Presentation On

Capital Market
NATIONAL SEMINAR ON CORPORATE
DISCLOSURE& INVESTORS PERCEPTION

DEPT. OF BUS. STUDIES(S P U)

C. A. JAGDISH THAKKAR
Past President
Vadodara Stock Exchange Ltd.

STRANGE BUT TRUE !!!

THE MYSTERY OF 26
26TH DECEMBER 2004. TSUNAMI
26TH JANUARY 2001 EARTHQUAKE AT BHUJ
26TH FEBRUARY 2002. GODHRA KAND
26TH JUNE 2007.. GUJARAT FLOODS
26TH JULY 2006.. MUMBAI TRAIN BLAST
26TH SEPTEMBER 2008.. BLAST AT AHMEDABAD
26TH NOVEMBER 2008MASSACRE AT MUMBAI

MYSTERY OF 8 YEARS
CYCLE
1984

ASSASINATION OF SMT. INDIRA

GANDHI

1992

HARSHAD MEHTAS SCAM

2000

KETAN PAREKHS SCAM

2008

US SUB PRIME CRISIS AND

GLOBAL MELTDOWN

WORST BEAR PHASES

PERIOD

MONTHS

SENSEX
FALL

APR 92 TO APR 93

12

-2351
54%)

(-

SEP 94 TO OCT 96

26

-1885
41%)

(-

AUG 97 TO OCT 98

14

-1759
40%)

(-

FEB 2000 TO SEP

01

18

-3324
56%)

(-

JAN 08 TO MAR 09

15

-13046 (-

Domestic Issues a Cause of Concern

Inflation is causing a big concern to the economy and with increase in

crude prices the inflationary pressure may increase. Though the Food
Inflation eases marginally on week ended on 14/01/2012. Bringing it
down to 7% by March 2012 sounds like a fairy tale. With winter season
ending the food prices may rise.

The Reserve bank of India has consistently increased Repo Rate and

Reverse Repo rate. From March 2010, RBI has increased it 13 times
with no impact on inflation control. Though on 24th January 2012, R BI
did reduce CRR by50BPS, almost all banks are not willing to reduce
interest rates. The Infrastructure and construction companies are
unable to get the loans.

Telecom and Land scam as well the involvement of some State Chief

Ministers in property and IT deals have shaken the confidence of

citizens of this country. Media has more to report on Bail than sale

The IIP data released for November 2011 has dramatically increased

because of base effect but it is at lowest in last two years.

Manufacturing sector which contributes 60% of IIP index grew at just
less than2% in November 2011

No Sigh of Relief Globally too.

The euro Zone crisis is more severe than 2008

sub prime crisis. Portugal may require 2nd bail out
package and failure of talks between Greece and
its private debt holders to write down 100 Bn.
Euros may weigh heavily
I M F has sharply cut its 2012 outlook to 3.3%
from 4.00%due to escalating euro zone debt
crisis.
Lower export figure for December 2011 has
widened the Trade Deficit to 19.6 Billion $,
highest in 4 years..Trade Ministry sees full year it
may be in excess of 150 Billion $!!!
Negatives news continued to impend after Japan
lodged its first annual trade deficit in 2011.
Partially convertible rupee has been the worst
performing currency in Asia for this year having
shed more than 9% ag.$
FITCH has downgraded sovereign credit ratings

Three Ratios That Tell

Your Bank Is Safe

Capital Adequacy Ratio

Private sector banks*

CAR (In per cent)

ICICI Bank

17.63

HDFC Bank

15.32

Axis Bank

18.81

State Bank of India

(SBI)

12

Bank of India

11.42

Punjab
ForeignNational
banks* Bank

11.76
CAR (In per cent)

Citibank

18.14

Standard Chartered

14.81

Public sector banks*

CAR (In per cent)

Non-performing Assets (NPA) Ratio

Private sector banks

Net NPA (In per cent)

ICICI Bank

1.11

HDFC Bank

0.19

Axis Bank

0.29

Public sector banks

Net NPA (In per cent)

State Bank of India

(SBI)

2.01

Bank of India

0.91

Punjab
ForeignNational
banks Bank

0.81
Net NPA (In per cent)

Citibank

1.23

Standard Chartered

1.04

Statutory Liquidity Ratio + 1% to 24% now

'How Buffet Does It?'

