The Third Eye of Investor

It's raining IPOs right now and days are as busy as it could get for IPO players and analysts. A lot of people I know are applying in all the IPOs and I understand the reason behind this frenzy. Most of the recent IPOs gave good listing gain to investors, which gave a sense of confidence to retail investors and hence most of them are applying blindly as  Stocks only go up!! If you are also one of them then you can take an edge over most by just analyzing few things and then you can make an informed decision. Now, if you are applying just for listing gains, then this article might not help much as listing gains are purely based on sentiments and not necessarily on underlying business or fundamentals of the company. However, a company with good fundamentals and if available at reasonable price might give good listing gain and you can even hold that for long term. So, let me share the main points which I consider before applying in an IPO.   Understanding the business and ri...

March is going crazy with IPOs. There is a long list of companies coming up with initial public offer. to raise funds. So, you must be wondering, why is it that so many companies are lining up for money at the same time. Let's discuss this. There could be various reason to it but following are also very obvious reasons: 1. Surging retail participation in equity markets - This is really good for companies planning an IPO as this can give easy exit to Private Equity investors and at times gives opportunity of encashing high valuations to the promoters also. 2. Response to recent IPO listing - This is a confidence booster. Almost all the recent IPOs were oversubscribed and listed at bumper price, way above its IPO price, which was already overvalued in most of the cases. Let's have a look at current price of recently listed companies.   Source: StockEdge We can see that most of the companies are trading at a price which is lower than listing price in most of the cases and even b...

Stock markets across the globe have fallen recently due to rising bond yields. Let us understand the relation between bonds and equities and try to figure out whether this fall will continue or it is just an overreaction of slight increase in bond rates and markets will rally again. Nifty - Last 5 days chart Government bond yield - Last 5 days chart Bond yield and equities have inverse relation, in general which we can see in published charts. However, it is not absolute relation because equities can move up or down due to a lot of other factors also but recent fall was primarily due to concerns over increasing bond yields. If bond rates are high, it is very obvious that few investors will move to bonds from equity as it is safer option and your capital is protected.  Stocks are risky by nature. You can lose your entire capital forget about dividend or capital appreciation. Whereas bonds are secured, in general and if it is government bond then of course it is backed by government ...

Heranba Industries Limited's IPO is opening for public tomorrow to raise up-to Rs. 625.24 crores. So, let's discuss this IPO. Company profile Heranba is a manufacturers of Synthetic Pyrethroids and its intermediates in India based out of Vapi, Gujarat, with Corporate and Administration Offices in Mumbai. It has a wide network of business in India as well as in world market with a phenomenal growth rate year after year. It produce advance agro-chemical solutions based on specially developed technology. Its Public Health products are supplied in both Government Tenders and to Pest control companies. It has expertise on all the key chemical reactions on commercial scales. Presently engaged in the following processes: Objective of the IPO 1. To fund working capital requirements 2. General corporate purpose Third Eye View - Not growth oriented but a good opportunity for retail investors to participate in.  Financial data Numbers are looking fabulous. Net worth is increasing, profit...

Tata Motors today announced that its subsidiary Jaguar Land Rover Automobile Plc (JLR) has laid out a new strategy for future and before I share my view on that please have a look at below extract from that announcement.  Start of journey to become a net zero carbon business by 2039 Re-imagination of Jaguar as an all-electric luxury brand from 2025 to ‘realise its unique potential In the next five years, Land Rover will welcome six pure electric variants as it continues to be the world leader of luxury SUVs All Jaguar and Land Rover nameplates to be available in pure electric form by end of the decade; first all-electric Land Rover model in 2024 Clean-hydrogen fuel-cell power being developed in preparation for future demand On a path towards double-digit EBIT margin and positive cash flow, with an ambition to achieve positive cash net-of-debt by 2025 with a value creation approach delivering quality and profit over-volume Image source: www.tata.com/business/jlr A lot of points are ...

Information technology service sector of India is well known and well established now. Biggest IT service company in the world is now an Indian company and there are total 4 Indian companies in the world top 10 list. These are TCS, Infosys, HCL Tech and Wipro.  However, these companies are traditional IT service providers and are considered as "Old Age" IT service companies. A lot of investors consider these matured and don't expect significant growth in this industry now.  Image source: Economic Times In this digital world, technology is rapidly changing and companies are adapting to newer technologies. With these changes comes new security and technical challenges and there are companies which are converting these challenges into opportunities and working in this highly growing segment. Following are few technologies or areas to name which were not common few years back. New consumer conversions (acquisitions, engagements and transactions) through relevant mobile advert...