Wednesday, October 11, 2017

View of an inquisitive average Indian investor

Yes, that is about me, the restless soul whose twinkling eyes forever stuck at the nifty graph! :)

2016-2017 have been quite a roller coaster ride for Indian Stock markets. Various factors have driven the Nifty to all time high and the bulls are not ready to hang their boots just yet. Having a sixth sense and lot of love for the markets (not to be confused as an expert, I am just an enthusiast in Investing) the current valuation makes me jittery. Keeping some extra bucks aside each month has been a practice for sometime, I am itching to invest it in the markets. However there are number of factors which is driving my mind towards fixed income space, here are few of them. 

Nifty 50 is trading above 25 PE. This is a dangerous level. In markets language, or whatever I can make if it is a valuation of 12-14 PE ratio is some how a fair valuation as an entry point. I am going sector agnostic. Every sector has its own metrics to decide on, for FMCG it is a little higher at around 18-22 PE. Trying for a better investing approach, I looked at individual stocks at specific sectors (I am talking about my favorites) are trading above 40 PE. All companies are good. But every thing has a fair price, premium for a better business proposition, but at the obnoxious valuation they are trading at, I feel its best to stay away till markets correct or company performance catches up with the current valuation. 

India is at its 'super feel good days'. Everything looks beautiful with new initiatives, disruptive steps by government, and continuous inflow of domestic institutiinal investors through mutual funds. Evergreen Indian consumption story is now selling double with Make In India tides. FII selling is not having any impact on the markets as domestic institution buying in every opportunity and pushing up valuations. Too much optimism may not neccesarily result into too much profit.  I am better off as a cautiously optimistic individual. 

GST not settled just yet, I believe this is an teething issue, and certainly believe, some of its impact should come on the coming quarterly results and market movements, giving some opportunity to buy in dips.

In the given scenario I often feel uncomfortable to buy new companies for my portfolio. But, my investment centric mind doesnt let me stop. I have figured out following few options to cautiously participate in the market yet staying away from being over zealous.

1. Continuing my SIPs in equity and hybrid mutual fund schemes. These are long term investments. I am continuing these for over 3 years to 5 years. Hence, the average cost of buying the units is pretty low compared to the current price. A dip in the market unlikely to blow away my capital.

2. Buying add on MF units on dips. Though overall marker remains highly priced, there are days when consecutively 2 or more trading sessions have been victim of profit bookings. I make some add on investments in my existing mutual fund scheme. I dont believe in bottom fishing, hence stick to a minimum amount and maximum 2 trades per month, discipline is the key for long term wealth creation. I even buy the nifty bees and junior Nifty, the Index funds on those days.

3. Investing in quality IPOs  - Given the optimistic markets condition, there have been an avalanche of equity IPOs this year. Being a small investor, I stay away from SME IPOs, as it has a huge monitory commitment (upwards of 1 lakh rupees for each). But I am always in look out for good IPOs. Few IPOs I applied for this year were BSE, CDSL, MBL, Dixon, Capacite, D-mart. Ofcourse I am not the only intelligent retail investor. Hence, most of the issues were super success with huge multi-times subscriptions. Hence, I was lucky to get three of the ten IPOs I applied for. No qualms to say, I made an average 60% profit on my investment and exited on the very listing day. One of the reasons of exit is IPOs are often highly priced compared to their valuation, so opportunity of cashing in on listing day looks safe to me.

4. I did invest in some debt funds. Interst rates going southwards, that was the only way to earn some extra bucks on cash. Fixed deposits rates are at multi year low, liquid and ultra-short term debt funds are at position to give 1-3% extra income on your idle cash. This money will be also used incase there is a significant correction in the market.

5. Though I dont recommend the stocks per say, but still these are learnings. Crisis many a times turn out to be an buying opportunity in equity market, if the stocks are like Infosys and JKumar Infra. Sudden news of shell companies being banned and erronously including JKIL in the list resulted in shedding a chunk of market cap on JKIL. It has given a brilliant entry point to the investors. Infosys management issues also has a similar story to tell. However I am not a certified stock analyst and their future growth potential needs to be studied well incase one makes a buying decision.

