Monday, March 20, 2017

SHANKARA BUILDING PRODUCTS IPO


Bangalore based Shankara Building Products IPO  opens for subscription from 22nd March to 24th March. 
The issue price band is Rs.440-460 (FV10). 
Bidding can be done in multiples of 32 shares. 
Listing on both BSE & NSE.
The issue objective is to primarily offer of sale by one of the promoters, Fairwinds Private Equity (formerly known as Reliance Equity Advisors, it is advisory arm of RELIANCE ADA GROUP)  and to repayment of loans.
Fairwinds is offering for sale its 25% stake and fresh issue constitutes of Rs.50 crores.






COMPANY DETAILS : 
Under the tradename SHAKARA BUILDPRO, the company caters to Home Improvement and Building products with its over 103 stores across India, mostly in South India as of now.
It offers Steel, TMT bars, Tiles, Cement, Flooring, Plumbing Materials, etc in its showrooms.

The focus is on Middle and Upper Middle Class.


THE GOOD, THE BAD AND THE UGLY!!










Good Points : 
1. The company was named among the TOP 200 BEST UNLISTED companies in India by Business Standard.
2. The company has pretty decent numbers consistently and has posted a profit of Rs.65 crores for March 2016.
3. The company has no direct competitor
4. Prescence across Value chain.
5. Has good variety of Building products including 3rd party brands like SINTEX, APL APOLLO.
6. EPS has shown a growing trend....
2014.......2015.......2016.......2017(9m)

13.13.......10.32.......18.9........19




Not so Good Points: 
1. The company will not get any benefit from the Offer of Sale by its PE investor FAIRWINDS.
2. The PAT growth rate is 7.94% compared to Revenue growth of 8.38% which indicates fall in margins and increased competition.
3. Even the company's promoter & MD Sukumar Srinivas is offering more than 8 lakh shares through this issue!!


WHAT OTHERS SAY : 


DSIJ (Dalal Street Investment Journal) says "Considering slower growth rate and higher valuation, we recommend AVOID".

MYINVESTMENTIDEAS  says " The profit percentage is gradually decreasing from 2% in 2012-13 to 0.6% in 2016 March. Considering that the Price Issue PE works out to 97.6, the issue looks highly priced.

APPLYIPO.COM says "Grey Market Premium started around Rs.95 per equity share and is now showing upward movement and is now quoting between Rs.155-160".

CHITTORGARH.COM has given the IPO a rating of 4 out of 5.

DILIP DAVDA says "Price apprears reasonable. Investors may consider investment for Medium to Long Term"

CHANAKYA ni pothi considers this company as " D-MART of Construction sector"



DISCLAIMER : 


I do not have any interest in this IPO. 
I am giving the good and not so good featurs only to create awareness. 
All the information published here is from various sources and cant be relied as 100% accurate. 
Request you to consult your Financial Advisor before considering an investment in this IPO. 
I may or may not invest in this IPO. 



Also visit http:/http://goodinsuranceadvisor.blogspot.in/

Thursday, March 16, 2017

LIC IS BEST.... REALLY??

A crap being attempted to make viral.....
I just received.
Wanted to share with you......
*Term Insurance premium : LIC v/s Pvt insurance Cos.*
Example: 1Cr Term Insurance, premium LIC - 40,000/- Pvt Cos - 20000/-. Presuming 10,000 policies done by each. Amount collected by LIC 40 Cr and Pvt Cos 20 Cr.
Mortality rate in India per 1000 is 3 (same for both LIC and Pvt Cos).
Now as per this rate presuming 30 claims will arise out of 10000.
So claim amt. to be paid will be 30 Cr.
LIC will pay 30 Cr out of collection of 40 Cr less Administration cost.

Image result for lic private insurance companies
How Pvt. Cos. can
pay 30 Cr from collection of 20 Cr less administration cost?
Hence they will have to reject 15 claims (50%) because at least 5 Cr will be their administration cost etc.
Now you understand why LIC's premium rates are higher than Pvt Cos in view of Mortality rate in India and Why LIC is the BEST?
*Friends !.. Gold is never cheap and Cheap things are never a Gold !*


EXPLAINATION FOR SUCH IGNORANT FOOLS


This is very simplistic portrayal of the concept and business of insurance, which,  unfortunately is not completely right. 

Re-Insurance will be used by most of the Insurance Companies including LIC...
with the likes of Societe Generali,Metlife,Newyork Life,Sunlife Inc...etc
Especially when the SA is higher..
That is how the companies reduce their risk...


Company applying for Re-Insurance is called a CEDING Company.

The Risk retained by the Ceding Company is called RETENTION.

The Risk transferred for RE-INSURANCE is called CESSION..


Selling a policy by degrading your competition and without giving the right information is not a good thing to do. 

FINAL THOUGHTS: 
I would never be a Customer with LIC


 instead,I will be the First to invest,If they get listed...

*Make the right choice and take a wise decision*


Image courtesy : www.basunivesh.com

Tuesday, March 14, 2017

NIFTY TOUCHES ALL TIME HIGH....BUT RETURNS IS 1% CAGR IN 2 YEARS....



Two years before for the first time Nifty was closed at all time high on 3rd March 2015 as 8,996 and today again it is closed at 9,087 which is all time high as far as today is concerned. We are in a structural bull market and surpassing all time high, going forward is a new normal!
In other words, Nifty crossed the same level exactly after 2 years. 1% returns in the last 2 years!

