or exceed their cost estimates.

Where the money will go ?

Roughly 67% of IPO proceeds (984 crores) will be used for building a dry dock, a ship repair facility and general corporate purposes.

The balance 33% (484 crores) will go to the Government of India. The Government’s stake will fall from 100% to 75%.

To be split among investors.

15% of the IPO is being offered to HNIs and 35% is being offered in the retail category.

A discount of Rs 21 (about 5% of the issue price) per share will be given to retail investors.

To those who are tracking GMP trends : It is expected that the GMP trend which is at Rs 181 has little room of ending lower. It is only expected to edge higher post application closure. Rational – lower FY 17 P/E at 18.8X Vs an industry average of 27.65X.

Expecting Cochin Shipyard Ltd to list with the following price targets :

  1. With Conservative risk : Rs 550
  2. With Moderate risk : Rs 599
  3. With Aggressive risk : Rs 669

DISCLAIMER I : 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. As SME issues have entry barriers and having low preference from broking community, any reader taking decisions based on any information published here does so entirely at own risk. Above information is based on information available as on date coupled with market perceptions. Author has no plans to invest in this offer. 

DISCLAIMER II : Notwithstanding any opinions my views are speculative in nature which bares me to be a guarantor of 100 % accuracy with regards to future trend prediction & pricing targets.

All you need to know about RERA Act, 2016

The Real Estate (Regulation & Development) Act, 2016, came into force on 1 may 2017. RERA seeks to bring clarity & fair practices that would protect the interests of buyers & also impose penalties on errant builders. Issues like delays, price, quality of construction & title are also easily resolved with clauses in RERA.

The Act requires developers to get all ongoing as well as under-construction projects that have not received completion certificate, registered with regulatory authorities within 3 months, i.e., by end of July. Projects with plot size of a minimum 500 sq.mt or eight apartments need to be registered with regulatory authorities.

Applicability : RERA is applicable only to those on-going projects which have not received the completion certificates before commencement of The Act i.e., 1 May, 2017. They need to get registration done on or before 1 July 2017.

Therefore, all projects which have not got completion certificate before 01/05/2017 will be deemed ongoing & will have to be registered.

Key provisions of RERA ;

  1. The promoter of a real estate development firm has to maintain a separate escrow account for each of their projects. A minimum 70% of the money from investors / buyers will have to be deposited. This money can only be used for construction of the project & the cost borne towards the land. To provide clarity to buyers, developers will have to keep them informed of their ongoing projects.
  2. RERA requires builders to submit those original approved plans for their ongoing projects and alterations that they made later. They also have to furnish details of revenue collected from allottees, how the funds were utilised , the timeline for construction, completion & delivery that will need to be certified by an Engineer/Architect/practicing Chartered Accountant.
  3. The regulator will ensure protection the buyers in matters of poor quality construction & provision of service for 5 years from the date of possession. If any issue is highlighted by the buyer, the developer has to rectify the same within 30 days of the grevience raised.
  4. Developers can’t invite, advertise, offer, market or book any plot, apartment, house, building, investment in projects, without first registering with the regulatory authority.
  5. If the promoter defaults on delivery within agreed deadline, they will require to return the entire money invested by the buyers along with the pre-agreed interest rate mentioned in the contract based on the model contact given by RERA. If the buyer chooses not to take the money back, the builder will have to pay monthly interest on each delayed month to the buyer till they get delivery.
  6. Too add further security to buyers, RERA mandates that developers can’t ask more than 10 % of the property’s cost as an advanced payment booking amount before actually signing a registered sale agreement.
  7. Where no contractual rate of interest is mutually agreed upon between the promoter & the allottee, the interest rate payable by the promoter to the allottee or vice versa as the case may be shall be the rate which is prevalent as per existing directives of RBI i.e., MCLR the SBI PLR + 2%.
  8. The interest payable by the promoter to the allottee shall be from the date the promoter received the amount or nay part thereof till the amount or part thereof & interest Theron is refunded, & the interest payable by the allottee to the promoter shall be from the date the allottee defaults in payment to the promoter, till the date it is paid.
  9. The Act has mandated real estate developers to specify ‘carpet area’s’ rather than ‘super built up area’s for ease of comparison between multiple projects. 



Suggestions to a homebuyer: As a  homebuyer

, you must remember that a developer can offer possession only after the completion certificate has been obtained. Once that happens, the developer can apply for various utilities such as water & electricity.

If you are buying a house or have bought one, also insist on getting a copy of the clearance certificate before you take possession.

Exceptions to this Act : All those on-going real estate projects whose proposed land to be developed does not exceed 500 sq meters or 8 flats, inclusive of all the phases are exempt from the provisions of The ACT.