Buffet says: If you are NOT holding stock for at least
10 years dont waste more than 10 minutes to
consider it!! However he still gave 4 steps for
Indians!!

Step 1: Identify your financial goals

Step 2: Identify your risk profile
Step 3: Identify asset allocation
Step 4: Invest regularly

10 Financial Resolutions You Must Make This Year

1. I will prepare a budget for the year 2011-12
2. I will rebalance my portfolio & book profit
3. I will resist the temptation to make quick profits
4. I will invest in equities systematically
5. I will repay high cost loans
6. I will review my insurance
7. I will not wait till the last moment to file I T Retn.
8. I will prepare my retirement plan
9. I will read the fine print before I sign on any docs.

10. I will follow ALL the above 9 resolutions

Nine GOLDEN RULES Of Investment

1. Look out for the companies that have made buyback from the
open market
2. Promoters acquiring stake through creeping acquisition route
3. Cheap is not always cheap- Don't be misled by EPS / PE Ratio
4. Dividends' don't lie
5. Prefer Companies having top-line growth over bottom-line
6. Higher tax outgo is a good sign
7. Look for domestic driven companies whose product cannot be
easily imported
8. Prefer companies with low debts and strong cash flows
9. Look away for a while and recharge yourself

BUY OR SELL? FOLLOW THE PATH OF LEGENDS

1.BENJAMIN GRAHAM: Even the intelligent investors is likely
to need considerable will power from following the mad crowd

2.WARREN BUFFET: Focus on fundamentally strong and

undervalue companies trading below its Intrinsic value.
3.PETER LYNCH: Invest in what you know.if you stay Half Alert
you can pick the performers right from your office or home
4. JOHN TEMPLETON: The maximum pessimism the best time to
buy and time maximum optimism is the best time to sell.
5. JOHN BOGLE: If you have trouble imagining a 20% loss in the
Stock Market, you should not be in stocks.
6. THOMAS ROWE: Investing in growth stocks with quality
management and generating superior earnings compared with
inflation.

ZERO DEBT CO. PAYING MORE

THAN 150% DIV. FOR LAST 2
YRS.
Company Name
CRISIL Ltd.

Compan Name

Orissa Minerals
Development
Co Ltd.
CRISIL Ltd.
Merck Ltd.

Year
End

Dividend
%

Year
End2

Dividend
%2

201012
200912
1000.00
Year 2000.00
Dividend
Dividend

End

%1

201003
1860.00
200903 1000.00
4550.00
201012
2000.00
201012

950.00

200912

4550.00

Hindustan Unilever Ltd. 201103

650.00

201003

650.00

OMDC

Merck Ltd.

Glaxosmithkline
Glaxosmithkline
Consumer Healthcare
Ltd. Ltd.
Powerica
VST Industries Ltd.

201003

1860.00

200.00

201012

950.00

200.00

201012

500.00

180.00

201012
500.00400.00
200912
201003
201103

450.00

180.00
250.00

201003

300.00

Bajaj Holdings &

Ltd.
201012
Investment
Ltd
201103
350.00300.00
201003
Source: ACE Equity (Accord Fintech)

250.00
300.00

Alfa Laval (India)

Cos. Where Profit & Div. Is

Increasing By 15% For Last 5 Yrs.
( A Group)
Company Name
Axis Bank Ltd.
Corporation Bank
Glaxosmithkline Consumer
Healthcare Ltd.
HDFC Bank Ltd.
IDBI Bank Ltd
LIC Housing Finance Ltd.
Torrent Power Ltd.

Source: ACE Equity (Accord Fintech)

Promoters Holding> 80% & FIIs Holding is

increasing continuously for last 4 quarters

Company Name

Promoter's
Holding (%)

FIIs Holding
(%)

Essar Ports Ltd.

83.71

8.53

Fortis Healthcare
(India) Ltd.

81.50

8.25

Puravankara Projects
Ltd.

89.96

6.89

Coal India Ltd.