Nifty on 14th March 2017
  9,087
Nifty on 3rd March 2015
  8,996
Total Returns
1.0%
Total Months
24
CAGR
0.50%

The typical investor’s reaction today is market is all time high and we should wait for the market to correct to invest further. Market is like GOD and nobody can predict  in the near termWhen you believe GOD, you will be blessed over a period of time, like that when you stay invested in the markets; investors will be rewarded handsomely, no doubt!

Majority of the investors fails to understand one thing that their portfolio is already into the market tunes, for the investment of additional 3 to 5% of newer investment they keep waiting for the markets to fall, even if somebody timed it perfectly also (It is highly difficult) what impact it is going to improve overall portfolio.

Nifty fell nearly 1500 points between 3rd March 2015 and 3rd March 2016 (8996-7475). It is one of the best time to enter the market, how many invested, very few. Either no money or no conviction!

Nifty on 3rd March 2015
   8,996
Nifty on 3rd March 2016
    7,475
Total Returns
-16.9%

On 25th February 2016 nifty closed at 6,970 which is the recent bottom. Everyone is expected nifty to touch 6,500 and it never happened.

The beauty of human mind is when it falls everyone will have their own expectation of fall and if it met quickly, then they think we should wait little more time probably our expectation is not right. If it is not falling, then they will keep waiting for the level to happen, will never happen!

On 21st November 2016, NIFTY again closed at 7,929 mainly due to demonetization event and everyone expected market to correct 7,500 levels and the market has crossed 9000 level.

8th January 2008 market closed at 6,287 and today it is 9,087. When it comes to CAGR it is only 4% and absolute returns it is only 45% in 9 years plus.
Nifty on 14th March 2017
   9,087
Nifty on 8th January 2008
   6,287
Total Returns
44.5%
Total Months
110
CAGR
4.03%

The best way to understand whether the market is high or not is to understand how the market has moved to this level, which will give the better picture.

We were never short of news and events in the past and equally or more events and news are going to unfold in the future as well. If we keep focusing on each and every event, for our investment decision we will never make any money. Investment is long term; today may be all time high and in the next 3 years plus time we will see much higher level than what we have witnessed today!

The best way to create wealth is keep investing your long term money as and when you keep getting it. If you do not get any money to invest enjoy the bumpy ride.
 Please note : From 3000 to 21000 levels in Sensex between Jan, 2003 and Jan 2008 market has corrected nearly 13 times more than 10% and two times more than 20%. Markets fall and rise are very quickly and it will not allow the individual to think and act. If somebody knows the past, they will not time the market and stay invested and keeps investing their surplus to capture this Bull Run. Life is full of choices, if we have not stay invested for the next 10 years and I can guarantee you one thing that you as an investor will regret forever!!!
No automatic alt text available.

The gist is....DO NOT WAIT FOR THE MARKETS TO FALL/RISE...
If you have got time horizon....just go ahead and invest
If you have achieved your goal....just go ahead and redeem....
Waiting for the right time to invest is wait forever




Thank you dear Padmanabhan Balasubramanian (foundly called Paddu.....my CFP friend from Chennai of fortune planners) for amazing inputs


Also visit http:/http://goodinsuranceadvisor.blogspot.in/

Monday, February 27, 2017

LIVE ON RADIO CITY

I will be LIVE on RADIO CITY throughout the month of March  giving Gyan on "INVESTMENT IDEAS & TAX SAVING TIPS"
Daily morning throught March 2017

Do tune in

Thursday, January 19, 2017

DO NOT GET LURED BY THE 5% DISCOUNT ON THE CPSE ETF




DO NOT GET LURED BY THAT 5% DISCOUNT
Image result for cpse etf issue

The Further Fund Offer (FFO) of the CPSE ETF is now open & set to close tomorrow.
This CPSE ETF
The CPSE ETF looks lucurative enough on the face of it.
After it consits of Maharatnas and Navrathnas and you are getting 5% discoutn to the boot.

The drawbacks are however many and not being understood even by many experts as everyone seems to be only looking at that 5% Discount!!!

1. The Fund has a concentrated portfolio of only 10 stocks and Energy Sector alone has a dominant weightage of as much as nearly 58% of the portfolio!!
Capture1
This is followed by Metals at 20%.
Just 2 sectors making up nearly 80% of portfolio is a huge huge overconcentration risk.

2. ALL the companies comprise of Public Sector Shares which are controlled by Govt and thus carries a risk of Govt intervantion and could face risk of Policy logjam too

3. The underlying shares have shot up in the last 6 months and could see profit booking in the coming weeks thereby affecting the returns.

4. The so called "experts" are talking that the previous CPSE ETF has beaten the Index.
Its nothing but the fact that the Dividends recd is REINVESTED in the ETF and hence the outperformance!! The dividend has been 4% , so for 2 years, it works to 8%.
Simple Maths but enough to lure gullible investors!!

5. Unlike the previous issue where there was a Loyalty unit bonus but this there is no such attraction this around.

6. Another point to note is that the February CPSE Futures is quoting at a discount of OVER 40% (!!!) clear indication that the Market participants expect a Fall AFTER the units in this issue is allotted.

So, for a 5% discount bait, you could well be risking a Bigger Percentage.

I HAVE WARNED YOU!




Please look at a Diversified fund and if you are so bullish on PSU stocks, even then investing in a PSU fund like a Invesco PSU Fund/SBI PSU fund makes more sense than investing in this ETF which comprises of just 10 stocks.
Invest ONLY if you have the talent/knowledge on when to EXIT too!

And, please please if you are investing only looking at making a quick exit on listing, DO NOT MAKE THAT MISTAKE. You might well have to sell at a loss!

Best of luck,
Srikanth Matrubai


https://twitter.com/goodfundadvisor

Comments System

Disqus Shortname

Disqus for Good Funds Advisor

Translate