Introduction

In this article I will be writing about the few factors which affects the share prices moves up and down. I spoke to many investors, one thing I understood that most of them are investing on companies without having the fundamental knowledge on the stocks. They just want their money to be doubled with in one year. This article just writes down few suggestions to before start investing in the shares.

Company Specific News

If there is a good news about the company which directly affecting the company, the prices may increase. For example, xyz company enters into a new business where there is less competition, the share prices will increase with the expectation of more profit for the company in future.

In the last week, Bharti Airtel announced that it will acquire the Kuwait based Zain telecom for $10.6 billion. The share prices were declined more than 10% because investors felt the company is over valued and it may affect the Bharti’s profitability.

Investor has to keep close eye on the market and utilize the golden opportunities.

Quarterly Earnings

We know that every quarter company will announce the results of that particular. If the earnings are more than the prediction, price will increase otherwise will decrease.

Fresh Issue Of Shares

If a company is issuing the fresh shares, then share prices will come down because the profit will be shared with more investors then before.

BuyBack

This is when the company buys back its own shares. As the number of shares decline, the company’s earnings will be distributed to fewer investors. As every investor is entitled to a larger share of company’s future earnings, its share price increases.

Summary

I hope this article will be useful for the new investors.  It is only the very basic ideas about the share price changes. There are many numbers of factors affecting price changes. I will be writing it on my future articles. Thank you for reading this article!!

Related posts:

1. Risk Factors related to Mutual Funds
2. What makes stock prices go "up" and "down"?
3. Earnings per share (EPS) ratio & what it means!

Everyday we see new companies formed and when they are able to grab some business in the Markets and want money to expand, they come out with an Initial Public Offering (IPO) wherein they collect the money from the market for their future ventures. This forms the very basics of Stock Markets. We have written various articles on explaining the basics of Stock Markets on EquiTipz. Some of the Articles are listed below:

• Why does a company issue stocks?
• What makes stock prices go “up” and “down”?

While surfing the Internet today, I found a very interesting Animated Video on YouTube explaing the whole phenomenon how Stock Markets Work, What Makes the Stock Prices go Up and Down, and many more interesting information, which I thought to share with the readers. This funny but very informative video explains how companies go public and sell stocks to the investors. A basic primer of the capitalist system and how it is making our lives better. When we remember the basic purpose of the stock market, we can better understand why income investments are the best. Good companies use our initial capital to create goods that are in demand in the world markets. Buying and selling feverishly is inefficient and not effective.

So, watch out the video below which answers many questions and reveals many interesting facts.

Hope you have enjoyed the video and it has helped to clarify many of your doubts about the stock markets. If you still have any questions in mind, please feel free to ask in the comments form below.

Related posts:

1. How to Short Sell: Earn in the Falling Markets?
2. 56 Tips to Make your Money Work Harder For You
3. Markets Surge: Sensex and Nifty hit new 2009 Highs

Are you facing trouble getting your credit card debt-free? If yes, don’t curse yourself about it – you are merely one of the thousands of other consumers who feel the same. However, once you choose to change the way you spend on the Credit Card, it is possible to make your credit card balances manageable.

The below mentioned mistakes, if avoided will help you stop adding to your existing credit card debt and start giving you control over your spends.

1. Pay More Than The Minimum Amount Due

It’s very tempting to pay only the Minimum Amount Due every month (often Rs.250 to Rs. 500) and postpone the remaining amount to the next month when you’re under financial crisis. Trust Me, The Next Month Never Comes. My advice here is “Never Do It”.

I will tell you why. Not only will you never pay off your bill, but the interest rates that credit card companies charge will add to the balance every month. Instead, pay as much as you can as payment if you cannot afford to clear the amount. Wherever possible, try reducing unwanted expenditures to focus on paying off the credit card dues. It will be well worth going without any extras like dinners at your favorite café or shopping unnecessarily when it can help you sleep easier in the night knowing that you will soon be free of debt.