90.00

6.37

Bajaj Corp Ltd

84.75

5.36

Plethico
Pharmaceuticals Ltd.

87.01

4.49

National Aluminium
Company Ltd.

87.15

4.47

NTPC
Ltd.
84.50
Source: ACE
Equity
(Accord Fintech)

3.54

Defense Stocks (Cos. Making Profit & paying Div. for

last 10 Yrs. & Avg. EPS for last 3 yrs. > 33 & P/E<15
& Eq. Paid up> 25 cr.)
Company Name
Indian Oil Corpn. Ltd.
Tata Investment Corpn. Ltd.
Maharashtra Seamless Ltd.
Kalpataru Power Transmission Ltd.
Tata Steel Ltd.
Jindal Saw Ltd.
Reliance Infrastructure Ltd
Dhunseri Petrochem & Tea Ltd.
Vardhman Textiles Ltd.
Piramal Healthcare Ltd.
Kesoram Industries Ltd.

ource: ACE Equity (Accord Fintech)

Price Shockers (15 Days top Movers)

Company
Name
Blue Circle

Yashraj
Containeurs
Dhruva
Capital
White
Diamond
Midfield
Industries
Starcom
Information

Last
Price*
(Rs.)

Volume in Value (Rs.in 15 %Chan

(000's)
Lakhs)
Days
ge

168

0.05

0.08

92.8

81.03

41.95

17.4

7.3

23.45

78.89

84.35

4.62

3.91

49.15

71.62

37.45

234.51

83.72

21.95

70.62

56.45

67.19

38.39

33.5

68.51

45.35

1.45

0.65

27.5

64.91

SteHol.Res

112.7
482.5
555.85
68.7
64.05
Cenlub Inds

38.95
54.64
21.21
24.2
60.95
SKS
ce: ACE
Microfinance
Equity (Accord Fintech) * Price as of 21st July 2011

FIIs Activity (July 10 to June -11)

12 months

Month
Jun-11
May-11
Apr-11
Mar-11
Feb-11

Equity (Rs.crore)

Gross
Purchase
49,346.3
0
54,936.8
0
57,414.1
0
49,276.0
0

Gross
Sales
46,174.2
0
60,095.0
0
50,395.6
0
42,309.3
0

Debt (Rs.crore)

Net
Net
Purcha
Purchase Gross
Gross se/Sale
/Sales Purchase Sales
s
25,173.5 23,865.2 1,308.3
3,172.10
0
0
0
24,929.5 22,281.4 2,648.1
5,158.20
0
0
0
23,274.6 23,732.9
7,018.50
0
0
-458.3
22,434.5 20,132.4 2,302.1
6,966.70
0
0
0

59,002.2 62,756.7
15,604.9 17,380.1 1,775.2
0
0
3,754.50
0
0
0
Jan-11
57,949.9 64,280.1
27,514.6 16,428.2 11,086.
0
0
6,330.20
0
0
40
Dec-10 61,475.3 59,999.2
17,779.4 15,490.9 2,288.5
Source: ACE Equity
(Accord Fintech)

FIIs Holding > Promoters Holding

(From A Group)
Company Name

FII's
Promoters' Holding
Holding (%)
(%)

FII less
Promoters
Holdings

Indiabulls Real Estate

Ltd.

22.96

53.73

30.77

Jain Irrigation Systems

Ltd.

30.36

55.17

24.81

United Spirits Ltd.

28.01

51.43

23.42

Yes Bank Ltd.

26.50

48.09

21.59

Infosys Ltd.

16.04

36.88

20.84

IndusInd Bank Ltd.

19.53

34.72

15.19

Opto Circuits (India)

Ltd.

28.05

38.81

10.76

United Phosphorus
Ltd.
26.55
36.29
Source: ACE Equity (Accord Fintech)
HDFC Bank Ltd.
23.28
29.23

9.74
5.95

Value Stocks

Jindal Poly Films Ltd.

Latest P/B
Price* V
0.5
396.45 7
0.9
595.70 4
0.8
215.80 9
0.9
66.90 0
0.7
152.80 5
0.6
82.45 7
0.8
121.70 6
0.7
276.40 6

Gujarat Alkalies &

Chemicals Ltd.

