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Stocksbaazigar - The Ultimate Wealth Creator

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Stocksbaazigar Mr. Deepak Doddamani is a Founder of Ratneya Group and Ashwamedh Foundation. He is an entrepreneur since age of 21 and have worked in various sectors like Education, Media, Personal Finance and Social work. More about Mr. Deepak Doddamani MBA (Marketing), B.Tech (Oils), NET qualified in Management, NSE's Certified Investment Analysis Professional, NSE's Certified Marketing Professional Level -4. 15+ years of experience Founder of Ratneya Group Founder of Ashwamedh Foundation Founder of Stocksbaazigar Entrepreneur and Educator Shortfilms Maker Social Entrepreneur Blogger

Wealth Creator Stocks of 2018

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      Wealth Creator Stocks of Calendar year 2018     Last Calender year 2017 was really good for the Indian Share Market thanks to GST and other major economic reforms Government took after Economy recovered from the effect of the biggest fiasco of Demonetization in 2016. Analysts predicted that it will be very difficult to earn good returns in the calendar year 2018 and unfortunately their prediction is turning out to be correct. This year many indices gave single digit to negative returns. The market recovered when the tension between the USA and North Korea resolved for some period but it could not sustain at the top thanks to the USA-China trade war. In 2018, we saw Crude oil prices and Rupee mostly affected the sentiments of Investors. From 3rd of Oct, fortunately, things are in favor of Market and Nifty is showing great rally since then. The Assembly Elections Results of 5 states in December are already factored in in the Nifty level and right now we are witnessing a Santa-Rally. Before FIIs book their profits and go for their Christmas vacation, let us discuss how Indian Markets performed in the Calendar year 2018. This year some Bluechip stocks really performed well.  Let’s see which Nifty 50 stocks gave really good returns in the Calendar year of 2018 in the following table. This year Private sector banks like Kotak Bank, ICICI Bank and Axis Banks gave good returns to investors. The IL & FS Crisis affected NBFCs and HFCs really badly. Money from these sectors shifted to Private Sector banking stocks. That’s why Nifty Bank index could give 7% returns even in such a bad year. Financial Sector stocks like Bajaj Financial Services (22.39%) and Bajaj Finance (48.90%) too performed really well. The year 2018 was really good for IT sector stocks thanks to depreciation of Rupee for most of the year. Stocks like NIIT Technology (80.88%), MindTree (45.14%) and Tech Mahindra (40.95%) gave tremendous returns. The implementation of GST definitely helped some FMCG stocks which gave double-digit returns to their investors. Dabur (31.90%), UBL (33.58%), Marico (27.31%), Colpal (24.07%), GSKCons (22.63%) etc. stocks helped Nifty FMCG give 17.12% returns in 2018. Thanks to HUL (38.78%) which lead this pack. HUL-GSK deal announcement will definitely take HUL further up at new 52-w High level. Some Pharma sector stocks wiz. DivisLab (44.51%), Glenmark Pharma (26.92%) and Biocon (22.92%) managed to recover the Nifty Pharma index from the year lows. This index gave -4.24% return in last 365 days. NSE Auto Index traded in red for most of the year 2018. It gave 18% negative returns in 2018. Still, stocks like ExideIndustry managed to give 27.31% positive returns thanks to the decrease in raw material prices. US-China Trade war affected Nifty Metal sector really bad in 2018.  This index gave -13.65% return in 1 year. Surprisingly JSW Steel (22.19%) made to top 10 performers list of Nifty 50 stock this year. Apart from these stocks, there are many such stocks who created wealth for the Investors. wiz. V-Mart Retail, HEG, Vinati Organics Ltd, L & T Infotech, L & T tech Serve, VIP Industries, Bata, Jubilant Food etc. After the heavy selling of 40-60% in Midcaps and SmallCaps in last year, we can clearly see that Investors prefered to Invest in Large Cap and BlueChip stocks to avoid risk. We saw more buying in highly liquid stocks and front-runners in Market who are always favourites of leading Analysts.  Let’s see how these Wealth Creators of Calendar year 2018 performs till 31st March 2019. If you have followed my Facebook Live videos you will realize that I gave positional calls in most of these stocks at very correct levels wiz. HUL @ 1200 Axis Bank @ 460 Kotak Mahindra Bank @ 1050 Jubiliant Foods @ 900 LT @ 1100 and so on. (Disclaimer: Please note, this post is for educational purpose only. Stocksbaazigar does not take any responsibility of profits/losses of the reader. Please consult your financial Advisor before taking any Investment decision. Mr Deepak Doddamani is NSE’s Certified Investment Analysis Professional and NSE’s Certified Marketing Professional Level -4, but he isn’t SEBI registered Financial Advisor.)