Investing is an art and science, and I am learning it with time. The insights and experience I share in hope that it eases some stiff negative and scary ideas about investing. Financial planning and managing money is fun.

Here is a low down on few more ideas you can look at at this point of time, are - 

1.If you have an existing investment in the market with a high profit in the book, and feel the PE is stretched beyond comfort level.You may look at booking partial profit if not full (assuming the equity investment is more than a year old,and the return is tax free). Parking this money in liquid funds/short term debt funds is wise, untill you see a good bet. If you are savvy investor, you can consider parking someportion in the FMCG stocks (I call them Evergreen).

2. If you have accmulated cash, and you may also park the cash in liquid fund, and using STP (systematic transfer plan) invest in equity mutual funds.

Would love to hear what are you doing in your investments given the current market conditions. Share your ways of inveating. Look forward to hear. If you like the post, do share and comment.  

Friday, October 6, 2017

Be disciplined and grow rich!

Building a good habit takes time, nurturing and care. Determination and discipline takes you a long way. One of such habits we have inherited from our wise elders is 'savings'. I must also accept that the world has changed incredibly in last few decades and so the way we save money has also seen a major shift. 

In this ever changing world, the savings have shifted from real estate and gold to PPF and mutual funds, for few lucky ones its private equity and bitcoins! What I would like to focus in this post is not the tool but the discipline by which wealth can be created and enjoyed. A discipline of regular savings, discipline of curbing frivolous expenses can not only make you richer, it also makes you a responsible  and a content individual. The following 5 habits would definitely make you richer next year, if you follow them with sincerity, wether or not you get a salary hike! 
Spend as much is required 

The famous investor Warren Buffet, who has created huge wealth almost equivalent to GDP of a small country is frugal. He stays in 3BHK apartment since last 30 years. And he openly endorse the concept of 'being frugal'. One of his famous quote is "if you buy something you donot need, soon you ll have to sell something you need".

When you itch to buy that iphone latest series, just ask yourself, is it worth it to spend 80 thousand on the gadget. What would be its resale value. How long are you going to use it? What is the purpose of the phone. What is the value is it adding to yout life and what are the 5 important areas you need to spend on where those 80 thousand will make a big difference.

Follow a discipline in saving
How about chucking that hollow calorie filled grilled sandwich you eat daily for Rs. 50. Just shifting to a health snack of a fruit or a box of munchies from home would save the whole money. Do you travel that walkable distance from home to railway station for Rs. 18 each side making it Rs. 36 daily while commuting to office. Does your extra cup of sugary cutting chai cost you 20 bucks a day? If you calculate, cutting some of your unhealthy habits and walking that extra mile would save you a neat 100 bucks daily. 22 wotking days make it to about Rs. 2200. Do you know a one NCFM certification in financial markets cost you less than this. And you can add that in your CV too! 

And saving 2200 bucks per month would make you richer by Rs. 26,400 a year.

First Save then Spend 

In some personal finance book I read this- first pay yourself. You are definitely wrong if you think I am talking about shopping. 'Pay yourself' here signifies securing oneself financially. Protecting with future income, insurance from risks and contingency for uncertain situation. You should also take out some money for personal upliftment, skill development and nurturing yourself. You are your biggest asset.Investing in yourself will yield you much more return than any external investments.

NPCI - Enabler of the Indian cashless dreams  

Give back to the society 
The most common traits of the richest people in the world are they are also biggest philanthropists, be it Bill Gates or Warren Buffet or Mark Zukerberg, all of them have pledged large part of their fortune for noble cause for humanity and world at large. 

You may argue and you are right at that. You are not Mark Zukerberg. But you have a way. And a great way. The money you saved cutting your everyday expense, can be used in some productive way, like providing for needy, sponsoring education for maid's children, helping your maid with some medical expenses etc to name a few which can be done way within your means. The immense satisfaction it gives, can fill you with whole new enthusiasm of growing rich to give it back! 


