Wednesday, December 24, 2008
This Block covers an area of 363 Sq. Km. and has high prospect of oil and gas reserve having located in rich Basin area. With the addition of this Exploration & Production asset base, the company looks forward to grow faster in its existing oil and gas business.
The stock was trading at Rs.9.62, down by Rs.0.30 or 3.02%. The stock hit an intraday high of Rs.9.94 and low of Rs.9.50.
The total traded quantity was 67053 compared to 2 week average of 136533.
MUMBAI, Dec 24 (Reuters) - A consortium of oil and gas services firm Deep Industries Ltd been awarded a block in Satpura-Rewa in the central state of Chattisgarh.
Deep Industries holds 70 percent in the block, it said in a statement to the BSE.
Aty 2:45 p.m., shares in the company were up 8.4 percent at 46.60 rupees in a weak Mumbai market. (Reporting by Jasudha Kirpalani, Editing by Ramya Venugopal)
Sunday, August 3, 2008
Adhunik Metaliks: Steel
McNally Bharat: Provides turnkey solutions in the areas of power, steel, alumina, material handling, mineral beneficiation, coal washing, ash handling and disposal, port cranes, civic and industrial water supply.
patel engg: 30%
MIC electronics: 30%
Sintex industry: 50%
tulip Telecom: 25%
AIA engg: 25%
Wednesday, March 5, 2008
First Stage is Floor Price, which almost always is the lowest of the levels in consideration. That's why the term 'floor' and not 'ceiling' or something in between. The floor price is practically always below the market price. Thanks to SEBI's loose guidelines. But the stocks actually gets sold at a price much above the Floor Price, say by +20% to 100%.
This is stage 2, and call it 'Exit Price'. By this time the 'ceiling' is reached. The roof is yet to be reached though. Which is when the delisting company comes with 'Offer Price' for those who did not 'exited' even at the exit price, and it is not uncommon to see such offer price is revised upwards to corner the last 9%-1% of the shares.
While the system of Floor Price and Exit Price is the mandatory part of the process, the Offer Prices beyond the Exit Price is discretionary on the delisting company.
Monday, February 4, 2008
Through much of 2006 and 2007, Indian markets traded above fair-value. We saw a fine example of reflexivity as traders profited from riding a strong uptrend and reinforced it further by taking long positions. In the past fortnight, we've seen the opposite effect. Once the sell off started, the downtrend was reinforced by margin calls.
The casual retail trader and the less committed foreign institutional investors have been blasted out in the past 10-15 sessions. So have highly-leveraged operators. Only committed investors with deep pockets and traders who are prepared to go selectively short are now left in the game.
The entire cycle of fluctuation was prompted by changes in liquidity. We now have some clarity about policy trends in US and Indian interest rates. It can be summed up thus. The United States is likely to continue cutting rates. The RBI is not, though rupee rates could soften a little anyhow.
A look at India's credit-deposit ratios and the liquidity in the banking system suggests that there is room for banks to cut commercial rates even though the RBI has chosen not to touch policy rates.
The incremental credit-deposit ratio is down to 0.65 from 0.95 a year ago. Deposits are growing at over 25 per cent and the recent market sell off is likely to bring more money back to banks. Credit is now growing at about 22-23 per cent, which is much lower than the 29-30 per cent logged in the past two fiscals.
Eventually, FII funding will also come back into the Indian market as the spread between US and Indian rates widens and the rupee strengthens. But this will be a slow process because most FIIs have taken mind-boggling losses speculating in subprime mortgages.
It's a good time to take a broad look at fundamentals. At current levels, the Nifty is valued at a price earning of 21-plus. That is still on the rich side. It means that long-term investors will be selective, even if they are optimistic about growth.
On the EPS front, the Nifty basket is likely to produce about 20 per cent growth in the second half of 2007-08. Assume first-half 2008-09 earning per share will also grow at about 20 per cent. That means a PE ratio of up to 20 or so is acceptable for the optimistic growth investor, if we assume a fair-value price earning growth PEG of 1.
The 364-Day T-Bill is currently trading at around 7.4 per cent � that translates into the equivalent of a PE ratio of about 14 in terms of earnings yield. A value investor would therefore, be seeking stocks trading at below 14 PE.
While GDP continues to grow at excellent rates, there has been a slow down in consumer demand - much of the growth is driven by investment rather than consumer demand. Auto/ two-wheeler sales are flat and home loans are slow. Manufacturing capacities are tight and capacity expansions will take a while.
We have already seen tacit recognition of changes in the consumption-investment mix as infrastructure industries have jumped while consumer-driven industries have dipped. That trend could be accentuated through 2008. In fact, we could say that the consumption driven segment of the economy is going through a cyclical downturn.
Now, quite apart from the subprime turmoil, 2008 and 2009 are likely to see violent market fluctuations because of geo-politics. A new US president must cope with a toxic legacy. It's also unlikely that the UPA will get a walkover in the next general election. Both events will cause volatility.
Whatever you buy, it makes sense to modify investment methods in this context.
You should try to use those price dips to keep adding to a core portfolio. Say, for example, pick market leaders across 10 key industries and add to these holdings whenever the price is ok.
You cannot time the market but you can put a war-chest together for specific political events that are guaranteed to cause fluctuations.
The US election, for example, will take place in November 2008. The Lok Sabha elections will be whenever. Sometime during both events, there should be a temporary crash.
Friday, January 11, 2008
Avoid These Awful Stocks in 2008
There are two types of stocks to avoid in 2008 -- the ones that are expensive and the ones that look cheap.
The expensive stocks are in a hot sector, one with the potential to change the world. Yet these stocks are among the worst investments I've seen recently. The cheap stocks would be great investments if they survive the next few years ... but some of them won't.
A tough business
The hot sector is solar power. It's a huge growth industry, now that the world is starting to move away from oil and focus on sustainable sources of energy.
The problem is that while the sector is hot, it's unclear how well investors will do. The semiconductor business is a tough one. It tends to be very competitive and difficult to earn high returns. It requires high capital expenditures.
As a result, cash generated from operations -- that could, in other industries, go to shareholders -- will end up buying the next generation of manufacturing equipment. Moreover, this new equipment won't provide any sustainable competitive advantage. Instead, it's what these companies require to stay competitive at all.
What's more, solar panels are becoming a commodity. Sure, there's an advantage to having more efficient panels and more efficient manufacturing processes, but not nearly the competitive advantage that Intel (Nasdaq: INTC) gets from its proprietary processors. So, it's not surprising that there's a lot of competition in the sector.
