Rakesh Jhunjhunwala holdings increase in 4 stocks

Rakesh Jhunjhunwala has increased his stake in 4 different stocks in April and May 2012.

As per the data available with stock exchanges, Rakesh Jhunjhunwala has increased his holdings in Prime Focus, Aptech, Viceroy Hotels and Geometric software through open market transactions.

These stocks have surged in past 2 months significantly even in falling market. Viceroy Hotels was the biggest gainer at 39%, Geometric (16%), Aptech (12%) and Prime Focus (3%). All the surge was mainly due to Rakesh Jhunjhunwala buying stocks of these companies. Basically these stocks are good stocks to buy as long term investment.

Rakesh Jhunjhunwala has acquired 25.5 lakh more shares or 1.71 per cent shares of Prime Focus. After this purchase, his total stake in company is at 7.64%.

He has bought additional 10 lakh shares, or 1.6% stake, in Geometric to take his total stock holding to 10.06%.

Rakesh Jhunjhunwala also acquired 2.24% in Aptech. His holdings in Aptech is over 32% per cent. Also he has increased his holdings in Viceroy Hotels to 13.45% by acquiring additional 3.45% shares.

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IPO News - Rashtriya Ispat Nigam (RINL) IPO Coming Up

Rashtriya Ispat Nigam has filed IPO papers with SEBI. Rashtriya Ispat Nigam (RINL)is a state-owned company and will mostly be launching it's first initial public offer (IPO) in financial year 2012-13.

RINL has filed draft red herring prospectus (DRHP) on May 18th with SEBI stating IPO of 48.898 crore equity shares ( it will be a dilution of 10% equity stake by the GOI).

This IPO is offering a discount of upto 5% on offer price to retail investors and employees of the company.

RINL is India's second largest government owned steel company. It has original liquid steel production capacity of 3 mtpa and this capacity will be expanded to 6.3 mtpa by the financial year 2013.

For the nine months period ended on December 31, 2011 RINL had recorded consolidated PAT of Rs 500.53 crore on total income of Rs 9,408.71 crore.

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Stock Research Report - Hyderabad Industries

Hyderabad Industries is a C K Birla Group company. It is into the business of producing building products, engineering goods and industrial products and is a market leader in its segments.

HIL markets its product AC and fibre cement sheets under the well-known brand “Charminar”. The total capacity of the cement sheet is 8.55 lakh tpa, prefab building panels at 4.60 lakh tpa, prefabricated autoclaved capacity at 3.05 lakh tpa and thermal insulation capacity is 6,000 tpa.

The commercial production of sheeting line 2 in Uttar Pradesh has started w.e.f. 09 February 2012. HIL is also the largest manufacturer of calcium silicate, insulation blocks, pipe sections and jointing for gasketing, thereby meeting the critical needs of the fertilizer, engineering & chemical industries. Company also makes aerocon prefab panels, autoclaved aerated concrete blocks, which find applications in the construction of buildings, malls, shopping complexes and office partitioning etc.

HIL has a strong & extensive distribution network with nearly 8000 sales points spread across the country which is serviced by its 45 depots across country.

The stock trades at current stock price of Rs.358 at P/E of 4.4 FY12. With expected EPS of 93.5 in FY13E, stock trades at P/E of 3.83 and at P/E of 3.25 with 110 EPS FY14E. With these estimates, stock price target will be Rs. 480 in medium term.

At current stock price of Rs. 358, dividend yield is also very attractive at 4.47%. It's book value is 474 making it a stock available below book value and a good dividend yielding value stock to buy.



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IPO News - Speciality Restaurants IPO will open on May 16

Speciality Restaurants has earned a strong position for itself in the gourmet world in last 16 years. It has established several famous brands such as Mainland China, Oh! Calcutta, Sigree, Haka, Machaan, Mostly Kababs, Just Biryani and Sweet Bengal. Now Speciality Restaurants is coming up with an Initial Public Offering (IPO) for it's lovers.

