Application Supported by Blocked amount

SEBI has recently introduced a new process popularly referred to as ASBA (Application Supported by Blocked amount) process. Under this process, the bid amount is blocked in your account at the time of bidding. If and when an allotment is made against your application to the extent of money due on the shares allotted, your account will be debited and the money will be remitted to the company. Therefore, the bid amount remains in your account earning interest during the whole process period. Your account will be debited only to the extent of shares allotted, if any, and the remaining amount will be unblocked. There will be no refund as such and therefore the problems related to non-receipt of refund will not be encountered by you. This is a facility extended by some self certified syndicate bankers (SCSBs) who have registered as such with SEBI. Currently the following banks have been identified as SCSB banks.

#	Name of the bank	#	Name of the bank
1.	Axis Bank Ltd	19.	Kotak Mahindra Bank Ltd.
2.	State Bank of Hyderabad	20.	Bank of India
3.	Corporation Bank	21.	CITI Bank
4.	State Bank of Travancore	22.	IndusInd Bank
5.	IDBI Bank Ltd.	23.	Allahabad Bank
6.	State Bank of Bikaner and Jaipur	24.	Karur Vysya Bank Ltd.
7.	YES Bank Ltd.	25.	The Federal Bank
8.	Punjab National Bank	26.	Indian Bank
9.	Deutsche Bank	27.	Central Bank of India
10.	Union Bank of India	28.	Oriental Bank of Commerce
11.	HDFC Bank Ltd.	29.	Standard Chartered Bank
12.	Bank of Baroda	30.	J P Morgan Chase Bank, N.A.
13.	ICICI Bank Ltd	31.	Nutan Nagarik Sahakari Bank Ltd.
14.	Vijaya Bank	32.	UCO Bank
15.	Bank of Maharashtra	33.	Canara Bank
16.	State Bank of India	34.	United Bank of India
17.	Andhra Bank	35.	Syndicate Bank
18.	HSBC Ltd.	36.	South Indian Bank

SEBI may register more SCSB (Self Certified Syndicate Bank) banks as and when they undergo the self certification process. In case your bank is not one of the SCSB as on date/you are not dealing with any of the bank listed above, you are requested to verify with them as to whether they have got subsequently registered as SCSB.

In case you are the client of any of the above banks and you wish to apply, we strongly advise you to consider making an application under the ASBA process. Should you require more details on this, please do write to us.

In case your bank is not an SCSB bank, you may participate in the FPO/IPO through the normal conventional process. Here again, we request you to ensure the following:

1. The application form is filled in all respects and duly signed by the applicants.
2. The demat account details provided therein pertain to the applicants.
3. The bank account details registered with the depository are correct.
4. In case you have not provided the 9 (nine) digit MICR code to the depository participant, please do the same, so that refunds, if any, can be sent through electronic means wherever possible.
5. Please retain the photocopy of the entire application for your future reference.
6. Please ensure that your application is submitted to one of the bidding centers listed in the inner pages of the application booklet.
7. We find that a large number of banks, particularly in the nationalized sector, have brought their branches under total computerization / core bank solution. In the process, account numbers of their clients have under gone changes. Please ensure that the account number registered with your DP is the current new number allotted, by the bank.

This communication is not to be construed as an invitation for applying in the FPO /IPO and the decision to apply shall be taken by you on your own / and / or in consultation with your financial advisor.

For other features of ASBA process, you are advised to go through the circulars hosted on the website of SEBI.

Indian economy grows by 8.8 per cent in Q1(2010)

Economy grew by an impressive 8.8% during the quarter ended June on the back of robust manufacturing growth.

However, certain sectors like financial services restrained the growth in economy, which had recorded 6 per cent growth rate in April-June 2009-10.

Agriculture and allied activities grew by 2.8 per cent, higher than 1.9 per cent in the year-ago period, but it is nowhere between the target of four per cent pegged by the government in the medium term.

Manufacturing expanded by strong 12.4 per cent in April-June, 2010 against a mere 3.8 per cent growth rate in the same period last year.

