Tuesday, October 14, 2014

Forget the market Hudhud,It happens only in India

In a hurry to meet the deadlines, the Indian government, the power companies and the leading banks are thinking to accomplish the herculean task of finding a quick and a permanent solution to the stalled power projects and tones of loans stake .The banks take the nasty blow if the projects financed by them fail to generate the cash flow after the announcement of the date of completion basically due to the delays in the land acquisitions and the environmental clearances. 

The RBI had given at least during this period the banks will not take any loss on these loans , and this grace period is about to end with in coming one year. The various other factors to be taken into the consideration are financing the extra costs of over runs and over heads, want of extra flexibility in financing the existing projects and refinancing the various projects which are stranded at one or the other stages of completions and last but not the least the fuel crisis due to the cancellation of the coal blocks by the supreme court of India.

So these are some of the very crucial points to ponder upon to bring the economy back on track and do some contingency planning.

                             Bezos and Biyani sniff an Amazon Future ahead

Finally the east meets the west!!!!. The world’s largest online store Amazon alliances with the India’s largest listed brick and mortar retailer – The future group. This could be the turning point as they have decided to jointly sell goods between online and offline retailer in the country to counter the heavy discounting battle .Future group will promote its own labels of 45 apparels and other categories of food and beverages and range of electronics goods while the Amazon will take care of handling the logistics and customer services for merchandise on its portal. Another pleasant development is that both companies will jointly develop an exclusive brand new line of products across various categories. 

This is a new breed of business where various opportunities will be explored like synergy of data, co working, mutual promotions and sharing the logistics too. This had to happen as the Future group was rattling from one scheme to another and Flipcart too had on the Billion Day Sale on October 6 fell head over heals !!!!

Advantage – Crude Oil

The crude oil is on its four year low will have multi dimensional positive effects in our country as our country heavily depends upon imports for almost 75% of its required consumption. It will give a fillip to pivotal macroeconomic indications not only such as CAD and fiscal deficits but also help in giving a shot in the arm to the consumer companies , the tyre industry but also give the booster to the energy sector. The cooling of the crude oil prices will also help the public sector units like HPCL, IOC and BPCL directly as the cheaper prices of crude will help reduce their working capital requirement and also put fewer burdens on the Government of India as it has to shell out subsidies. 

Saturday, October 11, 2014

The Odd Couple

It’s happening in India .The uncommon is becoming common – The Tata Power shakes hand with ICICI and team up to venture into buying into the stranded Power Assets!!!!. Tata power will take care of O&M where as ICICI will pump funds and plan to raise $750 million of equity initial equity, and that’s why we can call it an unusual collaboration of sorts as ICICI being the India’s one of the largest domestic private equity company in its sector will join hands with Tata Power to wade through the troubled water to pump life in the troubled power plants which are short circulated by the regularity uncertainties like high debt, intermittent fuel supplies and poor demands.

Both the concerns are finalizing and chalking out the common platform with a common mandate to buy out those specific power plants which are disrupted. The division of work is simplified that Tata Power will work in its field of specialization that is of operations and maintenance and post acquisitions where as ICICI will be solely responsible for arranging both the debt as well as the equity funding for all such acquisitions. The name of Tata and Tata Power is the India’s largest integrated power company in the private sector with a vintage heritage presence in the country in the generation, transmission and distribution will use its expertise in making these acquisitions come back on the fast tracks. The finalization of various technical, financial as well as commercial viability details are underway.

Tuesday, October 7, 2014

Combo Pack: For Smart Trader

Combo Pack

A) 1 month plan @ INR 30K [Basic Plan for investor/trader]
B) 3 months plan @ INR 60K [Affordable Plan]
C) 6 months plan @ INR 80K [Most Selling Plan]
D) 12 months plan @ INR 100K [Plan suitable for HNI, NRI or Sub-brokers]

Combo Pack:

Smart Traders understand very well that stock market does not give money every day, also every segment do not perform as per our expectation on day to day basis.

The facts which most of the traders do not know or do not want to accept are:

1)   Very few smart traders only make money from the stock market.
2)   You cannot earn daily profit.
3)   You cannot make money only from 1 segmented trading.

Whereas the most important fact which we often forget during trading is that, every month stock market gives 100% good opportunities which are very limited in numbers, and we miss those because of various reason. (Money already stuck in some stock, or capital loss etc.)