HUL-GSK Deal explained

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      HUL-GSK Deal explained by Stocksbaazigar Let’s discuss some important points of HUL-GSK Deal before discussing what to do in HUL shares?  Hindustan Unilever Ltd. acquired GlaxoSmithKline Consumer healthcare at a share swap ratio of 4.39:1, valuing the all-stock merger at Rs. 31,700 Cr. Bank of America Merrill Lynch was the sole Advisor of HUL for this deal while GSK was adviced by Morgan Stanley & Co. International Plc and Green Hill & Co. International LLP. Following the issue of new HUL shares, Unilever’s holding in HUL will drop from  67.2% to 61.9%. GSK Plc. will become the second largest shareholder in merged entity with 5.7% stake. It can offload this stake to any Investors and HUL does not have exclusive rights to buy these shares. For HUL India Foods and Refreshment contribute 18% of the revenue, whereas the proportion for the parent Unilever is 41.7% After the merger, the combined revenue of HUL’s Foods and Refreshment revenue will cross Rs.10,000 Cr.   After completion of the deal, HUL will become India’s largest Food company listed on Indian Stocks Market.  Boost, Maltova and Viva brands will be owned by HUL. However, Horlicks brand which is currently owned by GSK Plc. is acquired by parent company Unilever. HUL will pay for its royalty in India. Horlicks is Market Leader in Malt-based Beverages with 43% Market share in India followed by Bourvita of Mondelez International which has Market Share of around 13%. HUL will get distribution rights of  Oral Health Care and OTC products of GSKCH like Sensodyne, Crocin, and Eno for five years. This deal in the health and wellness category is very strategic and transformative as there will be great synergy in topline and costs after the merger. HUL reaches 8.2 Million outlets. It will help GSK’s brand reaching three-fold of the current distribution. HUL’s Margin in food business will get enhanced by 900 basis points to 27% from the current 18% of sales with sustainable profitable growth. HUL will increase it’s margin by 8 to 10% in medium terms after this Merger. What to do in shares of HUL after the announcement of the deal now? From last three months Nestle, HUL and Private Equity were eying for this Merger. But Market knew that only HUL had the Muscles to Pull the deal as it offered all-stocks deal whereas others offered Cash or combination of Cash-Shares deal. HUL gave good valuations to GSK, which is evident from the Swap-ratio finalized in the deal.   GSK share should move up after this news while HUL share should correct. This seems Win-Win deal but if you will study it closely, you will realize that GSK got a slight advantage in it. Distribution Muscles of HUL will help GSK brand products penetrate the Indian Market more effectively. HUL definitely has long-term benefits of this deal as explained in the discussion. But on short-term we might see some profit booking in the stock as it has already priced-in this HUL-GSK deal in Stock Price of HUL. HUL reached to 1800+ from 1500+ in just 3 months. HUL is a bluechip stock which has given consistent returns to its shareholders. Analysts have given thumbs up to this deal and have increased its 1-year target from 1800 to 2010-2050 now. (Disclaimer: Stocksbaazigar Mr. Deepak Doddamani is NSE’s Certified Investment Analysis Professional and NSE’s Marketing Professional Level – 4. He is not SEBI Registered Advisor. Stocksbaazigar is not responsible for any of your Gains/Losses. Please consult your Financial Advisor before taking any investment related decisions. Thank you) Video explanation on HUL-GSK deal:

