State-run MOIL's issue price has been fixed at Rs 375 per share at which Rs. 1,260 crore will be raised from IPO investors , and the company is likely to get listed on stock exchanges on December 15.
Each share of MOIL will be issued at Rs 375 and the company is likely to be listed on December 15, making the manganese miner the fifth PSU to divest stake this fiscal.
The issue price of Rs. 375 per share is at the upper end of the price band of Rs. 340 - 375 fixed by the government.
The public stake sale, which opened for subscription on November 26, was oversubscribed more than 56 times. By the end of the final day of the offer on December 1, it had attracted bids for 189.13 crore shares, though only 3.36 crore equities were up for grabs.
At the issue price of Rs. 375 per share, the IPO would raise about Rs. 1,260 crore.
The Centre is divesting a 10% stake in the company under the IPO, while the state governments of Madhya Pradesh and Maharashtra will offload 5% participating interest each.
The price band was fixed by an Empowered Group of Ministers chaired by Finance Minister Pranab Mukherjee and attended by Home Minister P Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia.
The government, which hopes to raise Rs. 40,000 crore through PSU disinvestment this fiscal, has already mopped up close to Rs. 20,000 crore through divestment in PSUs Satluj Jal Vidyut Nigam, Engineers India, Coal India and Power Grid.
Thank you,
Minita Aiya
Client Service Associate
DENIP COnsultants Pvt. Ltd.
Saturday, December 4, 2010
KRC - Weekly Presentation on Patel Engineering
PATEL ENGINEERING
Company Profile
Patel Engineering is an established construction company in India that operates in three business segments, namely, hydro power, irrigation, and roads and urban infrastructure. PEL has built 78 dams, 40 hydro power plants and completed 175 km of tunneling over the past 60 years.
Shareholding Pattern:
Promoter: 45.50 %
FII: 14.57 %
DII: 10.28 %
Others: 29.65 %
Source: BSE data, KRC
Valuations:
CMP: Rs. 335 Tgt Price: Rs. 485 (Upside Potential of 45%)
Source: KRC
Management Profile:
Mr. Rupen Patel: Managing Director
Ms. Sonal Patel: COO & Board Member
Mr. Pravin Patel: Chairman
Other Key Data:
Equity Value – Rs 6.9 crore
Face Value – Rs 1.00
Market Cap- Rs 2,316 crore
Free Float – Rs 1,128 crore (50%)
Industry Outlook
Construction Opportunity
Company Profile
Patel Engineering is an established construction company in India that operates in three business segments, namely, hydro power, irrigation, and roads and urban infrastructure. PEL has built 78 dams, 40 hydro power plants and completed 175 km of tunneling over the past 60 years.
Shareholding Pattern:
Promoter: 45.50 %
FII: 14.57 %
DII: 10.28 %
Others: 29.65 %
Source: BSE data, KRC
Valuations:
CMP: Rs. 335 Tgt Price: Rs. 485 (Upside Potential of 45%)
Source: KRC
Management Profile:
Mr. Rupen Patel: Managing Director
Ms. Sonal Patel: COO & Board Member
Mr. Pravin Patel: Chairman
Other Key Data:
Equity Value – Rs 6.9 crore
Face Value – Rs 1.00
Market Cap- Rs 2,316 crore
Free Float – Rs 1,128 crore (50%)
Industry Outlook
Construction Opportunity
Source: Planning Commission, Construction Industry Development Council (CIDC), KRC
Business Model:
1) Leader in the high margin segments like hydropower, tunnelling, and dam construction.
2) Pioneer in using Roller Compacted Concrete (RCC) technology in India.
3) Involved in two power projects, thermal power plant in Tamil Nadu and a hydro power plant in West Kameng Arunachal Pradesh.
4) Involved in water storage & distribution in international markets such as US, Australia, Sri Lanka, Nepal, etcetera through their US subsidiary.
5) Current order book stands at Rs 105 billion (including Rs 2,100 crore of L1 status).
6) Order book translates into revenue visibility for next 3.5 years.
7) Land bank of about 1,100 acres across India and ~60 acres in Mauritius with a book value of Rs. 300 crore.
8) Holds minority stake in two BOT annuity projects in Karnataka & AP.
Source: Company, KRC
Core Business...Revenue Visibility
• PEL is a leader in the high margin segments like hydropower, tunneling, and dam construction and a pioneer in using Roller Compacted Concrete (RCC) technology in India where cement is replaced with fly ash in the construction of dams resulting in faster execution of projects and cost savings.