Read: What is a Virtual Credit Card?

2. Don’t Use Credit Card for Day to Day expenses

Except in justifying circumstances, you should have your budget under control so that you can at least pay for your monthly expenses with your monthly income. By keeping daily purchases like groceries and utility bills off your credit card, you’ll be taking a major step in the right direction to getting your spending under control.

3. Beware of Credit Card “Rewards”

The reward points that you earn from credit cards, are not any worth if they surrender you to the extra interest rate because of the purchases that you made in order to earn the reward points and then are unable to make full payments. The credit card reward schemes that allow you earn points on your credit card purchases, if calculated often come out to an effective reward of 2% or less.

For example, I get one point for each Rs. 100 spent on my credit card, but you must have at least 500 points to redeem the points, which means that I have to spend at least Rs. 75,000 to accumulate those points. Because the amount of interest that is charged on outstanding account balances exceeds the 2% bonus that you receive, it may not be any worth to incur the interest charges for such a small reward.

4. Never use your Credit Card Overseas

For every overseas purchase you make you could be subject to an international transaction fee and a lousy exchange rate. So, even if you are the perfect credit card customer and pay your bill in full and on time, certainly the card issuer is making money out of you!

5. Never take the Cash Advance Facility

Credit card companies employ many tactics to pull money out of your pockets and providing the Cash Advance facility is one of them, which gives you the freedom of withdrawing Cash on your Credit Card from an ATM. The main reason why taking a cash advance should be avoided is that you start accruing interest the minute you take out the cash. Unlike regular credit card purchases, there is no interest-free period offered on Cash Advance.

Read How are Interest – free days calculated for a credit card?

The credit cards companies will also send you a pin number shortly after you receive the card so that you can use your credit card to get cash from an ATM. This PIN is also sometimes needed for registering and managing your card online. But trust me, what I did with this PIN was that after registering my Credit Card online I shredded the PIN and threw it in the bin

6. Do not apply too many credit cards

If you already know that you are not good at managing credit cards well, don’t give yourself more enticement in the form of more cards. It is also possible to miss payment deadline when you try managing more cards which have different billing cycles and different due dates.

7. Avoid Late Payment Charges

Late payment charges are another source of income for the Credit Card companies and also subject you to additional interest charges. At least, if you cannot afford the full payment, pay the minimum Amount Due and Avoid late payment charges. (Doing this, always keep the Point No.1 of this article in mind)

8. Never Ignore Your Debt – You have to clear it

People become tensed or embarrassed by their credit card debt that they simply stop opening their bills and pretend that the problem isn’t there. This is like fooling yourself. The debt is in your name and whatever be the reasons, you are the one who has to clear them. In addition, while you’re ignoring your bills, interest rates are causing the balance to grow each day. Also, missing on your payments may get you in the CIBIL Defaulters’ list and affect your credit score.

Read: How do I register my Credit Card for Verified by VISA?

Ignoring your debt can also spur the recovery departments into action, and lead to harassment with the unsavory tactics some collectors are employing these days.

Conclusion

Cleaning up your credit card debt takes time and self control, but the steps outlined here aren’t difficult. There’s no reason that credit cards can’t be a helpful and a convenient tool – assuming that you can learn to use them sensibly and responsibly for your own welfare. These tips will help you keep control of your cards instead of letting them control you.

What is the strategy that you follow when you use your Credit Card? What are your views regarding the points listed above. Please mention below if I missed on any important Point that you would like to be shared with the readers.

Related posts:

1. How are the Interest- free days calculated for my credit card?
2. What is a Virtual Credit Card?
3. How do I register for Verified by VISA?

Recently EquiTipz completed one year of its operation. With the year that passed, there were many achievements that we made. The main achievement, that I believe, is the most crucial for the success of EquiTipz is the trust that we were able to build in hunderds of readers like you, with the unique and useful content posted here on EquiTipz.

These readers included people of all ages, from all parts of  the world and with different mindsets. We are continuously moving towards our Mission to spread Financial Literacy among masses so that they Invest Smartly to get Smarter Returns.