Construction too grew by 7.5 per cent compared to 4.6 per cent.

Among services, financial, insurance and real estate services expanded by just 8 per cent, against a growth rate of 11.8 per cent in the year-ago quarter, while community social and personal services growth slowed down to 6.7 per cent, against 7.6 per cent a year ago.

However, trade, hotels and communication services rose by 12.2 per cent, against 5.5 per cent during April-June 2009.

The government expects economy to grow by 8.5 per cent this fiscal. Though the GDP numbers for the April-June quarter are higher than that of 8.6 per cent in the previous quarter, they lag expectations of 8.9-9.4 per cent forecast by various experts.

Read more: Indian economy grows by 8.8% in Apr-Jun - India Business - Business - The Times of India http://timesofindia.indiatimes.com/business/india-business/Indian-economy-grows-by-88-in-Apr-Jun-/articleshow/6466840.cms#ixzz0yHCBxkmb

Cranes Software - Will be delisted from NSE

Really saddened on the news that cranes software Trading will be suspend from 3rd september.
Allahabad bank J&K bank JMP sec has holding approx 1.2 percent each.seven percent holding is with KURUTO fund.biggest share holder is now small investors

Promoter holding coming down from 36.68% to 14.52% probably because pledged shares were kept as collateral. Company officials are mum. Investors like me are doomed

NSE notice
Members of the Exchange are hereby informed that trading in the equity shares of Cranes Software International Limited will be suspended w.e.f. September 03, 2010 (i.e. closing hours of trading on September 02, 2010) as the company has failed to respond satisfactorily to the notice of the Exchange for non-compliance with the provisions of listing agreement

P/E ratio plays big role in investment decisions

Source:http://economictimes.indiatimes.com/quickiearticleshow/6390513.cms

Price-earning (P/E) ratio is commonly used while taking investment decisions by many investors. P/E ratio is the ratio between the market price and earnings per share. The ratio indicates the market price of a share vis-a-vis its earnings.

According to one view, lower the P/E ratio, the better it is for investors, as there are chances of higher appreciation. According to others, it is the other way round. Of course, there are exceptions to these theories as well.

P/E ratio is calculated as market value of each share divided by its earnings. For example, if a company's stock price is Rs 200 and it has an earnings per share of Rs 5, the PE ratio is Rs 40 (Rs 200 divided by Rs 5).

High P/E means high projected earnings in the future

The earnings per share can be taken for the full year or for the last few quarters. It can also be taken from estimates of earnings expected in the next few quarters.

Sometimes, the P/E ratio is referred to as the 'multiple', because it shows how much investors are willing to pay per rupee of earnings. In general, a high P/E means high projected earnings in the future.

However, a P/E ratio actually doesn't tell you a whole lot by itself. It's usually only useful while you compare companies in the same industry, or a company's own historical P/Es.

The higher the P/E, the more you are paying for an estimated stream of earnings. Investors usually are willing to pay a higher P/E for companies they judge will be growing faster than the norm even though they do not pay those earnings out in dividends but retain them to fund future growth.

Higher P/E produces greater upside potential

If that growth is realised, the price of the company's stock usually grows faster than the price of a company with a slower growth or higher dividend-paying company. So, the higher P/E produces greater upside potential.

However, if the estimated earnings are not realised or the stock itself loses favour with investors, the downside potential is greater as well. The risk is not just in the ability of the company to earn profits, but also in the higher price you pay relative to its earnings.

If a company goes from a P/E of 50 to a P/E of 25 and maintains earnings of Rs 5 a share, your investment goes from a value of Rs 250 per share to a value of Rs 125 per share even though the company is still earning profits.

P/E ratio is used to value a company

P/E ratio is a commonly used way to value a company and to determine what a company's stock should be worth.

Generally, a company with a high P/E ratio is expensive when compared with a company with a low P/E ratio, since with a high P/E ratio one is paying a larger multiple against a company's earnings.

Higher P/E ratios are often associated with 'growth stocks', or companies that are growing faster than average. Investors believe that such a company's earnings will be higher in future.