What's more, if you exclude government subsidies, the economics of solar power are currently marginal at best -- other forms of power generation are generally cheaper. Consequently, investments in this sector carry political risk -- one of the most unpredictable risks of all.
Scary because they're so expensive
So, solar isn't a great business. Yet these stocks are extremely expensive:
SunPower (Nasdaq: SPWR)
First Solar (Nasdaq: FSLR)
Suntech Power (NYSE: STP)
Even if everything goes right for First Solar, how well will investors do? Well, the most successful semiconductor manufacturer on the planet is Intel. It's pretty hard to imagine First Solar doing better than Intel.
That allows us to create a (very) rough estimate of First Solar's potential. Intel recently had a market cap of about $165 billion. If everything goes right, and First Solar becomes a huge winner (and doesn't dilute shareholders through management stock options and stock offerings), then the absolute upside is a 700% return. That's not a great return for a growth stock in a crowded market where everything must go as well as it possibly can.
If you must play solar, one way is through Applied Materials (Nasdaq: AMAT), which makes solar panel manufacturing equipment. It's already proven itself in a tough market by becoming the leading provider of semiconductor manufacturing equipment. A significant chunk of the capital being thrown at the solar power gold rush should fall at the feet of Applied Materials, one company supplying "picks and shovels." And there's less risk, since Applied Materials isn't wholly dependent on solar and is trading at a reasonable 15 times earnings.
Scary because they're so cheap
The other group of companies to avoid are the companies that look cheap right now but actually aren't -- companies with significant exposure to the housing bust and credit crunch.
The housing bust is likely to continue in 2008, as tightening credit slows economic growth and hinders access to mortgages. Even companies such as MBIA (NYSE: MBI) and Washington Mutual (NYSE: WM), which seemed indomitable a year ago, look extremely, um, domitable now.
In other words, now is not the time to go bottom-fishing among the weaker homebuilders, lenders, and bond insurers ... even if some of these stocks look really, really cheap. Liquidity and balance sheet strength are critical when it comes to surviving the current environment, and companies that don't have it are likely to fail or require new capital at onerous terms, diluting existing shareholders.
Yes, this crisis will offer opportunities. But investors should do well waiting for more transparency and focusing on businesses that can survive for several years without new capital infusions.
The Foolish bottom line
2008 is likely to be a volatile year. Avoid these two types of high-risk stocks, but keep your eyes open, because that volatility will also bring big opportunities.
In fact, it already has. There are some excellent stocks that are already trading at prices way below their fair value, offering huge upside potential with reduced risk.
Tuesday, January 1, 2008
Gaming finally catching Indian fancy
December 31, 2007
The year 2007 surely belonged to the Indian gaming industry. Though investments made were larger than the returns, the number of people playing games certainly grew.
For instance, Zapak Digital Entertainment has, within a year of its launch, garnered 150,000 unique visitors and 270,000 total visits a day on its site. Till date, it has 4 million registered user with a total of 100 million page views.
Rohit Sharma, COO, said, "Currently one per cent of our free users are converted to paid customers for both downloadable games and cash games. This kind of percentage is a worldwide standard. However, with the launch of our Zapak Cards and the aggressive retail presence that we have across the country (over 5000 outlets), we expect the figure to rise to 30 per cent."
Indiagames.com, which adopted a completely different marketing strategy, is also growing fast. The company launched its subscription-based gaming for online users. It already has 10,000 users on its subscription model.
Vishal Gondal, founder and director, Indiagames said, "We expect the number to go up to 100,000 next year. While the growth is huge, we are still less than a per cent of the total broadband user base."
Players such as Games2win and Kreeda Games have even managed to attract Investment from the venture capital (VC) funds. While Games2win was able to raise $5 million from Clearstone and SVB, Kreeda Games received funding from IDG Venture India and Softbank.
Arun Natrajan, founder and CEO, Venture Intelligence said, "Gaming is definitely a sector that is attracting VC attention and we expect to see some investments happening in this space in the next few months. However, with the relatively high costs of gaming consoles and PCs in India, the real growth in this sector is expected to come from the mobile phone segment. While business models in the mobile gaming sector are at a nascent stage now, we can expect a couple of highly profitable companies to emerge in this space going forward."
The mobile gaming market today worths about Rs 120 crore (Rs 1.20 billion) and is expected to touch Rs 1,200 crore (Rs 12 billion) by 2011. With the average revenue per user (ARPU) is declining, operators are increasingly looking at ways to generate additional revenues -- mobile advertisements being one such option.
Advergaming -- placement of brands in mobile games -- is the fastest growing segment. Mobiles were the best way to showcase a brand and also interact with users, said analysts. Mobile2win, which has already worked with over 10 brands for advergaming, is in talks with 35-40 brands for similar tie-ups.
Rajiv Hiranandani, co-founder and country head, Mobile2win felt that advergaming would increase 300-350 per cent as brands were looking at this medium (mobiles) to reach customers.
Telecom players such as Reliance Communications [Get Quote] are increasingly looking at generating revenues from advergaming. Since 2003, it has associated with 40 brands across verticals. Mahesh Prasad, president, applications, solutions and content, felt advertisement on mobile was a serious opportunity.
"Mobile advertisement is not all hype. Look at Japan, mobile advertisement is around $1.2 billion market. Every operators across the globe is furthering the concept. This medium gives the advertiser 360 degree approach to the campaign," he said.
However, Neeraj Roy of Hungama said while mobile gaming could grow, it was being hampered due to limited GPRS connectivity and available content.
"Games on mobile continue and at present around 70,000-80,000 games get downloaded every day. But this is still small compared with other entertainment applications," Roy said.
The story is same for the console gaming segment as well. While analysts were sceptical on the uptake of console gaming due to price, major players such as Sony and Microsoft are bullish on growth.
The console gaming market in the country was expected to grow to $125.4 million (around Rs 500 crore -- Rs 5 billion) by 2010, said an iSuppli study.
The total install base of Sony Playstation in India is 300,000 (including grey market) and in 2008, the company is expecting a sale of 50,000-60,000 units. India is an important market can be gauged from the fact that the company reduced the prices of its game titles as well as of the consoles this year.
While, the company had earlier announced to cut price for gaming titles from Rs 999 to Rs 499, it recently reduced prices of Playstation3 from Rs 34,990 to Rs 29,990.
