Investment Idea 5 reaches its target !!
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IPO Update: Amar Remedies
Amar Remedies has entered the capital market with an offer of 1.5 crore equity shares through 100% book building process in the price band of Rs 24-28 per equity share of Rs 10 each. The object of the issue to set up a Ayurvedic institute at Surat.
Investment Guru recommends investors to apply in the IPO. The objective should be to offload on listing. Long term Investors can hold on to the stock with a 2 years perspective to generate the real potential of the stock.
Let’s dig into the company :
The company was established in 1984 by Mr. P. Shah for developing Ayurvedic Medicines.
The company has three products at present in its portfolio with Tooth Paste segment as a major contributor. The company markets its product under brand name “AMAR”
The company cliams to produce the first Vegetarian Toothpaste.
The company has regional market share for its products mainly in Wester and eastern parts of India.
The company has ambitious plans to launch its 25 FDA approved Ayurvedic medicines in India as well as in International markets. However, the market for Ayurvedic product is dominated by niche players and the company would have to staisfy with second grade buyers for its products.
The company is a profit making company since 1995.
The company clocked revenues of 106 crores for the year ending 30-June-05 with a net profit of 6.87 crores. Net profit was up 89% compared to previuouys year, while the sales shoot up by 29%.
The pre issue EPS stood at Rs.6.16. However, post issue the EPS would come down to 2.63.
The issue comes with a post-issue P/E of 10.6 which looks reasonable given the ambitious expnasion plans of its product portfolio.
Issue opens : 25-Aug-05
Issue closes : 31-Aug-05
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IPO Update : FCS Software Solutions Ltd.
FCS has entered the primary markets with a public offer of 35 Lac shares @ Rs. 50 Per share (a premium of Rs. 40 on face value of Rs. 10 )
Investment Guru recommends investors to ride on the IPO wave and apply for the IPO to get listing gains. The IPO is expected to generate listing gains in range of 30-50% mainly due to the IPO boom going on in the markets. Another reason being low float that will lead to good listing. Other factor is that 50% of the issue will be alloted to retail investors and this may also lead to spurt on listing day in the price of the stock.
The company has released limited applications resulting in scarcity of the application forms for this IPO.
About the company
FCS claims to be a leading provider of IT services. However the company can be termed to be a small player in the software service consulting space. The company is into fields of E-learning and digital consulting, IT Consulting, Product engineering services and application support.
The issue proceeds will be use to create IT infrastructure to for addding 300 software developres.
The company is promoted by Dalip Kumar , who looks reasonably qualified to take on the company, however, does not have any big feather in his cap.
The company has declared 0.25% dividend during last five years
The company is heavily dependent on US for its business and hence any negative turn of events in US directly impacts its revenues, for example the Sep11 blasts made a big dent in the performance of the company in year 2002-03.
Being a small player in a business which gives preference to the large players , the company would have tough competition in order to grow itself.
The offers comes at a P/E of 6 which looks reasonable and hence offers a scope for listing gains for investors.
Issue Closes : 26-Aug-2005.
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The Third Eye: Mphasis BFL
The stock saw a dip of Rs. 20 after the news that the bid for Barings stake may be around 260 per share. However with rumours of Tata back in action, the stock may see some volatility. The stock looks good for day trading . Read More!
Stock Markets : The Road Ahead
Outlook on markets still positive
The markets are expected to remain volatile with upward bias with short term perspective. The long term movement also looks positive. However , small bouts of corrections are not ruled out.
The biggest factor for markets to remain buoyant is that there is enough liquidity in the markets. The FII's continue their buying spree acrosss the caps and sectors. The Indian stock markets are seeing an unprecedentedt trend with large money flows chasing stocks and trying to find out value among underperforming stocks.
Retail investors have also flocked in large numbers to try their luck and get some pie in the stocks. The number of Demat accounts opened in last month has crossed the 2 Lakh marks. Retail investors are still betting on the IPO's as the main entry gate to the stock markets . With slew of IPO's lined up to hit the markets and retail interests intact, the IPO's are poised to do well and bring wealth to the investors.
Which sector will perform well from here ?
The Banking space is expected to perform better with private banks taking a lead over their public counterparts. Technology sector has remained an underperformer with no fresh triggers , however , positive news on the bell weather stocks and acquisition plays may create interest in the sector. This sector is expected to be a performer. Metals remain sluggish and are expected to be same with short term perspective. Oil & Gas sectors are expected to be market performer. Textiles will also continue to attract buyers.
Investment Strategy
It is recommended to keep the IPO investment route intact. Fresh buying in the stock markets should be done only on selective basis and not on rumours. Stick to the fundamentals and growth stories. Beware of small cap stocks which have run up quite high and do not let greed overtake the senses.
vivimed explodes on listing !
Investment Guru recommends those fortunate investors who got allotment to book partial profits at Rs.200 levels and wait for tomorrow for rest of the holdings to test the waters.
Happy Investing !! Read More!
Investment guru rules !!!
The stock was recommended at Rs. 63 and is now qouting at Rs.90, a cool return of 43% in just 3 months !!!
The stock is in news following talks of interest shown by Hinduja group in buying a controlling stake in the company.
Keep a watch on the blog for may more Investment Ideas to come.
Happy Investing!! Read More!
IDFC : Listing with a Blast!!
Over 10 crore shares have been traded in just 30 minutes of trade.
The stock has seen huge buying since the stock is recommended for a long term excellent returns. .However, looking at the listing,it looks like that even the listing gains are not bad.
Investment Guru recommends investors to garnet the listing gains on 50% of thier holdings @ Rs. 69 and keep the balance to see if some firework is left in the stock.
We will get an opportunity to get back the stock at a lower levels than today in the coming days.
Happy Investing !! Read More!
IDFC Ltd. – Listing Strategy
Expected Listing : Rs 45-50
The IDFC stock is getting listed on 12th August on NSE & BSE.
The issue price was Rs. 34 per share.
As I have already mentioned in the article on the recommendation for applying in this IPO, this stock is a good long term bet. Click here to see the article..
Following is the strategy that can be adopted by different investor groups:
For those intrested in listing gains : If the stocks lists around 45,you can book profits on 50% holdings and wait for day 1-2 to sell the ramianing shares.
For short term Investors (2-3 months) : Sell 50% on listing and hold the rest for 3 months duration.
For long term Investor: This group is going to benefit maximum out of the stock. Investor Guru recommends investors to maintian a long term hold on this stock for excellent returns (much more than the listing gains!)
Risk Factors :The risk factor for a good listing tomorrow is the big float of the stock. It was a large issue, hence the supply of the stock will be in huge quanitities tomorrow. This may lead to volatility in the stock after a initial good listing. Investors should devise their strategy accordingly.
Happy Investing!!
Read More!From the Pinkcity....
Though I am spendingmostof my time here meeting friends and realtives, its hard to resist taking a watch on the stock markets. Markets are continuing their northwards journey with little bits of pauses on where to go further. The energy looks unstoppable , however the road ahead is a bit steeper. Its very important to stick to fundamentals at this stgae and be choosy in stock selection.
Will get back with more flow to theblog once I am back to bangalore.
Cheers and Happy Investing !!
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