Photo Credit Link

I am listing below the articles that were posted on EquiTipz during the last months (since inception). In total, I have chosen 56 articles and I am calling this list as “56 Ways to Make your Money Work Harder For You“. I have been thinking of preparing this list since long but it kept on getting delayed for no reason. So, I thought of doing it on completion of EquiTipz’s one year. This list will be beneficial for those who are either new to EquiTipz or for those readers who missed any of our articles.

To make sure you do not miss any of our useful articles in future, Subscribe to our Free Email Updates now.

With the aim of imparting Financial Awareness to everyone, we promise to keep delivering more unique content for you in the coming years for you.

In the meanwhile do let us know which is your favourite article out of the above list and shower your love by putting in your views in the Comment form below.

Related posts:

1. [Video Tutorial] How do Stock Markets Work
2. Should I prepay my loan or Invest the money?
3. How to Make money by Investing in a Mutual Fund?

Happy Birthday EquiTipz!!

EquiTipz completes one year of powering Personal Finance today, thanks to all the wonderful readers and writers for all the support and making EquiTipz a success. It is such an immense pleasure and a touching moment for me as EquiTipz has been like a baby to me.

Photo Credit: <Link>

EquiTipz is one of the few blogs available online that primarily focuses on topics related to Personal Finance, Stock Markets, Insurance, Mutual Funds, Income Tax Planning and other Financial products with a special focus on the youngsters and the ones who are new to the world of investments. In the first year of its operation, EquiTipz has delivered high quality content on Investment basics and planning in order to achieve long term financial goals. I will soon be coming up with a round up of awesome posts written here which will be of a great help to you. (Subscribe to our Free Email Update Service if you do not want to miss any of our Posts)

In the year that passed, there were a lot of ups and downs that I faced during the first year of operation and there is a lot more that I got to learn from them. I would like to share something on behalf of EquiTipz with all the wonderful readers.

How it started?

In 2007, I accidently came across the concept of blogging and at that time I started a blog “The Links World” (which I do not update now). I used to share interesting links about various Movies, Downloads, Music, Softwares, Freewares etc. But, then I got into a full time job and had to give up blogging because of time constraints but all the time there were some ideas sprouting in my mind which could unleash the power of blogging.

Almost 2 years back, when the markets were at their high, like many others, I also started investing in the Share Markets. I still cannot forget the joy that I had when I earned my first profit of some odd Rs. 1100/- by investing through my friend’s DEMAT Account.

Read:

How to invest in the share market?

First Time Investing – Learn How Not To Fail On Your Debut

4 Golden Rules of Equity Investing

What I learnt from this was, if one invests step by step and with a strategy in mind, Stock Markets can be very fruitful provided one has the patience to wait for the results to come. I wanted to share whatever I learnt, with the millions of youngsters and newbies like me.

EquiTipz is Born

When I made the first investment, I used to browse over the internet with millions of sites providing News, tips, Investment advice. It was really a headache browsing these many sites for a person like me who did not even know what Intraday means (Now I know that ) Here, came the idea to give the world a service that houses everything related to Personal Finance and investing under the same roof.

EquiTipz was founded on this very day, last year i.e. 9^th Feb, 2009. It was started with a thought in mind that there should be a place where, in addition to reading what the author has to say, there has to be more involvement of the readers than that provided by other sites. Then the blogging that I had left in 2008, made a comeback in 2009 and so EquiTipz was born.

Photo Credit: <Link>

The Unforgettable Journey

We started as a free Blogspot blog (http://equitipz.blogspot.com), in July 2009 we purchsed the domain EquiTipz.com. It was supposed to be EquiTips.com (with an ’s’ instead of ‘z’) but could not be only because it was already taken. And then in December, 2009 made the move to WordPress with paid hosting service from Dreamhost and changed the look and feel to the present EquiTipz.