Company runs 62 Food & Beverage outlets in various cities of India. As per their website (http://www.speciality.co.in), Mainland China serves more than 2 lakhs Chinese meals per month. Mainland China and Oh! Calcutta have won major awards on various occasions for being India’s best restaurants in their respective categories. Company employs about 3000 people.



Company is launching its IPO issue of 1,17,39,415 equity shares of face value Rs 10 each on May 16, 2012. This issue will constitute 25% of the post-issue paid-up capital.

Speciality Restaurants is planning to use funds gathered thru IPO for development of new corporate restaurants (with an outlay of Rs 144.685 crore); development of a food plaza (with cost of Rs 15.1 crore); and repayment of a term loan facility (with Rs 10.433 crore). As per DRHP filed with SEBI, company plans to open 48 new corporate restaurants.

Promoters of Speciality Restaurants are Anjan Chatterjee and Suchhanda Chatterjee. They will reduce their shareholding in company to 60.69% post IPO issue. IPO will close on May 18.

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Buy Stocks of Titan Industries

Prabhudas Lilladher, an equity stock broker, has come up with a stock report on Titan Industries with 'Buy Stocks' recommendation. Checkout the target stock price.

Titan Industries posted PAT (Profit after tax) of Rs.144 crores in Q4FY12 which is 72% growth over PAT in same quarter last year. Watch sales was up 14% for Q4 and 15% for FY12. Jewellery volumes declined 7% for Q4 but it was up 5% for full year. Titan industries added 41 retail stores during Q4FY12. Now the total number of stores is 827 stores across India. Growth in Eyewear business was 17% in sales. Strong volume growth in Watches division is a key highlight of the quarter.

Titan Industries is following strategy of expanding its presence in Lifestyle segments and categories where demographic dividend can be most leveraged. Titan Industries is one of the top stock pick by Prabhudas Lilladher stock reseach team in the Retail space with ‘Buy Stocks’ rating. Target stock price for next one year is Rs.290 (28x FY14 expected). Price volatility in Gold may act as a deterrent for volume growth for company.



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Samvardhana Motherson Finance (SMFL) IPO Withdrawn - Why?

Samvardhana Motherson Finance (SMFL) IPO has been withdrawn from markets by it's management. This was the second-largest IPO withdrawal in Indian capital market history. Why?

The management of SMFL withdrew its Rs.1,665 crore IPO issue on Friday as investors turned back to it's expensively priced initial public offering and foreign funds panicked when Indian government announced that it was renegotiating the double taxation avoidance agreement (DTAA) with Mauritius government. SMFL has anchor investors and promoters based out of this foreign location.

This IPO was opened on May 2, and was subscribed just 0.38 times till 7 pm on the closing day of issue according to the NSE website. Such was the bad response to IPO by investors due to exorbitantly priced initial public offering.

SMFL is an auto part company being parent company of listed auto components manufacturer Motherson Sumi. Promoters Vivek Chaand Sehgal and his family owns 90.35% stake in company and the company was planning to raise around Rs 1,665 crore in the price band of Rs 113 to Rs 118 per share.

Various news agencies are stating that company received poor response to it's IPO due to weaker market conditions but they are ignoring the fact that company had priced this issue with exorbitantly high valuations and was dreaming to be a debt free company on people's money with no value/returns for small retail investors. Company had left nothing on table for small IPO investors and so retail investors were not keen on investing in IPO.

IPO Recommendation to readers of IndianStocksNews.com about SMFL IPO was very clear - "Small investors need not buy IPO of SMFL. Better stay away."

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IPO Analysis - Samvardhana Motherson Finance Limited

Samvardhana Motherson Finance Limited (SMFL) is a multinational business with manufacturing and design capabilities providing full system solutions to diverse industries. Checkout it's Initial Public Offering (IPO) grading and recommendation.

SMFL was founded in 2004 and provides an end-to-end range of design and manufacturing solutions to the automotive customers, including product concept and product design, engineering, manufacturing, sub-assembly and the production of integrated modules.

