FirstSource Solutions lists at 30% Premium
Thursday, February 22, 2007
FirstSource Solutions Ltd which recently completed its IPO got listed on the NSE with ticker "FSL" at Rs 83.0, a 30% premium to its issue price of Rs 64.
You can check the allotment status of FirstSource Solutions here. Long term investors can continue to hold the stock. Short Term investors must hold and book profit only when the IT stocks rally, i.e Q4 results will be out in April-07.
Published by DalalStreet Business @ 10:16 AM
EMI for Home Loan Borrowers up by 26%
Sunday, February 18, 2007
DalalStreet.Biz has a calculation of how rising interest rates by the RBI has raised the EMIs of Indian home loan borrowers.Loan Amount: Rs 25,00,000
Inception Jan - 1 - 2004
Floating Rate @ inception - 7%
Tenure of the Loan - 20 years
EMI at inception Rs 19,400
Since Jan-1-2004, the Indian central bank, Reserve Bank of India has hiked the interest rates 6 times. The table below shows how your EMI has shot up by 26% in 3 years.
Jan-2005, Interest Rate 7.5% EMI Rs 20,100
July-2005, Interest Rate 8.0% EMI Rs 20,800
Jan-2006, Interest Rate 8.5% EMI Rs 21,600
April-2006, Interest Rate 9.0% EMI Rs 22,300
July-2006, Interest Rate 9.5% EMI Rs 23,000
Feb-2007, Interest Rate 10.5% EMI Rs 24,500
Plus their is a blood sucking Service Tax on the part of interest paid to the bank.
Sure, our Real Estate Sector is headed for a trouble now.
Labels: EMI, India Home Loans
Published by DalalStreet Business @ 9:47 PM
MindTree Consulting Subscribed 103 Times
Thursday, February 15, 2007
BSE and NSE finally shutdown their systems at midnight and till then they had received 577662585 bids against an offer of 5593300 subscribing the MindTree issue 103 times. We had a blind subscription rating on MindTree IPO.
The retail portion of the issue is subscribed by 30 times. The fate of Rs 1 Lakh application by retail investor will also be decided by lottery in the ratio of 1:2. Here is the breakup of subscription.
| Category | No.of shares offered/reserved | No. of shares bid for | No. of times of total meant for the category |
| Qualified Institutional Buyers (QIBs) | 2964445 | 465359745 | 156.9804 |
| Non Institutional Investors | 494075 | 66679710 | 134.9587 |
| Retail Individual Investors (RIIs) | 1482220 | 44548665 | 30.0554 |
Cinemax listed on NSE today and the shares closed below the offer price. DalalStreet.Biz had an expensive rating on the issue. I wouldn't BUY as the Great Indian Multiplex story is melting down.
Labels: IPO India
Published by DalalStreet Business @ 1:00 AM
RBI Hikes CRR by 0.5% to 6%
Tuesday, February 13, 2007
With the Indian inflation at record high, 6.58 %, the Finance Minsitry had no other option but to cool the overheated economy. The Reserve Bank of India, just minutes ago announced the hike in Cash Reserve Ratio by 50 bps to 6%. This hike would suck Rs 14,000 crore away from the system.
In order to manage short term liquidity crisis, RBI has proposed the CRR hike in two phases with the second phase to come into effect after Budget on March-3rd.
RBI in a press release said,
It may be recalled that in the Third Quarter Review of the Annual Statement on Monetary Policy for the year 2006-07, the stance of monetary policy was set out. The Review inter alia stated :SBI CFO said that the lending rates will increase not just to the overheated Real Estate borrowers but also to all other borrowers. Banking stocks will be under pressure and the market correction is likely to continue tomorrow.
"Hence, a determined and co-ordinated effort by all to contain inflation without unduly impacting the growth momentum is not only an economic necessity but also a moral compulsion. To the extent the current inflationary pressures are attributable to monetary conditions, it is essential to undertake appropriate measures, in continuation of those already taken and in the light of anticipated developments." (paragraph 77)
Labels: RBI India
Published by DalalStreet Business @ 7:14 PM
Bear Hugs Dalal Street
The sensex has fallen close to 600 points in 3 trading sessions. Infrastructure & Real Estate stocks are the worst hit. Brokers attribute the correction due to the rise in interest rates and also their is a widespread speculation that some of the concessions given to Infrastructure sector linked to lands banks will be withdrawn in the current budget.