(If you want to start your own site, and are looking to buy hosting space, you may use the Dreamhost Coupon Code: SAVER51 to avail a $50 discount on any Dreamhost Yearly hosting plan.)

Read here: EquiTipz is reborn, to deliver you more…

In the past one year, we have achieved several milestones and our stats are as below:

• Google Page Rank : 3
• Alexa Rank : 4,60,000
• Alexa Rank India : 50,600
• Monthly Pageviews : 20,000+

We have achieved many other milestones apart from this, as recently we became a Member of the Stockezy’s Blogger Network. Also, some time back EquiTipz started accepting posts from Guest Authors and had a good response. Read here if you would like to write for EquiTipz.

Though, the journey that we have covered is nothing as compared to the vision that I have for EquiTipz, taking into account my full time job, still I have a lot to offer from the house of EquiTipz.

Plans for the coming year

There are a lot of plans that I have in my mind for EquiTipz which have been getting delayed for the past some time (thanks to my full time job). Below is the priority wise list which I will try to achieve in the coming months.

• Changing EquiTipz to a Revenue Sharing Model : I have been talking about this for some time now. This is on the top priority list to make you earn when you write for EquiTipz. This is to encourage authors posting content here and in turn earning money from the clicks on their Google Adsense Ads.
• Launch EquiTipz Discussion Forums : Again, this has been getting delayed for long and is on the hit list for the people to come and discuss about investments with different mindsets.
• Launch the SMS Premium Subscription service : I have never talked of this before and this will be different from the Free Google SMS service and it will provide with Stock Tips, Intraday and long term stock advice, Nifty trading tips. It will be free for the first few promotional months and later be a Premium Service. (I am still in discussion over this service and will keep you posted here.)

Before this post gets any more longer (it already has), I would once again, like to once again, thank all the  readers of EquiTipz for making it a huge success among the youth and also to all the Email subscribers for subscribing to our service.

What are your comments for the past year and suggestions for the coming yet another hopefully successful year for EquTipz. We really need your love and an honest feedback to achieve the heights that we aspire. Please put in your word below.

Related posts:

1. Happy New Year 2010 to EquiTipz Readers!!
2. Happy Independence Day to all Indians!!!
3. Free Investment Tips on SMS now | EquiTipz SMS Channel launched

What is Reverse Mortgage?

A reverse mortgage (or lifetime mortgage) is a loan available to senior citizens. The finance minister of India introduced this scheme in 2007 which is already well known concept in the West. “Reverse mortgage”, as its name suggests, in simple words is just the opposite of a normal housing loan.

 Image Credit : <Link>

How does Reverse Mortgage Work?

In this scheme, once you pledge your house for the ‘reverse mortgage’, the bank will arrive at the value of the house after carrying out its due diligence. After creating the room for interest costs and price fluctuations, the bank will disburse the balance amount to you depending on the payment option that you choose. With every payment that the bank gives you, your equity in the house decreases. This line of credit is open, typically for 15 years.

Read: How Rs 1 lakh grows to Rs 50 lakh in 25 years

Even after the tenures you can continue to stay in your house. Only if you leave the property permanently, or in case of death, the lending institution will sell the property, and from the proceeds it will take the amount that is payable by you to the bank; the balance will be distributed to your legal heirs. The bank will also conduct period valuation of the property, typically after five years, to ensure that the value of the house is more than the total amount payable by you.

As per the Wikipedia Definition, A reverse mortgage (or lifetime mortgage) is a loan available to seniors, and is used to release the home equity in the property as one lump sum or multiple payments. The homeowner’s obligation to repay the loan is deferred until the owner dies, the home is sold, or the owner leaves.

What are the features of this loan?