• Its current order book stands at Rs 105 billion (including Rs 2,100 crore of L1 status) and translates into revenue visibility for next 3.5 years.
• 18% of order book exposed to Andhra Pradesh
Valuations – Upside with limited downside
Relative Valuations
Income Statement (Consolidated)
Balance Sheet (Consolidated)
Disclosures :
The presentation has been prepared by the KRC PMS team. It must be borne in mind that this stock is a part of the PMS’s model portfolio. Hence, the presenters are directly / indirectly interested in the stock doing well.
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
Stock view for the week 6th Dec 2010 to 10th Dec 2010 - Disclaimer Post Applies
1.Buy: Heritage Foods
CMP: 198.90; Tgt1: 205; Tgt2: 209; SL 195
2.Buy: Engineers India Ltd
CMP: 334; Tgt1: 343; Tgt2: 350; SL: 330
3.Buy: DB Realty
CMP: 240; Tgt1: 250; Tgt2: 265; SL: 230
Note: DB Realty is a very risky call. As it is news affected anything might happen.
4.Buy: Bharat Electronics Ltd (BEL)
CMP: 1741; Tgt1: 1760; Tgt2: 1780; SL: 1725
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
The Story Behind The Irish Meltdown
The Story Behind The Irish Meltdown
The Irish Miracle
Ireland does not have a long history of economic success. Economists and historians still argue about the reasons why, but Ireland never really participated in the industrial revolution, and the well-known famine in the 1800s began a pace of mass migration that lasted more than 100 years. Simply put, Ireland spent much of the 20th century as a relatively poor (at least by Western European standards), largely agricultural country with a large public sector and heavy state involvement in the economy.
All of that started to change in the 1990s. The national government reduced its direct involvement in the economy, brokered social partnerships between business, unions and itself, significantly cut corporate taxes, and actively encouraged export-focused industry. The result was nothing short of remarkable - Ireland produced GDP growth on par with Asian growth stars like South Korea, Taiwan and Hong Kong, unemployment fell, and the government found itself able to invest in social services like education and infrastructure.
Too Much Too Soon
Unfortunately, it would seem that Ireland sowed the seeds for its own economic destruction during the boom times. The government consistently increased its spending and borrowed to do so, apparently forgetting the lessons of the pre-boom times. What's more, Ireland developed a reputation for rather loose banking laws and turned a blind eye towards rising inflation and a property bubble.
When the credit crunch hit in 2008, it hit Ireland hard. Rising wages were already making Ireland a less desirable offshoring location relative to places like Slovakia and Turkey. Couple that with an overall decline in import demand across Europe and North America and a sudden realization that the loan books of Irish banks were loaded with bad debt, and things went badly very quickly.
Where They Are Today
Where Ireland once came to expect GDP growth in excess of 8% as nothing out of the ordinary, it now appears that Ireland is in for more hard times. GDP seems likely to contract for some time, housing prices are falling, and the company faces large budget deficits and considerably more foreign debt than even Greece or Portugal. Although Ireland's public debt is not nearly so large as its total external debt, it is still large enough to be problematic.
IN PICTURES: What Is Your Risk Tolerance?
Seeing the same sort of systemic risk that emerged during Greece's debt crisis earlier in 2010, the European Union is taking more or less the same approach - a large bailout to help the country weather the storm. More specifically, the EU announced a bailout package worth about 85 billion-euro designed to help tide the country over for about four years. For whatever it says about the respective countries, Ireland's deal is a bit different from the bailout given to Greece - Ireland will have longer to pay the loans back, but will be required to kick in more of its own capital (tapping its own pension reserves).
Not surprisingly, this mess has wreaked havoc among Irish businesses, particularly those in the financial sector. Anglo Irish is nearly done for, while Allied Irish Banks (NYSE:AIB) is in deep trouble - so much so that it has had to dispose of valuable assets like its stake in a Polish bank that was acquired by Spain's Santander (NYSE:STD) and its sizable stake in American bank M&T Bank (NYSE:MTB) (which Santander also reportedly wanted to buy). While AIB trades at a price that suggests nationalization (whether formally or informally) is all but a given, Bank Of Ireland (NYSE:IRE) seems to trade with more of a glimmer of hope - but hardly anything close to optimism.
