New IPO News: Gammon Infrastructure

Gammon Infrastructure is priced aggressively with unreasonable valuations. This IPO is only for risk taking investors. The promoters valued it 3 times more than infrastructure giant Larsen and Toubro. These promoters have not learnt lessons from Reliance Power IPO.

My rating: 3/5. Stay away from Gammon Infrastructure IPO.
IPO Grade: 4/5 by CARE. About Gammon Infrastructure IPO:

Price band: Rs 167-200.
IPO duration: March 10 – March 13.
Total Number of shares: 16.55 lakh shares.
Face value: 10.

About IPO application:

1. Retail investors need to pay only Rs 50 per share per application. 30% of issue is allotted to retail investors.

2. NRIs need to pay full amount.

3. QIBs need to pay only 10% of the amount.

Strong points:

1. It is the infrastructure filed which has good growth prospects.

Negative points:

1. Company’s management reputation is not good.
2. Very high valuations.
3. Bad market sentiment.

Gammon fundamentals:

Net profit: Rs 29.85 crore.
Total Income: Rs 158.8 crore.

Stay away from Gammon Infrastructure IPO.

Please share your opinion.

Welcome to volatile week

With derivative expiry and RBI credit policy are around the corner, Indian share markets will trade in extreme volatility in the coming sessions. Indian stocks are in “unclear” zone with Mutual funds and big domestic investors are waiting for correction, NRIs and FIIs are pumping money. My advice- does not take long positions and book profits immediately in high growth stocks. Correction is eminent but when will it happen?

Global markets: US markets suffered heavy losses on Friday due to poor results by Google. Emerging markets suffered heavy losses along with Japan market. China is the only exception.

Stocks of the day:

1. Hindustan Lever: Future rise will depend on offer price. Dividend and Buyback offer make this stock of the week. My Target is Rs 250-280. HUL board will officially announce offer price on July 29 board meeting.

2. Dr Reddys – Results.

Rumours of the day:

1. NTPC will announce Bonus shares and good preferential allotment to existing investors in its FPO.

2. Chevron may buy stake in Petronet LNG.

Significant events:

1. Derivative expiry on July 27. Expect volatile trading in between.

2. Watch out for RBI’s credit policy on July 31st. What will happen to Interest rates? May be no change.

Significant News:

1. Current interest rates are at reasonable value – Finance Minister.

2. We are waiting for softening of interest rates – ICICI Bank.

3. Crude will cross $ 75 and may touch $ 90– Analysts.

Positive Stock news:

1. Nitin fire net profit rose by 109%.
2. Lead prices are rising. Watch out for Hindustan Zinc.
3. Karur Vysya bank net profit rose by 25% while Indian bank posted 29% rise in net profit. Bank stocks already factored these good results.
4. Mahindra and Mahindra will acquire Lokesh machines.
5. FICCI recommended 10 year tax holiday to health care infrastructure builders and soft loans.
6. UB Holdings is planning to sell stake in Deccan Aviation.

Negative Stock News:

1. ADRs of Indian IT stocks suffered heavy losses along with MTNL.
2. McKinsey sued Reliance and Reliance Communications over dues.
3. Increase in gross NPAs of ICICI Bank is worrying news.
4. UTI Bank priced its GDT at 1.7% discount.
5. NDTV and Arvind Mills are in F&O ban.
6. 50% of the penny and loss making companies are trading near all time highs. Stay away from such stocks.

Stock advice:

1. Ispat industries will announce results on July 24. Will it surprise CNBC analysts?
2. Zee News fundamentals does not justify the steep rise.
3. Voltas is looking very good and Meghamani Organics is a safe one for long term investors.
4. Raymond is a contrarian bet for long term investors.
5. Tayo Rolls is a safe bet for long term investors. Corus supply will propel this stock.
6. Dr Reddys is ready for sound results despite rupee appreciation.
7. Don’t take fresh long positions in Real estate stocks. You will get better price later.
8. Adlabs may move upwards at any time. Good results will be a trigger.
9. Business Standard published very good article on Gujarat NRE Coke. Must read.
10. If RBI will not change interest rates, Bank and real estate stocks will rule the markets along with Maruti. Crude oil price is a real concern.