Corporate Governance Issues in Sun Pharma explained

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Corporate Governance Issues in Sun Pharma explained by Stocksbaazigar              In past, IT  & Pharma stocks always acted as ‘Defensive sectors’ in falling Market. But in the last few years, we saw that IT sector stocks showed good synergy about rising and falling patterns but Pharma sector stocks had no specific direction, all credit to USFDA. Investors had to be very stock-specific and approach individual stocks differently in this basket.         In 2015 when Founder and MD of Sun Pharmaceutical Industries Ltd. Mr. Dilip Sanghvi became the richest person of India for a very short time, the stock of Sun Pharma traded above Rs 1000 per share price for a while. But then the ‘Halol’ night-mare started haunting the investors. Halol plant of Sun Pharma contributed 8-10% of the total revenue to the company. The delay in the resolution of regulatory issues raised by USFDA at Halol plant affected the approval of new drugs coming from the facility, which delayed its pick-up in US markets. Dilip Sanghvi is known as a visionary leader who successfully acquired sick companies and converted them into profitable ones. Sun Pharma acquired companies Caraco, Taro, Ranbaxy, Dusa, Insite Vision and URL etc aggressively. These all acquisitions had strategic reasons and made Sun Pharma 5th largest company of the world in Speciality business. But Ranbaxy deal came with Insider Trading allegations and Taro deal came with price erosion in their product portfolio.  Promoter’s interest in investing in unrelated businesses like Oil & Gas, Solar, Wind energy etc. unrelated businesses also affected Investor’s confidence in Sun Pharma stock post-2015. In the month of June, when Gujarat facility received its first approval in Cancer drug after the gap of 4 years, Sun Pharma share rallied to give it’s 52 Week high of 678.80. After 2 months, Sun Pharma again came under the scanner of US Food and Drugs Administration (USFDA) which issued 6 observations related to deficient procedures at Sun Pharma’s manufacturing facility of Halol. Sun Pharma shares corrected from the top and tried to take some support at 600 price level. Unfortunately, bad quarterly results pushed Sun Pharma further down to the price level of 485. On 29th November 2019 SEBI decided to re-open the Insider trading case against Sun Pharma after a 150 pages letter from a Whistleblower  (perhaps an ex-employee). From 495 to 402 stock fell by almost 23% in just one week.  After some clarification by Mr Dilip Sanghvi himself and an Investor’s conference call share of Sun Pharma rose up to 425 levels but only to hold 400 level support intact. The overhang of Corporate Governance Issue will keep this stock volatile for some more time. Institutional Investors have already exited the stock, that’s why company reduced to 1/5th of it’s Market cap after Macquire’s report of 29th November on ‘Corporate Governance Issues’ in Sun Pharma Industries Ltd. It means only retail investors are stuck in this company and stock will move up again only after Management of Sun Pharma answers all the un-answered/avoided questions by Big Investors.   Clarifications on the allegations: Let’s discuss the important questions raised by Australian brokerage firm Macquarie on Sun Pharma in its note and what Mr Dilip Sanghvi clarified about it in his conference call 1) Inadequate disclosures related to promoter’s brother-in-law Sudhir  Valia in the company Clarification:  Sanghvi said Sudhir Valia doesn’t have anything to do with Operations of Sun Pharma. He only gave financial and strategic advice. 2) About Re-opening of ‘insider trading case’ by SEBI Clarification: Shanghavi said that company is not aware of that as SEBI didn’t inform them anything about a complaint of Whistleblower and re-opening of Insider Trading Case. 3) About guarantees  which were given to real estate firm Surakhsha reality whose founding member is Sudhir Valia Clarification:  Management said it didn’t give any loan or bank loan guarantee to Suraksha realty 4) Questionable selection of London-based firm Jermyn Capital for managing $ 275 million FCCBS issued during 2004-2007. A note says Indian arm of Jermyn Capital has links with Ketan Parekh and Dharmesh Doshi, banned traders who rigged stocks prices and caused Share Market Crash of 2002 Clarification: Mr Shanghvi said J P Morgan was lead Manager and Jermyn Capital only co-managed it 5) About Insider Trading in Sun Pharma during Ranbaxy acquisition Clarification: No Insider traded in Sun Pharma before Ranbaxy Acquisition. The decision of acquisition of Ranbaxy was taken in a meeting conducted on Sunday. Being trading Holiday decision was not shared with SEBI on the same day. 6) Macquarie notes that some of Dilip Sanghvi’s stocks investments in a personal capacity as Natco Pharma also had bulk deals done by Orange Mauritius. Orange is FII sub-account of First International Group which has links with Dharmesh Doshi and Jermyn Capital Clarification: Minority stake in Natco Pharma by Dilip Sanghvi was already disclosed by him 7) Some of Sun Pharma’s subsidiaries are audited by Valia and Timbadia, whose one of partners was allegedly involved in a Stock rigging scam leading to freezing of his accounts. Clarification: This matter is 20 years old. The Subsidiaries in question are non-material for the company and account only for 0.6% of the consolidated revenue of the company. None of the partners of this audit firm or the firm itself was a party to this investigation. 8) About forceful acquisitions Clarification: Management clarified that Sun Pharma never arm-twisted any entity for its acquisition. Taro Pharma’s acquisition was done after a favourable court ruling. 9) Sun Pharma’s domestic formulations business being routed through a related party, Aditya Medisales Ltd (AML) Clarification:  Domestic formulation business transactions with AML exists from past many years. It became a related party in FY18. This arrangement was done for tax-purpose and can be re-looked if Investors demand. 10) Why did Sun Pharma lend to four Individuals without Security? Clarification: This too is a 20+-year-old event which involved money of few lakh rupees only and the loans are fully recovered. The loans were given as per business policies and guidance of applicable laws … Read more

Is it right time to buy G.M. Breweries?