Not Just About Ireland
As Ireland wobbles, familiar fears have come back into the market. Numerous large European banks and insurance companies own large amounts of debt from the so-called PIGS countries (Portugal, Ireland, Greece and Spain), and fears and rumors are once again circulating about what this latest crisis will mean to the solvency and liquidity of these banks. In other words, a second credit crunch (and the resulting economic spillovers) is the fear in many investors' minds, and the spreads on credit default swaps (a measure of investors' risk appetite and fear) have been moving higher again. Now, the fear is if Spain or Portugal will follow the path of Greece and Ireland and further strain the system.
The Bottom Line
Unfortunately for Ireland, there is no easy road back to prosperity. The entanglements of membership in the European Union limit the government's options, and competition from other countries has eroded Ireland's competitive advantage as an export factory of choice. Ultimately, property values will have to fall to whatever constitutes a new "normal," and wages will likely follow as well. Ongoing efforts to pull back government spending and encourage business formation are good starts, but there is no quick fix here. Ireland is looking at a stretch of hard times and tough decisions before it can think of how to bring the good times back to life.
Source: www.investopedia.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
The Irish Miracle
Ireland does not have a long history of economic success. Economists and historians still argue about the reasons why, but Ireland never really participated in the industrial revolution, and the well-known famine in the 1800s began a pace of mass migration that lasted more than 100 years. Simply put, Ireland spent much of the 20th century as a relatively poor (at least by Western European standards), largely agricultural country with a large public sector and heavy state involvement in the economy.
All of that started to change in the 1990s. The national government reduced its direct involvement in the economy, brokered social partnerships between business, unions and itself, significantly cut corporate taxes, and actively encouraged export-focused industry. The result was nothing short of remarkable - Ireland produced GDP growth on par with Asian growth stars like South Korea, Taiwan and Hong Kong, unemployment fell, and the government found itself able to invest in social services like education and infrastructure.
Too Much Too Soon
Unfortunately, it would seem that Ireland sowed the seeds for its own economic destruction during the boom times. The government consistently increased its spending and borrowed to do so, apparently forgetting the lessons of the pre-boom times. What's more, Ireland developed a reputation for rather loose banking laws and turned a blind eye towards rising inflation and a property bubble.
When the credit crunch hit in 2008, it hit Ireland hard. Rising wages were already making Ireland a less desirable offshoring location relative to places like Slovakia and Turkey. Couple that with an overall decline in import demand across Europe and North America and a sudden realization that the loan books of Irish banks were loaded with bad debt, and things went badly very quickly.
Where They Are Today
Where Ireland once came to expect GDP growth in excess of 8% as nothing out of the ordinary, it now appears that Ireland is in for more hard times. GDP seems likely to contract for some time, housing prices are falling, and the company faces large budget deficits and considerably more foreign debt than even Greece or Portugal. Although Ireland's public debt is not nearly so large as its total external debt, it is still large enough to be problematic.
IN PICTURES: What Is Your Risk Tolerance?
Seeing the same sort of systemic risk that emerged during Greece's debt crisis earlier in 2010, the European Union is taking more or less the same approach - a large bailout to help the country weather the storm. More specifically, the EU announced a bailout package worth about 85 billion-euro designed to help tide the country over for about four years. For whatever it says about the respective countries, Ireland's deal is a bit different from the bailout given to Greece - Ireland will have longer to pay the loans back, but will be required to kick in more of its own capital (tapping its own pension reserves).
Not surprisingly, this mess has wreaked havoc among Irish businesses, particularly those in the financial sector. Anglo Irish is nearly done for, while Allied Irish Banks (NYSE:AIB) is in deep trouble - so much so that it has had to dispose of valuable assets like its stake in a Polish bank that was acquired by Spain's Santander (NYSE:STD) and its sizable stake in American bank M&T Bank (NYSE:MTB) (which Santander also reportedly wanted to buy). While AIB trades at a price that suggests nationalization (whether formally or informally) is all but a given, Bank Of Ireland (NYSE:IRE) seems to trade with more of a glimmer of hope - but hardly anything close to optimism.
Not Just About Ireland
As Ireland wobbles, familiar fears have come back into the market. Numerous large European banks and insurance companies own large amounts of debt from the so-called PIGS countries (Portugal, Ireland, Greece and Spain), and fears and rumors are once again circulating about what this latest crisis will mean to the solvency and liquidity of these banks. In other words, a second credit crunch (and the resulting economic spillovers) is the fear in many investors' minds, and the spreads on credit default swaps (a measure of investors' risk appetite and fear) have been moving higher again. Now, the fear is if Spain or Portugal will follow the path of Greece and Ireland and further strain the system.
