BSE : Declared dividend of Rs 4 a share (or 400%).

A higher income from investments helped the Bombay Stock Exchange (BSE) post a rise in net profit, even though the Asia’s oldest bourse recorded a flat growth in revenue due to lower transaction charges and a drop in income from penalties, fees and other charges in the year ended March 31, 2009.

The BSE board has declared a dividend of Rs 4 a share (or 400%) on the post-bonus equity of Rs 10.2 crore, resulting in a dividend outgo of Rs 42 crore. The dividend will go to a string of local and foreign shareholders, with the top 20 receiving 48% of the payout.

Deutsche Boerse, Singapore Exchange, SBI, LIC, Dubai Financial Group, Atticus Mauritius, Acacia Banyan Partners, Caldwell Asset Management and Bajaj Holdings are among the top BSE shareholders. The exchange posted a total income of Rs 421 crore against Rs 420 crore in the previous year.

Brokers attributed the flat growth to a sharp fall in cash and derivatives turnover which affected the exchange’s income from securities trading.

Despite a fall in turnover-linked income, the BSE saw its net profit rise 18% to Rs 212 crore, thanks to a rise in income from investment and deposits — from Rs 175 crore in 2007-08 to Rs 222 crore last fiscal.

Last year’s stock market turmoil caused a significant fall in trading volumes on bourses, with the BSE recording a 30% decline in turnover to Rs 11 lakh crore in 2008-09 compared with Rs 15.8 lakh crore in 2007-08.

The BSE recorded a 30% drop in transaction charges to Rs 77 crore, while income from other charges amounted to Rs 40 crore compared with Rs 48 crore in the previous year. A higher net profit has boosted BSE’s net worth from Rs 1,559 crore to Rs 1,728 crore.

-- an article by ET dt:14th July 2009

(Also read a post on BSE dated: Nov 13 2008 & Nov 20 2008)

INDIA GDP GROWTH : A PREDICTION

Predictions about India GDP growth
Allianz, a major financial and insurance services provider has estimated that in 2009-10 fiscal gross domestic product of India would be growing at 6.5 percent. It says that even though economic recession has hit almost every financial market in world, emerging Asian economies like India would be growing, all be it at a slow pace.

Allianz says that growth of gross domestic product of India would be decidedly slow at first two quarters of financial year 2009-10 but would pick up in last two quarters. They have expressed that since there are sufficient and efficient capital and foreign exchange controls in place in India, it would be able to tide past difficulties like capital movements that can be extremely volatile.

Economic surveys conducted in India during February of 2008 fiscal had reported that gross domestic product of India would be growing at a rate of 8.7 percent. This was supposed to follow up impressive statistics of 2006-07 fiscal, when rate of growth of gross domestic product was 8.7 percent.

Much of this optimism was based on increase of rates of savings and investments in domestic financial circuit. It was predicted that aggregate gross domestic product of India in 2007-08 financial year would be approximately $10,00,82,03,62,968.85. It was expected that this growth would enable Indian economy to grow to one trillion dollar mark in near future.

In terms of nominal exchange rate, gross domestic product of India was supposed to be $1.16 trillion dollars in 2007-08 financial year. Per capita income in terms of nominal exchange rate was around $1,021.

Actual situation of India GDP growth
Actual picture is pretty different from what has been predicted. It is being assumed that in present scenario of economic recession, growth rate of India GDP would slip, if India's national government does not introduce economic stimulus packages.

NSE : Market methodology changes to FREE FLOAT METHOD

The National Stock Exchange’s index NIFTY will shift to free float capitalisation from market capitalization method from June 26th 2009. Under this method, the weightage of each of the 50 component stocks in the index will be proportionate to the amount of free float.

Free float is the number of shares of company in public hands- stocks that is “floating free”, that which is not with promoters.

Share holdings held by investors that would not, in the normal course come into the open market for trading are treated as 'Controlling/ Strategic Holdings' and hence not included in free-float.

