Archive | October, 2017
Nifty@MRP Suggest Markets Are Highly Overvalued, What Should Investors Do?

Nifty@MRP Suggest Markets Are Highly Overvalued, What Should Investors Do?

What is Nifty@MRP? As investors, we constantly track the Nifty movements. To make investing more profitable and not a game of mere chance, we need a solution, a solution which could help us identify whether the market is grossly depressed or irrationally exuberant. This is exactly what Nifty @ MRP is for! What is the latest value of Nifty@MRP? For Jun ‘17, considering the free float market capitalization at the MRP of individual stocks and the share price data as of 29 September, 2017, the Nifty@MRP is at 8800 including dividends. On 29th September, NSE Nifty ETF equivalent closed at 10516.4, which is ~19% overvalued. As of 23 October, 2017, closing index value of 10184.9, Nifty is ~15% overvalued. On similar lines, the Sensex@MRP value is at 29047. On 29th September, 2017, the Sensex closed at 31283.7, which is about 8% or 2237 points above Sensex@MRP. As of 23 October, […]

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Have you increased your equity investments recently?

Across years, we have observed that investor’s behaviour changes as per the market sentiment. They turn risk averse when markets are going through a rough patch. On the contrary, they take more risk during the bullish phase. Exactly opposite behaviour is expected while investing in equities. We wonder how investors make same mistakes time and again. Like they say, history never repeats but it rhymes. In the recent times, Indian markets have been very generous. Corporate earnings haven’t kicked in and still equity returns are fantastic. Recent investors believe that 15-16% CAGR is the minimum returns one can expect from equities irrespective of when one invests. This myth is spread by brokers and Mutual Funds who tend to highlight such high “returns” in their pitch for selling equity products rather than explaining other inherent advantages of equities. (Inflation beating returns, tax free, compounding returns to meet goals faster) Many argue […]

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GIC Re IPO : Good business; Punchy valuations

GIC Re IPO : Good business; Punchy valuations

Issue Open: Oct 11, 2017 – Oct 13, 2017 Issue Type: Book Built Issue IPO Issue Size: 124,700,000 Equity Shares of Rs 5 aggregating up to Rs 11,372.64 Cr Face Value: Rs 5 Per Equity Share Issue Price: Rs 855 – Rs 912 Per Equity Share Market Lot: 16 Shares Minimum Order Quantity: 16 Shares Listing At: BSE, NSE   About the company GIC Re provides reinsurance across many key business lines including fire (property), marine, motor, engineering, agriculture, aviation/space, health, liability, credit and financial and life insurance. The company has exposure to domestic and international business. In FY17, reinsurance written for risks outside of India represented 30.5% of gross premiums. It has underwritten business from 161 countries and as on June 30, 2017 the company was ranked as the 12th largest global reinsurer in 2016 and the 3rd largest Asian reinsurer in 2015 in terms of gross premium accepted. The […]

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How to make losses less painful?

Psychology plays a major role in any decision making. There are ample studies to indicate that poor decision making can be attributed to a few key heuristics, leading to terrible consequences for the decision maker. One such heuristic is called loss aversion. It was identified by two Israeli psychologists, Daniel Kahneman and Amos Tversky. In Decision Theory, loss aversion refers to people’s tendency to prefer avoiding losses over acquiring equivalent gains: it’s better to not lose Rs. 100 than to find Rs. 100. Studies conducted by above mentioned academicians suggest that psychologically, losses are twice as impactful as gains. Some examples are as follows, We don’t want to throw away the stuff we don’t need We don’t sell a stock that is below our purchase price just because we don’t want to take a loss We don’t sell a house for less than what we paid If we lose the […]

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Godrej Agrovet; Commodity business with scale advantage; valuation unjustified

Godrej Agrovet; Commodity business with scale advantage; valuation unjustified

Issue Date: Oct 4, 2017 – Oct 6, 2017 Face Value: INR 10 per equity share Issue Type: Book Built Issue IPO Issue Size: Fresh Issue: Rs 291 Cr Offer for Sale: Rs 866 Cr Issue Size: Rs 1157 Cr Price Band: Rs 450 – Rs 460 Per Equity Share Market Lot: 32 Shares approx Minimum Order Quantity: 32 Shares Listing at: BSE, NSE About the company Godrej Agrovet is a diversified, research and development focused agri-business company with operations across five verticals namely; animal feed, crop protection, oil palm, dairy, poultry and processed foods. Animal Feed: The portfolio of products comprises of cattle feed, poultry feed (broiler and layer), aqua feed (fish and shrimp) and specialty feed. It has aggregate production capacity of 23,00,000 MTPA, as of June 30, 2017. Also, its joint venture company in Bangladesh named ACI Godrej has two manufacturing facilities with an aggregate production capacity of 5,70,000 MTPA, as of June 30, 2017. Crop […]

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