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  About G.M.Breweries Ltd: G.M Breweries is one of the Multibagger stock of this decade. It gave multi-bagger returns to investors who spotted it in 2010 when it was trading in two digits only.  The 52-week high price of G.M. Breweries is 1057.95 and 52-Week low price is 491. This company is one of the best fundamentally strong small-cap company in the beverages and distilleries segment. The company was incorporated in December 1981 by Mr. Jimmy William Almeida. His aim was to create a quality country liquor brand available at cheaper prices for a cost-sensitive segment. It went public in 1993 when Almeida decided to share his wealth among stakeholders. GMBL  featured in Forbes 200 companies list. As per the website of G.M. Breweries, GMBL is engaged in activities of manufacturing and marketing of alcoholic beverages; such as Country liquor (CL) and Indian Made Foreign Liquor (IMFL). The GMBL company has state of the art fully automatic bottling plant in Virar, Palghar district of Maharashtra State, India.  It has a capacity of 13.76 Cr liter per annum. Around 49% of the capacity is being utilized to manufacture 50,000 cases a day. GMBL is a pioneer of introducing country liquor in PET bottles and also introducing 180 ml liter bottles in CL market. It boasts of 70% of Market share in Country Liquor in Mumbai, Navi Mumbai, and Thane areas while 25% market share in entire Maharashtra where it faces fierce competition with an unorganized player in CL category. G.M.Breweries has 4 main products in CL categories wiz. G.M. Santra, G.M Doctor, G.M. Limbu Punch, and G.M. Dilbahar Saunf. Apart from these it also markets its products brandy, rum and whiskey under brand names like Pioneer Doctor Brandy, Pioneer Special Doctor Brandy, Hot Shot Rum and Reporter Choice Whisky. But the most leading and prestigious blend of GMBL remains G.M. Santra which is made from premium distilled molasses based rectified spirit of Multi Pressure Vaccum Distillation Plant. G.M. Santra is no.1 Country Liquor brand in Maharashtra from last 12 years thanks to its Orange Blended organoleptic taste and aroma. Gas Chromatography is used to ensure the consistency of blend.  Clarity of liquor is due to fine filtration from 0.4-micron resin bonded cellulose cartridge filtration system. Basic Fundamental Analysis of G.M. Breweries: As  per the table data above recorded on 1st Dec 2018 1) You can see P/E of GMBL is very low compared to Industry P/E.  It is undervalued 2) The company gave 30% dividend  (Rs 3 per share) which makes it good investment stock too. As per the table data above 1) Revenue of G.M. Breweries is consistently increasing and so as the Net Profit (except the dip in 2017)or thanks to the increase in changes in inventory of FG, WIP, and Stock in trade. 2) While Sales in 2017 saw hike due to the ban on Poisonous Liquor in Maharashtra which may have increased demand for CL. Shareholding Pattern Promoter holds 74.43%, FIIs 2.38%, FIIs 0.3%  FIIs have increased their holding gradually. Total debt/ Equity ratio is 0 for 3 consecutive years. The company is  Debt free and Cash rich. Average ROCE is 26%  and Average ROE is 24% Company’s Net Worth has increased over the year and it has not yet its capacity fully. It means if it starts Double Shift company can easily increase its Production remaining Profitable and it can easily penetrate in other states too. This company has got enough experience now and it can definitely go for some Corporate Action now. It can enter in Foreign Markets like other Asian Countries first where CL type cost-sensitive segments can be targeted. G.M. Breweries had land in Wada, Thane too which can be used for expansion purpose in future. Is it right time to Buy G.M.Breweries? CMP of GMBL on 1st Dec 2018 is 670 on NSE. The stock is close to its important support of 665. It can reach 1000 again in the year 2019 if Maharashtra Government doesn’t include a decision to Ban Liquor in Maharashtra in its Manifesto. Govt is yet to decide GST level for Liquor segment. If it brings CL in a lower bracket, our target will be easily achieved. We are all aware of ‘Election time malpractices’ by Political parties in India, liquor consumption always increases during this period. Before 2019 Loksabha Election I see tremendous demand in CL category of liquor. GMBL will be the prime beneficiary. Also in the Winter, December is the month of highest consumption of liquor in India thanks to chilling cold and Christmas-New year vacations. To Summarize, G.M. Breweries is actually well-placed right now. The risk to Reward ratio is favorable in GMBL and one can definitely invest in it from the short-term view of 850 (most conservative target). (Disclaimer:  Stocksbaazigar Mr. Deepak Doddamani is not a SEBI registered Advisor. He is NSE’s Certified Investment Analysis Professional and NSE’s Marketing Professional Level – 4. Please consult your Financial Advisor before taking any investment related decisions. Stocksbaazigar is not. responsible for any of your Gains/Losses. Thank you.) Video explanation on G.M.Breweries

