Poly Medicure Bonus Issue - jumps 19%
Poly Medicure jumped 18.77% to Rs 211.05 n BSE after the company said its board will meet on Tuesday, 9 February 2010, to consider issuing bonus shares. The company announced the board meet before market hours today, 8 February 2010. On BSE, 45,524 shares were traded in the counter as against an average daily volume of 6,878 shares in the past one quarter.
The company’s equity capital is Rs 5.51 crore. Face value per share is Rs 10. The current price of Rs 211.05 discounts the company’s Q3 December 2009 annualized EPS of Rs 32.45, by a PE multiple of 6.50. If approved by the board, this will be a maiden bonus issue by Poly Medicure.
Poly Medicure’s net profit jumped 587.7% to Rs 4.47 crore on 22.4% increase in net sales to Rs 33.97 crore in Q3 December 2009 over Q3 December 2008. The company is engaged in manufacturing of disposable blood bags, IV cannula, endotracheal tubes, cold therapy pads and common disposables.
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Dalal Street Hot Chips - Kaveri Seed Company
Kaveri Seed Company (KSCL)
BSE Code: 532899
CMP: Rs. 264
Target: Rs 288 and Rs 310
Investment: 15-20 trading sessions, High Risk
Kaveri Seed Company (KSCL) is a Hyderabad based enterprise engaged in the business of seeds and agri-inputs chiefly for sunflower, maize, cotton and paddy. The company is now on the radar of several mutual fund managers. Even on the technical front the scrip looks attractive. It has shown a tremendous volume as well as price increment in the last two trading sessions and this is supposed to increase further. Some of the technical analysts are now predicting a break-up in the counter. Therefore we would advise on buying this scrip between Rs 274 and Rs 255 with a target price of Rs 288 and Rs 310. A higher target of Rs 321-324 can also be expected. This target price is expected to be achieved in the next 15-20 trading sessions and therefore at this price level one can think of taking an exposure to this counter with a short-term perspective.
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What is the IPO basis of allotment?
What is the basis of allotment?
In case of over-subscription in a fixed price issue, the allotment is done in marketable lots and on a proportionate basis. In case of a book building issue, allotment to Qualified Institutional Buyers (QIBs) and Non-Institutional Buyers (NIBs) are done on a discretionary basis. Allotment to retail investors is done on a proportionate basis.
After the closure of the issue, the bids received are aggregated under different categories, such as firm allotment, Qualified Institutional Buyers (QIBs), Non-Institutional Buyers (NIBs) and Retail Individual Investors. The oversubscription ratios are calculated for each of the categories as against the shares reserved for each of the categories in the offer document. Within each of these categories, the bids are segregated into different segments based on the number of shares applied for.
The oversubscription ratio is then applied to the number of shares applied for and the number of shares to be allotted for applicants in each of the buckets is determined. Then, the number of successful allottees is determined. This process is followed in case of proportionate allotment. In case of allotment for QIBs, it is subject to the discretion of the post issue lead manager.
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Dalal Street Hot Chips - Rolta India
Rolta India
BSE Code: 500366
CMP: Rs. 202
Target: Good returns
Investment: Short Term, High Risk
The positive surprise in the Q3FY10 result of Infosys has set the tone for the entire software space and might bolster it further. The BSE IT Index is up by 7 per cent in the last three trading sessions despite the Sensex being down by 1 per cent. Rolta India, a leading provider and developer of information technology-based geospatial information system (GIS) and engineering design services is a mid-cap IT company which still has to do some catching up with the sector. The company will come out with its Q2FY10 (year ending June) results on January 21 and is expected to provide some good news. The broking community has also shown a lot of interest in the counter as evident from the increase in volume by almost two times in the last couple of trading sessions. Therefore, investors with short-term gain can plan for an exposure in the counter and expect good returns from it.
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Dalal Street Choice Scrip - India Nippon Electricals - 42% Gain in One Year
India Nippon Electricals
CMP: Rs. 225
Target: Rs 321
Investment: 1 Year, Low Risk
With declining revenues since FY05 not many would have liked to see India Nippon Electricals (INEL) as a part of their portfolio. But INEL has been showing some resilience with a turnaround not only in terms of revenues but also profits in H1FY10. The worst seems to be behind it and with certain initiatives that INEL has taken, the scrip should do well in the coming years. Besides, with its zero debt status, high dividend yield, cash and equivalent of Rs 83.8 crore and low valuations, the company merits a second look for long-term investment. Also, it has been a consistent dividend payer since the last 19 years.
INEL is a joint venture between Lucas Indian Service, a wholly-owned subsidiary of Lucas-TVS and Japan’s Kokusan Denki. It is into the manufacturing of electronic ignition systems for two-wheelers, three wheelers and portable engines. Though a TVS Group company, the company also caters to companies beyond TVS Motors with clientele such as Bajaj Auto, Hero Honda, Honda Motorcycle & Scooters, Royal Enfield, Yamaha Motors, Piaggio etc. On the portable engines’ front, its clients are Greaves Cotton, Honda Siel Power and Birla Power Solutions.
There are certain reasons we feel INEL will do well. First, INEL has a diverse client base and so its revenues aren’t a function of a single client but several others which de-risks its business. Second, there is a revival in the auto sector and with the economy bouncing back in a much better way than expected, the sector is expected to do well and this augurs well for INEL. For the period April?December 2009, two-wheeler sales have witnessed a strong increase of around 24 per cent and with sentiments improving further these numbers should only improve going forward.