Wealth is not only bank full of money. Wealth signifies sustainable and balanced life, where needs are fulfilled at ease and there is always more than required. Recycling is one way of doing it. Recycling goods doesnt only help saving environment, it also can help reduce a chunk from your monthly budget.

Earning big money is onething. But rich is whose expenses are much less than income. You can only become rich when your expenses are in control. A person who is earning a million dollar and spends the whole money is not riche than someone who earns 10 thousand and saves 2 thousand.

Your water tank will never fill if it has a big hole at the bottom.  It is about managing money and not only earning. 

Monday, October 2, 2017

On what basis we should decide to invest in which mutal funds?

On what basis we should decide to invest in mutual funds?

I found this question on quora, and for a moment I found this question inadequate to respond. Then I realised that this is a common question i come accross from many of my friends and relatives. And decided to write a post which may not be exactly comprehensive, yet it will lead to a better idea about mutual fund investments.

So my reply ------

This is a very broad based question. Still to answer you, mutual funds is an amazing investment tool. It is very flexible way of investment for investors where one can choose equity, debt, gold etc as an underlying asset depending upon the financial goal. 

Broadly in India, there are equity mutual funds, debt funds, gold funds and hybrid funds. There are sub categories under these to suit investors' needs.

Happy Loans

If one have an ultra short term goal of 0–12 months - chose luquid funds/ ultra short term debt funds

Goal - 12- 24months - you may look at short term debt funds, dynamic bond funds, credit opportunitues fund, even long term debt funds

Goal 24 - 36 months - you may look at debt hybrid funds, 0–30% equity 70- 100% debt. These funds give stability of debt rerurns, yet give an opprtunity to invest in equity which has higher return potential. However, it has a tax treatment like debt investment.

Goal - 36 - 60 months - one may consider  investing in (SIP) equity oriented hybrid funds with 60–70% equity and 20–30% debt. They give a significant exposure to equity with a nice cushion against volatitility with debt exposure. These funds give tax free return after 1 year.

If you have goal 5 - 8 years away, choose a large cap fund and invest through SIP.

Any goal beyond 8 years, do some research in mid-cap small cap funds.

If you are more specific and comfirtable sharing details interms of your goal, your age etc, would be able to help you with more specific information.
If you want to know more specific, do mail me at or tweet me @debashree_ad

Happy Loans for small business

Friday, September 22, 2017

Financial awareness - planning helps

Win Rs. 500 BookMyShow Cash - Fortnightly.. now you can participate till 9 am on 3rd october!!

Rs. 250 PayTM Cash for participants who participate 5 quiz consecutively and given right answers, and not won the fortnightly prize. Entry for the quiz closes on 30th Sep, winner will be announced by 3rd October

About the quiz - (You need to do all 4 steps correctly to be eligible for the prize)

To participate, you need to do the following - 

1. Follow the blog mymoneystreets
2. Like this on Twitter page , tag two friends and retweet (LINK) use #IamFinanciallyAware #mymoneystreets 
3. Post the answers in comments section in the post
4. Only one entry from one participant

The winner will be chosen with a lottery from all the correct answers, and contacted.

(Only Indian participants)

Quiz : 

1. Which of the following investment does not comes under 80c purview?

a) Tuition fees  b) Premium for life insurance policy c)interest repayment for housing loan d) principal repayment towards housing loan

2. The returns earned from equity mutual funds are tax free if the investment held for minimum of - 
a) 6 Months b) 1 year c) 2 year d) 3 years

3. What is contingency fund - 
a) Money kept aside for travel and movies
b) Fund for Tuition fees
c) Money kept aside for emergency situations like accident/ sudden illness/ job loss
d) None of the above

4. You should start saving money - 
a) As soon as you start earning
b) After marriage
c) When you need a downpayment of some loan
d) When your child grow up

5) SIP (Systematic Investment plan) in equity mutual fund helps in - 
a) Investing in discipline manner
b) Help fighting market volatility
c) Create wealth over long term
d) All of the above

6) What is a pure life insurance?
a) Term plan
b) Savings plan
c) Guaranteed plan
d) ULIP Plan

** End**

NPCI the enabler of India's dream of less cash society

Tuesday, September 19, 2017

NPCI the enabler of India's dream of less cash society

True partner of the "transformational growth" Indian economy undergoing, NPCI conceived and launched series of products and services to ease the cash situation in India especially during the time of demonetization. Indian citizens and merchants, a special focus to the general public and small merchants were greatly benefitted by the initiative.