In specific, the following categories of holding are generally excluded from the definition of Free-float:

Holdings by founders/directors/ acquirers which has control element

Holdings by persons/ bodies with "Controlling Interest"

Government holding as promoter/acquirer

Holdings through the FDI Route

Strategic stakes by private corporate bodies/ individuals

Equity held by associate/group companies (cross-holdings)

Equity held by Employee Welfare Trusts

Locked-in shares and shares which would not be sold in the open market in normal course.

The remaining shareholders would fall under the Free-float category.

Free-float factor is a multiple with which the total market capitalization of a company is adjusted to arrive at the Free-float market capitalization. Once the Free-float of a company is determined, it is rounded-off to the higher multiple of 5 and each company is categorized into one of the 20 bands given below. A Free-float factor of say 0.55 means that only 55% of the market capitalization of the company will be considered for index calculation.

Globally, most indices are moving to this system as it is perceived to be more representative of market action. Reliance Industries retained its position as the top weighted stock due to its high free float component (50%), ONGC 3.5% from 8%, NTPC to 1.9% from 6%, Infosys 7% from 3.77%, ICICI Bank 6.45% from 2.96%, Larsen & Toubro 6.41% from 3.27%, SAIL 0.77% from 2.34%. All the fund managers tracking the NIFTY made changes accordingly.

RIL's WEIGHT A HEADHEACHE TO FUND MANAGERS

India Index Services and Products (IISL), the NSE subsidiary which manages benchmark indices such as NIFTY came to know about difficulties to manage RIL weightage in index by fund managers. RIL is the largest market capitalization and with the highest weightage in Sensex & Nifty at 17.7% & 13.3% respectively.

The stock has being biggest contributor to the recent rally accounting to 861 pnts of the 3859 point Sensex up move. Fund managers both local & foreign, are taking a big hit in their portfolios for being significantly underweight on the counter, most of them are forced underweight by 500 bps. As per the SEBI rules local fund managers cannot bet more than 10% of their portfolio on a single stock. Foreign fund managers are bounded by mandates from their investor to stick to similar limits. Thus an average fund manager has lost nearly 2% returns on the underweight on just this stock. RIL’s size has begun to create problems for fund managers and is bound to increase. NSE is making the Nifty a free-float index which will add to its weight and also with completion of RPL merger will add up to 2% weightage. And it is possible that this bluechip giant may end up with a weight of 20%-plus on indices if it uses up its surplus cash for acquisitions. And suppose it does, India will have KOREA like situation where SAMSUNG INDUSTRIES accounts for a fifth or 20%-plus of the market. The most impact is that fund manager’s performance is benchmarked with Nifty and they cannot give more than 9.9% weightage to any stock, they have the risk of underperformance, and also none of the fund managers can take sells call, even if they have negative view on the stock because they are already underweight. A free market call on Reliance Industries is not possible and thus gives RIL a premium valuation.

In the recent rally, the stock outperformed the Sensex by huge margin. While the Sensex rose 47% between March 09 and May 13, the bluechip rose to 68%. This in turn, has taken its weightage up substantially on Nifty from 11% to 13.3% & on Sensex from 15.5% to 17.7%. In such situation, it depends on which way the index moves. If index is going up, then there is disadvantage. But when it fall the fund managers outperform because of under weight.

The only option is either to change the rules of 10% or follow MSCI and apply the 10/40 rule. This 10/40 methodology was introduced by MSCI indices in 2002. Accordingly the maximum weight of securities of a single issuer cannot exceed 10% of market value of the index, and the sum of the weights of all issuers representing more than 5% of the market value of the index cannot collectively exceed 40%.

Suzlon ups stake in REpower (see co. details) to 90.72 pc

Wind turbine maker Suzlon Energy said its stake in Germany based REpower Systems AG has increased to 90.72 per cent, with the acquisition of Martifer Group's 14.4 per cent stake in the company.

Suzlon has completed "the acquisition of Martifer Group's stake in REpower Systems, with a final payment of 87.6 million euro (Rs 574.48 crore)," Suzlon Energy said in a filing to the Bombay Stock Exchange.