The draft guidelines of reverse mortgage in India prepared by the Reserve Bank of India have the following features:

• Any house owner over 60 years of age is eligible for a reverse mortgage.
• The maximum loan is up to 60 per cent of the value of the residential property.
• The maximum period of property mortgage is 15 years with a bank or HFC (housing finance company).
• The borrower can opt for a monthly, quarterly, annual or lump sum payments at any point, as per his discretion.
• The revaluation of the property has to be undertaken by the bank or HFC once every 5 years.
• The amount received through reverse mortgage is considered as loan and not income; hence the same will not attract any tax liability.
• Reverse mortgage rates can be fixed or floating and hence will vary according to market conditions depending on the interest rate regime chosen by the borrower.

What happens after the death of one or both of the spouses?

If one of the spouse dies, the other can still continue living in the house. If both die, the bank will give their heirs’ two options; either settle the overall outstanding loan and retain the house, or the bank will sell the house, use the proceeds to settle the outstanding loan and give the rest to the heirs.

Why is this scheme not popular?

Recent reports seem to indicate that a very small percentage of senior citizens only seem to have taken advantage of the facility since its coming into action. This could be perhaps because better awareness had not been created about the product.

Secondly, the Indian banking industry caps the available loan amount at Rs 50 lakh (Rs 5 million), instead of providing for an equitable percentage of the property’s value, and limits the loan period to a tenure of 15 years.

The product is still evolving and may take on new dimensions depending on how the banks wish to present its consumer appeal.

Which banks provide ‘Reverse Mortgage’ in India?

Some financial institutions that provide the scheme in India are Dewan Housing Finance, State Bank of India, Punjab National Bank, Bank of Baroda, Central Bank of India, Union Bank of India, LIC Housing Finance, Indian Bank, Andhra Bank, Corporation Bank, Canara Bank. Senior citizens are eligible for the scheme.

What are your views about ‘Reverse Mortgage’ Scheme? Have you taken the advantage of this option, and if not, are you planning to do it in future? Please put your valuable inputs in the Comment box below.

Related posts:

1. IPO Fever: Godrej Properties IPO in November
2. Should I prepay my loan or Invest the money?

India’s largest thermal power production company, NTPC’s FPO (Follow on public issue), which has opened for subscription, has been subscribed 0.6 times so far, according to reports.

The qualified institutional investors (QIB) book was fully subscribed. Most bids came in at Rs 209 per share on NSE as against floor price of Rs 201 per share.

Experts and brokerge houses have advised the investors to subscribe to the issue.

“The issue looks to be good. If one holds the stock with one-year plus horizon, will get 30% return at least”, advice the experts.

It’s an opportunity for large institutions who want some exposure in that area. It’s reasonable to assume that it would get it done in the range of Rs 200-220 and that is a reasonable long-term entry point for large institutional investors to buy that stock. It is not something that is going to give you large returns in the short-term. But for large investors looking for deploying significant amount of cash at one go, this price now becomes more attractive than what we were earlier talking about.

Reliance Money said in its’ report, “At the floor price of Rs 201, NTPC is priced at 2.6x of price to book value. Post dilution the ROE stands at 12.3%, better than its listed peers. Nevertheless, in view of its impressive track record, merchant power capacity addition and prolific avenues of nuclear power generation augers well for the company going ahead, hence we recommend investors to subscribe to the issue.”

“NTPC – The India’s largest Thermal Power Production Company is also Nav-Ratna company conferred by Govt. of India (GOI). The company is coming out with FPO at a price of Rs 201 (LTP on Feb. 2, 2009 – Rs. 206) to meet GOI’s divestment decision. The stock is recommended for portfolio with long-term perspective and target of Rs 250-275 in next 12-15 months when compared to its Industry peers,” said Swastika Investmart.

About the issue

The employees will get the shares at Rs 191/share, a discount of Rs 10/share to floor price. Of the FPO, a total of 4,273,220 equity shares are reserved for NTPC employees.

The minimum bidding lot is of 28 shares and in multiples of 28 shares thereafter.

The offer marks a divestment of 5% in NTPC by the President of India acting through the Ministry of Power. Prior to this Offer, the GoI owned approximately 89.5% of NTPC’s Equity Share capital.