Venkys Ltd : The best stock to buy for Winter

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In India, after the October heat ends, we enter in Winter. Till December, the temperature falls further and we normally face very chilling days during Christmas vacation. Room Heaters, Liquors, Woolen Clothes etc. industries earn good profits during Winter in India. Smart Investors take an early position in the shares of companies like Bajaj Electricals, Havells, United Spirits, Radico Khaitan, Monte Carlo etc. As per my experience, Venky’s Ltd is one of the best stock to buy for the Winter season. SKM Egg Products Export (India) Ltd. is one more company which also performs well in Winter but we will discuss the Market Leader in its Sector today i.e. Venky’s Ltd. Venkateshwara Hatcheries group (V H Group) was started in 1971 by ‘Father of Indian Poultry Industry’ Dr. Banda Vasudev Rao who revolutionalized the Poultry Industry of India. For his contribution to the Indian Poultry Industry in India, he received one of the highest honor conferred by the President of India ‘Padma Shri’.       Banda Vasudeo Rao was born in 1935 in Chanchalguda in Hyderabad. His involvement in Poultry business started in the 60s. Before it, he did various jobs like trained for Railways Police, Telephone Operator, Secretary to State Minister etc. One day he responded to the Advertisement of ‘Poultry and Dairy Farm training Program’ by RajendraNagar Agriculture University and ended up taking Admission in the same. He became the best pupil of Prof. Moore under whom he did his first Project of tending 500 birds satisfactorily. Impressed by this, Moore transferred all the knowledge he had to B.V. Rao. Uttara Devi,  wife of B.V.Rao sold her Jewelry to buy 7 Acre land in Pune where he started Venkateshwara Hatcheries. Since then there was no looking back. In his lifetime, B.V. Rao started various companies related to his core business and created one of the largest Conglomerate which pioneered the Modern Poultry Business in India. He also founded The National Egg Coordination Committee (NECC) on 14th May 1982 to decide the prices of eggs across the country and help marketing of eggs on the line of Kuril’s Co-operative Movement of distribution of Milk. Rao served as the President of World’s Poultry Science Association (WPSA) India Branch from 1993-1996. After the death of Dr. B.V. Rao, his daughter Anuradha Desai served as Chairman and his sons Balaji and Venkatesh Rao are sitting on the Board of V H Group (now known as Venky’s – a name of one of the flagship company of V.H. Group). Currently, the group has various companies under it ranging from the Poultry industry, Animal Vaccines, Humans Vaccines, and Healthcare products, and sports. etc. The Group includes: Venkateshwara Hatcheries Pvt. Ltd Venky’s Ltd Venco VRB B.V. Bio-Corp Ltd Uttara Foods and Feeds Pvt Ltd Uttara Implex Pvt Ltd. Eastern Hatcheries Ltd Venky’s Brazil Ltd Venky’s London Ltd Venky’s Vietnam Ltd Venky’s Singapore Pvt. Ltd V.H. Group Bangladesh Bala Industries and Entertainment Pvt Ltd. Venky’s is headquartered in Pune and has offices in more than 13 different countries.  It has production facilities in India, Bangladesh, Switzerland, and Vietnam and it exports to more than 42 countries. India is the third largest producer of Eggs after China and the USA. In India, the per capita consumption of Eggs is 68 eggs per annum and that of Chicken is 2.5 Kg per annum. As per Nutrition Standards, the per capita consumption of Eggs should be 180 eggs per annum and that of Chicken is  10 Kgs per annum minimum. It means Indian Poultry Industry has great opportunities ahead. Venky’s SPF Eggs is at par with the Internationally accepted quality of Eggs. That’s the reason, it is India’s leading exporter in foreign countries. Venky’s Stock was one of the Multibagger of FY 2017-18 and gave excellent returns to investors. It gave a dividend of as high as Rs. 6 per share in last quarter. Unfortunately, it posted bad results in the quarter ended in September 2018 where Standalone Sales were down by 14.55%. But if you will compare the results of the Last Three Years, you will realize that normally their September quarter results are always subdued.  But the best part is the company has given good profit growth of 52.57% in last 5 years and it has been reducing its debt significantly.  The fair value of the Stock is 2810. Currently, it seems to be undervalued. One can definitely buy it with SL at 2100 for the short-term target of 2800. (CMP 2351.60). In winter demand for Eggs and Chicken increases, the prices will surely go up. It will help boost the profit margin of Venky’s Ltd and December quarter results will be very good. Considering all these factors, I feel Venky’s Ltd can be a good bet as a Winter stock. In the comment, do let me know what do you think about this? (Disclaimer: Stocksbaazigar Mr. Deepak Doddamani is not a SEBI registered Advisor. He is NSE’s Certified Investment Analysis Professional and NSE’s Certified Marketing Professional Level -4. Please consult your Financial Advisor before taking any investment related decisions. Thank you.) Video explanation for Venky’s Ltd

Jet Airways Financial Crisis Explained

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Is Jet Airways the next KingFisher Airlines? Can Tata Group really acquire control of JetAirways? Will Naresh Goyal cede his control? Will Etihad buy more stake of JetAirways? What role will Government Play? What should an Investor of Jet Airways do? Is it safe to trade in such a volatile stock? Let’s discuss the current Financial Crisis in Jet Airways in detail in this post. Current Updates: On 26th Nov. 2018 Jet Airways handed over pink slips to 16 more employees. Last month it laid off 20 employees. Jet Airways is rationalizing the human resource for the cost-cutting purpose. They have been delaying Salaries of employees from last few months. September Salary dues will be paid to employees on 5th December 2018. Jet Airways has around 16000 employees and more lay-off is possible in near future. What is the Crisis all about?  Recently, one of the leading Newspaper claimed that Jet Airways has left with only 60 days of funds for carrying out its Operations. On the same day, Management of JetAirways denied this News and ensured the Investors that Jet Airways posted losses for 3 consecutive quarters and it is definitely facing a Financial crisis due to increasing Aviation Fuel prices and depreciating Rupee but Management of JetAirways is taking all the right steps to overcome the Financial Crisis. Effect on Share Price of Jet Airways:  52-week high of Jet Airways was 883.65 and a 52-week low was 163.  Clearly, when Brent Crude Oil price rallied from 45 to 87 Jet Airways stock price fell from 883.65 to 163. From 3rd Oct 2018, Brent Oil started correcting again which resulted in some delivery based buying in JetAirways. When the stock was trading near 220, the Speculation that Delta Airways will buy 24% stake from Etihad in Jet Airways and Tata Group too will buy Majority stake from Naresh Goyal created a buzz in the Market. The stock reached 280 within no time. On the previous day of Tata Group’s Management Meeting stock rose by 25% in a single day and more 8% rise took Jet Airways to 346 on next day (16th Nov 2018). After the Market hours. Jet Airways released a press note in which it clarified that any such news of Tata Group buying Jet Airways is only a Speculation and only preliminary discussion is going on. Profit booking dragged Jet Airways down after that. But for few days it managed to hold SL of 300 intact.  On 26th November 2017 stock broke the resistance of 300 as Market came to know that Naresh Goyal is not ready to cede its control in JetAirways and looking for more cash from its old Stakeholder Etihad Airways for its Operations. Why Tata Group deal isn’t materializing?  Founder Naresh Goyal and his wife have 51% stake in Jet Airways. Etihad Airways own 24% stake in Jet Airways. Rest 25% of shares are held by minority shareholders and retail investors. Tata Group owns AirAsia and Vistara Airlines which is a joint venture with Singapore Airlines. Tata wanted to buy out entire 51% of Naresh Goyal to acquire the Jet Airways which can make them second largest Airline in India after Indigo. But Naresh Goyal was ready to dilute his equity to as low as 15%. This meant that Tata Group should give profitable exit to Etihad by buying their 24% to reach the magic figure of 51%.  The government wanted Tata to help Jet Airways in this Crisis as they themselves can’t bailout Private Airlines and crash of Jet Airways is not good for Customers as well as 16000 employees of Jet Airways. What steps did Goyal take after Tata Group – Jet Airways deal didn’t Materialize?    Naresh Goyal and his team met Tony Douglas, Group CEO of Etihad Airlines last Sunday. Goyal offered to dilute his equity from 51% to as low as 15% and requested Etihad to double its stake in Jet Airways in exchange of Cash Infusion. Naresh Goyal prefers dealing with Etihad than accepting the deal offered by Tata Group. This way Etihad Airlines may hold as high as 49% in Jet Airways in the coming future depending on how much Cash they will infuse in the beleaguered Jet Airways. This is not the first time Aviation sector facing Financial Crisis. In India, we saw consolidation in this sector since 2010. Kingfisher Airlines closed its operation in 2012. Since then Jet Airways is handling 17.8%  passenger market share with its fleet size of 124 which serves 67 destinations across the world.              What to do in Jet Airways shares now?  The rally in stock was due to Speculation that Tata Group will acquire Jet Airways. But now as we all know that Naresh Goyal is taking help of Etihad to revive debt-ridden Jet Airways, the stock has started to cool off. We may see stock falling up to levels of 240-260 again this week. The fundamentals of Jet Airways company are really bad and this stock is no more an Investment bet. High-risk traders can trade in stock but Stop Loss of the Stock can be as deep as 240 which doesn’t make any sense to trade in stock. I would suggest you, stay away from this stock for now. Indigo is always a better option if you want to invest in the Aviation sector. Disclaimer:   This post is for Educational Purpose. Stocksbaazigar Mr. Deepak Doddamani is NSE’s Certified Investment Analysis Professional and NSE’s Certified Marketing Professional level – 4. He is not SEBI registered Financial Advisor. Please consult your Advisor before taking any Investment related decisions. Thank you. Video explanation on Jet Airways crisis.