With the conclusion of this transaction, Suzlon now holds approximately 90.72 per cent of shares and voting rights in REpower Systems, it further said.

Prior to this transaction, Portugal-based Martifer had held about 14.4 per cent stake in the Hamburg-based REpower Systems and Suzlon acquired it in a two part payment plan.

The purchase of Martifer's stake in REpower by Suzlon was agreed in February 2007 at the time of the joint bid by Suzlon and Martifer.

The Pune-headquartered firm had paid 65 million euro as the first tranche in December last year, hiking its stake in REpower to 73.1 per cent.

This is final tranche of the 270 million euro that Suzlon had agreed to pay to buy Martifer's 22.4 per cent stake in REpower Systems.

Today, shares of Suzlon Energy closed at Rs 125.70, up 2.95 per cent on the BSE ,and on NSE Rs.125.45, up 3 per cent with the volume of 79,853,861 shares traded on NSE and 24,097,763 shares on BSE.

SUZLONs London GDR scrip code(bloomberg)- SUEL:LI; Luxemburge GDR scrip code(bloomberg)- SUEL:LX.

Today REpower Systems AG is trading at 110.65 euros a share with a-

Market Cap: 1,015.439 million Euros.
Share capital: 9,177,039
Earnings: 5.750
Price/Earnings: 19.412.
Last Dividend: 0.571 Regular Cash.
52-Wk High-(09/01/08): 240.370.
52-Wk Low-(10/27/08): 50.520.
Initial listing: March 26, 2002

Global leader VESTAS has 203,704,103 shares & Share size in DKK 1.00. Currently trading at 391.5 DKK.
Market Cap.: 79,750 MDKK
Market Cap.: 10,711 MEUR
1.00 DANISH KRONE (DKK) = 8.9584 INDIAN RUPEE (INR)

Sensex from 1k to 21k : A HISTORY

1000, July 25, 1990

On July 25, 1990, the Sensex touched the magical four-digit figure for the first time and closed at 1,001 in the wake of a good monsoon and excellent corporate results.

2000, January 15, 1992

On January 15, 1992, the Sensex crossed the 2,000-mark and closed at 2,020 followed by the liberal economic policy initiatives undertaken by the then finance minister and current Prime Minister Dr Manmohan Singh.

3000, February 29, 1992

On February 29, 1992, the Sensex surged past the 3000 mark in the wake of the market-friendly Budget announced by the then Finance Minister, Dr Manmohan Singh.

4000, March 30, 1992

On March 30, 1992, the Sensex crossed the 4,000-mark and closed at 4,091 on the expectations of a liberal export-import policy. It was then that the Harshad Mehta scam hit the markets and Sensex witnessed unabated selling.

5000, October 8, 1999

On October 8, 1999, the Sensex crossed the 5,000-mark as the BJP-led coalition won the majority in the 13th Lok Sabha election.

6000, February 11, 2000

On February 11, 2000, the infotech boom helped the Sensex to cross the 6,000-mark and hit and all time high of 6,006.

7000, June 20, 2005

On June 20, 2005, the news of the settlement between the Ambani brothers boosted investor sentiments and the scrips of RIL, Reliance Energy, Reliance Capitaland IPCL made huge gains. This helped the Sensex crossed 7,000 points for the first time.

8000, September 8, 2005

On September 8, 2005, the Bombay Stock Exchange's benchmark 30-share index -- the Sensex -- crossed the 8000 level following brisk buying by foreign and domestic funds in early trading.

9000, November 28, 2005

The Sensex on November 28, 2005 crossed the magical figure of 9000 to touch 9000.32 points during mid-session at the Bombay Stock Exchange on the back of frantic buying spree by foreign institutional investors and well supported by local operators as well as retail investors.

10,000, February 6, 2006

The Sensex on February 6, 2006 touched 10,003 points during mid-session. The Sensex finally closed above the 10K-mark on February 7, 2006.