VPS Advisory Services gives opportunity to all traders to become smart and en-cash those market opportunities into your profit.

Combo pack is designed for those who understand above mentioned facts. The product features are as follows:

1)   Total 6-9 trades in a month.
2)   Trading in Stock future, Equity Cash, Stock Option, Nifty Future segments.
3)   Accuracy 100%.
4)   Holding Period Maximum T+3 days.
5)   Profitability 50k to 70k in a month.
6)    Investment required 1 lac to 1.5 lac.


Monday, October 6, 2014

The rise of online food business industry

With the rise of the internet and Smartphone has brought a huge change in our eating habits .As the lifestyle has changed and so also has our cuisine habits, even if we are in utter shortage of time but still we can have best of the assorted range of food at our finger tips delivered at our door step thereby totally avoiding the traffic commotion and the long queues.

The online food and home delivery has crossed Rs-1000/- crores and is expected to grow by 40% because of the wide range of eateries and the increase in the purchasing capacity of the customers not only in metro cities but also ‘B’ grade towns too . There is a change in trends as some restaurants are coming  up without any sitting spaces but  engage only in booking order for cash and carry or free home delivery .

There are  web sites of big food chains who take order of multiple restaurants and offer you discounts too like www.foodpanda.in.

Than there are some apps like zomato who give you information of the restaurants in the vicinity and you can review the menu to give the order, yes and a major chunk of revenue of McDonalds and Dominos comes from the home delivery and same is the case with the other restaurants which have big names are following this new trend and are clocking 65%, moreover 75% is the growth rate of the food chain restaurants, and 80% of the restaurants in the metro cities are offering the free home delivery.

The websites have a dual benefits as they not only provide services but also get earning through ads and innumerable hits and the websites have grown by more than 30% .The customers are happy as they save on both the money and the time plus they have the choice to choose food as well as the place of delivery and a whooping 30,000 clients hit the foodpanda website. 

This revolutionary growth in online business industry is due to the fact that it has eaten into the market share of traditional restaurants and highway restaurants and school – college food joints, and also the online food industry has hit badly the grocery market and ready to cook food or ready to eat food products are no more in vogue . But alls not that glossy until the local cuisine like roti-dal-chaval,or idlee- dosa-samber are available online at the same price as in home. The unusual rise in online food industry is solely due to the chine and Italian food which customers order for the sake of change .There will be a phenomenal growth as and when they are able to market the Indian staple food.

Wednesday, October 1, 2014

Banks marching ahead with renewed confidence

 There is always cutthroat competition among the investment banks to lobby share sale mandate from the government is very well known as they charge no fee at all , for example standard chartered bank which has not make any mark in the IPOs is now extending the fee less work to the Union Bank of India’s Rs 1386 crore qualified institutional placements for a token amount of Rs1 , the bidding process for fund raising is complete by this state owned bank is enquiring other arrangers to match the lowest price.

 Now it’s quite possible that the bank will do the issue with either one investment manager or with differential pricing for other relative lower bidders amongst a dozen merchant bankers like Axis Capital, Merrill Lynch, SBI Cap, ICICI Securities who participated in the bidding process .Usually an issuer enquires for the bids from the qualified investment bankers which only helps build the issuance and usually they place their structure of commission around 0.25% to 1% .

Few months back State Bank Of India which happens to be a giant lender had come out with a bigger Qualified Institutional Placement (QIP) and proposed to pay Rs21 crores or 0.3% of Rs7K crores and even some prominent global bankers could not make the issuance a success until the LIC India along with SBIs loyal clients came in to bail them out and this only goes on to prove the status and stature of SBI and Union Banks as the Union Bank I still undecided about the timing of floating the issue and has to be done till Sept next year.

 Now even the Government has plans to disinvest in its top companies, so the state owned Union Bank Of India is raising funds to muster up its capital base .The important point to note is that in the first quarter the bank’s capital adequacy ratio i.e. the minimum capital requirement in proportion to loans was 10.41% and as per the international regulatory frame work the minimum total capital adequacy (CAR) requirement is 11.5% which will be managed by the end of this financial year. Even the HDFC Bank proves that it’s the dark horse as it gets the HSBCs Asia Super ten tag beating ICICI Bank.