NCPI,  the umbrella organization was created to address the need of payments system of India jointly by Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) is a not-for-profit organisation. Over last five years, the organization has worked relentlessly to come out with world-class products and services to match the needs of the hour.

In this post, I would like to talk about the products and services on payments especially designed for common man, and their phenomenal features we are not much aware about the products. Though the NPCI initiatives have benefitted both individual and merchants, this blog aims to reach out to common man, and going with the tradition I would focus on the initiative taken for the general public

UPI - Unified Payments Interface (UPI), pilot launch with 21 member banks was first launched in April 2016. It first allowed Indians to do “Peer to peer” transactions. Available to smartphone users, this app was the first to merge multi banks functions under one App.
Benefits for end Customers are round the clock availability, single application for accessing different bank accounts, Use of Virtual ID is more secure, no credential sharing, Single click authentication, raising complaint from Mobile App directly.

BHIMLaunched on 30th December 2016, this UPI app was designed for both smartphones and feature phones. The Adhaar based app launched *99# service for wide base of feature phone users in semi-urban and rural India proves to be a true partner of the financial inclusion drive. App available on play store and i-tunes, the main objective is to get every Indian onboard to the digital payments system.  

User just needs to link his/her BHIM App to the bank accounts and use host of featues which was previously available to net banking customers. The features actually helped converge many functions into one The features includes – Send/ Receive money, Scan and pay, and do transactions.
With creation of Virtual payments address, users can safely transact without divulging accounts details, it also made the experience much smoother compared to the other existing transfer process. It made the transactions instant.
IMPS – Fastest online banking transaction, IMPS first launched on pilot basis in the year 2010. It is a fee based service compared to percentage based remittance services.

Rupay – RuPay was introduced as linear extension of all other products available in the payments system. Having a long run by VISA and MasterCard, RuPay is our own Indian Payments  card. Available in credit, debit and Pre-paid category it is an complete offering of plastic money. Competitive pricing and global partnership with Discovery, makes it an emerging leader in the category

According to news reports, the digital transactions have grown exponentially over last decade. The introduction of these innovative products and services empowered the common man of India. No more standing in banking queues and sending cheques. The digitization also likely to help a lot on documentation, keeping a prudent check on money laundering and terror financing.  

Wednesday, September 13, 2017

ICICI Lombard IPO - Details and review

About the company -
Image result for icici lombard ipo proceeds of the issue

ICICI Lombard IPO - Maiden IPO by Non-life Insurer

#ICICI Lombard is the largest private-sector non-life insurer in India based on gross direct premium income in fiscal 2017,  being one of the first few private-sector companies to commence operations in the sector in fiscal 2002, according to the CRISIL Report. They have well-diversified range of products, including motor, health, crop/weather, fire, personal accident, marine, engineering and liability insurance, through multiple distribution channels. They were founded as a joint venture between ICICI Bank Limited, India’s largest private-sector bank and Fairfax Financial Holdings Limited, a Canadian based holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management with US$43.38 billion of total assets at December 31, 2016.

In fiscal 2017, 87.5% of their new policies were initiated electronically, either by our distributors or  customers. No. of policies grew at a CAGR of 13.1% between fiscal 2015 – 2017. Their per employee productivity, measured in terms of gross direct premium income per employee, increased from Rs. 114 lakh in 2015 to Rs. 166 lakh in 2017, representing a cumulative annual growth rate of 20.7%.