Muhurat Trading Stocks for Vikram Samvat 2075

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Stocks to buy on Muhurat Trading of Samvat 2075 Samvat 2074 went really bad thanks to increasing crude prices and depreciating Rupee. We have seen how Stocks corrected by 50-60% in a year. Portfolios of Investors who invested in last Muhurat trading day is now in deep red. Loksabha Elections and States Elections are all aligned in Samvat 2075. The market will remain volatile and rangebound till results of Loksabha elections. After which we can get a good rally of more than 1000 points in Nifty in one year.  12000 on Nifty can be achieved within the next 18 to 24 months. So clearly, this correction in Market should be utilized to build your Portfolio rather than short-term trading in it. In Samvat 2074, many of the Investment Ideas given by Stocksbaazigar Mr. Deepak Doddamani gave very good returns. This year we believe that one should focus on investing in Bluechip Stocks which are now available at lower valuations than last year’s Diwali. The volatility in Midcaps and Smallcaps will increase in recent future. Every dip will be used for buying in these stocks but at every rise, same stocks will be sold. Effectively, from this Diwali to next Diwali these indices will not perform the way it performed in calendar years 2016-2017. The trend of 2018 will continue for some more time till the global scenario gets normalized. This is the reason, we are betting on Bluechip companies like Maruti Suzuki, Bajaj Finance, Britannia, HDFC Bank, ICICI Bank, HUL, Infosys, Asian Paints, Titan and Reliance Industries etc. We have shared a list of 50 stocks which can give good results in Samvat 2075. These stocks are recommended by leading Financial Services of India and compiled for benefits of Investors. You can select your Muhurat trading picks from this list itself. Disclaimer: Please consult your financial advisor before taking any investment decision. This blog is only for educational purpose. Do not consider it as recommendations. Stocksbaazigar is not responsible for your gains/losses. You can Instamojo @Stocksbaazigar to support this Blog. Thank You

