gold

Syngene IPO: A Very Dull Analysis

by Paul Joseph July 27, 2015 Featured

Syngene has an IPO coming up, here’s the detail: Offer: 2.2 crore shares Price: Rs. 240 to Rs. 250 Size: Around Rs. 500 cr. From: 27th July to 29th July 2015 Lot: 60 shares (Rs. 15,000 approximately) We make a very cursory analysis of the IPO, as we have realised in recent times, (paraphrasing Samir Arora): If the IPO is bad you don’t want any shares. If it’s good, you wont’ get any shares (allocated). So detailed analysis are largely useless and it’s better to consider buying after the company lists, usually. So this is going to be abrupt and boring. Who gets the money? Not Syngene. They don’t get a paisa from the IPO. All the money goes to Biocon, the promoter of Syngene. This is bad for Syngene – typically it would have taken money from an IPO and expanded operations. But because it is a cash generating company it probably doesn’t want the dilution, and eventually they can dilute away through QIPs etc.… (Read On…)

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JP Associates Gets a "Near Default" tag by CARE, Loans of Over 22,000 cr. at Stake

by Paul Joseph July 26, 2015 Featured

CARE has downgraded JP Associates ‘ rating to D, which means that according to CARE they are in default, or very likely to default. What they say: The revision in the ratings of the bank facilities and instruments of Jaiprakash Associates Ltd (JAL) takes into account delay in servicing of debt obligations by the company due to its weak liquidity position. But What Do Rating Agencies Know, Huh? The biggest problem with rating agencies is that they react late. Typically a big problem is that they are paid by the companies, not by the buyers of bonds or lenders of loans, to rate the facilities. This means if they cut the rating down, they could lose revenue. Also that they are aware of the consequences of a downgrade – that because they downgrade a company’s loans, it can make life difficult for that very company to borrow any more money. (Will have to pay higher rates as borrowers will require a lower loan) But the point is also that when they do downgrade a company things are really really really bad.… (Read On…)

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The Big Mo Corner: Money Buys Half?

by Paul Joseph July 23, 2015 Featured

The rest of this content is only available to premium members. Register for a premium membership today ! Apart from this content you will get our proprietary research and weekly newsletter too! Already a subscriber? Log in now !… (Read On…)

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Premium: Of Sun Pharma, Infy and Some Results That Spooked The Day

by Paul Joseph July 23, 2015 Featured

The rest of this content is only available to premium members. Register for a premium membership today ! Apart from this content you will get our proprietary research and weekly newsletter too! Already a subscriber? Log in now !… (Read On…)

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Infy: Jun 2015 Quarter Results Show Terrible Profit Growth Even Though Revenues Pick Up

by Paul Joseph July 22, 2015 Featured

Infy results had come out yesterday and we do a chart thing with them: Revenues up 7.03% : The Only Good Thing About Results Profits are up 5% yoy but down 2% quarter on quarter. The only metric that works for them is quarter-on-quarter revenue growth. EPS Growth, Too, Falls Earnings Per Share has grown 5% year on year, after showing more than 20% growth last year. Employee Growth at 11%, Utilization at 80% Infy seems to have fixed the falling utilization rates and bumped it up to 80%, which means they have little scope for more productivity. (Yet, their profits fell quarter on quarter, which tells you how much of a problem this is!) Employee net addition year on year is 11% which is probably how much their revenue will grow next year. Given that they don’t have much room for increased productivity, they will have to bank on: higher billing rates or higher USDINR conversion rates. … (Read On…)

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Real Estate To Fall Big Time, Says Ambit. The Data Seems To Agree.

by Paul Joseph July 20, 2015 Featured

A big Ambit report is doing the rounds – they predict that real estate will fall big time . We are seeing a broad-based real estate pullback, with prices correcting in most tier-1 and tier-2 cities alongside sharp drops in transaction and new launch volumes. The drivers for this slowdown are a mix of supply-side factors (banks have pulled back lending to developers) and demand-side factors (the Black Money Bill has created fear amongst speculators). The result is not just a drop in demand for building materials and challenges for lenders with big mortgage, LAP and housing finance books, but also a generalised slowdown in GDP growth, as the sector which drives 50% of India’s capex and 30% of its jobs conks off. The drivers, they say: Heavy inventory (Mumbai and Delhi have over 10 quarters of unsold apartments) Property prices are falling in Tier 2 cities as well Foot falls at registration offices have fallen Banks have cut lending to RE esp commercial RE Subsidies have been cut, so pilfering and parking in RE has been curtailed Squeeze on black money through the black money bill Rise in the “guidance value” rates that increase the “white” component of a purchase Some Good Charts ICICI has the most exposure to RE: Indiabulls housing has the highest relative LAP (Loan against Property) portfolio: India has one of the highest spreads between rental yields and interest rates: Our view:A Fall is on the Cards We have been noticing a slow down in real estate for around a year now, and it’s looking rough.… (Read On…)

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Webinar Recording: Puneet Khurana on How to Allocate Money to Stocks

by Paul Joseph July 14, 2015 Featured

In this webinar conducted via Capitalmind.in, Puneet Khurana, the founder of Stoic Advisors, takes us through a process of allocations across a portfolio. This post is for Capital Mind Premium subscribers only.

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Greece Has To Kneel, Beg and Completely Capitulate, Says New Deal

by Paul Joseph July 13, 2015 Featured

Greece finally has a deal. We don’t know if this is agreed upon in pure exhaustion after 17 hours of negotiations, but it’s something that involved total capitulation by Greece . It is even worse than the deal that Greece was getting earlier (before the referendum). It gives Tsipras, the Greek PM, three days to get the major demands passed through the Greek parliament. We saw a few things earlier, in our post, which I’ll paste here: What Now? By July 15, Tsipras must do the following, through parliament: they have to raise the sales tax, and cut pensions. Any misses in the deficit/surplus expected will automatically trigger some very specific spending cuts Greece must keep the statistics and the privatization piece completely independent of the Greek government (or limit the influence) Once this is done, the parliaments of Germany, Austria, Holland, Finland and others that previously opposed a deal will have to say okay to doing the bailout.… (Read On…)

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Macronomics: IIP Sectors Show Alaming Slowdowns in Key Sectors

by Paul Joseph July 11, 2015 Featured

The rest of this content is only available to premium members. Register for a premium membership today ! Apart from this content you will get our proprietary research and weekly newsletter too! Already a subscriber? Log in now !… (Read On…)

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China: Gotta Buy Those Shares, You Insiders!

by Paul Joseph July 10, 2015 Featured

From the country of we-will-find-you-and-then-we-will-kill-you if you sell shares:  ( link ) All listed companies,   To support shareholding increase by listed companies’ shareholders and their concerted actors as well as stabilize the capital market and protect investors’ interests, the Shanghai Stock Exchange (SSE) hereby makes notification on relevant issues as follows:   1. Relevant regulations in Article 9 of “Code of Conduct for Shareholding Increase by Listed Companies’ Shareholders and Their Concerted Actors” and Subparagraphs (1), (2) and (4) of Article 4.5 of “Code of Conduct of Controlling Shareholder and Actual Controller of Listed Company” published by the SSE shall not be applicable to the following situation: a listed company’s shareholders, controlling shareholders and their concerted actors holding more than 30% of its shares increase shareholding and promise not to lessen shareholding in the next 6 months, when stock price of the company has accumulatively dropped by over 30% for 10 consecutive trading days. … (Read On…)

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