Usually, this yardstick is used to analyse whether a stock is under-valued, overvalued or trading at fair value by investors planning to buy stocks.

low P/E does not mean cheap stock!!!!

Sudha, a housewife had just returned from her weekly kitty party session. She immediately turned on her computer at home and went to one of the trading websites. She was impatient. Mrs. Kumar at the kitty party had just mentioned how she had tried her luck at stock investing. She explained the thumb rule of of finding stocks at low P/E’ s being a good bet and went on bragging about how she had a earned a good Rs. 10000 in one month. As soon as Sudha heard this her thoughts were only on getting home early & finding stocks with low P/E s to invest in. She immediately logged on to one of the financial trading websites & looked for stocks that traded at price to earnings ratio less than 10 (a ratio Mrs. Kumar had mentioned as being a good buy.) She was excited to find some 50 stocks trading at a P/E of less than 10. Wow she thought!!! She was going to be rich soon too. She invested randomly in the top 10 stocks in the list. So what do you think happened to Sudha after 6 months…… Let’s see…

Well six months later, when Sudha checked her portfolio, Sudha realized she was in deep trouble. Forget high returns, 9 out of her 10 investments had reached pitfall levels. She was in heavy losses. After studying the stocks for a while she realized that most of the companies she had invested in were small risky companies, with extremely erratic earnings. She realized being undervalued was not the reason for the stocks having a low P/E. The main reason was the sudden jump in earnings, in most cases due to the sale of an outside business asset.

A stock that trades at a low P/E is not always cheap!!! P/E is the market price of the share divided by the current earnings per share. The problem mainly lies in the earnings per share. The number of outstanding shares in the market too brings a difference in the P/E ratio.

Companies having a history of erratic earnings will trade at low P/E s when they witness upward swings in their earnings. These are high risk stocks and investing in them becomes more of a gamble. Consider the stock below:

Year 2006 2007 2008 2009
Stock Price 23 30 25 15
Earnings 0.72 4 0.5 0.32
P/E 32 7.5 50 46.88

Many innocent investors would have been caught in the trap in 2007, just by looking at the attractive P/E. Any investment in the year 2007 would have given nothing but losses to the investor for the next 2 years.

Consider the example of TVS Motors – In March, 2003 it was trading around Rs.40 and at a low P/E level of 7.5. Seems like a great candidate for applying the P/E thumbrule, doesn’t it? However March 2003 was a great time for the company with a 129% increase in profits – the result a seemingly attractive low P/E. However investing in the company in March 2003 would have given nothing but losses to an investor over a 5 year period. For the next 5 years, the company saw its profits falling & in March 2008 the company’s stock price was Rs. 34 and was trading at a P/E of 28. Buying at a low P/E of 7.5 and selling at a high P/E of 28 brought nothing but losses to the investor.

The other likely reasons for a company trading at a low P/E, could be the company has had a history of trading at a low P/E. Even its industry P/E plays a role here. Probably the companies in the industry have had low P/E trends.

Even when I initially entered the world of stock investing, I always used to end up considering stocks with a low P/E, conveniently assuming that they are cheap. It was only when I was guided by my colleagues at the company I work & they introduced me to the concept of value investing I realized that there are a number of myths in the stock investing world; one of the most dangerous ones being that a stock with a low P/E is a cheap buy.

Hence, for beginners in the stock investing world, beware of stocks with unusually low P/E s. There could be many reasons for this. Always check on the past fundamentals of the company, study why the market is undervaluing the stock; maybe the company is up to some goof up etc. Don’t always use the thumb rule of low P/E and invest blindly!!!