Third, INEL has also entered into a new line of business for a domestic client for the supply of electronic control units (ECUs) for diesel passenger car application. Electronic control of diesel engines for passenger cars is a critical function in the automotive industry. However, there is no information on how big this order could be but a media reports claims that this client is Tata Motors. That apart, INEL is also setting up a new unit at Uttarakhand to meet its customers’ requirements. The commercial operations of this unit are expected to start before the end of FY10.
Besides, INEL’s products have received approval from a North American client and it is expected to start commercial production for the same in this fiscal. All these factors will help will push INEL’s revenues further. Also, INEL is increasing its after-market presence, which will not only provide additional fillip to sales, but also improve its margins. INEL is almost a zero debt company, thus limiting interest its outgo and keeping its profits healthy. Its FY09 dividend at Rs 6 (FV Rs 10) works out a yield of 2.62 per cent. But the best part is that the interim dividend has gone up to Rs 3.5 per share in FY10, indicating a better profitability for INEL.
Assuming a similar dividend in H2FY10, its FY10 dividend could be Rs 7 per share, whereby the yield works out to 3 per cent. The company has cash and equivalent of Rs 83.8 crore in its books, which is 45 per cent of market cap of Rs 186 crore. For H1FY10 INEL’s sales and profits grew by 22 per cent to Rs 80 crore and by 76 per cent to Rs 10.64 crore respectively on better realisations and low input costs. For FY10 its estimated sales and profits could be Rs 161.7 crore and Rs 20-21 crore. On an estimated EPS of Rs 26 the scrip is available at a PE of just 8x and this certainly makes it worth a pick with a one year target of Rs 321.
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Buy Recommendation - Power Finance Corporation
Fresh investments can be considered in the Power Finance Corporation (PFC) stock that appears a good defensive bet within the financial sector. The company’s loan book grew at a strong pace of 20 per cent in 2009 despite lower demand for credit witnessed by the banking sector. At current market price of Rs 252, the PFC stock is trading at 10.5 times its estimated FY11 earnings and two times its estimated adjusted book value, which does not reflect the strong earnings growth posted by the company.
Near-zero non-performing assets and a high proportion of floating rate assets (87 per cent) allow PFC to pass on interest hikes and minimise credit risk. Strong earnings growth (36 per cent for nine months ended December 31, 2009, adjusted for extraordinary items), superior profitability (Return on Equity of 17 per cent) and the insatiable funding requirements of the power sector make for bright growth prospects.
The outlook for power financing looks promising given that investments of Rs 10 lakh crore are expected in the power generation alone over the next eight years. PFC being the market leader may corner a chunk of this pie.
Source: Businessline
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What are the requirements regarding IPO promoter’s contribution and lock-in?
What are the requirements regarding IPO promoter’s contribution and lock-in?
In case of an IPO, the promoters have to necessarily offer at least 20 per cent of the post issue capital. In case of public issues by listed companies, the promoters shall participate either to the extent of 20 per cent of the proposed issue or ensure post-issue share holding to the extent of 20 per cent of the post-issue capital.
In case of any issue of capital to the public the minimum contribution of promoters shall be locked in for a period of three years, both for an IPO and public issue by listed companies. In case of an IPO, if the promoters’ contribution in the proposed issue exceeds the required minimum contribution, such excess contribution shall also be locked in for a period of one year. In addition, the entire pre-issue share capital, or paid up share capital prior to IPO, and shares issued on a firm allotment basis along with issue shall be locked-in for a period of one year from the date of allotment in public issue.
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Technical Analysis - Maruti Suzuki
The stock slipped Rs 20 or 1.5 per cent previous week. Taking support from the 200-day moving average at Rs 1,321 and also just above our support level of Rs 1,311, the stock bounced upward on Friday in line with our expectations.
Significant support for the near-term is at Rs 1,321 and subsequent support level is at Rs 1,291. Short-term trader can buy with tight stop at Rs 1,350, with targets at Rs 1,410.
The medium-term trend is negative for the stock from its all-time high of Rs 1,740, recorded in September 2009. The upcoming week is crucial for the stock, any move above Rs 1,470 will negate this downtrend.
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Technical Analysis - ONGC
ONGC experienced an erratic movement during the week, trading between Rs 1,066 and Rs 1,155 intra-week low and high respectively. Though the stock rallied above the 200-day moving average at Rs 1,120, it failed to hold above the average. The stock lost Rs 5 for the week. The near-term trend is sideways for the stock in a narrow band between Rs 1,080 and Rs 1,120. Next support and resistance are at Rs 1,060 and Rs 1,150 respectively. Short-term traders can initiate fresh short position if the stock fails to penetrate Rs 1,120 and exit at Rs 1,060.
The medium-term trend is bearish since October 2009 high of Rs 1,273. This stance will turn positive on a close above the medium-term resistance at Rs 1,160 level.
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Technical Analysis - Infosys Technologies
The stock commenced the week with a volatile session and later sessions it witnessed selling pressure. On Friday, it conclusively penetrated our last week’s first support level of Rs 2,400 and also dipped below the second support of Rs 2,350, however, it managed to close above this level. The stock appears to have found near-term support at Rs 2,350. The short-term trend is down since January peak of Rs 2,710. Immediate resistance is at Rs 2,450 and next resistance is at Rs 2,510 for the week. Failure to move beyond Rs 2,450 will be a bearish indication for initiating short positions. Key near-term supports are pegged at Rs 2,350 and then Rs 2,300. As long as the stock trades above Rs 2,300 level, the medium-term outlook remains positive.
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