Antindriya Bose, country manager, Playstation, said, "The company feels that the price cut was important to get the Indian user at par with their European counterpart."
Mohit Anand, country head, Microsoft entertainment and devices division, is confident about the growth of console gaming in India.
"While we do not break numbers according to regions, worldwide we have shipped 14 million units. In India, though, the base is very small but we expect a growth of over 200 per cent," he said. Microsoft has also slashed the prices of gaming titles on the Xbox earlier this year.
- Online gaming is expected to be a Rs 800 cr market by 2010
- All major players are likely to tie up with studios abroad or Bollywood production houses for content
- Mobile gaming will be a Rs 1,200 cr industry by 2010
- Console gaming to touch the Rs 500 cr mark by 2010
- Advergaming -- placement of brands in mobile games -- is the fastest growing segment
December 31, 2007 12:21 IST
When Rajeev Verma, 40, senior general manager of a leading bank just walked up to his boss and said, "I quit", he shocked everyone. No, there was nothing wrong with his boss, but Verma had decided almost a month back that it was time he did something on his own, rather than report to someone else.
Sounds familiar? Yes, many of us dream of that day when we would be able to do things our way. Sadly, a large of number of those dreams just stay --'dreams'. However, if you are one of those who wish to start an independent business venture, it's important to remember that this newfound freedom comes with a whole set of financial issues.
Setting it up
For starters, decide the ownership structure of the company. That is, whether it will be a sole proprietorship, partnership or a company -- private or public. In case you are the only person behind the venture, you can opt for the sole proprietorship format, for its simplicity and reduced statutory compliance.
If, however, you intend to project a corporate image or have others partnering you in your enterprise, you may consider a private limited company, since it provides both, a corporate setup, as well as limited liability.
This is because, in case of a proprietorship firm, even your personal property can be attached to settle claims against the firm. On the other hand, in a private limited company, only the assets that are owned by the company can be attached to settle claims.
Funding your needs
With no access to a regular pay check, you will need to work out a sustainable method for meeting your personal and family expenses. The best way to manage personal expenses in this situation is to sit with your family and draw up a realistic monthly expense budget.
Add to this, expenses that occur over longer periods, like quarterly or annually, such as insurance premiums, on a proportionate monthly basis. Also, add to this all the monthly investments you need to make to meet your financial goals like children's education and marriage, your retirement and others.
This exercise will give you an idea of your monthly outgo. From the very start, pay yourself this amount from your business every month as salary. This will help in two ways.
One, it will act as a substitute for your monthly pay check and will give you and your family adequate time to psychologically adjust to the change in your work status.
Two, it will curb the tendency to overspend by drawing from the business at will. It is important to remember that ad hoc withdrawals from the business can lead to bankruptcy. Also, treat this salary as a business expense, as it will act as an incentive to generate revenues in your new business.
A new business is likely to face situations where the cash flows are volatile. This can lead to a situation where you may feel tempted to overspend at times, when the income has been good and delay your personal expenses or investments during times of cash crunch. However, neither situation is desirable.
The best way to tackle this situation is to have a contingency fund in place at the very outset and withdraw from this when the business is not doing so well as well as in case of other emergencies.
Business people need a bigger contingency fund in place than salaried persons. It is recommended that there should be at least 18 months of expenses kept aside in a fixed deposit with an overdraft facility or in a short- term debt fund. However, make a rule that whatever is withdrawn will be replenished, as soon as the situation improves.
While, investing remember that your asset allocation has to be tweaked to accommodate your status as a businessman. So, you could opt for high yielding investments like equities and real estate.
Also, if you are borrowing for your business needs at higher rates, it may not make much sense to invest in lower yielding fixed income instruments. But segregate personal investments from business funds and investments.
It is often noticed that when there is a cash crunch in the business, or when the business is generating higher returns, such investments are liquidated and ploughed into the business. This could adversely affect your ability to meet your financial goals, in case of any adversity in your business.
The first thing you need to check is whether you have any personal life and medical insurance. Most employers provide group life insurance and family medical covers to their employees. Therefore, it would be imperative for you to immediately take out a family floater medical cover for the desired amount.
Also, buy a new cover, which should be at least 10-15 times your annual income. Along with these term policies, you should add on riders such as accidental death and critical illness benefit. Regarding your business, depending on its nature, you may have to take out various insurances like office policy, fire, burglary, marine, cash or goods-in-transit, etc.
When you venture out on your own, as you were doing in your job, there has to be a very big difference in the mindset to handle this transition. While you have more independence, there has to be greater responsibility to make your venture a truly fruitful one.
Veena Venugopal with Kayezad E. Adajania | December 19, 2007
You might have read W. Somerset Maugham's classic short story, The Ant and the Grasshopper. In the story, Maugham, the master storyteller, turns the wisdom from an Aesop's Fable on its head.
The fable talked of how an ant that labours through the summer preparing for winter ends up a winner instead of the grasshopper who does nothing to prepare for the harsh months ahead. In Maugham's short story, Tom, the carefree but proverbial black sheep of his family, constantly gets into trouble only to be bailed out by his hardworking brother George.
Tom beats his brother's predictions of ending up in a gutter when he marries a rich lady, who, on death, leaves him a fortune, making him a winner and his brother a perpetually sulking loser. When it comes to real life, especially saving for the future, we all know that it is the fable's moral that works. The boring, but diligent, Georges triumph in the end.
How much should you save?
Whether you save regularly or irregularly, a question often comes visiting: "Am I saving enough?" Saving the right amount is crucial for at least two major reasons.
First, it is only when you save money that you can invest in options such as fixed deposits, public provident fund, stocks, mutual funds, real estate and gold to create a future income for meeting small and large requirements, such as the education and marriage of your children and your retirement.
Second, while it is necessary to prepare for the future, current needs also have to be taken care of. Equally important, we would like to have a life and enjoy it with our families.
But the problem is that beyond a point, the more you live it up, lesser are the chances of accumulating enough savings for a minimum decent standard of living in the future.
Clearly, drawing a balance between the present and future holds the key. The good news for you is that the balance is achievable if you follow certain rules that we present here.
We, at Outlook Money, crunched numbers to give you an indicative idea of how three kinds of people -- those who start early, in their 20s (Early Birds), those who begin in their 30s (Late Bloomers), and finally, those who first reach for a piggybank in their 40s (Final Chargers) -- should save at various life stages.