Issue Open: May 02, 2012
Issue close: May 04, 2012
Price Band: Rs. 113 - Rs. 118 Per Equity Share
Minimum Bid Size: 50 Equity Shares
Face Value: Rs. 10 Per Equity Share
Issue Type: 100% Book Building
Maximum Subscription Amount for Retail Investor: Rs. 200000

IPO Grading / Rating:
ICRA has assigned an IPO Grade 4 to Samvardhana Motherson Finance Ltd IPO. This means as per ICRA, company has 'Above Average Fundamentals'. This rating is influenced more by the group’s standing, production capabilities and the diversified product portfolio. But as on today, company is currently in losses.

Future Prospects
Consolidated total debt of the company is Rs.3918 cr against networth of Rs.1433 cr. After this IPO, company is planing to reduce the debt by Rs.966 cr. Reduced debt will lighten interest costs and give a boost in balance sheet for profits, the effect of this will not be visible anytime soon in balance sheet.

IPO Valuation
SMFL reported EPS of Rs 2.90 in FY11 and had posted loss of Rs2.50 per share in FY12. Company has fixed a price band of Rs.113 to Rs.118 for this IPO. Company has also allotted nearly Rs.2 cr share to some anchor investors at a price of Rs.115. This valuation looks very high for IPO and especially when company had made preferential offer at Rs.52.10 per share in sept2011. From price to Book Value perspective, the ratio stands at more than 5 for lower and upper price band of IPO. Value investing says, value stock is the one which has P/BV ratio of 1 or lower. This IPO offering is way away from being an value investment for IPO investors.

Small investors need not buy IPO of SMFL. Better stay away.

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Mid Cap Stock To Buy - Jain Irrigation

Jain Irrigation has been facing tough time since past year. This was due to delay in it's receivables from government. As a company, it looks like Jain Irrigation is working on to be less vulnerable to non-receivables and to expand the market abroad. The turn around for stock could be on next corner.

Business:
Jain Irrigation is in business of micro-irrigation systems (MIS) and it is the biggest player in it's industry. Sales of Micro-irrigation systems constitute half of Jain Irrigation's total revenues. Company's products are eligible for capital subsidy from central government. These subsidy payments were delayed by government (as you know how Indian government works!!) in past 6-9 moths. This created problems for Jain irrigation in terms of working capital requirements and have contributed to it's lackluster performance in last one year. The company lost more than half of its value in stock markets in 2011 for its inability to curb the receivables.



Jain Irrigation's PVC pipe business grew 36% Y-O-Y in previous quarter. Company is tapping foreign markets and expecting exports revenue to grow to $100 millions. If company achieves this target, it will be more than 6 fold growth in PVC pipe exports business. Company is also working towards reducing it's working capital cycle for better balance sheet stability. For the same reason, Jain Irrigation has decided to operate an Non-Banking Financial Company (NBFC) and has approached RBI to obtain the same. Operating NBFC will help company in it's working capital requirements.

Stock Financials
Reported Profit After Tax for last quarter was at Rs.1.2 Crore which is a fall of 98.3% Y-o-Y. Fall in PAT was on account of higher interest cost of Rs.91.6 Crores and forex loss of Rs71.1 Crores. However, adjusted PAT stood at Rs.72.4 Crores.

The company's profitability in the last two quarters was hit by mark-to-market losses on its $157-million outstanding loans. The losses stood at Rs 59.3 crore in the September quarter and Rs 71.1 crore in the December quarter. However, these mainly remain non-cash adjustments. The main source of pain was the interest cost, which at Rs 250.6 crore for the nine months ended December 2011 was up 58% against the year-ago period. The net profit in the same period almost halved to Rs 95.2 crore.

Stock Valuations
At current stock price of Rs.88, the stock trades at P/E of 17. In coming quarters, balance sheet would be without forex losses and company's profits would be boosted by significant difference. This makes it a stock to buy in mid cap space.

