However, raw material price fluctuations could impact the company as it has not inked any agreements to insulate itself from cost escalations; it also needs to broaden its client base
Issue Date: 23rd September-28th September
Number of shares: 75,50,000 shares
Employees: 2,00,000 shares
Qualified Institutional Buyers (QIBs): Up to 60% (including 5% to mutual funds)
Non-institutional bidders: 10%
Retail investors: 30%
Face value: Rs10 per share
Issue price: Rs340 to Rs355 per share
Issue size: Rs268 crore
Listing: BSE & NSE
Pre-issue promoters' holding: 60%
Post-issue promoter and promoter group holding: 53%
EPS (FY10): Rs25.01
P/E Ratio: 13.59 (at the lower band) and 14.19 (at the upper band)
Highest P/E in the industry: 83.2
Industry composite: 31.7
Incorporated in 1990, New Delhi-based Tecpro Systems Ltd is engaged in material handling, provides turnkey solutions in material handling, ash handling, balance of plant (BoP) and engineering, procurement & construction (EPC) contracts. The company designs, engineers, manufactures, sells, commissions and services a range of systems and equipment for the core infrastructure related sectors like power, steel, cement and other industries. The company is promoted by Ajay Kumar Bishnoi and Amul Gabrani who are entrepreneurs with around 25 years of experience in the material handling industry.
Rating agency CRISIL has assigned an 'IPO Grade 4' to the issue indicating 'Above Average Fundamentals'.
Objects of the Issue
To fund working capital requirements at Rs200 crore and general corporate purposes.
Its competitors like BGR Energy Systems Ltd, Elecon Engineering Company Ltd, McNally Bharat Engineering Company Ltd, Sunil Hitech Engineers Ltd and TRF Ltd have an EPS of Rs27.9, Rs5.6, Rs11.2, Rs18, and Rs41.90 respectively.
They have a P/E of 29.1, 16.6, 25.3, 10.9 and 19.40 respectively. The issue is priced 34 times of its face value on the lower side and 35.5 times on the higher side. The issue price looks somewhat better than its peers. The issue consists of fresh issue of 62.50 lakh shares and offer for sale of 13 lakh equity shares. The issue shall constitute 14.96% of the post-offer share capital of company.
IDBI Federal launches Wealthsurance Milestone Plan
IDBI Federal Life Insurance has launched its new unit linked insurance plan (ULIP) called IDBI Federal Wealthsurance Milestone Plan. The Wealthsurance Milestone Plan has 13 investment options and seven insurance benefits. The Plan can be insured not only against risk of death, but also against 17 major diseases, hospitalisation, disability, accidental injuries etc.
Conservative customers can choose guaranteed return options which offer fixed, assured returns. Those who can take more risk can opt for capital protected options where the entry net asset value (NAV) is guaranteed and returns depend upon the market. Customers who would like to get potential high returns of equity markets in the long-term and understand the risk can opt for market linked equity options. Wealthsurance Milestone Plan offers an investment option called Asset Allocator Funds, where the company’s fund managers invest in equity or debt depending upon market conditions.
The insurance benefits offered by the Plan include Major Diseases Benefit in which lump-sum cash amount up to Rs20 lakh is paid upon diagnosis of any of 17 specified major diseases. These include heart attack, coronary bypass surgery, cancer, stroke, paralysis, coma, brain tumour, renal failure, major organ transplant etc. Another benefit is Hospital Cash Benefit in which daily cash benefit up to a maximum of Rs5,000 per day will be paid for each day of hospitalisation, irrespective of the amount actually spent. The claim process is simple since no bills have to be submitted but only proof of hospitalisation. Other benefits offered include accidental death and disablement benefit and waiver of all future premiums upon death or disablement. Premium contributions are eligible for tax deduction under Sec 80C. All benefits under the Plan are tax-free under Sec 10(10D).
Amish Tripathi, National Head–Marketing & Product Management, IDBI Federal Life Insurance says, “While Equity Growth Fund invests in listed stocks and aims to generate returns by picking stocks that have growth prospects in the long run. Asset Allocator Fund is designed to delegate the fund allocations decisions to our team of fund managers, who change the asset allocation to suit the market conditions.” He adds, “This unique fund also presents three options to the investors depending upon their risk profile i.e. Cautious, Moderate and Aggressive.”
The equity component is restricted, based on the risk profile chosen by the investor. Therefore, although Asset Allocator Funds are market linked, they are not compulsorily equity linked. These funds try to maximize returns of investors by actively choosing between debt and equity.
IDBI Federal also offers convenient and free switching between funds with no tax incidence. This means that customers can adjust their investment portfolios as their life stage changes, thus making Wealthsurance their investment partner for life.
IDBI Federal Life Insurance is a joint venture of IDBI Bank, Federal Bank and Ageas, a multinational insurance company.