The savings thumb rules
The Early Birds. When it comes to savings, the early birds have an advantage over those who are off the blocks late. They manage to save a decent pile for all their requirements with much lesser fuss. If you start saving from the age of 25, when you are likely to be in your first job, you can begin with saving 10 per cent of your net income (post-tax income) till the age of 30, by which time you are likely to be married.
If your savings horse proceeds even at a canter in this period, marked often by the absence of familial responsibilities, you will need lesser abstinence to save later, when responsibilities increase.
Step up your savings to 20 per cent in your 30s, 30 per cent in your 40s, and finally, to 50 per cent in your 50s. With this, you would have clocked a very healthy 30 per cent since age 25. Not a bad deal, is it?
Our assumptions for this as well as other categories are: income is net of taxes; partial withdrawals are made from savings for house down payment, education and marriage of children and for lifestyle needs; and average salary increments of 15 per cent take place.
Importantly, 30 per cent of the income at the time of retirement is earned in the 60s, after retirement, from jobs or assignments, and work life finally ceases at the age of 70, something already happening in urban India.
We have also assumed that the entire corpus is invested at 7 per cent and the surplus of the resulting income flow over current needs is reinvested in index funds that return 12 per cent a year.
Another assumption is that the corpus is liquidated at the rate of 6 per cent per annum starting from age 70. This gives a cushion if the person lives till the age of 90, or leaves an inheritance for the next generation.
The retirement money will be reinvested at 12 per cent per annum and will not be used fully till the expected life of 90 years. A portion of it will be left as a cushion, or for bequeathing.
Late Bloomers. Life is not rocket science. Circumstances might have prevented you from keeping your promise to yourself to start the savings journey early -- a super specialisation qualification that had to be completed, or a doctorate that took too much time, younger siblings who needed your support, or simply failure in meeting the right person to get married.
Such people need to start their savings vehicle in the second, if not the third gear. Assuming you start at age 35, you can begin this game of catch up by saving 30 per cent of your post-tax income till 40, zoom up to 40 per cent in your 40s and press the gas pedal further by saving 50 per cent in the 50s, till the chequered flag of the retirement finishing line looms up. You end up saving 42 per cent of your net income during the period.
Final Chargers. If you haven't been saving till age 45, you better hear the last and final call for the savings flight. Till age 50, you will have to jet at 40 per cent of your net income, followed by 50 per cent of net income in your 50s.
This will enable you to clock an average savings rate of 47 per cent, or almost half of what you get during this period.
Why you need to step up savings with age. The savings rates are higher for people who start saving later in life because the early risers get the benefit of compounding. This also spares them the agony of denying themselves in the present in order to provide for the future.
At the same time, you need to step up savings as you move on in life. At the beginning of your work life, you do well to even cover your expenses. At this point, a small but consistent amount of savings is crucial. Often, taking some practical steps is all it needs.
By the time you get married, your income has risen, but so have the costs, as you get down to setting up your own establishment, which, among other things, often involves taking loans for big-ticket items such as cars and consumer durables.
This stage typically lasts till your mid-30s or early 40s, after which your income simply pulls away from your expenses. The reason is that expenses don't grow as fast at this stage and, in many cases, the growth slows down. This is also the time when your savings should be the maximum and get invested.
In your 50s, you could have to bear big expenses such as higher education and marriage of children, besides relocation preparations for retirement. But the rise in your income with salary increments and investment income will let you continue saving.
You can also step on the gas when the big-ticket expenses get over and reinvest the residual savings.
Why saving enough is half the job done
You can save a lot and yet be forced to be miserly when you need money. This slip between the cup and the lip can happen if you haven't invested your savings in the appropriate order to give it the right opportunity to grow.
On an average, Indians are saving more, but the savings are getting invested in lower risk-lower return options such as FDs and mandatory retirement funds such as provident fund and life insurance. Some investments of this sort happen by default. Employees' Provident Fund is a case in point, where 12 per cent of your basic pay gets stashed away every month.
Besides, the risk averseness of many Indian investors, lack of awareness of options that bring higher returns, absence of quality financial advice and, sometimes, simply lethargy makes people invest money in their savings account in fixed deposits of the same bank.
This is despite the fact that equities have been found to be providing the best returns among all asset classes -- 18 per cent compounded annual growth rate (CAGR) since 1979. For instance, if Rs 1 lakh (100,,000) was invested in the Sensex, a PPF and a 5-year bank fixed deposit in 1982, today you would get Rs 55.12 lakh (5.512 million), Rs 7.69 lakh (769,000) and Rs 15.07 lakh (1.507 million), respectively.
Thumb rules for equity investing
Thumb rule No. 1: (100 minus your age). If equity is the best bet for brisk growth of our savings, then the logical question is how much should we invest in them either directly or via mutual funds?
The standard rule of thumb to determine your ideal equity exposure is a simple formula that suggests you subtract your age from 100. For example, if you are 35, then 100-35 or 65 per cent of your portfolio should be exposed to equity.
While this can be taken as an indicative formula, it would not, of course, be applicable to everybody at every point in their lives. For example, if you are a 30-year-old and part of a double income family with one young child, you could put in 70 per cent of your investments into the market.
However, if due to a sudden turn of events, you also have to provide for dependent parents and siblings, you should change your allocation and tweak down your equity exposure.
Thumb rule No. 2: Keep debt-equity proportion constant. If the age-based thumb rule does not apply to you, use a tactical allocation thumb rule. Here, you start off by investing, say, 60 per cent in equities and 40 per cent in debt, and continue keeping the ratio constant at all times.
If you find at the end of the year that equities have done well, you should trim your equity exposure in the next year, the assumption being that there is likelihood of a market downturn. However, in times of a long-running bull market, like the one we have been witnessing, this strategy may not be ideal.
Thumb rule No. 3: Factor in the trend. This thumb rule on trend-based asset allocation is the opposite of the previous one. The assumption in this one is that if the stockmarkets are going up, then that is the trend of the cycle, and you should enhance your equity exposure for the next year. Of course, trends could change and you might be trapped with a high equity exposure in a falling market.
How to follow the thumb rules. Since the thumb rules tend to contradict each other, you can adopt the following approach. Use the '100 minus age' formula if there is nothing exceptionally different in your profile and the assumptions fit you.
Keep that as the guiding number, and tweak it upwards or downwards depending on your specific circumstances. If you are in your mid-30s and single, you could invest more than 70 per cent in equities. If you are 60 and do not see yourself retiring for another eight years, you could invest more than 40 per cent.