0.7
150.05 4

Gujarat Narmada
Valley Fertilizers
Company Ltd.
Electrosteel Castings
Ltd.

0.6
96.90 6
0.5
28.30 4

Company Name
Piramal Healthcare Ltd.
Bannari Amman Sugars
Ltd.
Nava Bharat Ventures
Ltd.
IVRCL Ltd.
Dhunseri Petrochem &
Tea Ltd.
Anant Raj Inds. Ltd.
Rolta India Ltd.

52 Wk
High
Price

52 Wk
Low
Price

560.00

354.00 0.52
12.8
522.00
4

0.02

57.67

0.32

52.01

195.05 5.39
11.3
60.25
1

0.15

43.95

0.87

37.11

0.57

32.56

160.00

144.30 4.20
14.5
54.80
3

0.03

32.28

188.50

116.00 3.96

0.63

32.23

700.00

199.00 2.15

0.45

29.08

158.80

110.05 9.64

0.23

26.17

1052.00
420.05
191.70
243.75

TTM Debt/Eq Cash Earning

PE uity(x) CAGR 10 yrs.

146.20

88.30

5.65

0.27

25.39

56.00

27.10

6.07

0.78

19.72

Source: ACE Equity (Accord Fintech ) * Price as on 21st July

Top 10 Cos. Having High

Mkt. Value of Investment
Company Name
Oil & Natural Gas Corpn.
Ltd.
Bajaj Holdings &
Investment Ltd

Invested
Amount

Current Mkt
Value*

Differenc
e

2756.48

21274.62

18518.14

1788.01

18515.08

16727.07

Adani Enterprises Ltd.

Mahindra & Mahindra
Ltd.
Reliance Infrastructure
Ltd

860.80

17251.67

16390.87

1512.30

12017.61

10505.31

1720.00

12181.14

10461.14

Grasim Industries Ltd.

3168.05

9965.86

6797.81

Indian Oil Corpn. Ltd.

Jaiprakash Associates
Ltd.

3828.38

10622.52

6794.14

844.07

7137.80

6293.73

Godrej Industries Ltd.

769.52

7042.00

6272.48

Source:
ACE Equity
Fintech
as on 21st July
EID-Parry
(India) (Accord
Ltd.
204.97) * Price6070.27
5865.30

Portfolio: Rakesh Jhunjhunwala

Company Name
A2Z Maintenance & Engineering
Services Ltd.
Viceroy Hotels Ltd.
Aptech Ltd.
Autoline Industries Ltd.
Zen Technologies Ltd.
Titan Industries Ltd.
Praj Industries Ltd.
Bilcare Ltd.
Agro Tech Foods Ltd.
Geojit BNP Paribas Financial Services
Ltd
CRISIL Ltd.
Delta Corp Ltd
Geometric Ltd.
Ion Exchange (India) Ltd.

Holding (%)
19.11
11.20
10.56
10.25
10.12
9.77
8.80
8.51
7.91
7.88
7.75
7.44
6.87
6.52

Portfolio: Rakesh Jhunjhunwala

Company Name
Rallis India Ltd.
VIP Industries Ltd.
Prime Focus Ltd.
NCC Ltd.
Rander Corporation Ltd.
Adinath Exim Resources Ltd.
Reliance Broadcast Network Ltd.

Holding (%)
6.48
6.43
6.35
5.67
4.86
4.59
4.40

Hindustan Oil Exploration Company

Ltd.

3.60

Orchid Chemicals & Pharmaceuticals

Ltd.
Alphageo (India) Ltd.
Subex Ltd
Lupin Ltd.
Provogue (India) Ltd.

3.54
2.43
1.80
1.73
1.66

MFs Selling in June 2011*

(Top 10 Cos.)
201105
201106
Company Name
Gammon Infrastructure
Projects Ltd
Ashok Leyland Ltd.
India Cements Ltd.
KS Oils Ltd.
EID-Parry (India) Ltd.
TVS Motor Company Ltd.
Corporation Bank

MF_Mark MF_No of MF_Mark MF_No of

et Value Shares et Value Shares
1.52

938113.0
0

3.40

665671.0
0

4.49

531000.0
0

0.79

312000.0
0

21.72

1025894.
00

1.41

260000.0
0

22.89

420088.0
0

0.49

356925.0
0

1.77

364633.0
0

1.79

251000.0
0

0.25

112000.0
0

22.30

887932.0
0

0.77

144000.0
0

16.13

306804.0
0

Source: ACE Equity (Accord Fintech ) * Selling by no. of shares

MFs Buying in June 2011*

(Top 10 Cos.)