11,000, March 21, 2006

The Sensex on March 21, 2006 crossed the magical figure of 11,000 and touched a life-time peak of 11,001 points during mid-session at the Bombay Stock Exchange for the first time. However, it was on March 27, 2006 that the Sensex first closed at over 11,000 points.

12,000, April 20, 2006

The Sensex on April 20, 2006 crossed the 12,000-mark and closed at a peak of 12,040 points for the first time.

13,000, October 30, 2006

The Sensex on October 30, 2006 crossed the magical figure of 13,000 and closed at 13,024.26 points, up 117.45 points or 0.9%. It took 135 days for the Sensex to move from 12,000 to 13,000 and 123 days to move from 12,500 to 13,000.

14,000, December 5, 2006

The Sensex on December 5, 2006 crossed the 14,000-mark to touch 14,028 points. It took 36 days for the Sensex to move from 13,000 to the 14,000 mark.

15,000, July 6, 2007

The Sensex on July 6, 2007 crossed the magical figure of 15,000 to touch 15,005 points in afternoon trade. It took seven months for the Sensex to move from 14,000 to 15,000 points.

16,000, September 19, 2007

The Sensex scaled yet another milestone during early morning trade on September 19, 2007. Within minutes after trading began, the Sensex crossed 16,000, rising by 450 points from the previous close. The 30-share Bombay Stock Exchange's sensitive index took 53 days to reach 16,000 from 15,000. Nifty also touched a new high at 4659, up 113 points.The Sensex finally ended with its biggest-ever single day gain of 654 points at 16,323. The NSE Nifty gained 186 points to close at 4,732.

17,000, September 26, 2007

The Sensex scaled yet another height during early morning trade on September 26, 2007. Within minutes after trading began, the Sensex crossed the 17,000-mark . Some profit taking towards the end, saw the index slip into red to 16,887 - down 187 points from the day's high. The Sensex ended with a gain of 22 points at 16,921.

18,000, October 09, 2007

The BSE Sensex crossed the 18,000-mark on October 09, 2007. It took just 8 days to cross 18,000 points from the 17,000 mark. The index zoomed to a new all-time intra-day high of 18,327. It finally gained 789 points to close at an all-time high of 18,280. The market set several new records including the biggest single day gain of 789 points at close, as well as the largest intra-day gains of 993 points in absolute term backed by frenzied buying after the news of the UPA and Left meeting on October 22 put an end to the worries of an impending election.

19,000, October 15, 2007

The Sensex crossed the 19,000-mark backed by revival of funds-based buying in blue chip stocks in metal, capital goods and refinery sectors. The index gained the last 1,000 points in just four trading days. The index touched a fresh all-time intra-day high of 19,096, and finally ended with a smart gain of 640 points at 19,059.The Nifty gained 242 points to close at 5,670.

20,000, October 29, 2007

The Sensex crossed the 20,000 mark in just 14 days all because of huge FII's money inflows into large cap stocks making almost all of the to touch their highs. Index touched intraday high of 20,024 on the basis of DII's & Mutual Funds buying.

Huge buying in midcaps, small caps stocks like RNRL, RPL, ISPAT IND, IFCI etc

21,000, January 9, 2008

Sensex was in the range of 19,200 to 20,000 for 2 months and on 9th January 2008 the index touched to 21,000. This was on an excitment of Reliance Power IPO at Rs.440/sh.

Large caps such as Reliance Ind went to Rs.3050.50, Rel.Cap to Rs.2,695.50, Rel.Infra to Rs.2,654.35, Grasim Ind to Rs.3,400, Aditya Birla Nuvo to Rs.2,456.90.

The very next day Sensex touch to its all time high of 21,206.

On October 27, 2008 Sensex touched its lows of 7697.39 down 1003.68 points & Nifty at 2252.75 in intraday giving a closing of 8,509.56 down nearly 64% from its high due to global recession and selling pressures & 

MAY 18,2009 A two thousand point rally on the Sensex within sixty seconds was the day on which the world saw the largest intra day rise on any index anywhere in the world. The first time was after the Sensex hit the upper circuit, the second time it hit the upper circuit after two hours the roof almost came off!