IL&FS Crisis explained

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                          IL&FS Crisis explained      Whether the Holding firms in key sectors should remain listed on not? Whether Government should bail out IL&FS or not? Whether LIC, SBI, HDFC should infuse more funds in IL&FS or not? Whether NHAI should pay it’due to IL&FS to give it some relief? Whether IL&FS should sell its assets to fight liquidity crisis? Whether Investors should remain invested in NBFCs or not? Whether it’s a right time to invest in NBFCs and HFCs? Is IL&FS Crisis equivalent to Lehman brothers of 2008? There are many questions raised in the minds of Investors today. Therefore it becomes very important now to understand what is IL&FS Crisis in detail. In this post we will discuss the profile of IL&FS, What is IL&FS Crisis? Is it really as big as Lehman Brothers crisis? What are the effects of IL&FS mess? What is the solution taken by the Government? What should Investors do about IL&FS and other NBFC shares now? etc. Profile of IL&FS Name: Infrastructure Leasing and Financial Services  (IL&FS) Industry: Infrastructure development and finance/ Non-Banking Financial Company (NBFC) Founded: 1987 Founded by: IL&FS was formed as an ‘RBI Registered Core Investment Company’ by three financial institutions namely, Central Bank of India, Housing Development Finance Corporation (HDFC) and Unit Trust of India (UTI) to provide finance and loan for major infrastructure projects. Headquarters: Mumbai, Maharashtra, India Website: www.iifsindia.com Tagline: Partnerships, Innovation and Empowerment for sustainable infrastructure development Total Subsidiaries: 256 Major Shareholders:  Life Insurance Corporation of India, State Bank of India, ORIX Japan, ADIA Well known projects: 9.28 km long Chenani-Nashri tunnel located at NH44 in J & K,  GIFT City Gujarat Total Assets: Rs. 1.15 Lac Crores What is IL&FS Crisis? Defaults on loans and bonds by IL&FS in July to September 2018: Two of the Subsidiaries of IL&FS defaulted on payment obligations of the loan (including interest), inter-corporate deposits, term deposits, short-term deposits to other lenders and failed to meet the commercial paper redemption obligation due on 14th September. On 27th September one of the subsidiaries of IL&FS defaulted on repaying of Rs.450 Cr worth of inter-corporate deposits to Small Industries Development Bank of India (SIDBI). IL&FS is unable to pay short-term loan worth Rs. 1000 Cr given by SIDBI. Accumulation of very high debts: IL&FS is funding the long-term Inftrasture project of durations 20-25 years by taking loans of duration 8-10 years from its lenders. Most of the projects funded by IL&FS are Government Projects because of which they normally get delayed, the cost escalates and there is a delay in receipt of payment too. This systematic investment error has increased a debt-to-equity ratio of IL&FS to 18.7. Due to the 2013 Land acquisition bill, many of the projects funded by IL&FS became unviable. The group IL&FS is sitting on Rs. 91000 Cr debt through its 24 direct Subsidiaries, 134 indirect subsidiaries, six joint ventures, and fours associate companies. IL&FS Credit rating affected adversely: On 27th September 2018, IL&FS informed the BSE that it has defaulted on repayment of short-term deposits of Rs. 52.4 Cr and term deposit of Rs. 104 Cr. Consequently, rating agency ICRA degraded credit rating of IL&FS from AA to Junk. This jeopardized the Investors of the IL&FS and other NBFCs. Domino Effect of IL&FS Crisis: Holding Firm IL&FS Group is not listed in Market. It’s subsidiaries IL&FS Networks Ltd, IL&FS Investment Managers and IL&FS Engineering and Construction companies are listed in the market. On 14th Sept. all the three shares fall to their 52 Week Low and since then they are making new lows every week. Investors reduced their positions in SBI, HDFC, LIC subsidiaries, exited NBFCs and also booked profits in Housing Finance Companies after they came to know about IL&FS Financial Crisis. We saw Nifty coming down by almost 600 points after they realized how NBFCs and Banks are inter-linked. The government decided that it won’t bail out IL&FS as it is a Private company. It also questioned why Regulators and Investors didn’t question Managing Committee of IL&FS when they came to know about increasing debts of IL&FS Group companies. The domino effect of IL&FS Crisis is not good for Indian Economy which is already suffering from external factors like increasing crude prices and global economic slowdown which is depreciating the Indian Rupee. Is IL&FS Crisis as big as Lehman Brother Crisis? The panic created by IL&FS Crisis has made Investors compare it with Lehman Brothers Crisis of 2008.  We must understand that IL&FS Crisis is not an Insolvency Crisis, it is Liquidity Crisis. So, comparing it with Lehman Bros. crisis is absolutely wrong.IL&FS has assets worth Rs. 1.25 Lac Crores vs Debt of 91,000 Cr. Out of which 60,000 Cr worth debt is from the projects like Road, Water and Electricity which directly or indirectly depend on decisions of Government like Land Acquisition etc. As Government knows how ‘Domino Effect can harm the entire Indian Economy. Therefore Government has assured that it will help IL&FS wherever possible. IL&FS is facing a liquidity crunch which can affect its day to day operations. It is not good for investors too. Major Investor like LIC will definitely bailout IL&FS after IL&FS agrees to sell some of its assets first. IL&FS Crisis is really big but it is definitely not as big as Lehman Brothers Crisis. Solutions to IL&FS Crisis: IL&FS has identified 25 projects for sale. The company has already received some 14 offers for same. Key Investors has more than Rs 4500 Crore rights share for sale. In 18 months IL&FS can reduce its debt from 91000 Cr to 30,000 by implementing the Assets Sale Plan. LIC may infuse fund in IL&FS to take care of its day to day operations once this Assets Sale Plan is executed. NCLT has replaced the existing board of Directors of IL&FS by appointing new BoDs in their place. The new board consists of Kotak Mahindra Bank Director Mr. Uday Kotak,  Former IAS officer and Tech … Read more