It enjoys a diverse customer profile base including large and mid-sized corporates, MSME, central and state governments, and individuals. In fiscal 2017, our retail (including SME), corporate and government business groups contributed 60.4%, 17.5% and 22.1% of our GDPI, respectively. For the three months ended June 30, 2017, our retail (including SME), corporate and government business groups contributed 54.3%, 23.2% and 22.5% of our GDPI, respectively.

Financial Performance
In Rs. Crore               
FY 17
FY 16
FY 15
FY 14
FY 13
Total Assets

Industry Overview
The Indian non-life insurance sector offers different products such as motor, health, crop, fire, marine, liability, travel, aviation and home insurance aimed at meeting different protection needs of retail customers, government as well as corporate customers.
According to CRISIL Report, The size of the Indian non-life insurance sector was Rs. 1.28 trillion on a GDPI basis as of 31st March 2017. Indian non-life insurance sector GDPI grew at a CAGR of 17.4% between fiscal 2001 and fiscal 2017. According to Swiss Re, India was fifteenth largest market in the world and the fourth largest market in Asia in 2016, behind China, Japan and South Korea. India was also amongst the fastest growing non-life insurance markets over 2011-2016, growing at 14.5% (as per Swiss Re). Despite its size and growth profile, India continues to be an underpenetrated market with a non-life insurance penetration of 0.77% in 2016, as compared to 1.81% in China, 1.70% in Thailand, 1.67% in Singapore and 1.62% in Malaysia and a global average of 2.81% in 2016. At US$13.2 in 2016, insurance density also remains significantly lower as compared to other developed and emerging market economies.
Multi-Product Insurers:
Four public sector companies offering multiple products – National Insurance Company Limited (“National Insurance”), The New India Assurance Company Limited (“New India”), The Oriental Insurance Company Limited (“Oriental Insurance”) and United India Insurance Company Limited (“United India”)
o 18 private sector companies offering multiple products – including ICICI Lombard General Insurance Company Limited (“ICICI Lombard”), Bajaj Allianz General Insurance Company Limited (“Bajaj Allianz”), HDFC ERGO General Insurance Company Limited (“HDFC Ergo”), IFFCO Tokio General Insurance Company (“IFFCO Tokio”) and TATA AIG General Insurance Company (“Tata AIG”). There are also single product insurers.
Besides these 30 companies, the state owned General Insurance Corporation of India (“GIC”) operates as the main Indian reinsurer.

About the Issue 

With the IPO, ICICI Lombard likely to mobilise upto Rs. 5700 crore, offering 8.62 crore equity shares in a price band of Rs. 651 to Rs. 661.

IPO Opening and closing date – Sep 15 – Sep 19, 2017

Face value -  Rs. 10

Lot size – 22

Allotment portion
Upto 47%
14% and above
Reserved for ICICI Bank shareholders
33% and above
Shareholding pattern of promoters post IPO

IPO Proceeds to be used in – #ICICI Lombard is the non-life Insurance company to offer IPO. Promoters to dilute 19% in ICICI Lombard's Rs 5,700-cr IPO. IPO proceeds are not going to the insurers. It is a pure stake sale by the promoters

Mymoneystreets Take on the IPO

The company’s has registered revenue growth of 25% over last five years. Its profits have grown at a CAGR of 65% over last five years. On the upper price band of Rs 661 for FY17, its PE is at 46 times. IPO proceeds are not going to the insurers. It is a pure stake sale by the promoters. The pricing of IPO looks high.
The brand is promising, however, there are no competitor listed on the bourse. Highly under-penetrated sector likely to see a robust growth over long term. Subscribe this IPO only if you have a long term view.


