Tuesday, August 26, 2014

SNOWMAN LOGISTS IPO - SUBSCRIBE................HERE'S WHY..................









Bangalore based Snowman Logistics Ltd, the Cold Storage Arm of Gateway Distriparks has come out with a public issue with a price band of Rs44-47 targetting to raise between Rs.185-Rs.197 crores.
The Issue opens on 26th August and closes on 28th August.
Minimum shares to be applied is 300 shares and minimum investment should be Rs.13200/-.

COMPANY BACKGROUND :
The Company is present across 14 locations and operates 23 Temperature Controlled Warehouses.
The Company is proposing to set up facilities in another 6 cities. Snowman operates 370 reefer vehicles for primary and secondary transportation as of 31st March 2014.


The Company is promoted by Gateway Distriparks, which is a big player in Logistics Sector with its operations in Container Freight Stations at Major Indian Ports. Gateway Distriparks present holding of 54% will get reduced to 40% post the IPO.
The Performance of the company is mixed. While the CAGR is 35% in terms of revenue, the EPS is a pathetic  1.7 due to low ROE.

Anchor investors subscribed to 9.45 million shares at Rs.47 each, the upper end of the price band of Rs.44-47 set for its initial public offer (IPO) that opens on Tuesday. These anchor investors include Faering Capital India Evolving Fund which subscribed to 3,492,000 shares, ICICI Prudential Growth Fund Series 2 which opted for 2,127,900 shares, ICICI Prudential Value Fund Series 4 which subscribed for 851,100 shares, IDFC Sterling Equity Fund which subscribed for 2,659,800 shares and IDFC infrastructure Fund which opted for 319,200 shares.



POSITIVES :

1.     Crisil has rated the IPO at 4/5 which indicates Above Average Fundamentals
2.     Snowman is growing at a CAGR of 79%
3.     Mitsubishi Corporation holds 12.57% state
4.     High Entry barrier
5.     Reputed Promoters


NEGATIVES :
1.     50% of the Revenues is contributed by 20 customers leading to concentration of clients which may hurt profitability.
2.     Heavily dependent on Third party Services Providers
3.     Low Return on Equity is denting profitability


WHAT OTHERS EXPERTS SAY :

Hindu Businessline says :
“For an investor who can stomach high risk, the initial public offer (IPO) of Snowman Logistics presents a good opportunity.

MyInvestmentIdeas  says :

Hem Securities “The issue looks attractive with strong growth prospects in Cold Chain Industry”
Sharekhan “Snowman Logistics will benefit from the experience of its promoters. One can subscribe to the IPO”
Ajcon Global says : “Tax benefits available to Snowman Logistics Ltd under Sec35Ad will help the company”
SBI Cap Securities says :” We expect the growth to unfold once the capex cycle for the company is over. We recommend a SUBSCRIBE rating with a long term perspective considering the EPS growth opportunity awaiting the company”
ICICI direct says “Given the possibility of a shift from the unorganised to organised segment, we believe, earnings CAGR of 21% over FY14-17E make valuations attractive for SLL. Consequently, we recommend SUBSCRIBE to the IPO”
K.R.Choskey says “Considering leadership, unique business model and growing industry we recommend “Subscribe” to SNOWMAN LOGISTICS IPO”
GEPL Capital says “The stock enjoys premium in terms of valuation as it is the only player in the organized cold storage industry with huge business potential & its pan India presence. Hence we recommend to SUBSCRIBE to the IPO.
Dilip Davda says “Although this IPO looks pricey, considering the performance parameters and this being the first IPO from new specialized segment; it is set to reward investors in medium to long term. It is said to be another Just Dial / Wonderla in the offing.
Capital Mind says “The valuation is reasonable. Prudent to invest a small amount now”

Rakesh-Jhunjhunwala.in has boldly said "Missed Gati & TCI?....You can make up with Snowman Logistics IPO"


SRIKANTH SHANKAR MATRUBAI recommends :
The Company is a leader in the category with virtually NIL competition.  
The Narendra Modi Govt’s infra push too will help the business of Snowman.
The Markets too are in bullish mode. A definite Pop-up on Listing is a given.
Lack of peer listed players will force the Institutions to take exposure in Snowman as part of Industry exposure resulting in good support for the shares.
The retail portion is very small at just 42 lakh shares. I expect a strong listing gains.
SUBSCRIBE





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Monday, August 4, 2014

INFLATION - THE SILENT KILLER



 Inflation is a Silent Killer.



https://i.ytimg.com/vi/E0QORBzgpQw/mqdefault.jpg
Before you know it, Inflation has reduced the purchasing power of your money.
Watch the amazing video to know more....


It is imperative that you invest in those assets which give you returns above the Inflation.


https://www.youtube.com/watch?v=E0QORBzgpQw&list=UUYE5Xk94ocYsDf-QW-LOaDg Also visit http://http://goodinsuranceadvisor.blogspot.in/



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

Evergreen Investment Mantra

Is there any magic formula through which you can ALWAYS make money and never lose??
YES!!
There is!!!
Doing a Systematic Investment Plan (SIP) is indeed an Evergreen Investment Mantra...