SEBI had no choice but to suspend trading for the day. Investors were jubilant all day around the BSE.

18th May 2009 WILL BE AN GOLDEN MONDAY FOR THE INDIAN STOCK MARKET, THE FIRST EVER UPPER CIRCUIT

The 30-share Sensex closed 2,110.79 points or 17.34% higher at 14,284.21 and the Nifty surged 651.50 points or 17.74%, to settle at 4,323.15. It hit all 3 circuit limits in today's trade. The trading on both the BSE and the NSE was halted today as markets hit a 20% upper circuit after re-opening in trade. At the beginning of today's trade, 9:55 am, the markets were locked at 15% upper circuit and exchanges halted the trade for two hours. Total trade turnover Cash+ F&O was Rs. 3103 cr.

The Sensex has hit circuits on four occassions — including today — in the past five years.

However, on all three instances Sensex was locked at 10% lower circuit.

Jan 22, 2008: This was the latest instance, when the market hit 10% lower circuit. The reason for the down circut was subprime loss & dismal global markets cues.

Oct 17, 2007:The BSE Sensex crashed by 1743 points on 17 October 2007. The crash was led due to concerns of the Securities and Exchange Board of India (SEBI) issuing new guideline for P-Notes

May 17, 2004:The markets crashed 5 years back when the then incumbent National Democratic Alliance (NDA) alliance lost power during the general elections in 2004.

The UPA's (United Progressive Alliance) clean sweep win has cheered the markets and helped the benchmark indices to hit 20% upper circuit today.

The Sensex saw the 14,000 mark and the Nifty surpassed the 4,300 level for the first time since September 22, 2008.The Nifty May futures ended with 46.85 points premium.

STOCK EXCHANGE & AMBANI's

In 1982, Reliance Industries came up against a rights issue regarding partly convertible debentures. It was rumored that the company was making all efforts to ensure that their stock prices did not slide an inch. Sensing an opportunity, a bear cartel which was a group of stock brokers from Calcutta started to short sell Reliance shares, its being said that nearly 11 lakhs shares of Reliance were shorted on March 18, 1982 and stock went down from Rs.131 to Rs.121 in minutes. To counter this, a group of stock brokers till recently referred to as "Friends of Reliance" started to buy the short sold shares of Reliance Industries on the Bombay Stock Exchange. Ambani through his known brokers indirectly bought more than 8,00,000 shares from that 11,00,000 shares sold by bear cartel. 

The Bear Cartel was acting on the belief that the Bulls would be short of cash to complete the transactions and would be ready for settlement under the "Badla" trading system operative in the Bombay Stock Exchange. The bulls kept on buying and a price of Reliance went to Rs. 152 per share & was maintained till the day of settlement. On April 30, 1982, the day of settlement, the Bear Cartel was taken aback when the Bulls demanded a physical delivery of shares only. To complete the transaction, the much needed cash was provided to the stock brokers who had bought shares of Reliance, by none other than Dhirubhai Ambani. In the case of non-settlement, the Bulls demanded an "Undha Badla" (a penalty sum) of Rs. 25 - Rs. 35 per share. With this, the demand increased and the shares of Reliance shot above Rs. 180 in minutes. The settlement caused an enormous uproar in the market and Dhirubhai Ambani was the unquestioned king of the stock markets. He proved to his detractors just how dangerous it was to play with Reliance.