Capital Goods and Cement stocks are also amongst the top losers. Auto stock is driving in the reveres gear as well. FII interest in the market has been lackluster but they have been selectively picking stocks.
The IPO market is also expected to cool down and markets are expected to be volatile until the budget.
Published by DalalStreet Business @ 3:10 PM
End of Real Estate Stock Boom ?
Sunday, February 11, 2007
With the Indian inflation at a record high, 6.58% and interest rates at a four year high, it maybe the right time to exit Indian Real Estate Stocks as the correction has already begun warned Analysts with several brokerage houses.
That's good news for wealth and job creators who were complaining about unrealistic real estate prices. Late December-2006, Bangalore was the first city to witness correction in Real Estate prices.
Three Stocks, Mahindra Gesco Developers Ltd, Parsvnath Developers Ltd and Peninsula Land Ltd are among the 10 worst.
A six-bedroom duplex apartment in the Malabar Hill area in South Mumbai, where Bollywood actor Vinod Khanna and Citigroup Inc.’s India head Sanjay Nayar reside, sold for about Rs25 crore ($5.7 million), according to the buyer, Rakesh Jhunjhunwala.
Mahesh Nandurkar of CLSA Asia Pacific Markets said,
While a decline in housing affordability and potential oversupply could weaken prices in the near term, the long term outlook remains attractive on strong demand.Parameswara Krishnan of DNB Nor Asset Management said,
Property-stock valuations are approaching bubble territory. We should see some correction. He said he is avoiding real-estate shares. As more supply of paper hits the market, valuations and returns will come down to more stable levels.Purvankara Projects, Omaxe, DLF, Kolt Patil and others are waiting for an IPO.
Labels: India Investment, Real Estate Stocks
Published by DalalStreet Business @ 2:08 AM
Citi Maintains BUY on TCS, Infosys, Wipro, HCL
Friday, February 09, 2007
Citigroup in its latest research report has maintained a BUY on all the front line IT stocks.
TCS is expected to report an EPS of Rs 54.26 and Rs 65.67 for Fy2008 and FY2009. Price target for TCS is Rs 1560.
Infosys is expected to report an EPS of Rs 84.74 and Rs 105.9 for FY08 and 09 respectively. Price target for Infosys is Rs 2660. 21% upside from current levels.
Slowdown in Telecom sector is unlikely and Wipro is all set to cash in. Wipro's BPO is also doing extremely well. It is expected to report an EPS of Rs 25.05 and Rs 31.1 for FY08 and FY09 respectively. Price target for Wipro is Rs 730. I am wondering if Wipro will spin off its BPO as a separate business to unlock shareholder value ? Maybe not as the management is much more ethical and has long term road map and blueprint of the company rather than short term stock market profits.
Citi continues to be bullish on HCL Technologies. HCL Tech is expected to report an EPS of Rs 36.5 and Rs 44.05 for FY08 and FY 09 respectively. Conservative price target for HCL Tech is Rs 770 [Cum Bonus]
Detailed review of Satyam's stock recommendation is available here.
Citi has recommended a SELL on iFlex solution with a price target of Rs 1850 as the company's stock is currently overvalued compared to its peers.
Published by DalalStreet Business @ 11:25 AM
Power Finance IPO - Heavily Subscribed
Wednesday, February 07, 2007
I am not sure if Finance Minister P Chidambram is awake @ 1:00 AM on Feb-7th, but if he is, he would probably be celebrating the confidence FIIs have in his economic policies. I just received the final SMS which said the recently concluded IPO of Power Finance Corp is subscribed 77.24 times.
Foreign Institutional Investors have bid for a whopping 5.68 Billion shares of PFC against the total offering of 117 Million.