ICICI Securities Limited, Citigroup Global Markets India Private Limited, JP Morgan India Private Limited and Kotak Mahindra Capital Company Limited are the book running lead managers to the Offer and Karvy Computer Share Private Limited is the Registrar.

Related posts:

1. NTPC approves filing Special Leave Petition in RIL case
2. OIL IPO: Should I Subscribe?
3. Subscribe to the NHPC IPO : Experts

All the fund houses recently are betting big in technology to reach out to real investors to attain their attention. So, after internet, it’s now the turn of mobile phones. UTI Mutual Fund (MF) is planning to launch a mobile transaction platform in the coming months. “The UTI MF will be the first fund house in the country to offer mobile phones transaction platform” said Jaideep Bhattacharya, chief marketing officer of the UTI MF.

The fund house is planning on the fact that India has over 500 million mobile subscribers and the market for mobiles is still expanding at a great pace. Hence, there is a large market that can be captured via this medium (Mobile Phones).

To avail the service, you will need to register yourself with the UTI MF website online. This new platform will give you an option to buy, sell, and switch through your mobile itself. The system will be based on wireless technology. At present, based on this system only, UTI MF is offering a mobile-based knowledge platform where investors can get all information about the UTI MF schemes and the market.

This is a very valuable and yet another initiative from a fund house to reach out to the investors after the entry load ban was introduced, UTI hopes to widen its customer base as well as make it more convenient for the people like us to invest in MFs through this latest initiative.

What is your view over this initiative from UTI. Do you think it is of any good to you as a retail investor? Please share your views in the form below.

Related posts:

1. Risk Factors related to Mutual Funds
2. Mutual Funds :: Advantages of Investing
3. Tips for Small investors: Don’t buy; don’t sell!

Swastika Investmart has come out with a research report on Aqua Logistics IPO (initial public offering). The research firm said long-term investors might consider investing in IPO.

The IPO of Rs 150 crore of Mumbai based Aqua Logistics has opened for subscription and the price band is fixed at Rs 220-230 per share. It is engaged in the business of freight forwarding services with agents to provide end-to-end solution to its clients.

Read other Posts related to Aqua Log IPO on EquiTipz:

• Aqua Logistics to raise Rs 150cr; IPO to open on Jan 25
• Aqua Logistics IPO opens for Subscription
• Should I buy Aqua Logistics IPO? : Angel Broking Report

Swastika Investmart report on Aqua Logistics IPO:

Aqua Logistics is operating as a Third Party Logistics (3-P Logistics) provider. Very few companies in the country are working on this model of Logistics business. However, in future bigger companies are expected to rely on 3-P Logistics rather than incur their costs for building their own logistics network. This may help company to command good business in long run. However, considering weak market sentiments for Logistics company as of now, long-term investors may consider investing in IPO after making a Peer-Group comparison for the Industry.

Disclaimer: The views and investment tips expressed by Swastika Investmart on Equitipz.com are their own, and not that of the website or its management. Equitipz advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment: Aqua Logistics Report – Swastika.pdf

Source: Link

Related posts:

1. Should I buy Aqua Logistics IPO? : Angel Broking Report
2. Aqua Logistics IPO opens for Subscription
3. Aqua Logistics to raise Rs 150cr; IPO to open on Jan 25

Yesterday we updated you regarding the Thangamayil Jewellery IPO opening for subscription from today, i.e. 27th Jan, 2010. Hem Securities has come out with a research report on Thangamayil Jewellery IPO (initial public offering). The research firm has recommended subscribing the issue.

The initial public offering (IPO) of Rs 28.75 crore has opened for subscription today. The price band for the issue is at Rs 70-75 per equity share. The issue will close on January 29.

Hem Securities report on Thangamayil Jewellery IPO:

The company is bringing the issue at price band of Rs 70-75 per share which will turn into P/E multiple of 5.65-6.06 at post issue EPS of Rs 12.37 (Basis PAT annualized 6 months ending 30.09.2009).The company’s topline has grown at a CAGR of 75% from FY05 to FY09 while bottomline of the company has gown at a CAGR of more than 100% from FY05 to FY09. Looking at the peers valuation, company’s issue price looks reasonable at present level. Hence, we recommend investor to Subscribe the issue.