ICICI Prudential Life launches ICICI Pru LifeLink Wealth SP
ICICI Prudential Life has launched ICICI Pru LifeLink Wealth SP. The Plan provides potentially higher returns over the long term, with a single premium. The minimum premium amount is Rs40,000 and the maximum age of entry is 60 years.
The Plan provides customers the flexibility to choose between 125% to 500% premium. It will give a loyalty benefit of up to 2.5% of the fund-value at the end of every fifth policy year, which will start from the 10th policy year. In addition to this, LifeLink Wealth SP also gives tax benefits on the premium paid and Change in Portfolio Strategy (CIPS), which means the customer is given an opportunity to choose from two unique portfolio strategies.
For passive customers, the product has Trigger Portfolio Strategy, which gives them the opportunity to automatically capitalise and protect gains made from equity investment based on market movement.
Kotak Mahindra Bank launches Click2Remit
Kotak Mahindra Bank has launched Click2Remit - an upgraded portal designed to help non-resident Indians (NRIs) to remit money to India in a convenient and cost-effective manner. Click2remit enables NRIs to remit in currencies like US dollars, British pounds, euros, Japanese Yen, etc through more than 65,000 branches of over 100 Indian banks across India. Click2Remit, with enhanced security to safeguard online transactions, is also available through Kotak Net Banking.
Click2Remit also offers the option of choosing guaranteed rates and there is no fee levied for transfers undertaken. NRIs can remit money to India through various transfer modes such as automated clearing house, bank transfer, wire transfer and cheque transfer. The new portal offers attractive foreign exchange conversion rates and low transaction costs. A service desk has been set up to provide prompt customer service.
Toyota Kirloskar Motor inks MoU with UCO Bank for auto loans
Toyota Kirloskar Motor has signed a Memorandum of Understanding (MoU) with the UCO Bank to extend auto retail finance to their customers. UCO Bank will be one of the preferred financiers for the entire range of vehicles sold by Toyota Kirloskar Motor. The tie-up will enable the bank to increase its car loan portfolio substantially. Thus, the bank's retail portfolio as well as customer base can be increased. Under the agreement, both Toyota Kirloskar Motor dealers and the Bank branches will source Toyota Car loan business using their customer database.
BSE starts mobile-based trading
The Bombay Stock Exchange has launched mobile-based trading through its 33 leading brokers. Leading BSE stock brokers namely, Angel Broking, Motilal Oswal Securities, Marwadi Shares & Finance, BCB Brokerage, Asika Stock Broking, Geojit BNP Paribas Financial Services, SMC Global Securities, ICICI Securities, India Infoline, Kotak Securities, Standard Chartered STCI Capital Markets are among those who started providing mobile-based trading facility to its clients. The mobile trading service will be extended to all the investors through its 900 active brokers soon. Mobile trading is an extension of Internet-based trading. The security on mobile trading will be same as on Internet trading.
A recent Credit Suisse report asks the question on everybody's mind... where now? And comes out with mixed answers...
A latest CS report points out that Indian markets are now just 5% away from their previous peak but in terms of the peak P/E (price to earnings ratio), we are still way below. In the previous peak, the markets touched a P/E multiple of 23x while we are still at only 17x.
While it is probably widely known that this rise has been driven by foreign institutional investor money — FII flows of around $11 billion took the market up from 17,000 to 20,000 — the report points out a lesser known fact — ETFs have accounted for only 12% of this compared to about 20% in 2009 — investors were worried that this would be much higher, leading to ‘hot money’ flowing out of the country too quickly in case of any unforeseen event.
However, there is something that should have investors worried too. The report points out, “The last 1,000-point move took just seven trading days compared to 30 and 37 days for the previous two.” We have moved up too fast.
For the market to achieve new peaks, generally, a more holistic participation is necessary. However, this time, domestic investors have stayed well away. Mutual funds have been net sellers worth $2.5 billion mainly because of redemptions — which means that even retail investors are not convinced. Insurance companies have been sellers worth almost $2 billion. The lopsided participation by FIIs makes the Indian market intensely vulnerable to global shocks even if it seems that most of the bad news is factored in. Media reports indicate that investors seem very confident of continued FII participation.
The CS report concludes that, “So far, financials, real estate and staples have been the leaders of the rally while utilities, energy and pharma have been the laggards. We believe that now telecom, industrials and real estate provide the best combination of improving fundamentals and valuations. Among stocks, our top picks are Bharti, Tata Motors, L&T, ICICI Bank and Reliance Industries.”
(This article is based on secondary research. The report is for information only. None of the stock information, data and company information presented herein constitutes a recommendation or solicitation of any offer to buy or sell any securities. Investors must do their own research and due diligence before acting on any security. Some of the opinions expressed in this article are the author's own and may not necessarily represent those of Moneylife).