How many mutual funds are enough?
Once you decide how much money you should place in equity, you need to figure out how much to keep in equity mutual funds and how much in stocks, if at all. Then, you will also have to figure out how many equity funds and stocks to buy.
The truth is that there is no magic number, though the number of funds in your portfolio should give you adequate diversification without making your returns suffer. Let's first examine mutual funds and then stocks.
How many mutual funds? You can target up to about 10 equity mutual funds. Apart from 10 being an easy number to track, academicians like J.L. Evans and S.H. Archer have shown in their research that most of the risk reduction due to diversification takes place in an aggregation of 8-10 securities.
Which categories of mutual funds? Typically, if you're venturing into equities for the first time, you can start with an exchange-traded fund (ETF). ETFs are low-cost cousins of index funds and invest in all the securities that lie in their benchmark index in the same proportion in which the index has them.
ETFs don't have risks associated with fund managers. They aim to give you returns in line with the market, so you don't lose or gain more than what the market does. Says Mumbai-based financial planner Jayant Pai: "It's not possible for active funds to outperform the market on a continuous basis. ETFs ensure that your returns are at least in line with the market." One ETF tracking a large-cap index like Nifty or Sensex should do fine.
Diversified equity funds. One ETF in your equity portfolio can be supplemented by a couple of diversified mutual funds, including equity-linked savings schemes. This will form the core of your portfolio and provide a baseline of expected growth.
As diversified equity funds invest in around 30-50 or in an even higher number of scrips, chances are the same scrip will feature in more than one fund if you have too many funds in your portfolio. Also, ensure that these schemes are different in styles. For instance, Franklin India Bluechip and SBI [Get Quote] Bluechip are similar in objectives, so it does not make sense to have both in your portfolio.
Mid-cap funds and thematic funds. You can supplement your core funds with higher growth investment options. One of them is mid-cap funds. Though there are 26 mid-cap funds in the market, almost all of them target the same universe of stocks and there are negligible differences among them.
Then, there are thematic funds that invest according to a theme, such as infrastructure. You can invest in one mid-cap and one thematic fund.
How many stocks are enough?
After gaining equity experience through equity mutual funds, you can invest directly in stocks. Financial planners believe there isn't much merit in holding top-line equities as they would be anyway present in your mutual funds.
"Target some good, small companies that your funds may not have," says Pai. Although Nifty has 50 scrips and Sensex has 30 scrips, you don't need to hold as many, as tracking would be a problem then. Here, too, 10 sounds like a decent number. "Ensure that these 10 scrips are from different sectors," adds Pai.
Winning the savings game is about succeeding in providing for the future without losing out on your present. It is here that thumb rules serve as great guideposts. They show a happy middle path that lies between the ways of the ant and the grasshopper. In the end, you still win.
20 great stocks to buy in 2008
BS Smart Investor Team | December 31, 2007
Stock selection will be the key factor in determining returns in 2008, given concerns of a global slowdown and premium valuations in domestic markets.
Year 2007 saw the market deliver good returns amidst volatility, especially in the second half, thanks to global concerns. The BSE Sensex was up a good 46.6 per cent, helped by strong foreign and domestic inflows.
And what led to these inflows was none other than a strong performance by India Inc. For investors, the moot question is how will 2008 be? The answer is not simple given that none of the global concerns have eased, while the Indian rupee is still firm and India Inc is experiencing a deceleration in growth rates.
"Year 2008 will be difficult globally, although it is not yet known how deep the US downturn will be," says Andrew Holland, managing director -- strategic risk group, DSP Merrill Lynch.
While India's vulnerability to global shocks has been put to test adequately over the past year, the overall macroeconomic growth remained strong owing to infrastructure, capital goods and real estate sectors.
Notably, the story is not likely to be very different in 2008 barring drastic surprises, which means that domestic consumption plays should remain in flavour.
By this logic, the most certain sectors are capital goods, financial services, infrastructure, power, logistics and oil, gas and energy sectors among others. Even among these sectors, not all stocks can be expected to do well, owing to the differences in business models and the individual strengths and weaknesses.
Further, in our selection, we have looked at the fundamentals of companies and their potential to deliver earnings growth of over 20-25 per cent.
But, while growth is a must, valuations too need to be fair, which is why we kept a tab on the price earnings to growth (PEG) ratio. Here, most stocks are trading at a PEG of less than 1 times based on FY09 earnings estimates, which ensures that the price is not exorbitant.
To ease your effort of picking the juiciest fruits from the orchard, we have handpicked a few likely winners of 2008. Read on.
Adlabs Films [Get Quote]
With a strong presence across the entertainment industry value chain of content production, distribution, and exhibition, Adlabs becomes the choicest pick.
Domestic consumption and leisure spends will remain buoyant as disposable incomes rise across the country fuelling growth at Adlabs.
Adlabs produces and distributes films, and is a dominant player in the multiplex segment. It has also acquired 51 per cent stake in television content producer Synergy Communications, the maker of Jhalak Dikhhla Jaa and Kaun Banega Crorepati.
In the FM radio business, its subsidiary, which runs Big FM has 44 FM licenses across India. This could also become a value unlocking opportunity going forward.
Over the past three years, Adlabs has impeccably delivered a top line growth of over 100 per cent y-o-y, along with high profitability. In the September 2007 quarter, it raked in a whopping 69 per cent operating profit margin.
But going by the past numbers, operating margins have remained in excess of 50 per cent consistently, with net profit margins at over 22 per cent. The stock has appreciated three-fold since January 2007 and should do well.
Bank of Baroda [Get Quote]
Bank of Baroda has a strong presence in western India -- a key zone for retail and industrial growth-- with equally good rural network.
Further, the bank is one of the few banks having a substantial international presence, which contributes 18-20 per cent to total business and 30 per cent to profits. This business is expected to rise further with the bank growing its global presence.
The bank has improved its fundamentals over the past several years on key parameters such as net interest margins (NIMs) and asset quality despite growing at a robust pace (asset growth CAGR of 19 per cent in FY04-07). Going ahead, the bank's focus on NIMs backed by moderate growth augurs well.
Besides, its initiatives such as online trading services, and joint ventures in insurance and asset management, will help it create value for its shareholders.
Additional triggers could be in the form of consolidation within the public sector bank space. All this put together makes this stock, which is reasonably valued at 1.4 times its FY09 estimated book value, an attractive investment opportunity.