IPO views:

1. Central Bank of India will list around Rs 130-140. 25-40% gains on the listing day itself. Invest in this IPO.
2. Omaxe may list with 40% gains. Good return if you will get allotment.
3. I don’t have positive opinion on IVR Prime. Stay away from this IPO.

Hot stocks for day traders and investors:

1. Hindustan Zinc – Rise in lead prices.
2. Hindustan Lever – Buyback offer.
3. Nitin Fire – wonderful results.
4. Voltas – Positive momentum on the back of good results.
5. Sell UTI Bank – GDR low pricing.
6. Dr Reddys – will post wonderful results.
7. ICICI Bank – good results.
8. Deccan Aviation – Stake sale and open offer.
9. Prajay Engineers syndicate – Medium term stock.
10. EID Parry – Technically strong.
11. Sun TV – Bonus, Dividend and Stock split.

Please share your views on Indian Stock markets and my stock recommendations.

Can Infosys save Stock market correction?

Infosys will announce Q1 results today against negative sentiment surrounding global markets. Can Infosys save Indian markets by giving positive guidance? US market Dow Zones lost 148 points against mortgage and earning concerns. Most of the Asian markets are trading in the negative zone and crude is moving above $73. Indian stocks are on the verge of a major correction due to these negative triggers. If Infosys gives positive guidance, markets will be saved from major correction (partially). If Infosys gives negative guidance, BSE Sensex will lose around 250-300 points.

Global cues: Negative sentiment surrounded global markets.

Sector of the day: IT Stocks.

Stock of the day: Infosys Technologies.

Rumour of the day:

1. Prajay Engineers Syndicate – Good results and Bonus rumours.
2. KS oils – safe bet for medium term. Stock split may up the stock.

Events of the day:

1. Infosys results. Infosys guidance more than results will change the fortunes of IT companies. My opinion is Infosys may miss the target. In the current financial year, rupee appreciated against dollar, Pound and Euro by 5-8%.

2. Rupee may touch 9-year high against dollar today.

3. Everonn IPO will end today. Allotment will be very low.

Positive stock news:

1. Tatas will pickup stake in DCB.
2. HDFC Bank posted 34% rise in net profit. It may bounce back.
3. Blackstone may pickup stake in Nagarjuna Construction.
4. Reliance Energy is on massive expansion plans.
5. PTC will pickup stake in Indian energy exchange.
6. IFC picked up 3.5% stake in Max healthcare.

Negative stock news:

1. Dublin high-court gave ruling in favour of Pfizer. Problem for Ranbaxy.
2. Suzlon will continue to fall on the back of negative news (IPO Money).

Best stocks for day traders and investors:

1. DCB:
2. Nagarjuna Construction.

Stock advice:

1. Stay away from markets. If Infosys gives positive guidance, take long positions in IT stocks.

Please share your opinion on my stock recommendations and give your stock ideas.

Correction will continue in June due to IPOs

Markets are in the dangerous territory. DLF and ICICI IPOs will suck big amounts from markets in June. Stock markets will continue to trade in this volatile zone for another 20-30 days. If investors accumulate money, they can buy some good stocks at attractive valuations. This is the only happy news in this month. Sometimes correction is also good. Newly entered traders and investors will suffer heavy losses in this whole episode.

Dangerous news:
1. Rupee may fall below 40.50 Vs dollar on the account of increased inflows due to big IPOs.

Most significant news:

1. Slow down in the growth of coal, cement and steel sectors in the first month of current financial year.
2. Petroleum refinery and power sectors showed improvement in growth.
3. Closely watch Berger paints stock as it will announce results today.