The final subscription figures are as below.
| Sr.No. | Category | No.of shares offered/reserved | No. of shares bid for | No. of times of total meant for the category |
| 1 | Qualified Institutional Buyers (QIBs) | 57408350 | 7874596640 | 137.1681 |
| 2 | Non Institutional Investors | 17222505 | 840603600 | 48.8084 |
| 3 | Retail Individual Investors (RIIs) | 40185845 | 343103680 | 8.5379 |
All retail application bids for over 800 shares will get firm allotment of 80 shares. Going by this subscription rate I am wondering if I should apply for the smaller IPOs or not as fate of every application will be decided by lottery.
Published by DalalStreet Business @ 12:59 AM
Ansal Properties & Infra - Bonus Issue Likely
Monday, February 05, 2007
The stock of Ansal Properties was locked in upward circuit today due to a rumor of Bonus issue.
Recently, IL&FS Investment Managers (IIML), the private equity arm of IL&FS, signed an agreement to invest in two special purpose vehicles (SPVs) being floated by Ansal Properties and Infrastructure (APIL). DalalStreet.Biz could not confirm the quantum of investment, sources close to the deal said that IL&FS will have 49% equity in the SPVs with an investment of about Rs 130 crore.
The two SPVs that APIL plans to float in partnership with IL&FS, will develop projects in Gurgaon. While the first SPV is being floated for an integrated township, the second SPV will develop an IT special economic zone (SEZ). IL&FS is the second private equity fund to commit investments in an APIL SPV in the last six months. Earlier, HDFC Realty Fund had taken a 33% equity in an APIL SPV for developing an SEZ in Greater Noida.
In recent times, APIL has also attracted private equity investment in the holding company by diluting promoters' stake. The company had raised Rs 175.8 crore through a 5% private placement with Citigroup in October last. Later, in November, George Soros had bought close to 1% equity in the company for Rs 25 crore through the secondary market.
APIL has reported a profit of Rs 40.19 crore for the quarter to December 2006, up by 256% from a profit of Rs 11.3 crore in the corresponding previous period. The company's revenues has also jumped 194% to Rs 197.28 crore against a revenue of Rs 67.1 crore in the quarter to December 2005.
In the December quarter, the company signed a Memorandum of Understanding (MoU) with the Uttar Pradesh government for developing a hi-tech city on 2,504 acre adjoining Noida. The company also completed the qualified institutional placement issue to raise Rs 681.75 crore.
To cash in on the booming medical tourism business in India, Ansal Properties and Infrastructure (APIL) is reportedly said to have signed up with Fortis Healthcare for developing a 50-acre medicity project in Greater Noida. Apart from a 200-bed hospital, the project will also have an adjoining service apartments.
Ansal Properties & Infrastructure is engaged in real estate promotion, construction and development activities and executes contracts for building residential complexes, commercial complexes etc. It undertakes projects in India and abroad. The company later diversified into development of shopping malls and retail business by establishing a chain of departmental stores.
Published by DalalStreet Business @ 4:04 PM
Metal Stocks Down in Early Trade
Hindustan Zinc was down 5% to Rs 657.90, Sterlite Industries was down 5.5% to Rs 491 and Hindalco had shed 2.3% to Rs 178.80, in response to the fall in metal prices arising from fund-liquidation. Reports indicate that a hedge fund had suffered heavy losses.
Benchmark copper for delivery in three months closed at $5,330, down 4.8% from Thursday's close of $5,600. In New York, copper futures closed at their cheapest levels in ten months. Rising LME copper stocks also dampened sentiment, with stocks up 127% over the last year. Copper is down more than 12% since the start of the year and around $3,000 below the peak hit in May 2006.
Zinc ended down at $3,085 versus $3,390 after falling 11.8% at one point, to $2,990 on Friday. Zinc prices have tumbled by more than 25% since the start of the year on worries about a looming surplus, China's reporting net exports of zinc in 2006 and a slowing demand in Europe and the United States.
Aluminum fell a relatively modest 1.2%, to $2,720, on Friday.
Copper and zinc makers reported a strong financial performance in the December 2006 quarter on the back of firm prices of these metals on a year-on-year basis. Hindustan Zinc’s net profit rose 305.8% in the Dec-06 quarter to Rs 1335 crore, on 171.3% growth in net sales to Rs 2480 crore.
Hindalco’s net profit rose 91.5% in the Dec 2006 quarter to Rs 643.90 crore on 62.1% growth in net sales to Rs 4656.20 crore.
