Positive Outlook till Union Budget

Fears of monetary tightening at home and tougher rules for US banks to invest in equities cast a shadow over the market last week. Worries of monetary tightening, however, receded for the time being on Friday, 29 January 2010 when the Reserve Bank of India left interest rates unchanged while raising cash reserve ratio by 75 basis points.

Meanwhile, US President Barack Obama stunned markets last week by unveiling new rules for US banks that would potentially restrict their size and prohibit them from certain business activities. US market recoiled on the concern that banks could begin to restrict lending activities just as the global economy is recovering from a deep recession.

BSE Sensex fell 501.72 points or 2.98% to 16,357.96 in the week ended Friday, 29 January 2010. S&P CNX Nifty tumbled 153.95 points or 3.05% to 4882.05.

BSE Mid-Cap index fell 273.86 points or 4.04% to 6,509.80 in the week. BSE Small-Cap index dipped 428.49 points or 4.95% to 8,232.68. Both these indices underperformed the Sensex.

Last week there were IPO of Syncom Healthcare, Thangamayi Jewellery, Vascon Engineers & Aqua Logistics. In the coming week, we have few more D B Realty, Emmbi Polyarns, NTPC and Aqua Logistics(revised).

Indian Stock market is highly oversold and a bounce back is very much anticipated. Nifty is expected to trade in the range of 4800 to 5000 in the coming week and can see a maximum upside of 5300 in this series. One could do cherry picking for the month of Feb. We see positive outlook from here to Union budget.

Thangamayil Jewellery IPO Analysis

Thangamayil Jewellery Ltd (TJL) was incorporated as Thangamayil Jewellery Pvt Ltd. in March 2000. The company was converted into public ltd in November 2007. TJL is a Madurai based retail jewellery chain trading mainly in gold jewellery, diamond, platinum and silver jewellery. Gold jewellery business constitutes the major part of revenue of the company. The Company has its showroom at Netaji Road, Madurai. Also during FY 2008-09, the company opened three new branches at Rajapalayam (April, 2008), Karaikudi (Sep 2008) and Ramanathapuram (March, 2009). During the year FY07 and FY08, TJL acquired two associate companies namely Thangamayil Gold and Diamond Pvt Ltd and Balusamy Silvers Pvt Ltd.

Issue Objectives

• For expansion of existing business by establishing retail outlets at Tuticorin, Dindigul, Theni, Nagercoil, Thirunelveli, Kovilpatti and Sivakasi and to refurbish the existing outlet at Madurai


• To meet the working capital requirement

IPO Grading / Rating
ICRA has assigned an IPO Grade 3 indicating average fundamentals.

Issue Open: Jan 27, 2010 - Jan 29, 2010
Issue Type: 100% Book Built Issue IPO
Issue Size: Equity Shares of Rs. 10
Issue Size: Rs. 28.75 Crore
Face Value: Rs. 10 Per Equity Share
Issue Price: Rs. 70 - Rs. 75 Per Equity Share
Market Lot: 80 Shares
Minimum Order Quantity: 80 Shares
Listing At: BSE, NSE

For our analysis, visit our IPO Center

Aqua Logistics IPO Analysis

Incorporated in 1999, Aqua Logistics Mumbai based third-party logistics service provider, delivering end-to-end solutions in the logistics and global supply chain domain. The company is full scope third party logistic service provider delivering end to end solutions in the logistic and supply chain domain, which include Multimodal Transportation, Contract Logistics, Regulatory Compliance, Warehousing, Valued added Services and Project Logistics.

Issue Objectives

• Purchase of Specialized Equipments
• Expanison and Establishment of Offices
• To finance the fund required for proposed aquisitions
• Additional Working Capital requirememnts
  
• General Corporate expenses

IPO Grading / Rating
ICRA has assigned an IPO Grade 3 indicating average fundamentals.

Issue Open: Jan 25, 2010 - Jan 20, 2010
Issue Type: 100% Book Built Issue IPO
Issue Size: Equity Shares of Rs. 10
Issue Size: Rs. 150 Crore
Face Value: Rs. 10 Per Equity Share
Issue Price: Rs. 220 - Rs. 230 Per Equity Share
(Rs 5 Discount to retail investors)
Market Lot: 25 Shares
Minimum Order Quantity: 25 Shares
Listing At: BSE, NSE

For our analysis, visit our IPO Center

Buy now for pre-Budget Rally

Last week Nifty broke the psychological 5000 mark and so did the Sensex by breaching 17000. Thanks to China for raising banks reserve requirement ratios by 50 basis points thereby reducing the liquidity in the market and potentially causing slowdown in their economy. On another front, US President Barack Obama proposed new restrictions on banks, which would prevent banks or financial institutions that own banks from investing in, owning or sponsoring a hedge fund or private equity fund.

BSE Sensex fell 694.62 points or 3.96% to 16859.68 in the week ended Friday, 22 January 2010. S&P CNX Nifty tumbled 216.20 points or 4.11% to 5,036. Nifty Support 4890 and Resistance 5140.