Positive stock news:

1. Jammu & Kashmir bank is planning to list in foreign markets.
2. Reliance capital is planning to enter into i-banking.
3. Reliance gas price bids may get clearance from government shortly.
4. Strides Arco labs acquired Grandix Pharma for 100 crore.
5. Hero Honda motors will enter into 4-wheeler components business.
6. Ispat group will invest $3 billion in Bangladesh.
7. GV Films will buy 10% stake in animation company “Sanara”.
8. Yashraj films will tie up with Disney to produce animation films.
9. Yashraj films may form JV with Blackstone group to enter into exhibition business.

Negative Stock News:

1. 10% price correction in the last 6 months in housing sector.
2. Courier companies stocks will suffer heavy losses due to 40% decrease in speed post charges.
Stock advice:
1. Buy Idea, RPL, RNRL and Zee Tele on declines.

Stocks to watch out:

Patni Computers, Jammu Kashmir bank, Berger paints and Reliance.

Note: I will not publish my daily recommendations until June 14 due to busy personal work.
Happy trading.

10 tips for Stock market investors

Investing in stock markets is an art; It is a science; You can never earn money in markets without hard work.

Stock Investment Advice:

1. Never invest in stock just based on rumors. If they become news, you may hit jackpot, if not you will be bankrupt.

2. Never invest in stocks just based on the broker or magazine recommendations. That stock price may have already risen due to these recommendations.

3. Never invest in IPOs which are overpriced or from promoters who have bad credentials.

4. Entering or exiting a stock that bit late may be better than making instant decisions based on rumors that could lead to losses.

5. Fundamentals are more important along with entering price. Though Reliance industries, SAIL, Bharti, ABB and Sun Pharma are good stocks with strong fundamentals, you may not get good returns due to their share price (over valued).

6. Never invest in as stock that rose too much too soon. Though Mind tree consulting, Idea and ICRA are good stocks, they rose too much within a short span of their listing.

7. Invest in fundamentally sound stocks at reasonable price. Stocks like Hindalco, Reliance Petro, Crompton Greeves, Finolex cables are good bets. Sectors like shipping, power and Bio-technology are future stars.

8. You may never get high returns in the already over heated market. If you want very good returns, invest in good midcaps (future large caps). Investors in 2007 may not reap rewards as in 2006.

9. Never invest in penny stocks which may hog lime light in bull markets.

10. Never change your targets without any reason. Greed is the major reason for the losses of investors.

Always invest. Never speculate. Do your own research. Never follow herd.

Reliance Money – New online trading platform from reliance Capital

Reliance capital entered into online trading business through “Reliance Money”. Reliance Money is offering highly competitive brokerage fees with the option for “fixed flat fee structure”.

Reliance Money, promoted by Anil Dhirubhai Ambani Group firm Reliance Capital, would offer the brokerage services across 700 cities including Delhi and Mumbai through 3,000 outlets.

Reliance Money consumers can trade in equities, commodities and offshore investments, IPOs, mutual funds, insurance and money transfer.

Brokerage fee structure:

Delivery trades – 0.05%
Non- delivery trades – 0.005%

Fixed brokerage fee:

Rs. 500 for delivery trades up to 10 lakh
Rs. 500 for non-delivery trades up to 1 crore.

Pre-paid coupon brokerage charges:

Rs. 500 coupon is valid for 2 months.
Rs. 1300 coupon is valid for 6 months.
Rs. 2500 coupon is valid for 1 year

Reliance money website:

It is one of the best designed financial web sites in India. It will catch visitors’ attention with its neat interface, quality content, fast loading and research information. Content is divided into 3 sections – Beginners, Intermediate ones and Experts.

Highlight: Morning News letter from reliance Money is a must read for every investor.

Reliance money will definitely give tough competition to other brokerage houses like ICICI Direct and Sharekhan, India Bulls etc. If you want to enter in to online trading, opt for Reliance Money.

Please comment on this article.

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