Published by DalalStreet Business @ 10:34 AM
ACC buoyant on FY-2006 outcome
Thursday, February 01, 2007
ACC posted 106.66% surge in net profit to Rs 358.46 crore for the quarter ended December 2006, whereas the same was Rs 173.45 crore for the quarter ended December 2005. Total income rose 52.46% to Rs 1677.94 crore (Rs 1100.51 crore).
For the year ended December 2006, ACC posted a net profit of Rs 1231.84 crore compared to Rs 709.70 crore for the year ended December 2005. Total income increased to Rs 5934.96 crore (Rs 4445.68 crore). The board of directors of the company recommended a dividend at the rate of Rs 15 per share for year 2006.
The results for the year ended December 2006 include figures of Tarmac (India), which was merged with ACC in January 2006. The current quarter's and year ended December 2006 figures are not comparable with the corresponding quarter of the previous year and year 2005 figures. The operation of Tarmac (P) resulted in a profit of Rs 4 crore during the current year as compared to the Rs 1.23 crore loss during the corresponding period of the previous year (not included in these results).
On a consolidated basis, the group posted a profit of Rs 1239.60 crore for the year ended December 2006, whereas the same was at Rs 695.97 crore for the year to December 2005. Total income for the same period was Rs 5974.39 crore (Rs 4672.03 crore).
ACC is expanding capacity at its Wadi plant, Karnataka, by three million tonnes a year, at Rs 1,480 crore. Apart from the new Wadi plant, ACC is gearing up to capture the boom in the cement industry by increasing capacity by 2.9 million tonnes per annum in Gagal (Himachal Pradesh), Lakheri (Rajasthan) and Bargarh (Orissa). ACC also plans to expand by 2 million tonnes per annum every year through internal accruals, if the demand-supply gap widens.
Holcim, along with Gujarat Ambuja Cements (GACL), hold 35.15% stake in ACC as of December 2006.
Published by DalalStreet Business @ 3:43 PM
Reliance Energy sizzles as Haryana, UP offer power projects
In what may be the single largest engineering, procurement and construction (EPC) contract, the Haryana Power Generation Corporation has asked Relience Energy to set up a 2x600 Mw coal-based power project on a turnkey basis for Rs 3763 crore. The project will be financed in a debt:equity ratio of 80:20, with 20% of the contribution coming from the state government.The project will be implemented in a schedule of 35 - 38 months.
REL has also bagged the ‘balance of plant package’ from Uttar Pradesh Rajya Vidyut Utpadan Nigam for the 2x250 Mw extension units 5 & 6 of the Parichha Thermal Power Station, Jhansi. The value of the order is Rs 395 crore. The order for the main plant, which consists of boiler turbo-generator and civil works, was earlier awarded to Bhel.
As many as 90,645 shares changed hands in the counter on BSE. The stock had advanced ahead of this announcement; from Rs 502.10 on 25 January to Rs 513.60 by 31 January.
In late-2006, Reliance Energy, along with its consortium, recently signed a contract with the Ministry of Petroleum and Natural Gas (MoPNG) for exploration and production of four coal-bed methane (CBM) blocks – two in Rajasthan, one in Andhra Pradesh and one in Madhya Pradesh.
REL will be responsible for utilising the coal from the four blocks for power-generation. REL has major expansion plans in the power-generation segment. The company is planning a 4,000 Mw gas-based plant in Maharashtra. The company may bid for two ultra-mega projects, which have been launched by the Government of India, at Mundra and Sasan.
REL posted 22.10% growth in net profit to Rs 201.03 crore for Q3 December 2006, against Rs 164.64 crore in the corresponding period of the previous fiscal. Total income in the quarter rose 60% to Rs 1,820.34 crore (Rs 1,137.63 crore).
During the quarter, REL purchased the balance equity shares of BSES Kerala Power (BKPL) making it a wholly-owned subsidiary of the company. The company also acquired 100% shareholding in Reliance Aworld, Reliance Infrastructure Projects and Reliance Infrastructure Services. REL also purchased 51% shareholding in Reliance Energy Transmission. Consequently, all these companies have also become REL's subsidiaries.
Published by DalalStreet Business @ 3:30 PM