Bharat Bijlee [Get Quote]
Though Bharat Bijlee has risen by a whopping 228.5 per cent in the last one year, even at current levels, it is inexpensive.
At current rates, their combined value works out to Rs 317 crore (Rs 3.17 billion), or about Rs 560 per share.
Excluding this, the core business is valued at attractive valuations of 20 times FY08 earnings and 15 times FY09 estimated earnings.
The company is capitalising on the emerging opportunities in the power transformer sector, which accounts for 65 per cent of its total revenues with the balance from motors.
In the Eleventh Five Year Plan, a total power generation capacity of 78,000 mw is planned. This augurs well for transformer manufacturers such as Bharat Bijlee.
The company on its part has recently expanded its transformer capacity to 11,000 MVA from 8,000 MVA. The motors business is also witnessing 25 per cent growth and Bharat Bijlee has forayed into higher frame motors of up to 400 kw. All this put together make Bharat Bijlee a good pick.
Bharati Shipyard [Get Quote]
Stocks of shipbuilding companies have been re-rated on the back of rising order book-to-sales to over seven times. The stock price of ABG Shipyard [Get Quote] has gone up 267 per cent, while Bharati Shipyard is up 107 per cent over the last one year.
The gain has been higher in the case of ABG Shipyard, thus stretching its valuation at 33 times its FY08 estimated earnings. Bharati Shipyard is still trading at a comfortable 18 times estimated FY08 EPS and 13 times FY09 EPS.
Also, its current order book of about Rs 4,639 crore (Rs 46.39 billion) (11 times its FY07 revenue) is strong enough for maintaining 50 per cent growth for the next three years.
Bharati is building a greenfield shipyard which will enable it to build six vessels up to 60,000 dwt (dead weight tonne) against 15,000 dwt currently by December 2008. This will enable Bharati to improve its execution speed and bid for more projects.
Besides, it is planning to invest Rs 2,000 crore (Rs 20 billion) along with Apeejay Shipping to set up a shipbuilding yard on the eastern coast, which will be commissioned in FY 2011. A relatively lower valuation and strong earnings visibility makes this stock an attractive investment.
Today, the biggest constraint in the power sector is the supply of equipment, especially the critical power equipment required for the larger projects.
But, for Bhel, which commands about 65 per cent market share in the domestic power equipment industry, this provides long-term earnings visibility.
While competition is rising with new players like L&T and Chinese companies vying for a share, Bhel's order book of Rs 62,400 crore (Rs 624 billion), almost 3.6 times its FY07 revenues, instils confidence. The successful acquisition of orders for super critical boilers and high technology gas turbines required for the bigger projects would only improve its order book further.
Considering the huge order backlog and the orders in pipeline, Bhel is expanding its capacities by 67 per cent to 10,000 mw by January 2008, which will further increase to 15,000 mw by December 2009.
Bhel is also expanding its forging and casting capacities and a new fabrication plant to help reduce its dependence on imports. These should also help lower costs in the years to come. Overall, a better industry outlook, strong order book and expansion of existing capacities will drive the stock from the current levels.
Bharti Airtel [Get Quote]
With a mobile subscriber base of 51 million, Bharti Airtel is India's largest mobile service provider. While it has added an average of 2 million subscribers a month in Q2, it is expected to crack the 100 million subscriber mark by FY10.
While the company has experienced good growth, its ARPU has fallen by 10 per cent over the last three quarters, much ahead of the 4 per cent decline experienced by Reliance Communications [Get Quote]. Even then, operating margins have improved, on the back of higher margin in broadband business and cost reduction.
Going forward, increase in scale of operations will keep costs in check. Capital and operating expenditure is also likely to come down after the formation of Indus, a tower infrastructure company, which will manage the tower infrastructure of Bharti, Vodafone and Idea.
A trigger for the stock could be the listing of Bharti Infratel, the tower division and which holds 42 per cent in Indus. Bharti Infratel already has 20,000 towers and plans to set up more.
RCOM will be the biggest threat for the company if it manages to soon roll out its GSM services across 15 circles. Additionally, any unfavourable outcome over the spectrum issue will have its impact; it could lead to increased investments in upgradation of existing equipment.
To conclude, Bharti's revenues should grow by 35 per cent in the next two years on the back of subscriber expansion, start of Sri Lankan operations by March 2008, and launch of IPTV and DTH. A sum-of-parts valuation puts the per share value of Bharti at Rs 1,200, a 27 per cent upside from the current levels.
Blue Star [Get Quote]
The central air conditioning major, Blue Star, is a key beneficiary of the economic boom in the country across sectors like IT/ITES, retail and telecom.
This is reflected in the strong CAGR of 32 per cent and 40 per cent in sales and operating profit respectively in the past three years.
Notably, such strong growth traction is expected to continue as the company is sitting on a strong order book position, which is at Rs 1,030 crore (Rs 10.30 billion) as on September 2007. It is likely to get repeat orders from its existing customers as they expand operations.
It is expanding its capacities by investing about Rs 60-70 crore (Rs 60-700 million), which will lead to economies of scale and rationalisation of costs leading to margin expansion. Its return on equity and return on capital employed, which were at 34 per cent and 26 per cent, respectively, in FY07, will only improve.
However, the full benefits will be reflected only from the next financial year. The macro factors too continue to be robust, with huge investments planned in all the above mentioned sectors.
Dishman [Get Quote] Pharmaceuticals
Dishman, a pharma outsourcing player, is moving up the value chain from being a commoditised chemicals supplier to a research partner for innovator companies.
Its acquisition of Swiss-based Carbogen-Amcis (CA), which offers drug development and commercialisation services, has helped it tap into the client base of CA that includes seven of the top ten US drug companies.
With three projects in phase-III development, and likely to hit commercial production in two years, CA's revenues are expected to grow 15 per cent annually to Rs 400 crore (Rs 4 billion) by December 2008.
Dishman caters to 50 per cent of Dutch pharma major Solvay Pharma's requirement of eposartan mesylate, an anti-hypertension medication. Its acquisition of Solvay's Vitamin-D business will boost revenues. Its foray into China to manufacture Quats, a catalyst, is also seen positively.
All these should help reduce Solvay's share of 25 per cent in Dishman's revenues going forward. With earnings expected to grow between 25-30 per cent in the next two years (Rs 12 in FY08, Rs 15 in FY09 and Rs 20 in FY10), the stock can deliver 28-30 per cent returns in one year.
