IPO Update: Entertainment Network (India) Ltd.

Will markets listen to Radio Mirchi ?

Entertainment Network (India) Ltd. (better known for Radio Mirchi) is entering the capital markets with an initial public offer of 120 Lac shares at a price band of Rs.144-162 per share.

Investment guru recommends investors to subscribe to the issue. The broadcast (narrow cast in real sense, since FM stations have regional presence) through FM has gained quite popularity in India, specially, in the metros and studies shows that India has to go a long way still to unleash the full potential of this sector. However, the going would get tougher as other participants enter this arena and the fittest would survive. Radio Mirchi is an exciting ipo in this context and will see huge participation. The issue is expected to generate good listing gains. The stock can also be subscribed for a hold by investor with high-risk profile.

What adds spice to Radio Mirchi IPO ?

ENIL is the the largest private FM radio broadcaster in India based on the number of operating stations and listeners. The company is also in the business of event management and out-of-home media through the brands 360o and Times Out-of-home Media,respectively.

The company belongs to the Times Group and hence enjoy high brand value.

The funds will be utilised to participate in the bidding for FM channels in new cities and finance the migration fee to shift to the new licensing regime

The Revenue comes from airtime sales and is bound to increase with increasing popularity of FM stations. The company clocked a revenue of 49 crores for six months ending September,2005. The major expense remains to be the license fee which will impact the second half of the P&L account.

EPS for the half year ending Sep-05 was 6.52. However the company ended Year 2005 with a EPS of -5.28. The company has no peers listed in the markets. However even we we consider the P/E of companies having similar business like Adlabs, the sector P/E comes to about 35.

Issue Details
Opens: January 23rd,2006
Closes : January 27th,2006
Retail Investors: Rs.1 Lac Read More!

IPO Update: Dynemic Products Ltd.

Average Issue : Apply for listing Gains
Dynemic products has entered the capital markets with a intial public offer of 44.21 Lac shares at a fixed price of Rs.35 per share (Rs. 25 premium on a face value of Rs.10) for expansion of its existing facilities. Investment Guru rates the issue as an average issue and recommends investors to apply only with a view to take advantage of the listing gains on account of ongoing IPO Boom.

Dynemic is into manufacturing of food colours (dyes & pigment) which has applications in food industry, beverages,drugs and alcohol. The company has a popular product named "tartrazine".

Major share of Revenues comes from export earnings.

For FY05 the company clocked sales of Rs. 27.75 crores and a net profit of Rs. 2 Crores. For first 5 months of FY06, the company has clocked a turnover of Rs. 11.45 crores and a net profit of Rs. 1.2 Crores.

At the offer price of Rs. 35 and the weighted average EPS of 3.5, the offer comes at a P/E multiple of 10.14 This looks reasonably given the P/E of its peer in the range of 6-37.

Return on net worth(weighted average ) comes to 20.59% and the post issue Net Asset value will be Rs. 21.86

Issue Opens : 18-Jan-2006
Issue Closes : 25-Jan-2006
Registrar: Big Share services Pvt. Ltd. Read More!

The Third Eye: Reliance Industrial Infrastructure

May become RIL's Infrastructure arm
Reliance Industrial Infrastructure(RIIL) scrip is showing good strength on the charts based on a positive news flow. Investment Guru blog has reported on 12th January that Reliance Industries has announced to take a controlling stake in the RIIL. The stock was also highlighted in the Trader Insight Blog .

Since the announcement of Reliance taking control of the company, the stock price has zoomed from Rs.290 to Rs 355 at end of today's session. The company has announced good results and the going is get to be even more attractive for the future.

The stock is also being accumulated at lower levels for long term appreciation. Reliance Industries may eventually use this company for its foray into Infrastructure given its interest into SEZ's and other retai space.

Investment Guru recommends investors to consider RIIL as a stock which would show considerable strength in the coming months. Read More!

Reliance Value discovered at Rs.714.90

Record 3.98 crore shares traded to discover the price
The markets have done it at last. The price discovery for the Reliance Industries stock without the new entities yet to be listed has been arrived at Rs. 714.90

Today's trading session will now start with the opening price of reliance at Rs.714.90.
Please note that the Reliance Industries Stock is on No-Delivery mode from 18-Jan till 25-Jan. Investment guru expects a good amount of volatility in the stock during this period.

The Reliance Industry stock is now a pure play on the Petroleum and Retail front.

We will keep you abreast of all developments in the stock in the coming days. Read More!

Reliance Pack: The Road Ahead

Cynosure of all Investors, But What to do ?
Investment Guru puts a Rs. 700 tag on Reliance Industries

The Reliance Saga is on its climax. If you want to get the share in the would be listed companies of Reliance , you will need to buy reliance today. If you don’t want these new shares , you will need to wait till tomorrow to buy in only the Reliance Industry scrip. The basic question in minds of all investors is what to do?
What to do?
It’s a million dollar question right now. The reliance industries stock is going to serach its standalone value tomorrow. The scrip has been quite volatile in last few sessions with huge volumes. Thereare lot of talks on the street over the valuation of Reliance and the to be listed entities. The buzz is that the value of the new entities (the 4 companies) will be in therange of Rs. 250. If we assume the closing price of reliance today at Rs. 900 (looking at the ternd), the price of stanalone RIL comes to about Rs. 750.
What are the Hazards in buying and holding today?
If you buy today or if you keep a hold today of your earlier position in reliance, the only problem that comes is the value in the four newly listed companies will reamin unlocked till they are listed. They are expected to be listed by April 2005. So till the part of your holding gets blocked.
The positive side
The positive of buying in reliance today or hold it is if tomorrow the markets place s a good premium to the standalone Reliance Industries, the buyers today will stand to benefit.
What should be the right strategy?
For those who do not hold Reliance Industries scrip today, the best deal would be to buy in 50% of your target today and buy 50% at tomorrow‘s price. This will average out your cost of purchase and will also give you beneift when the other entity lists. However if you are already invested in the Reliance Industries stock and have a long term view on Reliance, Investment Guru recommends you to hold your positions. In summary, whether you buy today or tomorrow , it just depends on your outlook on Reliance. However,Investment Guru is of view both sides should be winner in long term.