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Buy Gold via Gold ETF

It’s Akshaya Tritiya time of the year again and people are out in markets to buy gold. Is there a smart way of buying gold than traditional way of buying gold jewellery from jeweler? Yes there is. Check it out.


The easiest way people follow traditionally is to buy gold from jewelers in the form of ornaments. It is best way if you want to buy ornaments and make your other half happy! But what if you want to buy gold only for investment? Do you know that jeweler charges you making charges of more than 15 to 20% of total cost of gold jewellery that you are buying? And then sales tax is added on top of it. Immediate loss of more than 20% in your gold investment the moment you walk out of jeweler’s shop! And then when you go to sell the same gold after some time, another few percentage points (often more than 10%) of loss in the name of purity loss, breaking charge etc. that jeweler thinks of. Eventually you end up paying more than 30-40% of your gold purchase price (your investment in gold!) as making charges, breaking charges, taxes etc. So where is your profit that you want to earn from the appreciated price of gold? It’s in the pockets of jeweler (making/breaking charges) and government (taxes).

Gold bars or gold coins offered by banks you think is a smart choice? Banks often charge you more than 10 to 20 % on top of market cost of 24 carat gold when they sell you gold bars and coins.

Also, when you buy gold in the form of jewellery or gold bars and coins, you are always under threat of theft of gold.

Think smarter.

Unless you have black money that you want to convert in gold without any receipts, and you want to make most out of appreciating gold price being smart and savvy investor, go for Gold ETF.

Gold ETF
Buying Gold ETF is purchasing gold in electronic form. You can buy them just like you buy the stock of any company from your broker. Gold ETF makes it easier for you to invest in gold. The investment objective of Gold ETF is to provide you with returns that closely correspond with the domestic price of real gold.

They are easy to purchase since you can buy even just one gram at a time. Over time, you can build up your gold portfolio to the level you want.

Gold ETF Features
1. Cheapest form of pure physical gold with no premium or making charges
2. No issues of wastage or impurities like in the case of physical gold
3. Tax efficient way to hold gold, No Securities Transaction Tax or wealth Tax
4. Can be easily purchased or sold anytime at transparent real time price
5. Can track your investment value in real time
6. No worries of theft and also save on locker charges
7. Benefit on long-term capital gains



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Small Cap Stock To Buy - KNR Constructions

KNR Constructions is an attractive small cap stock from infrastructure sector. The company caters to construction of roads, bridges and water infrastructure businesses.

Low debt and strong execution skills are KNR Constructions (KNRC) key positives as part investment rationale and makes it a good stock to buy from infrastructure space. The company's current order book stands at Rs.2,800 crore. It is 2.7 times its FY11 revenues.

Stock Analysis:
Company's debt-to-equity is 0.48 as in march 2011 and it is one of the lowest ratio among its peers that shows it has the least leveraged balance sheet. Company follows conservative approach for bidding cautiously and selectively for new projects. This conservative approach has helped company when most infrastructure companies have reported huge losses. KNR Constructions gave a decent performance even in troubled times.

In the December quarter, the company had posted a PAT of Rs.16.1 crores compared to Rs.5.5 crores in the same period an year ago. In present high interest rate regime, KNR Constructions with a low leverage would be insulated and benefitted compared to other infrastructure businesses.

KNRC have integrated it's businesses backward for construction activities. This helps company in maintaining a healthy operating margin. KNRC has captive quarrying mines and crusher units that reduces operating expenses for it. The major road developers such as GMR Infrastructure, Sadbhav Engineering and Patel Engineering are among company's clients.

It is expected that significant number of road projects would be awarded over the next few years as infrastructure sector is the sector that needs big improvement in India, KNRC with its execution skills and strong balance sheet will be in a comfortable position to grab at least a few projects. Growth of company seems to be comfortable.

Stock Valuations
At current stock price of Rs.137, the stock trades at a price-to-earnings multiple of 5.85. The stock had a good run since January 2012. Considering above discussed positives for the company, the stock has some potential to run up further. if it corrects from current levels to Rs.100 levels, it is definitely a good stock to buy for medium term.

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