Company Name

201105

Market
Value

No of
Shares

Market
Value

201106
No of
Shares

11381547.
2235.05
00

67528143.
4336.50
00

13908623.
49.97
00

60635007.
202.52
00

Titan Industries Ltd.

5252920.0
932.54
0

41602131.
892.49
00

Rallis India Ltd.

1285287.0
124.32
0

19938594.
372.23
00
8863558.0
161.76
0
2973184.0
5.95
0

HDFC Bank Ltd.

Rain Commodities Ltd.

Cox & Kings (India) Ltd.

Zee Learn Ltd.
Power Grid Corpn. Of India
Ltd.
NTPC Ltd.

2.80 150593.00

7398016.0
74.74
0
3697553.0
62.30
0

10327785.
113.02
00
5835169.0
109.05
0

11187672.
216.33
00

13233239.
268.19
00

ITC Ltd.
Source: ACE Equity (Accord Fintech ) * Buying by no. of shares

Nos. Year

Total IPOs Year-Wise (Nos)

2011 2010 2009 2008 2007

28

74

21

40

109

Saving Schemes
Post Office Recurring Deposit
Tenure

5 Years

Interest Rate

7.5% p.a. (comp. qtrly)

Min. Amount

Rs. 10

Max. Amount

No limit

Tax Benefit on Investment No benefit

Tax on Interest

Fully Taxable

Available at

Post Office

Saving Schemes
Public Provident Fund
Tenure

15 Years

Interest Rate

8.5% p.a. (comp. yrly)

Min. Amount

Rs. 500

Max. Amount

Rs. 70,000 p.a.

Tax Benefit on Investment Available u/s 80C

Tax on Interest

Tax Free

Saving Schemes
Senior Citizen Saving Scheme
Tenure

5 Years

Interest Rate

9% p.a. (payable qtrly)

Min. Amount

Rs. 1,000

Max. Amount

Rs. 15 lakh

Tax Benefit on Investment No benefit

Tax on Interest

Fully Taxable

Saving Schemes
Banks Tax Saving Fixed Deposits
Tenure

1 to 3 Years

Interest Rate

9% to 10.25%(comp.
qtrly)

Min. Amount

Rs. 1,000

Max. Amount

Rs. 1 Lakh

Tax Benefit on Investment Available u/s 80C

Tax on Interest

Fully Taxable

Saving Schemes
Banks Fixed Deposits
Tenure

15 Days to 10 Years

Interest Rate

2.75% to 9.75%(comp.
qtrly)

Min. Amount

Rs. 500

Max. Amount

No Limit

Tax Benefit on Investment No Benefit

Tax on Interest

Fully Taxable

Saving Schemes
National Savings Certificate
Tenure

6 Years

Interest Rate

8% (comp. half-yrly)

Min. Amount

Rs. 1,000

Max. Amount

No Limit

Tax Benefit on Investment No Benefit

Tax on Interest

Fully Taxable

Available at

Specified Banks

Saving Schemes
Post Office Monthly Income Scheme
Tenure

6 Years

Interest Rate

8.2% p.a.(paid monthly)

Min. Amount

Rs. 1500

Max. Amount

Rs. 4.5lakh (single a/c)

Rs. 9 Lakh (Joint A/c)

Tax Benefit on Investment No Benefit

Fully Taxable

Saving Schemes
Post Office Time Deposits
Tenure

1, 2, 3, & 5 Years

Interest Rate

6.25% to 7.5%(comp. qtrly)

Min. Amount

Rs. 200

Max. Amount

No Limit

Tax Benefit on Investment No Benefit

Tax on Interest

Fully Taxable

THANK YOU

PowerPoint by:
C.A. JAGDISH THAKKAR