Read More!

IPO Update: Royal Orchid Hotels

Capitalising on IT Cities, Strong business outlook

Royal orchid hotels has eneterd the capital market with a initial public offer of 68.2 lac shares on a book building basis in a price band of Rs150-165.

Investment Guru recommends investor to subscribe to the public issue. The issue not only offers handsome listing gains, but can also be hold for a medium term perspective. The hotel industry is in limelight and is expected to outperform in the near future. Royal orchid has an advantage of having hotels at prime locations in the happening city of bangalore and mysore and planning to expand in high demand cities of hyderabad and Pune.

Company & Issue highlights

The company belongs to Baljee group and operates 3 hotels in Bangalore & 1 in Mysore.

The company propose to use the issue procedds to expands its hotel chain to Hyderabad, Pune & Bangalore.

The company is focussing on the happening cities in India where the room occupancy and room rates are high. The business is less dependant on tourism and more on the business travels in these IT cities. The demand for hotels in these cities is expected to remain robust.

The company reported a profit of 12.98 Crore on a turnover of 58 crore for FY2005. However for the First half of current year, the profit zoomed to 8.56 croreson a turnover of 35 Crores.

Based on FY05 EPS of 7.10, the issue price works out to be at P/E multiples of 23. The peers are currently valued at a P/E range of 20-30.

Issue details
Opens: January 12th,2006
Closes : January 17th,2006
Registrar : MCS Ltd.
Retail Investors: Rs.1 Lac Read More!

Educomp Solutions Listing Today!

Educomp Solutions is listing today. The listing is expected to be in the range of 180-190.
Partial profit can be booked at these levels. If the stock crosses 215, investors eyeing for listing gain can sell entire holding.

Another news is that Reliance has decided to take control of Reliance Industrial Infrastructure. This has led to a spurt in the stock prices. The stock has some more steam left in it before it consolidates.

Infosys Technologies can see some recovery since its ADR posted a 1.8% rise in yesterday's sesion.

Recently listed Celebrity fashion and Bartronics will see continued action and would be good from trading perspective. Read More!

Stocks in News- Narmada Gelatine

US drug companies in race to buy Narmada Gelatine
The company is on the block for sale by Chhabria group. The group has recently sold its tyre and liquor businesses. The sale is expected to fetch Rs. 60 crore to the group.

Rajesh Exports bag Rs.146 Crore Export Order
The export order from a UAE jewellery wholeseller is to be executed by 31-Mar-2006. Read More!

Stock in News: Jet Airways

The Economic times has reported that Jet AIrways is likely to clinch the air shara deal. The merged entity would become the largest airline of India, in terms of fleet size, turnover and valuation. The merged entity will cover 50% of the domestic market and will have jumbo fleet of 90 aircrafts.

The above deal is expected to lend a helping hand to jet airways which has witnessed a fall in market share to the low cost airlines. The deal will also place Jet airways in the big league. Read More!

The Third Eye : Welspun Gujarat S R Ltd.

Welspun Gujarat Stahl Rohren Ltd. has attracted lot of Investor attention. The company supplies high grade Submerged Arc Welded pipes to the companies in Oil and Gas sector. Welspun-Gujarat reported a 19.86 per cent rise in net profit to Rs 18.1 crore for the quarter ended September 30, 2005 as compared to last year.
The promoters have hiked their holdings in the company from 30 % to 39 %. The FII’s have also hiked their holding in the company from 30% to 38%.

The oil and gas sector is expected to witness laying of pipelines on a large scale and welspun will be a beneficiary on this account. The company has recently secured an order worth Rs. 5000 million from Indonesia and another worth Rs, 3000 million from Algeria. Welspun Gujarat has recently raised $75 million through FCCB to finance its expansion plan.

On the Trading patterns the stock has shown consistent strenght in last few sessions.
The stock is currently trading at Rs. 97
Read More!

Market Pulse: Traders rush to book profits

The stock markets closed down today admist bouts of volatility. Profit booking was clearly evident in the last hour of trading with many stocks coming off their day's high.
The Nifty closed at 2910 down 4 pts. However, sensex shed around 50 points.

However, selective buying was seen in stocks such as IPCL, Punj LLoyd and Reliance industries.
Other stocks which showed interesting patterns during the day were Pyramid Retail, Welspun Gujarat,Tulip ITS, Radha Madhav, Ranbaxy and GE Shipping.

The markets are expected to remain volatile for the coming sessions. Investors should avoid fresh entry into overheated stocks as they may be doomed in the coming days.

IPO route still remains an attractive option to park the surplus funds. Read More!

Thanks 2005 !! Welcome 2006 !!!

Dear Visitors,
Investment Guru wishes all of you a Very Happy and prosperous new year.
Let us thank the year 2005 for giving us a wonderful time in terms of the increasing the shareholder's wealth and let's look forward to Year 2006 for a even more joyful journey of the stock markets.
I believe that the sensex should be able to touch the 10K mark by March,2006 before showing a consolidation phase.

My advice to all the visitors will be to take a resolution for this year that all your investments will be based on knowledge and understanding of a stock rather than a hearsay or rumour.

Investment Guru Blog will stand by you as your trusted partner in enhancing your investment wisdom.
Happy Investing !
Read More!