HSBC in itself a big Asian brokerage House has included HDFC in the top ten stocks portfolio, and looking back it has underperformed against the BSE Bankex year till date hovering around 8% and is an clear opportunity for the investors to enter the stocks, the bank may get the nod for higher foreign limit and other factors will boost up the picture. The bank has given excellent return on assets (ROA) of around 1.6 to 2% over the years , return on equity(ROE) of around 21% ,net interest margin (NIM) of around 4.5%  reflecting a great management and defensive nature of the bank’s earnings and a great healthy assets book, future is bright .

Tuesday, September 30, 2014

The revolutionary trends in the world of marketing

From the days of small time retailing shops to the well planned furnished retail shops with kiosks to the chains of retail franchises, the retail business has come a long way.Graduating to shopping malls which are one stop shopper’s paradise where products ranging from good morning to goodnight are available in air conditioned environment. Now the Malls have to give way because the rentals were skyrocketing.

If we consider the current volumes of marketing business, it’s just too hard to believe how the young internet market place is while the timeline of internet marketing has been short, but the cumulative events leading up to the current times where we are is just a part of a huge success story where as the entire globe was influenced much faster than any of the marketing revolution so far.  Going back to 1994 when the internet came in vogue it was mostly used for universities and military purposes for as a tool of exchanging email and other digital interactions and was not a tool of advertising medium and in 1994 the spending for the internet marketing was hardly anything but by the end of 1995 the business was $300 million!!!! and now a little more than a decade later the internet marketing business has exploded to a whooping $200 billion !!!! .

Today it’s hard to believe about any organization which does not has any online presence mainly because the product comes from the manufacturer to the single middleman and directly to the end user , cutting short the national distributor, c&f, state distributor, wholesalers thereby cutting upon the various % of margins distributed to the various hands the product would go through .

Now it was not long ago before the marketing pioneers began to see the potential for the internet business as a million web surfing hits to find the relevant and valuable information and within a few years the information and educational marketing as well as graphically enticing banner ads cropped up and very soon the results begin to flood in which only proved the value of the internet market place o even the worst of the critic skeptical advertiser. It was not long enough that the companies which had been spending huge chunks of their marketing budget on the brick and mortar begin to realize that they could achieve the same results through emails and that too for much less and soon the industry giants such as Microsoft corp to small business houses begin to build company sites and spend marketing dollar to attract qualified traffic , even the search engine companies like yahoo began to create grand profits from advertising alone .

Then came the giant internet marketing boost around the year 2000 which marked the beginning of the end of the internet marketing such as flashing banner ads because as the interactive features were added to the web pages the consumers were given the option of turning off the marketing messages or rather skipping them .Following this came the educational based invitational marketing crystallized with creation of web200 tech and billions of voices begin to rise all over the world and the internet marketing became a global community medium as it was not only a marketing medium but it lead to relational based marketing which led to the most lucrative opportunities for both solo entrepreneurs and small startups alike .

The B2CE –commerce and business to business (B2B) also became popular when the National Science Foundation lifted its restrictions for commercial use of its internet and online and thus it led to a great boom in the market .In 1995 the largest online chain introduced and many more companies like e-bay followed the league.
1983- Email, 1993 HTML, 1995-Amazon,2003-Adwords,2006-twitter,2007-Iphone 2010-open graph.

Despite the explosion seen in the online companies the growth rate is almost in all verticals is in the range of 14% to 20% range, however 90% of the online businesses fail just like the brick and mortar business fail simply because they fail to achieve their objectives which are tactical and also fail to address the more urgent strategic issues relative to the environment of the web business, lack of understanding and knowledge of the online world , the company has to keep monitoring the online business at regular intervals and do up gradations from time to time .For the online e commerce business one should find the niche , good use of technology, logistics, know beforehand the ever-changing marketing tends ,facilitate pickup depots orders through smart phones of daily and monthly needs of the customers, flashy apps virtual dressing facility use of social networking sites ,whatsapp application on pc and laptops, retail based social networks, coordination at the international level and capitalization.

The location also matters just not of the retail store but also location on the web page because it’s the common assumption that the best locations are on the first page of the Google search engine page and the user usually clicks anyone of the options given on the first page and they seldom go to the next page , secondly Google’s first page represents the 80% of all the search traffic .