Educomp Solutions [Get Quote]
Educomp, the market leader in Kindergarten-12 education products, is a successful niche player. It has made some smart acquisitions, entered new areas. and garnered a client base of almost 6,000 schools across India besides, a small presence in Singapore and the US. Its first mover advantage makes it difficult for competition to catch up anytime soon.
Besides, the company has so far acquired and built the abilities to design and create content for schools, learning and school infrastructure management solutions, online teaching solutions, community building solutions and more recently into setting up its own schools.
Financially, Educomp's top line has almost doubled every year and operating margins have been maintained above 50 per cent.
Considering the growth potential in the Indian education industry, Educomp is likely to keep its juggernaut rolling for the coming few years. In FY09, Educomp will double its top line again and grow its earnings by 75 per cent. Although there has been a concern over valuations, the consistent earnings growth justify the same.
HDFC is an ideal play on the gamut of financial services. Besides market dominance in housing finance, it provides huge potential for value unlocking from its investment in banking, insurance and mutual fund subsidiaries.
The proposed UTI Mutual Fund IPO, stake sale by Reliance Capital [Get Quote] in its mutual fund entity and the probability of listing of insurance companies though in the long term, should provide triggers. Moreover, there is a possibility of a merger with HDFC Bank.
Its core business--housing finance will continue to do well. Its loan book is expected to witness a CAGR of 25 per cent over the next two years. Its net interest margins are expected to remain stable at around 3 per cent.
And, HDFC is known for its asset quality. HDFC's stock trades at about 5 times FY09 estimated book value (adjusted for the value of its subsidiaries, which is about 30 per cent of HDFC's market capitalisation), and is a worthy pick.
India Infoline [Get Quote]
India Infoline is another company representing financial services, except the lending business.
Its stock price has grown more than fourfold in the last one year amid many positive triggers like capital raising for expansions, tie-up with strategic investors for investments in subsidiaries and restructuring of its various businesses.
Besides equity broking, it has expanded its product basket to include institutional equities broking, commodities broking, margin finance, investment banking and, distribution of life insurance, mutual fund and loans products.
It is investing towards building a strong distribution network (596 branches in 345 cities) and customer base (5 lakh clients) for its various services. Accordingly, the share of its traditional broking business of about 56 per cent in FY07 revenues is expected to come down over the years.
The stock trades at 51 times and 44 times estimated earnings for FY08 and FY09, respectively. While it looks cheaper than Edelweiss, in terms of market capitalisation to revenues, it trades at a higher P/E than Indiabulls [Get Quote].
However, it has the most de-risked business model compared to other players. Given India Infoline's aggressive growth strategy, the stock is ideal for long term investors.
Jain Irrigation, which is in the businesses of micro irrigation systems, food processing and plastic pipes and sheets, is a direct play on the growing emphasis on agriculture. Irrigation systems account for 30 per cent of its revenue. It's revenues from micro irrigation have grown at 70 per cent annually.
Growth will be maintained on the back of its plans to launch new irrigation systems, higher replacement demand, focus on geographical diversification.
Jain's five overseas acquisitions, including a 50 per cent stake in NaanDan of Israel, the world's fifth largest micro-irrigation company, will help in terms of access to technology and access to large markets such as South Africa, US, and Europe.
In food processing, which accounts for 14 per cent of total income and grew by 74 per cent in FY07, Jain produces juices and dehydrated vegetables for companies like Coco Cola, Nestle [Get Quote], etc. This business to grow at healthy from hereon.
In plastic pipes and sheets, its products find application in agriculture (30 per cent market share) and telecom (70% share) among others and, should continue to grow at a healthy pace.
To sum up, Jain is operating in high growth areas, while exports too are expected to grow rapidly, which makes it a good investment case.
Jindal Saw [Get Quote]
Jindal Saw, the most diversified Indian pipe manufacturer, makes submerged arc welded (Saw), seamless and ductile iron spun pipes, which are used in diverse applications like oil & gas and water-based infrastructure.
The company is expanding its capacities in phases which will bring economies of scale-- longitudinal Saw pipes (by 25 per cent), helical Saw pipes (233 per cent) and seamless pipes (150 per cent) -- by FY09. These expansions are well-timed due to strong demand for pipes on account of surging demand for oil and gas globally.
Over the next three-four years, global demand (including India), for Saw pipes is estimated at 200,000 km involving an investment of $60 billion.
Jindal Saw is likely to gain due to restructuring of the investment holdings in Jindal Group companies, wherein it has substantial investments in Nalwa Sons, Jindal Stainless [Get Quote], JSW Steel [Get Quote] and Jindal Steel & Power, are worth about Rs 2,200 crore (Rs 22 billion). Excluding the value of investments, the stock trades at 9 times its FY09 estimated earnings, which is attractive as compared with 17 times for Welspun Gujarat.
Larsen & Toubro
Reinventing itself and successfully developing new businesses are among L&T's key strengths. That, along with the domestic infrastructure and global hydrocarbon investments, is responsible for the rising revenues and order book. It is now targeting a turnover of Rs 30,000 crore (Rs 300 billion) by FY10 as compared with Rs 18,363 crore (Rs 183.63 billion) in FY07.
Going forward, there is more business to come, as the government has estimated an infrastructure investment of $500 billion during the Eleventh Five Year Plan. Besides, a lot of money will also be spent by domestic players in the metal, oil and gas, power and other industries.
Little wonder, L&T's order book has been rising. As of September 2007, the engineering and construction division had an order book of Rs 42,000 crore (Rs 420 billion).
Going forward, L&T is also focusing on the overseas markets and has targeted exports to increase to 25 per cent of 2010 sales. It is entering shipbuilding, railway locomotives, power generation and power equipment as well.
While all these investments in different businesses will help sustain future growth, the medium term continues to be robust. Some of it is already rubbing off positively on the share price. Although the stock seems richly valued, it can fetch good returns.
Maruti [Get Quote] Suzuki
On the back of a sound foundation of existing products (13 models priced between Rs 2 lakh and Rs 15 lakh), strong distribution, efficient service network and new product launches, Maruti Suzuki will maintain its dominant position.
The company has 52 per cent market share by volume of the Indian car market and 62.5 per cent of the small car segment, which is commendable given the stiff competition from global majors.
