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 […]

Read more
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 […]

Read more
SBI Life IPO – Stretched Valuation; Euphoria in IPO Space

SBI Life IPO – Stretched Valuation; Euphoria in IPO Space

Issue Date: Sep 20, 2017 – Sep 22, 2017 Face Value: INR 10 per equity share Issue Type: Book Built Issue IPO Issue Size: Offer for Sale of 120,000,000 Equity Shares Issue Size: Rs 8,400.00 Cr Price Band: Rs 685 – Rs 700 Per Equity Share Market Lot: 21 Shares approx Minimum Order Quantity: 21 Shares Listing at: BSE, NSE   About the company SBI Life Insurance Company Limited (SBI Life) is the largest life insurance company in  India in terms of New Business Premium (NBP) with the highest 20.04% market share. It was incorporated in March 2001 as a joint venture between largest PSU bank SBI(74%) and global insurance company BNP Paribas Cardif (BNPPC) (26%) with equity capital of Rs.125Cr. Initially, the business was operated only through the agency channel with 719 advisors and by end of FY03 bancassurance channel was launched, which has now become an immense network covering rural and urban India. In FY06,SBI Life became […]

Read more
ICICI Lombard IPO – Stretched Valuation; Taking advantage of Euphoria

ICICI Lombard IPO – Stretched Valuation; Taking advantage of Euphoria

Issue Date: Sep 15, 2017 – Sep 19, 2017 Face Value: INR 10 per equity share Issue Type: Book Built Issue IPO Issue Size: Offer for Sale of 8,62,40,000 shares Issue Size: INR 5,700 Cr. Price Band: INR Rs 651 – 661 per equity share Market Lot: 22 Shares approx Minimum Order Quantity: 22 Shares Listing at: BSE, NSE   About the company ICICI Lombard General Insurance Company Limited largest private‐sector non‐life insurer in India based on gross direct premium income in fiscal 2017. Incorporated in 2000, ICICI Lombard General Insurance Company Ltd founded as a joint venture between with ICICI Bank Limited and Fairfax Holdings Canada.   It offers customers a range of products, including motor, health, crop/weather, fire, personal accident, marine, engineering and liability insurance, through multiple distribution channels. In fiscal 2017, the company issued approximately 17.7 million policies and their gross direct premium income was Rs.107.25 billion, translating into a market share, on a gross direct […]

Read more

Matrimony IPO; Not yet reached an inflection point

Issue Date: Sep 11, 2017 – Sep 13, 2017  Face Value: INR 5 per equity share  Issue Type: Book Built Issue IPO  Issue Size: Offer for Sale of 3,767,254 shares  Issue Size: INR 130 Cr.  Price Band: INR Rs 983 to Rs 985 per equity share (10% discount on the issue price to the retail individual investors)  Market Lot: 15 Shares  Minimum Order Quantity: 15 Shares  Listing at: BSE, NSE   About the Company Founded in 2001, Matrimony.com is a leading provider of online matchmaking services in India, in terms of average number of unique website page views in June’17. It provides matchmaking services to users in India and Indians located across globe through its websites, mobile sites and mobile apps, besides 140 retail outlets located across India. Its specialized brands BharatMatrimony.com, CommunityMatrimony.com and EliteMatrimony.com are well established in India. Along with online matchmaking services, it also provides marriage services in […]

Read more