I will never ever sell my Yes Bank shares tweets Rana Kapoor

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        One-man Army of YES BANK surrenders! Yes Bank Founder and CEO Rana Kapoor tweeted today that he will never ever sell his Yes Bank shares. In back to back 3 tweets today Rana Kapoor expressed his loyalty to Yes Bank after he realized that he won’t get any extension as a CEO and MD of Yes Bank. As directed by RBI he will step down on 31st January 2019. Earlier this Wednesday, Board of Directors of Yes Bank sought an extension of minimum 3 months and maximum one year for their CEO and MD Rana Kapoor. They gave a reason that Audits of Yes Bank needs to be done under his guidance. They also said that Yes Bank hasn’t found their Successor yet and it will take time to decide who will lead the bank. To complete the transition of leadership smoothly they tried to buy some time. But the Central bank didn’t approve it as they already feel that rampant Corporate Governance issues in Yes Bank have already made investors in this bank vulnerable.  Reserve Bank of India is on the mission to bring reforms in the banking sector. Mergers of Public Sector banks and taking strict actions on Private Sector banks who didn’t comply with the disclosures of NPAs rule properly are some of the actions RBI is taking to reduce the NPAs in the banking system of India. After Nirav Modi scam Government too is going rough on Leaders who have made some dubious decisions in the past. Yes Bank’s Rana Kapoor too faced the wrath of central bank thanks to the discrepancy in the NPAs stated by Bank. Now it is confirmed that Rana Kapoor will step down on 31st January 2019 and RBI might bring Professional CEO from outside of the Bank to ensure the safety and trust of Investors.   Tweets by Rana Kapoor on 28th September 2018 “Diamonds are forever: My Promoter shares of @YESBANK are invaluable to me” “I will eventually bequeath my @YESBANK shares to my 3 daughters and subsequently to their children, with a request in my Will stating not to sell a single share, as Diamonds are forever !” “Even after I demit office s MD and CEO of YES BANK, I will never ever sell my @YESBANK shares” “In this leadership transition at @YESBANK, I continue to remain fully committed to the interests of the Bank and all its Shareholders. I will fully be guided by the Board of Directors of YES BANK and Reserve Bank of India” Rana Kapoor, an Indian Billionaire is the Founder of private sector bank ‘YES BANK’ in India. He founded Yes Bank in 2003 after he received a banking licence from RBI. After 16 yrs of experience in Bank of America and 2 years in ANZ Grindlays, he decided to quit his job and become an Entrepreneur. He stated with NBFC first in 1998 and then Bank in 2003. Yes Bank became one of the largest banks in India in very short time. It gave 28% CAGR return to its investors. In 2017 he became Billionaire thanks to his 26% stake in Yes Bank. Currently, he holds 10%+ stake in Yes Bank and has tweeted that he will never sell his YES BANK Shares in his life.

Yes Bank shares tumbled to 52 Week Low price. What to do now?

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 Yes Bank at 52 week low, What to do in YES BANK now?        It seems that the problems for YES Bank will not end soon. This is for the second consecutive day, YES Bank shares have fallen by more than 9%. Today on 28th September 2018 Yes bank share touched 165 on NSE today. It is said that Madhu Kapur has sold some shares (0.04% stake) of YES Bank in the market on 21st September.        Yes Bank was trading at 319 when the RBI first questioned the discrepancy between the NPAs shown by Bank and the actual NPAs RBI estimated. There was a difference or misappropriation of about 319% which raised the alarm for all the Investors of YES BANK and they all started exiting the stock. YES Bank share corrected by 34% that day with low of 210 and closed near 226. On Wednesday Yes Bank Management sought an extension of at least 3 months for CEO and MD Rana Kapoor after the step-down date of 31st January 2019 decided by RBI. The share price was 2% up but couldn’t stay in green for long. Investors hoped that 200 will become support for YES bank and decided to bottom fish in the same. But share broke that important psychological level today and touched it’s 52 week low of 165 so far.    What will happen in the share price in the future?      The recent turmoil in NBFCs, HFCs and Financial Sector in stock has pulled Sensex down by more than 1100 points in intraday last week. The government can not afford big damage to Banking and Financial system of India before upcoming elections. Modi government has already announced Mergers of Public sector banks to reduce their effective NPAs. Major private banks like Axis Bank, ICICI Bank and Yes Bank are already facing the Leadership Crisis, as none of them was prepared for the untimely exit of their CEOs/MDs. But Corporate Governance issues have forced them to step down before completion of their tenure. Same is true for Yes Bank. In the Article of association of the company, there is a clause that Rana Kapoor cannot be removed from the Managing Committee/ Board of the company. So directly or indirectly he will lead the organization in the future as well. Therefore once the successor/Leader is confirmed stock will see good rally again.      What to do in YES Bank now? Valuation-wise YES bank was very expensive stock above 300 (post-split). 28% CAGR growth has made many Investors rich in this company in the past. As this stock is available in cheaper valuations sooner or later good buying will emerge in this bank. Traders can keep Stop Loss of 180 and Buy it for the short team targets of 200, 220 Investors should accumulate this bluechip stock by nibbling small quantities ( as we can’t predict exact low level, let’s wait for the double bottom structure to confirm the exact level to enter the stock if you want to buy lump sum in one shot)   Disclaimer: Please consult your financial advisor before taking any investment decision. This post is only for educational purpose. I am NSE’s Certified Investment Analyst and can give my views on Investment. I am not SEBI registered Advisor so I can not give any Recommendations. Don’t consider my views as my recommendation. Thank you.  

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