Source:http://stockshastra.moneyworks4me.com/learn/a-stock-that-trades-at-a-low-pe-is-not-always-cheap/

Birla Cotsyn (India) Ltd

When i opened the times of india, i found a full page advertisement of this company.It is part of Yash Birla Group. What i was astonished was that they are giving 4.5% of bonus and 1:5 bonus shares to celebrate 60 years jubilee.

http://economictimes.indiatimes.com/stocks.cms?ticker=birla+&pagenumber=1&pagesize=30&companyid=21607&matchcompanyname=false


the face value of this share is 1.Future plans of the company are
Rs200 crore investment in retail foray
Rs150 crore in yarn processing
Rs75 crore each in expansion of existing yarn capacity and manufacturing of garments

PE ratio 32.53
EPS (Rs) 0.04
Mkt Cap (Rs Cr) 275.40

Though it is a birla group company, it is surprising that it is available at such a low price.Record date for Bonus share is yet to be announced.
Some of my friends have bought this stock today.
http://www.dnaindia.com/mumbai/report_birla-cotsyn-draws-up-rs-500-crore-capex-plans-for-expansion_1422026

Rakesh Jhunjhunwala Speaks with ET now

At 18000 plus, how would you characterise the market?

Bullish. One with opportunity, with attended risk. Rather than looking at the market levels, we should look at the Indian economy and I see no reason why India's growth will be reversed. Of course, there are attended risks internationally. So overall, the picture is good.

But are the low hanging fruits being plucked?

It depends on what kind of time period you are looking at. If you are looking at 3 to 5 years, there is tremendous opportunity and I do not think even the low fruits have been really hanged because you have seen good news stories coming out every year. The fact that people are feeling difficult and they feel there are no news stories and markets will refuse to go down, is a healthy sign.

How would you describe the market earnings? They surprised us or are we in 2007 when it was a power of liquidity which took markets up?

I do not understand this liquidity and all. Markets go up not because there is abundance of buyers, but because there is a lack of sellers. So markets always go up because there are more buyers than sellers or they go down because there are more sellers than buyers.

So I do not understand all this liquidity because I do not know on what basis you can create fair value and then you can say it is overvalued and it is undervalued. After all, it is the way you see it. So I do not know whether we are in somewhere like 2005, 2006 or 2007.

Do you think we are in that stage of disbelief because retail participation is low? If you look at futures and options open interest also, that is not high by any yardstick.

I do not know about the future interest, future positions and all. But I know one thing, I do not think there is retail participation at all and there is a lot of money waiting on the sidelines. Socially people are not participating in the markets. There is a fair amount of disbelief.

What is Rakesh Jhunjhunwala, the trader, thinking?

Trading is momentum and the markets - although the Nifty and some of these heavyweights are not doing well - are gaining gradually. But they are gaining. So I am a bull at the moment.

Let's say for the next 3 to 6 months, does the directional call for a trader has to have a long bias or a short bias?

I can tell you one thing that there are no directional calls for 3 to 6 months. Directional calls in trading can change overnight, but as circumstances play out today, markets are going up. It is wholly your trade challenger or right now the person who feels that the market is at a turning point will be a bear today.

What is the possibility that we can make a new high in this financial year itself?

I will read the probability high.

Can we make a new high and stay beyond that mark, which is 21000?

I do not know if we can make a new high. I personally think we can, but even if we do not make a new high, I know one thing that direction of the market is upwards and with a good range. Although the international scenario is unknown, my personal opinion for the next 3 to 9 months is that I do not see any adverse thing happening.

Why do you say that?

Because I feel the point where this growth is really going to slow down is still 9 to 12 months away.

Do you think all the problems have been pushed under the carpet and they will not surface up for another 6 to 12 months?

I want to say one thing. Is it a crisis in the system or is it a crisis of the system? So it is not that the world has not borne sub par growth, we will bear it. The world is not going to fall as long as there is confidence in governments and in banking institutions and the financial system.

I do not know if world is going to turn upside down and I do not see India going at less than 8-8.5-9% and if we take the scene on infrastructure and other reform, I do not think world can go at 1.5 and India can grow at 12.

The fact that we are at a 3-year high, Chinese markets are marching towards a new 52-week low. There is a disconnect there. In 2007-2008, the story was different. All markets were going up together and all markets were coming down together. Can this disconnect really last?

It is lasting.