Now winning the first page placement on Google requires a thorough understanding of how the search engine operates .Web based marketing skills. Timing and tech expertise in search engine optimization with the click of a mouse site surfing can be done, so the site should be maintained as very attractive as there is no salesman to convince the customer .

In the online business the company should keep updated with the web landscape and nature and taste and frequency of the online shopping community. As the web is relatively a new frontier and a truly impulsively compulsive buyer driven world with different sets of ever-changing rules. Thus the buyer has the choice of unlimited variety of choices of not only the products but also the choice of online companies so the company should be very careful about the mood of the customer and the issues the customers face while buying online and sole them to the customer’s satisfaction. But still the E-commerce is just a baby and has a loooong way to go with a good track record behind it.

Monday, September 29, 2014

The L&T Finance Holdings

In the last two years L&T has been a steady performer despite that other companies in its competition have struggled in the same time in the same market conditions. This Mumbai based non banking financial company (NBFC) has performed well in each successive quarters except one, and earnings declined for the rest of the industries. L&T has a diversified portfolio of financial services and truly a well positioned company to go a long way.

L&T is a financial holdings company registered in RBI as NBFC, it offers vast range of financial products and services across retail, housing, corporate, infrastructure financial sectors, mutual products and investment management services. It is promoted by Larsen and Toubro limited which is one of the leading companies in India dealing in technology, engineering, construction, manufacturing and finance services spread across 23 states in India and therefore offer better services to the growing business needs of various diversified customer base. It has five major groups operating-- Infrastructure finance group, Retail finance group, Corporate finance group, Investment management group, and Housing finance group.

Milestones – 1994 – L&T was incorporated.

2004 – L&T Finance starts financing the rural assets like tractor and farm equipments.

2006 – L&T Infrastructure incorporated.

2007 – L&T Infrastructure receives its certificate of registration from RBI , and commences financing of commercial vehicles.

2008 – L&T gets into microfinance and capital market products and also forays distribution of finance products.

2009 – L&T Finance tap retail sources to raise funds for the first time and very successful in back to back NSD issuances.

2010 – L&T Finance acquires DBS Cholamandalam asset management limited and also DB Cholamandalam Trustees Ltd thereby entering into mutual funds business. L&T Infra Finance receives Infrastructure Finance Company status from RBI and closes a public issue of long term infrastructure bonds.

2011 – L&T Finance holdings successfully completed its IPO becoming the first subsidiary of L&T listed. L&T Finance holdings total asset crosses Rs-20,000 crores.

2012 – L&T Finance holdings total assets crosses Rs – 30,000 crores , and enters into Housing Financing by acquiring Indo Pacific Housing Finance . Acquisition of Fidelity’s mutual fund business in India , and also enters into two wheeler finance by acquiring Family Credit .

2013 – Incorporates L&T Capital Market – A wealth management platform ,and a maiden issue of preference shares worth Rs 750 crores by L&T Finance holdings.

2014 – L&T Finance Holdings total assets crosses Rs 40,000 crores.

With this track record L&T Ltd is positioned itself as a very comprehensive business solution provider which is why it has sustained growth even in adverse business cycles. As in the past two years the infrastructure sector was not doing well and so the retail business compensated the loss in terms of good growth. The plus point with L&T is the comprehensive portfolio of financial services , strength fo the management and risk management provides the cutting edge over its peers .

Even in this fiscal year the company is expected to improve in margins despite no substantial growth in lending, so during the last three years the company depended a lot on bank borrowing as the capital market was not conducive. But during the last three months the debt placements to the various institutions have picked up due to a stable interest rate environment and so also expectations of reduction in interest rate in the next couple of quarters, which has given the various institutions the confidence to invest in the fixed rate securities and the company intends to maintain the net interest margin around 6% because the segment in which the company operates in has got great potential to grow especially the rural banking is too upbeat with the focus on technology. Stress is on quick transfer of the data and  with processes accomplished in the same day .The focus of the company is On the mutual funds which ranks 13th at present and targets to keep retail and wholesale loan book nearly same , as at the moment the wholesale loan is a bit on the higher side .

The company plans to stay focused on the achieving sustainable returns over a long period of time that is RoNW of around 18% which is now on the lower side because of the significant investment in asset management business .With the scintillating track record behind the company, all said and done the company is headed for a successful bank in the near future.