To find a solution to this situation, the Bombay Stock Exchange was closed for three business days. Authorities from the Bombay Stock Exchange (BSE) intervened in the matter and brought down the "Undha Badla" rate to Rs. 2.00/share with a stipulation that the Bear Cartel had to deliver the shares within the next few days. The Bear Cartel bought shares of Reliance from the market at higher price levels and it was also learnt that Dhirubhai Ambani himself supplied those shares to the Bear Cartel and earned a healthy profit out of "The Bear Cartel's adventure". After this incident, many questions were raised by his detractors and the press. Not many people were able to understand as to how a yarn trader till a few years ago was able to get in such a huge amount of cash flow during a crisis period. The answer to this was provided by the then finance minister, Pranab Mukherjee in the parliament. He informed the house that a Non-Resident Indian had invested up to Rs. 22 Crore in Reliance during 1982-83. These investments were routed through many companies like Crocodile, Lota and Fiasco. These companies were primarily registered in Isle of Man. The interesting factor was that all the promoters or owners of these companies had a common surname Shah. An investigation by the Reserve Bank of India in the incident did not find any unethical or illegal acts or transactions committed by Reliance or its promoters.

A few points discussed on Limited Liability Partnership

1. Liability of partners can go up to the extent of Capital contributed by him.
2. There are few legal/procedural requirements in LLP in comparison of The Companies Act.
3. Board meetings are not required in case of LLPs.
4. Under LLP, the profit distribution is flexible, i.e. A partner can be given any %age of profit irrespective of the capital contributed by him.
5. LLP CAN NOT be formed for a charitable purpose.
6. Any body corporate or Foreign company can be a partner in LLP.
7. An LLP/Foreign LLP can also be a partner in LLP.
8. A partnership firm CAN NOT be a partner in LLP.
9. In LLP, individual partners are not mandatory. Any two companies or two LLPs can also form an LLP.
10. At least 2 designated partners require DPIN. Its not mandatory for all partners to obtain DPIN, like in case of a company where it is mandatory for all directors to obtain DPIN.
11. DPIN is required for the designated partner even if he is having a DIN also.
12. Minimum 2 persons are required to form an LLP, but there is no restriction on the maximum number of persons.
13. In case, an individual and a company are the partners in LLP, then it shall be required for the company to nominate a designated partner other then the individual.
14. One designated partner is required to be Resident of India, and the conditions given in LLP Act for residential status have to be checked on the DATE OF APPOINTMENT only. Later on if these conditions are not fulfilled, even then that person can remain as designated partner.
15. Vacancy of any designated partner has to be filled within 30 days. If this vacancy is not filled in 30 days, then all the partners of LLP shall be treated as designated partners.
16. Incorporation document – Declaration in Incorporation document has to be given by an advocate/CA/CS/ICWA AND ONE SUBSCRIBER ALSO.
17. LLP has to be incorporated by the Registrar within 14 days, provided the documents are complete. Period can not be extended.
18. In case of a LLP, if any application of change in registered office is filed with the department, shall take effect from the DATE OF FILING OF FORM only. Means, it can not be changed with retrospective effect.
19. It has to be noticed that all invoices, documents etc of LLP has to bear the name of LLP, Address, and REGISTRATION NUMBER of LLP.
20. Unlike in partnership firms, the partner in LLP shall be treated as agent of LLP only, and not of other partners.
21. Accounts of LLP can be made either on CASH BASIS OR MERCANTILE BASIS. Hybrid system is not allowed.
22. Statement of Account and Solvency has to be filed within 6 months from the end of the financial year, whereas Annual return has to be filed within 60 days only.
23. Audit of LLP is mandatory by virtue of the LLP Act itself.
24. Loan by the partner is allowed in LLP.
25. Partner of LLP can do business with the LLP itself and can earn profits from LLP.
26. ALL OFFENCES UNDER LLP ACT SHALL BE TREATED AS CRIMINAL OFFENCES UNDER INDIAN PENAL CODE.