Do you think it is here to stay?

If the Indian economy performs and with what Manish said that day that with the underexposure of equity in India, I see no reason for Indian markets to go down.

On a personal side, you have just turned 50. So how will Rakesh Jhunjhunwala in his 50 be different from Rakesh Jhunjhunwala in his 40s?

Rakesh Jhunjhunwala is going to live more for himself now. I reflected a lot, I thought a lot on my 50th birthday. It has been one of the most important birthdays in my life, not in terms of celebration but in terms of retrospect. I want to know what I enjoy. I want to give more time to my children, my family, to my health.


What are some of the personal pleasures you have taken?

After my 50th birthday?

Yes.

I have started exercising very little, but I am doing it, spending more time with my children. I never used to go home before 9:30-10:00. Now at 7:30, I want to be at home. I want to develop habits outside the market. I want to do lots of things and I own the theory of all age beyond 60-65 is bonus. So I feel that there are not many years left. So let me do what I have not done in the last 50 years.

So you are running fast, but this time you are running fast on the treadmill. Can I say that?

Not, I do not run fast. I run very slowly, but I am trying.

You are a proud father of 3 children. So every morning when you leave your house, what do you tell them and what do you teach them?

The two small ones are too small to be really told and my daughter also, I do not want to give moralistic lectures, but I wish them to be responsible in life. They have their mother's nature and my brain, and I hope they turn out to be responsible people.

I always feel that I want to give them personal freedom and let them do what they want in life. I do not want them to be fund managers. They may not like to be wealth conscious. I do not want them to be wanting to own wealth unnecessarily. So I want them to be responsible and leave them well, do what they want in life and pray that they do well. That is the only thing we can do.

A year ago, you had indicated that the best is yet to come for Rakesh Jhunjhunwala. So what do you mean by that? Do you think the best in terms of stock idea, best in terms of a strategy, best in terms of a trade, it is yet to come?
Rakesh Jhunjhunwala can be what he is only when the external opportunities expand. So the opportunities are expanding day by day. I would like to replicate what I have done in India on the international scene is a dream. I am learning with every experience, every passing moment. I am trying to build an organisation.

People may feel that I have achieved a lot, but there is far more to be achieved compared to what I have achieved. So I still feel the best is yet to come. Then I still feel even on my deathbed, the best is yet to come. So I do not think we can ever peak in life.

The insiders we talk to have told they have told me privately that Rakesh Jhunjhunwala has pledged that he will never sell Titan. Is it so?

I make pledges and wishes for my children, not for my stocks. I will sell Titan one day, but I do not know when. I have a dream. I will sell my share for a billion dollars, otherwise I would not hold on to the stock.


But they are not a billion dollar yet, so you will not be selling them soon?

Well, if they go to 3 times what they are today, it will be a billion dollars.

Do you think Titan can go up 3 times from these levels?

Who knows?

But at least the belief is there. I mean your belief is there that it could go up.

Otherwise I would not hold on to the stock. I do not know 3 times or two times, but I think it should give a good return. Let me make a disclosure, I am interested, I have a holding in Titan. So whatever I say has to be taken with a pinch of salt.

But Titan as an investment is very close to your heart even though you have identified bigger multibaggers -- Praj and Crisil. Why is Titan so close to your heart?

Well I don't think I have identified any bigger multibagger than Titan and also I believe I am excited because I think there is scope to improve Titan's margins. Titan's business is not volatile. Titan is still according to me a very young company and I personally believe that Titan can be an international watch brand.

Once Titan starts generating Rs 400-Rs 500 crore in India every year, they have free cash flows which I think they can invest and they can replicate worldwide or may be at least in the emerging world what they have done in India. That's very exciting and my emotions about Titan are about my investment. I have a lot of respect for its management, for the ethics like for the kind of skills they have, the dedication which they work for.

Are you really emotional about any of your stock ideas, any of investments or they are pure investments?

I have emotions for my children, for my wife, may be for my girlfriend. I would not say there is no emotion when you have invested for such a long periods of time, but they are not such emotions that will not part ways.