DISCLAIMER I : 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. As SME issues have entry barriers and having low preference from broking community, any reader taking decisions based on any information published here does so entirely at own risk. Above information is based on information available as on date coupled with market perceptions. Author has no plans to invest in this offer. 

DISCLAIMER II : Notwithstanding any opinions my views are speculative in nature which bares me to be a guarantor of 100 % accuracy with regards to future trend prediction & pricing targets

Ethereum – An investment opportunity you will never get again.

It’s a cryptocurrency

While Bitcoin is currently trading at close to its all-time high, its dominance in terms of proportion of total cryptocurrency market cap is rapidly decreasing — ground largely given up to Ethereum.

This shift is probably being driven by a few factors. Despite its recent appreciation in value, as a technology, Bitcoin has stagnated over the last three years. Two rival factions have emerged with violently opposing views on what should be done to allow the Bitcoin network to handle more transactions than it can right now. While Bitcoin has been paralysed by indecision, Ethereum has raced ahead with technology that not only does everything Bitcoin can do faster, in higher volume, and at lower cost — it does a lot more besides.

The other part of the story which I won’t get much into is, bitcoin is splitting into two halves.

While Bitcoin is currently trading at close to its all-time high, its dominance in terms of proportion of total cryptocurrency market cap is rapidly decreasing — ground largely given up to Ethereum.

This shift is probably being driven by a few factors. Despite its recent appreciation in value, as a technology, Bitcoin has stagnated over the last three years. Two rival factions have emerged with violently opposing views on what should be done to allow the Bitcoin network to handle more transactions than it can right now. While Bitcoin has been paralysed by indecision, Ethereum has raced ahead with technology that not only does everything Bitcoin can do faster, in higher volume, and at lower cost — it does a lot more besides.

As a “hard fork” looms, which looks set to split Bitcoin into two separate currencies that will have to fight for custody of the Bitcoin moniker, anxious Bitcoin holders are increasingly divesting themselves of Bitcoin to acquire Ether — the cryptocurrency that fuels the Ethereum network.

The other side of it is that Bitcoin is really only useful as a store of value. Even then, its usefulness for actually transacting value is limited. In a world where people are used to online payments being confirmed instantly, Bitcoin transactions can take anywhere from tens of minutes to several hours, depending on how busy the network is. It’s also expensive — especially if you’re only sending small amounts. The average transaction currently costs about $1.50.

Ethereum, on the other hand, was never intended as a Bitcoin competitor. Ethereum is actually a platform for new kinds of decentralized (often financial) applications (dApps) that run on a peer-to-peer network of computers. These dApps are designed to disintermediate the kinds of relationships and transactions for which we have traditionally required things like banks, public registries, and the legal system.

For technologists, this is exciting stuff, and a vibrant community of software developers has enthusiastically embraced it. Hundreds of projects, startups, and companies at every scale — including the likes of Intel, Microsoft, and Samsung — are building software using Ethereum. And everyone who wants to use any of these dApps on the public Ethereum blockchain will need to pay a small fee in Ether each time they do so.

The utility of many of these dApps are based on network effects, so Ethereum as the underlying protocol is a network upon which other networks are being built. It is therefore a group-forming network— a much faster growing and more resilient kind of network effect than Bitcoin enjoys. In group-forming networks, even if the utility of individual groups is low, the network effect of all being part of the same underlying network can dominate the overall economics of the system. In other words, the value of the whole becomes greater than the sum of its parts. That’s particularly interesting in the case of Ethereum as that value is captured within the Ether price.

Platforms requiring network effects are however, famously hard to bootstrap — but here Ethereum has an ace up its sleeve. Token sales, or Initial Coin Offerings (ICOs), allow Ethereum projects to sell their own native token to the crowd. A token is a cryptocurrency that has special purpose within the dApp to which it corresponds. The purpose and value of these tokens varies, but what they all share in common is that their sale not only provides funding for the dApp’s development, it also catalyses the creation of a community around the dApp that is financially incentivized to see it succeed. The more successful a dApp becomes, the greater the demand for, and therefore value of, the token required to use it.


Bitcoin’s dominance is slipping because its utility is limited and weakening versus other more recently developed, less politicized cryptocurrencies. Financial markets don’t like uncertainty, and Bitcoin is gearing up for a messy divorce. Ethereum was never intended as a competitor to Bitcoin, it’s something very different. But the value of Ether is underpinned by utility within the kind of group-forming network that tends to grow rapidly when it picks up steam. That’s why its value is increasing faster than Bitcoin, and why many pundits are predicting it will continue to do so long after Bitcoin’s market cap has been exceeded.

DISCLAIMER I : 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. As SME issues have entry barriers and having low preference from broking community, any reader taking decisions based on any information published here does so entirely at own risk. Above information is based on information available as on date coupled with market perceptions. Author has no plans to invest in this offer. 