For the first time since October 2008 the benchmark Sensex of the Bombay Stock Exchange has closed beyond the 12,000. This achievement is not a sign of the fact that the country has came out of the worst economic storm in fifty years but its an indication that we’re at least getting there. Dalal Street can finally afford to give out a smile; restless traders can afford to wipe the sweat of their brow because the buyers are finally starting to return.
By no means should the last statement be interpreted as something which would lead someone to believe that a new bull market has been born .No, India is yet to reach that cornerstone just like the rest of the world.
By all indications it has become clearer that if a new global bull market has to start it has to first lay root in the BRIC countries.
The hectic activity on the Indian stock markets has resembled the highs and lows of a heart monitor. Many a time sellers have resorted to profit booking which has driven down the Sensex,a few months ago this was the predominant trend.
What we are now seeing is that when the sellers are making their move so are the buyers. The latter were reluctant a few months ago because everytime they tried to rally they were beaten down by the bears who were intent on profit booking alone.
Now that the impact of the recession has reduced just a little bit because governments have been pro active in making funding available, things are beginning to change.
The buyers are beginning to return and are slowly beginning to accept market risk. They’re willing to shell out their money towards investments. If over a period of time this trend continues then we can say that a bull market has indeed been born.
The Bombay Stock Exchange and the National Stock Exchange have both seen the return of FII’s.Moreover,the most encouraging fact about the recent spike in the Sensex has been due to the participation of the big Mutual Fund houses.
The very same institutions that pressed the ‘sell’ trigger a few months ago leading to a massive drop in the Sensex and the nifty.
What could spoil the party is the perception that this is only a ‘fake rally’. A phrase often used by bearish traders; it indicates that the situation is just as worse as before or getting even worse and this rally is just a sentimental one or a ‘rebound’. If indeed it’s true then it would be a sad event. The chances of this spike being a ‘fake rally’ are low but its possibility cannot be ruled out entirely.
It is now up to companies themselves to create an easy demand situation in the market. Now that the markets have cooled off they can concentrate on making sure that they break the last line of defense of a recessionary economy by making it easier for the consumer to get back to spending his money.

IPL LOSER DECCAN CHARGER ACTUALLY TURNED PROFITABLE LAST YEAR

The company has spun an EPS of Rs 30.9 for the period from 10 April 2008 to 22 January 2009.
Last year's Indian Premier League underdog was not exactly an underdog as far as the financials are concerned. Deccan Chargers Sporting Ventures, the firm behind the Deccan Chargers cricket team of Hyderabad at IPL, has turned in profits in the first year of formation. The firm, which is a subsidiary of publicly listed media firm Deccan Chronicle Holdings, has been recently put up for sale. KPMG is advising the parent on the sale. Around 20% stake in Deccan Chargers is held by Group M, the media arm of the ad conglomerate WPP.
According to a financial report( of VCCircle) of Deccan Chargers, , the cricketing company has spun an earnings per share of Rs 30.9 on shares having par value of Rs 10 each for the period from 10 April 2008 to 22 January 2009. That is not a bad thing since the team ended up at the bottom of the table in the debut edition of domestic 20:20 cricket tournament last year.
According to the financial report, the firm earned a total income of Rs 56.6 crore for the reporting period of which Rs 24 crore came as 'income from franchisee rights' while sponsorship fees brought in Rs 15.8 crore. Income from ads and ticket sales brought in another Rs 16.4 crore and there was other income worth Rs 40 lakh.
As against this, players' cost was pegged at Rs 22.7 crore. Operating and other expenses totalled Rs 13.39 crore and depreciation was at Rs 17.12 crore. The firm clocked PBT of Rs 3.15 crore and carried forward Rs 2.05 crore as PAT to the balance sheet.
Details for other teams of IPL is not in the public domain.
However, what is to be looked at is how the firm has funded the fee the firm would have paid to BCCI for the franchisee rights. The books show unsecured loans worth Rs 385.23 crore as amount payable to BCCI towards franchisee rights acquired last year. The franchisee rights were acquired by Deccan Chargers Sporting Ventures for Rs 428.04 crore.
DECCAN CHARGERS P&L:Income from Franchisee rights- Rs.24 cr.
Sponsership Fees- Rs.15.8 cr.
Income from ads & ticket sales- Rs.16.4 cr.
Other Incomes- Rs.0.4 cr.
TOTAL INCOME- Rs.56.6 cr.
Players Cost- Rs.22.7 cr.
Operating & Other Expenses- Rs.13.3 cr.
Depreciation- Rs.17.1 cr.
Preliminary Expenses w/off - Rs.0.2 cr.
TOTAL EXPENDITURE- Rs.53.4 cr.
PROFIT BEFORE TAX- Rs.3.1 cr.
PROVISION FOR TAX- Rs.1.1 cr.
PROFIT AFTER TAX- Rs.2 cr.
EARNING PER SHARE- Rs.30.9