Watch this simple and exciting video on the POWER OF SIP INVESTMENT.
https://www.youtube.com/watch?v=1-mpLYRKqEk&list=UUYE5Xk94ocYsDf-QW-LOaDg


Even investing at Market Peaks is not a worry, especially when you investing via SIPs


Also visit http://goodinsuranceadvisors.blogspot.in

D.S.KULKARNI DEVELOPERS NCD ISSUE REVIEW

 





Pune based Real Estate Development and Construction player D.S.Kulkarni Developers has come out with a Public Issue of Secured Redeemable Non convertible Debentures (NCD) to raise Rs.200 crores.


ISSUE DETAILS : 


The Company intends to utilise the proceeds of the NCD issue to fund its New Residential Township project planned on the Pune-Sholapur Road.
The issue is for Rs.200 crores.
The Face Value of the Debenture is Rs.5000 and the minimum application should be for 5 NCS i.e. Rs.25000/- . However, there is an option III wherein the Face Value of the NCD is Rs.25000.

The Issue opens on 4th of August and closes on 26th August.
D.S.Kulkarni Developers Limited NCD Series Details

Options
I
II
III
IV
Tenure 36 Months 66 Months 72 Months 84 Months
Frequency of Interest Payment Quarterly Cumulative Annually Monthly
Minimum Application value 25,000 25,000 25,000 25,000
Face Value of NCDs 5,000 5,000 25,000 5,000
Coupon (%) per annum in
Category I, II and III
12.50% N.A. 12.65% 12.75%
Coupon (%) for DSK
Employees,Shareholders, Senior Citizen Ex-servicemen and Women
12.75% N.A. 12.90% 13.00%
Coupon Type Fixed Fixed Fixed Fixed
Effective Yield
(per annum)Category I, II and III
13.10% 13.43% 12.65% 13.52%
Effective Yield
(per annum) DSK
Employees,Senior Citizen,and Women
13.37% 13.43% 12.90% 13.80%

Category I is Institutional Investors
Category II is Non-Institutional Investors
Category III is Individual Investors
80% of the Issue is reserved for Category III i.e, Retail Individual Investors



In the Cumulative Option, the Redemption amount will become exactly double of the Invested amount after 66 months.

COMPANY BACKGROUND :
D.S.Kulkarni Developers Ltd is a Pune based company in the field of Construction and Real Estate Development with proved Track Record. It has been a profit making company right since its inception.


SPECIAL FEATURES :
It is given that Additional Incentive is given for Senior Citizens, Servicemen, Ex-Servicemen Employees and Shareholders, but D.S.Kulkarni has taken 1 step further and is giving an additional 0.25% to even Women Investors, which is the First for any NCD issue in India!
Good social responsibility move by the Company.
The Company has also come with a Unique Staggered Repayment Option, only for Option III investors.
Staggered Option – (Step by Step Repay your Money)

Year
Coupon
Coupon*
% redeemed of face value
Repayment
Repayment*
1 12.65% 12.90% 5% 4413 4475
2 12.65% 12.90% 10% 5504 5564
3 12.65% 12.90% 15% 6438 6491
4 12.65% 12.90% 20% 7214 7258
5 12.65% 12.90% 25% 7831 7863
6 12.65% 12.90% 25% 7041 7056






Total 38441 38707

This could be a good option for those who are looking to pay Fees for Higher Education for their children.

NOTE :
There is an option to invest in Physical form as well as Demat form.
However, note that the Interest on investment via Demat Form will not attract any TDS while the Interest income on investment via Physical mode would be taxable

RECOMMENDATION :
The issue is rated as BBB+ by CARE. The rating is not great, but for a Real Estate company is good. The rating indicates Moderate Degree of Safety regarding timely servicing of Financial Obligations. Such instruments carry moderate credit risk.
In the recent downturn faced by Real Estate Sector, D.S.Kulkarni showed good resilience to come out unscathed.
The issue is very small and should easily get subscribed within a week of its launch.
The biggest thing going for the issue is it is SECURED and its relatively Interest Rates. The Trustee for the NCDs are GDA Trusteeship Limited who also are trustees for L&T Bonds, Shriram NCDs and hava a Asset Under Management of over Rs.1 lakh crores. The Issue is Secured with the Cover of Land placed with 1.5 times the Issue Size.
D.S.Kulkarni is the 1st Real Estate Company to come out with NCD. We have seen a deluge of NCDs from NBFCs and this certainly gives a diversification to investors who are primarily interested in Fixed Income Instruments.

Go for it, but in moderation. But do keep in mind that the NCD should only form a part of your overall Debt allocation and should not cross 5% of your Debt portfolio.




Regards,
Srikanth Matrubai



Also visit http://goodinsuranceadvisor.blogspot.in

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