Coming week will be highly volatile due to Derivatives expiry on 28th Jan, negative news overflowing from the global market, short trading week and pre-budget rally kicking in any time. In the midst of volatility, we suggest small investors to do cherry picking for the pre-Budget Rally. Start deploying your cash in small percentages in each dip for short term delivery.

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Jubilant Foodworks IPO Analysis

Jubilant Foodworks Ltd. (JFL) was initially incorporated as Domino’s Pizza India Pvt. Ltd. in March 1995.The Company was subsequently converted into a Public Ltd company and the name changed to the present in September 2009. JFL is engaged in the business of selling pizzas under the brand name of Domino’s via its quick service restaurants, catering primarily to the takeaway and delivery segments.

JFL has Master Franchise rights from Domino’s Pizza for developing and operating Domino’s Pizza delivery stores in India, Sri Lanka, Bangladesh and Nepal.

As of November 30, 2009, the company has 286 stores in India located in 22 states and union territories, including in 59 cities across the country, and, through a sub-franchisee DP Lanka Pvt. Ltd., five stores in Sri Lanka.

Issue Objectives

• Pre-Payment of loans
  
• General Corporate expenses

IPO Grading / Rating
ICRA has assigned an IPO Grade 3 to ICSL’s IPO indicating below-average fundamentals.

Issue Open: Jan 18, 2009 - Jan 20, 2009
Issue Type: 100% Book Built Issue IPO
Issue Size: 22,670,447 Equity Shares of Rs. 10
Issue Size: Rs. 306.05 to 328.72 Crore
Face Value: Rs. 10 Per Equity Share
Issue Price: Rs. 135 - Rs. 145 Per Equity Share
Market Lot: 40 Shares
Minimum Order Quantity: 40 Shares
Listing At: BSE, NSE

For our analysis, visit our IPO Center

Market cautiously positive

Indian Stock Market continued to display range-bound movement for yet another week. The Sensex touched a high of 17,777, but steadily moved lower to 17,276. The index finally closed the week with a nominal gain of 14 points at 17,554.

IT stocks, thanks to better-than-expected Infosys numbers, outperformed this week. TCS zoomed 13 per cent to Rs 792. Wipro surged nearly 10 per cent, and Infosys rallied nearly 9 per cent. ACC, Grasim and Reliance Communications were the other prominent gainers. SBI, on the other hand, was the major loser, down over 6 per cent at Rs 2,144. Hindalco, ICICI Bank, Sterlite, Hindustan Unilever, Reliance Infrastructure, Sun Pharma and HDFC were the other major losers.

The Sensex has not given any clear indication as of now. The index is currently moving in a 600-point band of 17,255-17,830. A breakout at the lower end of the range could see the index slip to 17,100-16,990-16,875. Whereas the upward breakout could see the index move to 17,940-18,055.

Next week again things may remain volatile even as the earnings announcements accelerate and investors weigh their options. The Nifty might conquer the 5300 milestone but will face resistance in its journey to 5400 and beyond.

Indian Stock Market will be cautiously positive. Investors are advised to do regular profit booking.

Birla Shloka Edutech FPO Analysis

Birla Shloka Edutech Ltd incorporated in 1992, is a part of Yash Birla Group Company. Birla Shloka provides end to end solutions in sales and services of various educational products to various educational institutes and government organizations. The services provided by the company include ICT (Information and communication Technology) & Multimedia in private schools, ICT solutions in government schools as well as hardware, equipments & software product sale.

Birla Shloka has setup computer labs, digital classroom solutions and audio visual solutions in schools along with software product “XL@School” which is a curriculum based interactive multimedia software for mathematics and science subjects.

Issue Objectives

• Capital expenditure for Turnkey Projects executed by the company under the BOOT model
  
• Capital expenditure on up gradation of infrastructure and content development for XL@School
  
• Funding the proposed M&A activities
• To meet the Working Capital requirements

IPO is already listed on BSE, CSE & ASE.
Presently Price is hovering around 55
52 Week High - 90.30
52 Week Low - 19.05

Issue Open: Jan 11, 2009 - Jan 13, 2009
Issue Type: 100% Book Built Issue IPO
Issue Size: Rs. 34.78 Crore
Face Value: Rs. 10 Per Equity Share
Issue Price: Rs. 45 - Rs. 50 Per Equity Share
Market Lot: 120 Shares
Minimum Order Quantity: 120 Shares
Listing At: BSE, CSE, ASE

For our analysis, visit our IPO Center

Small Caps surging buzzes alarm bells

Although the week started on a positive note, there was evident profit booking towards the end of the week. The indications are clear negative based on the options writing. Also note every other small cap was hitting few percentages up setting warning bells.

Coming week is full of news and data. IIP numbers for November 2009 will be out on 12th Jan and Inflation data for December 2009 is due on 14 January

India's food price inflation eased slightly in late December, but experts believe a rise in fuel prices may elevate headline inflation, maintaining pressure on the central bank to tighten monetary policy due on 29th January by RBI

Major companies announcing Q3 results include, Infosys Technologies (on 12 January), Bajaj Auto (12 January), TCS (15 January), HDFC Bank (15 January), and Axis Bank (15 January).