The Bottom Line
Unfortunately for Ireland, there is no easy road back to prosperity. The entanglements of membership in the European Union limit the government's options, and competition from other countries has eroded Ireland's competitive advantage as an export factory of choice. Ultimately, property values will have to fall to whatever constitutes a new "normal," and wages will likely follow as well. Ongoing efforts to pull back government spending and encourage business formation are good starts, but there is no quick fix here. Ireland is looking at a stretch of hard times and tough decisions before it can think of how to bring the good times back to life.
Source: www.investopedia.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
Mr. Kashyap Ananth joins DENIP Consultants
We take immense pleasure in informing you all that Mr. Kashyap Ananth has joined DENIP Consultants Pvt. Ltd. as Technical Analyst. Kashyap is currently doing his M.B.A. in Finance from S.I.E.S. College of Management Studies, Nerul.
We wish him good luck for this opportunity and know that he will give his best in this job.
Thank you,
DENIP Consultant Pvt. Ltd.
We wish him good luck for this opportunity and know that he will give his best in this job.
Thank you,
DENIP Consultant Pvt. Ltd.
Friday, December 3, 2010
Shipping Corporation FPO subscribed 4 times
Shipping Corporation of India's (SCI) follow-on public offer has subscribed over 4 times on last day, as per NSE website. The response has been seen from across categories. Qualified institutional investors (QIBs) was subscribed for 17.67 lakh equity shares against reserved portion of 4.2 crore shares i.e. 4.19 times.
Issue received applications for 11.87 crore shares as against reserved portion of 2.9crore shares in retail category, which was 4 times. Non-institutional investors' portion subscribed 3.66 times.
The issue has received bids for more than 36 crore equity shares as against issue size of 8,46,90,730 shares.
A price band was at Rs 135-140 a share. The company aims to raise over Rs 1,100 crore through the FPO. The company will not receive any proceeds from the offer for sale by governments. However, net proceeds from fresh issue will be used for part funding the equity portion for the acquisition of certain vessels by company and general corporate purposes.
SBI Capital Markets Limited, ICICI Securities Limited and IDFC Capital Limited are the book running lead managers to the issue.
Source: www.moneycontrol.com
Thanks,
Gaurav Agarwal
Head Dealer
DENI Consultants Pvt Ltd
Issue received applications for 11.87 crore shares as against reserved portion of 2.9crore shares in retail category, which was 4 times. Non-institutional investors' portion subscribed 3.66 times.
The issue has received bids for more than 36 crore equity shares as against issue size of 8,46,90,730 shares.
A price band was at Rs 135-140 a share. The company aims to raise over Rs 1,100 crore through the FPO. The company will not receive any proceeds from the offer for sale by governments. However, net proceeds from fresh issue will be used for part funding the equity portion for the acquisition of certain vessels by company and general corporate purposes.
SBI Capital Markets Limited, ICICI Securities Limited and IDFC Capital Limited are the book running lead managers to the issue.
Source: www.moneycontrol.com
Thanks,
Gaurav Agarwal
Head Dealer
DENI Consultants Pvt Ltd
Mr. Shrikanth & Mr. Rahul join DENIP Consultants!!
We take immense pleasure in informing you all that Mr. S. Shrikanth and Mr. Rahul Raghavan have joined DENIP Consultants for Marketing & Sales.
They both are currently pursuing their MBA at SIES College, Nerul and will be working concurrent with us.
We wish them all the best for this opportuity.
Thanks,
Nimesh.
They both are currently pursuing their MBA at SIES College, Nerul and will be working concurrent with us.
We wish them all the best for this opportuity.
Thanks,
Nimesh.
Thursday, December 2, 2010
One97 Communication Limited IPO REVISED details
One97 Communication Limited.
BRLM: IDFC Cap Ltd/ Avendus Cap Pvt Ltd
Syndicate Member: Reliance Sec Ltd/ Sharekhan Limited
Issue Period: December 13 – December 16, 2010
Issue Period (For QIB): December 13 – December 15, 2010
Issue Period (For Retail & HNI): December 13 – December 16, 2010
Price Band: Advertised @ least 2 working days prior to Issue Opening Date
Lot Size: Advertised @ least 2 working days prior to Issue Opening Date
Registrar: Link Intime .