DISCLAIMER II : Notwithstanding any opinions my views are speculative in nature which bares me to be a guarantor of 100 % accuracy with regards to future trend prediction & pricing targets

HUDCO IPO – A BET ON AFFORDABLE HOUSING FOR ALL 2022

​The Modi administration is know for its execution of projects in time & it’s far more formidable to believe that the Affordable Housing for all scheme will be his pitch for 2019 general elections.

Housing and Urban Development Corporation (Hudco), a wholly-owned subsidiary of the Government of India is first of its kind IPO which is a step by the government to meet its disinvestment targets.HUDCO is a wholly owned government company with focus on housing and urban infrastructure finance in India. HUDCO primarily lends to urban infrastructure projects relating to water supply, roads & transport and power accounting for 69 per cent of the loan book.  Housing Finance forms the remaining 31 per cent of its loan book. It’s business model is skewed towards state government spending The success of this IPO will lay a trajectory for the government to make other govt. owned enterprises, publicly listed.

Proceeds from this 1200 crore IPO is to be used by the government unlike other IPO’s which use it for capex, debt repayment or to meet working capital requirements.The IPO is priced between Rs 56-60 and can be applied in lot sizes of 200 shares.

Financials At a P/E of around 14 plus and at a P/BV of around 1.3 plus. It has no listed peer to compare with.

ADVANTAGES TO THE COMPANY: 

  1. PAN India presence
  2. Zero default risk from the lending book exposure to state governments.
  3. The Company is set to play a significant role in PMAY under Housing for All (HFA) by 2022.
  4. Available at a fair valuation & a Rs 2/- discount to retail investors.
  5. Should show long term interest of big fund houses.

Risk : Default on the obligations by borrowers  primarily the private Cos. may adversely affect the financial metrics of the company, which is a key risk in the business of HUDCO.

ALL ABOUT LISTING : This listing is expected to give a return of Rs 24 per share i.e., a low risk target of Rs 80, a moderate risk target of Rs 90 (Rs 34 premium) a high risk target of Rs 99 (Rs 43 per share premium).

 DISCLAIMER I : 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. As SME issues have entry barriers and having low preference from broking community, any reader taking decisions based on any information published here does so entirely at own risk. Above information is based on information available as on date coupled with market perceptions. Author has no plans to invest in this offer. 

DISCLAIMER II : Notwithstanding any opinions my views are speculative in nature which bares me to be a guarantor of 100 % accuracy with regards to future trend prediction & pricing targets

Why Avenue Supermarts Ltd. (DMart) IPO deserves a record listing – Yash Dave

DMart came into existence in some year which only augur’s little relevance to this analytical opinion.

Coming straight to the facts & figures before forming basis to a range bound conclusion.

  • Follows ownership model of business similar to global giant Walmart.
  • PE at 33, FY 17 Vs industry PE of 179.
  • Promoter holding at 82% (approximate) after share allotment.

Comparison of Supermarts Avenue with its closest peer V-mart retail ltd 

Revenue CAGR of 40% Vs 30%.

Operating profit margins at 7.9% Vs 7.6%.

Annual Revenue (FY 17) at Rs 25,844 crores Vs Rs 9849 crores.

ROE at 21.1% Vs 17%.

Net profit (CAGR) at 52% Vs 27%.

Asset T/O at 3.9 times Vs 6.55 times

Inventory T/O at 14.18 times Vs 4.11 times

  •    Out of total issue size :
  1.  35% is open for Retail allotment
  2. 50% for QIBs
  3. Rest 15% for institutional buyers.

Conclusion : To the blogger the data seems to suggest that an upper price band of Rs 299 per share is comparatively cheap. Hence, it’s a definite buy with an modest target of Rs 350, moderate target of Rs 399 & an aggressive price target of Rs 480.

For questions, suggestions, opinions & queries please comment.

Disclaimer : Notwithstanding any opinions my views are speculative in nature which bares me to be a guarantor of 100 % accuracy with regards to future trend prediction & pricing targets.

Stock pick for year 2017

Stock pick for 2017, MCX India Ltd..

Rationale :

1. Largest listed Indian commodity index.

2. Possibility of favourable option trading norms by SEBI in coming weeks.

3. Listing of BSE a sentiment booster which can potentially lift share price .

4. Positive announcements in union budget 2017-18 to encourage farmers hedge positions through use of commodity derivatives.

Opinion :

Greetings !! 

Today was the last trading session of Indian markets. 2017 seems to be less of a challenge & investors can expect indian equities to outperform & end on a rather higher positive note.

Wishing you a fundamentally backed, technically indicated & sentimentality boosted, prosperous 2017.


Disclaimer : Notwithstanding any opinions my views are speculative in nature which bares me to be a guarantor of 100 % accuracy with regards to future trend prediction & pricing targets.