Disclaimer: The views and investment tips expressed by Hem Securities on Equitipz.com are their own, and not that of the website or its management. Equitipz.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment: Thangamayil – Hem.pdf

Related posts:

1. Thanga Mayil Jewellery IPO to open on Jan 27
2. Subscribe to the NHPC IPO : Experts
3. OIL IPO: Should I Subscribe?

Thangamayil Jewellery is coming out with an initial public offering (IPO) of Rs 28.75 crore on January 27, 2010. The price band for the issue has been fixed at Rs 70-75 per equity share. The issue will close on January 29.

The company intends to use issue proceeds for expansion of existing business by establishing retail outlets at Tuticorin, Dindigul, Theni, Nagercoil, Tirunelveli, Kovilpatti and Sivakasi, and for renovation of the existing outlet at Madurai; working capital requirement and issue expenses.    

For the year ended March 31, 2009, it has reported 10% jump in its net sales of Rs 246.84 crore and net profit of Rs 7.49 crore.    

Revenue break up for FY09:    

Gold & Jewellery – Rs 241 crore
Diamond                 - Rs 0.28 crore
Silver                        – Rs 5.53 crore
Others                      - Rs 0.04 crore    

It is one of the leading jewellery retailers in Madurai and trades in Gold Jewellery, Diamond and Platinum jewels. It has introduced the Hallmarking practice for the first time in Madurai.    

Equity shares are proposed to be listed on the BSE and NSE. The book running lead manager to the issue is Keynote Corporate Services Limited and SKDC Consultants Limited is the registrar.

Related posts:

1. Subscribe to Thanga Mayil Jewellery IPO: Hem Securities
2. Aqua Logistics to raise Rs 150cr; IPO to open on Jan 25
3. Pipavav Shipyard IPO to open on Sept 16, 2009

We have already updated you that Aqua Logistics is open for subscription from today onwards. Being an investor, everybody has a question in mind, whether to invest in the IPO or not.

Angel Broking has come out with a research report on Aqua Logistics IPO (initial public offering). According to the report released from the firm, the investors are recommended to avoid the IPO.

The IPO of Rs 150 crore of Mumbai based Aqua Logistics opened for subscription and the price band is fixed at Rs 220-230 per share. It is engaged in the business of freight forwarding services with agents to provide end-to-end solution to its clients. 

Angel Broking report on Aqua Logistics IPO:

The company has been on a high growth trajectory since the last three years due to its low base. However, this may not be the case going forward especially in the MTO Segment. Nonetheless, we have assumed 50% Earnings CAGR (Compound Annual Growth Rate) over FY2009-12E on account of Margin expansion due to higher contribution from the Project Cargo and Contract Logistic Segments and overall improvement in the trade scenario. At the lower price band, the IPO is available at 13.4x FY2012E EPS, which is in line with Allcargo, but at a premium to GDL (Gateway Distriparks) on our estimated FY2012E EPS. We believe ALL should trade at a discount to Allcargo and GDL given that these players have a proven track record, diversified portfolio of services and stronger balance sheets. Hence, we recommend an avoid on the IPO.

To read the full report from Angel Broking Click on the attachment: Aqua Logistics – Research Report.pdf

Disclaimer: The views and investment tips, views expressed in the report are that of Angel Broking, and not that of the website or its management. Equitipz.com advises users to check with certified experts before taking any investment decisions.

What are your personal views on this IPO? What have you decided whether to invest your money in this company or not? Please share your views in the comment box below.

Related posts:

1. Aqua Logistics IPO Recommended for Long-term investors:Swastika
2. Aqua Logistics IPO opens for Subscription
3. Aqua Logistics to raise Rs 150cr; IPO to open on Jan 25