Other companies announcing result are, Dhampur Sugar Mills, Exide Industries, Geojit BNP Paribas Financial, Maharashtra Scooters, Jaiprakash Hydro-Power, Bajaj Finserv, Mastek, Nectar Lifesciences, Piramal Life Sciences, Indowind Energy, TCI Finance, TTK Prestige, Rural Electrification Corporation, Bajaj Holdings, Texmaco, Infomedia 18, Sintex Industries, Tata Metaliks, Jindal Saw, Rallis India, CMC, Finolex Industries, Usha Martin, Orient Paper, South Indian Bank, GRUH Finance, IDBI Bank, Shree Renuka Sugars, Indusind Bank, Development Credit Bank, State Bank of Travancore, State Bank of Bikaner and Jaipur, NIIT Technologies, UCO Bank, Escorts, Camlin, Finolex Cables, and ETC Networks.

The mood indicates horizontal or downward move in the next week, as the rupee appreciation concerns would impact the future earnings of some of the major IT players, which could have a dent on the index.

On the whole, the indian stock market will remain choppy and rangebound.

Infinite Computer Solutions India IPO Analysis

Infinite Computer Solutions (India) Ltd (ICSL) was incorporated in September 1999, as a pvt ltd company and later converted into a public ltd company in February 2008. ICSL is a global provider of IT services, Infrastructure Management Services and Intellectual Property Leveraged Solutions. ICSL’s services span from Application Management Outsourcing, Packaged Application Services, Independent Validation and Verification, Product Development and Support and higher value-added offerings including Managed Platform and Product Engineering Services.

The company caters to a vast array of industries such as Telecom, Media, Technology, Manufacturing, Power and Healthcare industries. ICSL has a widespread global presence with 14 offices situated across globe including US, UK, India, China, Malaysia, Singapore and Australia. The company also has delivery centers in Bangalore, Gurgaon, Hyderabad and Chennai.

ICSL’s customers include large global companies such as Verizon Communications, Affiliated Computer Services (ACS), GE, America Online, Alcatel Lucent and Fujitsu.Post issue promoters & promoter’s group shareholding will reduce to 63.82% from existing 78%.

Issue Objectives

• For expansion of IT infrastructure at existing campus located in Bangalore and to set up facilities at SEZ in Gurgaon in National Capital Region


• For funding any future acquisitions


• For repayment of balance term loan

IPO Grading / Rating
ICRA has assigned an IPO Grade 2 to ICSL’s IPO indicating below-average fundamentals.

Issue Open: Jan 11, 2009 - Jan 13, 2009
Issue Type: 100% Book Built Issue IPO
Issue Size: 11,503,000 Equity Shares of Rs. 10
Issue Size: Rs. 178.30 - 189.80 Crore
Face Value: Rs. 10 Per Equity Share
Issue Price: Rs. 155 - Rs. 165 Per Equity Share
Market Lot: 40 Shares
Minimum Order Quantity: 40 Shares
Listing At: BSE, NSE

For our analysis, visit our IPO Center

Positive Trend likely in the coming week

Year 2009 ended on a firm note for the Indian Capital market amid still persisting uncertainty globally. S&P CNX Nifty closed at 5201.05 with excellent rollover being witnessed in the futures & options (F&O) into the January 2010 series.

The global market mood will continue to play a major role going ahead, besides as the result season commences from the second week of January that could provide a precursor for any fresh direction.

Technically, on the upside the Sensex faces resistance at the 18115 and 18700 levels but seeks support at the 17300 and 17100 levels. Nifty faces resistance at the 5230, 5303 and 5485 levels while 5150 and 4957 are its important support levels.

Positively trend is likely to continue for the coming week.

We believe for the year ahead 21000 and 22000 are highs that we can achieve and even go down as low as 15000 and 14000. Mostly positive trend in the first two quarters and thereafter high volatility is expected.

Year ending with strong gains

Indian economy expanded 7.9% in the three months ended 30 September 2009, the quickest in six quarters. The market closed the last truncated week of the year with strong gains. The growth lagged behind only China among the major world economies.

Indian Stock Market was open only for three trading days. BSE 30-share Sensex rose 104.20 points or 0.60% to 17,464.81 in the week ended Thursday, 31 December 2009. S&P CNX Nifty rose 22.65 points or 0.43% to 5,201.05 in the week. BSE Mid-Cap index outperformed the Sensex, rising 1.15% to 6,717.82. The BSE Small-cap index, too, outperformed the Sensex, rising 2.92% to 8,357.62 in the week.

Foreign funds invested Rs 83,070.09 crore (till 29 December 2009) in Indian equities in 2009, after pulling out Rs 52,987.10 crore last year when the global financial crisis rattled investors and triggered a flight to the safety of bonds and gold. The inflow boosted the Sensex 81.03% in calendar 2009 as investors chased bargains after the market had slumped over half in 2008.

Banking stocks rose on expectations of a pick up in credit offtake. Auto stocks extended recent gains on the back of strong sales in the month of November 2009 and higher advance tax payment in the third quarter. Telecom stocks rose on bargain hunting.