This year you made two large investments -- one is Rallies, the other one is VIP. One is consumer-oriented business and you like the consumption story in India. But does Rallis mean that you also like the rural related businesses in India?

Yeah, I like them and that is one of the reasons I have invested. I think Rallis has done a tremendous turnaround and the opportunities are unbelievable. They have very good distribution base which we do not recognise. They have no debt, they have a lot of excess assets.

So it's a company which can grow very large without having any need for equity and they perform very well and have very good management and tremendous opportunity.

But are you bullish on agri as a theme?

How are we going to feed India's people?

But are there enough opportunities?

And I also believe that there will be food inflation because to get more food, you will have to have terms of trade in favour of the farmer.

So do you like anything which is a typical rural story which is automobiles, which is FMCG or you only like companies which would be boosting agri production?

I like automobiles and they are not only linked to agri. They are linked to all of India. A lot of other products and FMCGs are also linked to urban India and rural India. So I won't call them as agri product companies. I would say agri product companies are basically those which are inputs.

In VIP Industries you invested at sub 100, it has gone up to 500 plus. Is it fully valued or is there still upside for VIP Industries to go?

I would not comment on its price, but again comment on its business that it has about 55-60% organised luggage market in India. If India is going to have a middle class and India is going to travel right and you want to have people more brand conscious, then branded luggage is going to sell and they have got reasonably good margins.

I think they have a sensible management. So it was a lucky pick. I bought some stocks sub-par, I bought at 295-300 also. I think it's a good company, but I would not comment on the price.


You do not like PSU banks and you have said that on various public forums. Why is that?

Well, I do not like PSU banks as a long-term investment. One biggest thing is a public sector banks are not able to bring down their ratio of cost to income. In private sector banks as incomes goes up, the cost as a percentage of income goes down. Therefore, the real efficiency never comes.

What about valuations, the valuations are quite supportive?

That's why I say I trade them, but I do not make long-term investment in those. I do not trust them and I do not trust government's companies beyond a point. Look at ONGC, IOC. So beyond a point I do not want to. I have a very little surplus capital to invest.

Are you fully invested in equities?

Yeah, absolutely. 200-300%.

And there is no reason why you are looking at taking some chips off the table.

No, I do not know what I will be doing, it could change tomorrow. But at the moment, I am not and I do not want to sell some part and buy some other stocks. I do not want to have a consolidated portfolio, I do not want to sell my holdings and then create smaller holdings. Sell these because this will go up double and that we will go up triple. I do not want to do all that.

What about real estate stocks? You have always said that you do not like real estate stocks, their business models are very difficult to decode.


I hold my words for long term investment, but I think as a trading bet they may be good. I am holding some real estate stocks, but I would not be a long-term investor.

Why not? Real estate is a complete proxy to India consumption if you are bullish on Indian consumption.

Well there are lots of things for which, let us not discuss the reasons. If somebody feels bullish, it's his or her choice.


Keep Reading
Source:http://economictimes.indiatimes.com/opinion/interviews/I-still-feel-the-best-is-yet-to-come-Rakesh-Jhunjhunwala/articleshow/6370393.cms?curpg=1

Deccan Gold mines

Source: http://www.arunthestocksguru.com and BSE Website

1)Deccan gold mine is engaged in the gold exploration sector.Deccan gold has got close to about 10,000 square kilometer of prospective blocks in different states.it has recently started drilling in karnataka
http://www.bseindia.com/xml-data/corpfiling/AttachHis/Deccan_Gold_Mines_Ltd_200510.pdf

2)India produces just 3 tonne of gold per annum as compared to 300 tonne, produced by Australia.Gold mining business is just like the oil exploration business, where there is a high degree of uncertainty involved. Nobody knows whether the amount that is being spent for the exploration process will really yield any results or will have to be written off.But this company is something which can yield windfalls of gains in the long run

First Post

This is my first post. In this blog i am going to talk about stocks that i own. At the same time i am going to share the concepts that i learn