Maruti grew at a scorching 18 per cent, compared with the 13 per cent recorded by passenger car market in H1 FY08. For eight months ended November 2007, sales volume was up 19.7 per cent to 500,108 vehicles led by 49 per cent growth in exports. Notably, exports are expected to grow 40 per cent annually for the next two years; its share in total sales is likely to move up to 12 per cent in 2010 from 7 per cent in FY07.
Maruti is already augmenting capacities by 3 lakh in a phased manner by FY10 to a million units. Besides, it has lined up Splash (A2 segment) and the concept car A-Star (A1 segment), while a Swift sedan is on the cards. These will help earnings grow by 20 per cent annually in the next two years. Aggressive pricing, enhanced margins on the back of improved product mix, indigenisation and scale benefits, will help Maruti do well.
ONGC [Get Quote]
Oil exploration companies are set to benefit from the current high oil prices and firm outlook. India's largest oil exploration company, ONGC is the best bet in this space. ONGC with interest in 85 domestic blocks including 52 offshore fields, has made 28 discoveries in the past two years, of which, 14 were made in FY08 itself.
Further, its 100 per cent subsidiary, ONGC Videsh has stakes in 26 blocks across 15 countries and is expected to be the key growth driver with its share in ONGC's consolidated revenues and profits expected to rise to 20 per cent (14 per cent now) and 14 per cent (9 per cent now), respectively.
ONGC's substantial interests in MRPL, Petronet LNG [Get Quote], GAIL and Indian Oil Corporation [Get Quote] are the topping. Moreover, the IPO of Oil India in the next few months could provide further triggers.
What also makes ONGC attractive is that it is the cheapest among its Asian peers trading at 10.1 times estimated FY09 earnings and enterprise value per barrel oil equivalent of about 7.5 times for FY09.
Going ahead, exploration successes especially in the KG basin and favourable announcement on various issues like sharing of subsidy burden, cess and deregulation in gas prices will be big positives.
Patel Engineering [Get Quote]
Patel Engineering, which is having an order book of Rs 5,400 crore (Rs 54 billion) almost 4.8 times its FY07 revenues, would be the key beneficiary of the boom in the construction, power and real estate sectors.
Within power sector, the 11th Five Year Plan has an outlay of Rs 70,000 crore (Rs 700 billion), adding another 18,000 mw in hydropower generation. Patel Engineering has 22 per cent market share in the domestic hydropower construction, which accounts for 60 per cent of its current order book.
Also, the company has pre-qualified for new projects worth over Rs 6,000 crore (Rs 60 billion) as on September 30, 2007.
Besides, its entry into own power generation setting up of 1,200 mw thermal power plant at an investment of Rs 5,000 crore (Rs 50 billion) are positive triggers. Meanwhile, its core businesses including construction of dams, transportation and micro-tunneling are growing at a faster pace thus providing sustainable earnings growth.
The immediate trigger would come from its real estate business. Patel Engineering has transferred a land bank of about 1,000 acres spread across Bangalore, Chennai, Hyderabad and Mumbai to Patel Realty India, a 100 per cent subsidiary.
According to estimates, the real estate business is valued between Rs 500-520 per share. All of these make Patel Engineering an attractive investment.
Reliance Communications (RCOM) has a mobile telephony market share of 18 per cent and subscriber base of 38 million, which is rising by a million every month. And this should continue to rise as RCOM penetrates into smaller towns.
What's more interesting is that despite concerns over declining, operating margins have improved to 42.2 per cent in Q2 FY08, thanks to the benefits of larger scale.
This is expected to improve further if RCOM gets the go-ahead to operate an additional 15 GSM circles as 65 per cent of passive infrastructure such as telecom towers, is common to both GSM and CDMA technologies and the investments in its existing networks will be incremental.
Additionally, it is the value unlocking in its subsidiaries that are likely to provide further triggers.
In 2008, RCOM is likely to announce a stake sale and subsequently list its tower subsidiary, Reliance Telecom Infrastructure, list its submarine cable subsidiary, FLAG Telecom, hive off of its SEZ and BPO businesses and the launch IPTV and DTH services by the first quarter of 2008.
Analysts estimate that a conservative sum-of-parts valuation based on FY09 numbers for RCOM comes to Rs 850-Rs 900 per share, which indicates an appreciation of 17-24 per cent from current levels.
Reliance Industries [Get Quote]
In 2008, Reliance Industries' (RIL) exploration and production (E&P) division, which accounts for 50 per cent of its sum-of-parts valuation, will start selling gas from the KG Basin. The only ambiguous aspect here seems to be the pricing of gas and settlement with the ADA group and NTPC.
Within a few months, Reliance Petroleum [Get Quote] will also start operations, all of which should lead to a jump in RIL's profits.
Also, the bids for NELP VII will be awarded by July 2008. While further wins will add to reserves, new discoveries at existing reserves should further add to valuations and the possible de-merger of RIL's E&P division would unlock value.
While the company is yet to prove its mettle in its retail and SEZ initiatives, given its track record managing mammoth projects, one can hope to see positive results here as well.
Notably, analysts maintain their bullish outlook on the core businesses. Refining margins for RIL, already the best among global players, should remain firm until FY11, while petrochemical margins are expected to be stable with good growth in volumes. At a P/E of under 12 times FY09 estimated core earnings, RIL is a worthy investment.
State Bank of India [Get Quote]
SBI's move to merge State Bank of [Get Quote] Saurashtra with itself has the potential to trigger the re-rating of public sector banking stocks by pushing the much needed consolidation process.
To further expedite consolidation, the boards of SBI and its other six associate banks are meeting in January to consider merger. Should that happen, SBI's standalone balance sheet size will grow 1.5 times to Rs 8.20 lakh crore (Rs 8.20 trillion), almost double the size of ICICI Bank's.
Also, its branch network will jump 50 per cent to 14,400 branches. But, the improvement in valuations (re-rating) should get a boost when the merged entity is able to rationalise costs and extract benefits from the merger.
SBI will raise Rs 17,000 crore (Rs 170 billion) through a rights issue that should provide fuel for future growth. In a competitive Indian banking business, it is important for banks to achieve size and scale to be globally competitive.
And for investors, it is more important to find such banks at reasonable valuations. SBI meets both these criteria. SBI's stock trades at 2.2 times and 2 times its estimated consolidated book value for FY08 and FY09, respectively.
Further, SBI has investments in mutual fund and life insurance subsidiaries, which make valuations more compelling.