Tuesday, September 12, 2017

Capacite Infraprojects IPO - Details and review

About Capacite Infraprojects

About the company 

Founded in 2012, #Capacite Infraprojects is a fast growing construction company focussed on Residential, Commercial and Institutional buildings, with growth in consolidated revenue from operations from Rs. 2,142.59 million for Fiscal 2014 to Rs. 11,570.40 million for Fiscal 2017, and an Order Book of Rs. 46,024.76 million as at May 31, 2017 comprising  56 ongoing projects. They provide end-to-end construction services for residential buildings (“Residential”), multi-level car parks, corporate office buildings and buildings for commercial purposes (collectively, “Commercial”) and buildings for educational, hospitality and healthcare purposes (“Institutional”). Their projects include constructing concrete building structures as well as composite steel structures. They also provide mechanical, electrical and plumbing (“MEP”) and finishing works.
Company has a order book of Rs. 4600 crore+. The company has bagged worth over Rs. 1500 crore post demotisation.  Company has a reputation of bagging repeat orders from existing clientele, latest being order worth more than Rs. 300 crore from radius developer. The company has 56 ongoing projects. The company grew 75% on revenue CAGR. The company has about 1700 employees and 18000 labour workforce. The company owns construction equipments required for the all stage of the project, hence it has advantage of timely access and also tax benefits on depreciation. The management believes in using latest, viable and suitable technologies for all its project making it a competitive player.

About Promoters - With significant experience in the construction industry, the management is visionary. Promoters has been hands on in the business and driving the growth story. It has significantly experienced board of directors in the sector, ensuring securing projects from big clients and strengthening its position in the field, gives them an edge over competitors.

Clientele - Some of our clients include Kalpataru, Oberoi Constructions Limited, The Wadhwa Group, Saifee Burhani Upliftment Trust, Lodha Group, Rustomjee, Godrej Properties Limited, Brigade Enterprises Limited and Prestige Estates Projects Limited.

Key Financials IN CRORES
Financial Year
Fy 17
Fy 16
Fy 15
Fy 14
Profit margin

About the IPO
Capacite is issuing fresh issue of 1.6 crore shares in the IPO. Rs 400 crore to be raised in the issue on its upper price band.  At the price band of 245-250, the stock is available at 23.9-24.4 times of FY17 earnings.

Price Band – 245-250 Rs.
Lot size – 60
Issue open and closing date – 13th Sep – 15th Sep 2017
Finalisation of Basis of Allotment - September 21, 2017
Initiation of refunds - On or about September 22, 2017
Credit of Equity Shares - On or about September 22, 2017
Commencement of trading - On or about September 25, 2017

Bankers to this issue are - 
1. Axis Capital Limited  
2. IIFL Holdings Limited 
3. Vivro Financial Services Private Limited  
IPO Proceeds to be used in 
Funding Working Capital Requirements - 250 Crore
Funding Purchase of Capital Assets - 51.95 crore
AND General Corporate Purposes

Capacite Infra Allocation structure
the Issue is being made through the Book Building Process, in reliance on Regulation 26(1) of the ICDR Regulations, wherein not more than 50% of the Issue shall be available for allocation on a proportionate basis to Qualified Institutional Buyers (“QIB Portion”).Further, not less than 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Investors and not less than 35% of the Issue shall be available for allocation to Retail Individual Investors

Risks to the business
Capacite will have risk of avalibility of large number of contract labours, with help of local contractors and sub-contractor. Issue on this could lead to project completion delays. They may be subject to liability claims or claims for damages or termination of contracts with their clients for failure to meet project milestones or defective work, which may adversely impact their profitability, cash flows, results of operations and reputation. Risks relating to reliance on sub-contractors and third parties for supply of raw materials, non-Core Assets and for providing certain services in the construction of their projects that may adversely affect Capacite reputation, business and financial condition. They are required to obtain approvals for our operations and any failure to obtain licenses and approvals by us could adversely affect our business,

Moneystreets Take on #Capacite Infra IPO

At the upper price band company is quoting a price of 24 PE. The company has kept its focus only on construction, it has registred consistent growth in last 4 years. Man Industries, a close competitor is trading at 16 PE. The IPO is fully priced. However, looking at the clientele and growth numbers, the IPO is attractive. Capacite Infra can be looked at for medium to long term story given government’s focus on housing for all project. No promoter or investors are liquidating their stakes with the IPO, which indicates their strong commitment towards the business and reflects significant growth potential
#Capacite Infra, #Capacite Infra ipo, #Capacite Infra a capacite Infra IPO Allotment, Capacite IPO allotment, llotment

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