Retail Appl Limit: Rs.2,00,000/-
Issue size: Rs.120 Cr
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
BRLM: IDFC Cap Ltd/ Avendus Cap Pvt Ltd
Syndicate Member: Reliance Sec Ltd/ Sharekhan Limited
Issue Period: December 13 – December 16, 2010
Issue Period (For QIB): December 13 – December 15, 2010
Issue Period (For Retail & HNI): December 13 – December 16, 2010
Price Band: Advertised @ least 2 working days prior to Issue Opening Date
Lot Size: Advertised @ least 2 working days prior to Issue Opening Date
Registrar: Link Intime .
Retail Appl Limit: Rs.2,00,000/-
Issue size: Rs.120 Cr
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
Wednesday, December 1, 2010
KRC Research : Market Wrap
Market Overview
Implications: Nifty December future is trading at a premium with spot. Consecutive second trading session of comparatively more writing in put than call options, shift of put concentration at 5,800 and increase in PCR between 6,000-5,700 strike prices indicates market may continue its upward momentum above 6,000. However, we expect 6,000 to act as a resistance on account of profit booking in long positions and call concentration and above that 6,100 level. The range for December expiry is 5,800 and 6,000 on account of concentration.
Option Analysis:
· Call writing: Major writing was witnessed at out-of-money strikes and marginal shedding at in-the-money strikes. 6,100 CE and 6,200 CE added 8.5 lakh and 4.85 lakhs shares respectively. Major concentration of open interest is still observed at 6,000 strike price of 67 lakh shares.
· Put Writing: 5,900 PE witnessed addition of 12.41 lakh and 5,800 PE added 8.67 lakh shares. Shedding was witnessed in deep out-of-the-money strikes. Concentration of open interest has shifted from 5,600 PE to 5,700 PE (69.95 lakh shares).
Implications: Consecutive second trading session of comparatively more writing in put than call options, shift of put concentration at 5,800 and increase in PCR between 6,000-5,700 strike prices indicates market may continue its upward momentum above 6,000. However, we expect Nifty at 6,000 to act as a resistance on account of profit booking in long positions and call concentration and above that 6,100 level. The range for December expiry is 5,800 and 6,000 on account of concentration.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 1st December, 2010 close at 19.2 which is 7% lower as compared to previous close, after touching an intraday high of 20.7 and low of 19
Implications: Indian VIX plunged for consecutive third trading session. We expect it to move upwards and we are Bullish on the same which would have negative impact on Nifty.
Put Call Ratio across Active Strike Price – December Series
Implications: Nifty December future is trading at a premium with spot. Consecutive second trading session of comparatively more writing in put than call options, shift of put concentration at 5,800 and increase in PCR between 6,000-5,700 strike prices indicates market may continue its upward momentum above 6,000. However, we expect 6,000 to act as a resistance on account of profit booking in long positions and call concentration and above that 6,100 level. The range for December expiry is 5,800 and 6,000 on account of concentration.
Option Analysis:
· Call writing: Major writing was witnessed at out-of-money strikes and marginal shedding at in-the-money strikes. 6,100 CE and 6,200 CE added 8.5 lakh and 4.85 lakhs shares respectively. Major concentration of open interest is still observed at 6,000 strike price of 67 lakh shares.
· Put Writing: 5,900 PE witnessed addition of 12.41 lakh and 5,800 PE added 8.67 lakh shares. Shedding was witnessed in deep out-of-the-money strikes. Concentration of open interest has shifted from 5,600 PE to 5,700 PE (69.95 lakh shares).
Implications: Consecutive second trading session of comparatively more writing in put than call options, shift of put concentration at 5,800 and increase in PCR between 6,000-5,700 strike prices indicates market may continue its upward momentum above 6,000. However, we expect Nifty at 6,000 to act as a resistance on account of profit booking in long positions and call concentration and above that 6,100 level. The range for December expiry is 5,800 and 6,000 on account of concentration.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 1st December, 2010 close at 19.2 which is 7% lower as compared to previous close, after touching an intraday high of 20.7 and low of 19
Implications: Indian VIX plunged for consecutive third trading session. We expect it to move upwards and we are Bullish on the same which would have negative impact on Nifty.
Put Call Ratio across Active Strike Price – December Series
Source: NSE, KRC ResearchThanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
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