FIXED INCOME INVESTING - BY BENJAMIN GRAHAM

I came across an interesting article on "fixed income value investing". A larger part of this text has been taken from Benjamin Graham's popular books - Security Analysis and The Intelligent Investor.

Two paragraphs I particularly liked :

1. "It's our argument that a sufficiently low price can turn a security of temperance quality into a sound investment opportunity - provided that the buyer is informed and experienced, and that he practices adequate diversification."

2. On the topic of diversification, Graham makes an interesting connection between investing and insurance. He notes that any individual security purchase may not prove profitable, even if the margin of safety is present at the time of purchase.

Graham says, "The margin guarantees only, that he has a better chance for profit than for loss - and not that loss is impossible. But as the number of such commitments is increased the more certain does it become that the aggregate of the profits will exceed the aggregate of the losses. That is the simple basis of the insurance under-writing business."

FINANCIALS OF IPL : A PERSPECTIVE

Alchemy released a report on the economics involved for teams participating in the IPL. I have heard a lot about franchisees overpaying for teams, players, rights ... and blaming BCCI for being non-transparent. Incidentally BCCI has itself called on franchisees to be patient and enjoy the fruits of their investment (read : ROI) after 3-4 years. Alchemy's report paints an optimist picture of the T20 cricket league and explains how much BCCI, the franchisees and supporting institutions (like Sony for media rights) tend to gain from the venture.Surprisingly, the report claims that an individual franchisee will be profitable from year 1 onwards , scoring an EBIT of Rs. 4 crores. A bulk of the revenue (Rs. 90.2 crores) will come from global media rights (Rs. 25 crores) a mere ten second commercial on Sony sells for at least $6000, supported by ticket sales (15 crs), lead sponsor (15 crs) and in-stadia advertising (10 crs). From the cost angle, the franchisee cost takes the wind out of the financials with a Rs. 40 crs charge followed by player acquisition cost (Rs. 24 crs). The assumptions have not factored a number of things like cost of capital, or financing of the acquisition cost, or trading of players etc. But the investment for Sony seems to have paid off, for this season alone they’re expected to make about fifty million dollars. These things happen a lot in soccer leagues around the world (Real Madrid finds it hard to survive until they have purchased the most expensive player in the world; am not sure where Jose Mourinho is headed but expect some big signings there too)The report has drawn a number of parallels between the English Premier League (with two clubs - Tottenham Hotspurs and Arsenal) and the IPL. Not to mention, a number of these EPL teams are also listed on the stock exchange. Manchester United was listed in the London Stock Exchange (1992) at GBP 47 million. In 2005, American businessman Malcolm Glazer acquired a controlling interest in the club in a takeover valuing the club at approximately £800 million (approx. $1.5 billion) .Perhaps, IPL is the alchemist's secret portion afterall !

VOTER ID CARD REGISTRATION ONLINE IN INDIA: EASY & FREE

In India, Voter ID card is important Identity document for lots of work. You can get your Voter ID card easily by filling online application form.

Here is the website for online registration for voter ID card- Jaagore.com (on clicking the link you will visit at Form filling page).

After submitting the form you will get pdf copy of your filled application, that you need to take printout. After taking print out, you need to submit this printed copy to your nearest local Electoral Registration Officer (ERO) with xerox copy of other ID card and proof of residence.Find your nearest ERO office here.

The address proof document is required for the BLO (Booth Level Officer) to come and verify your residence status. Therefore, it is not essential for the address proof document to have your name, but needs to have only the address of the place you are staying at.

You can use address proof document on the name of your parents, relatives, friends etc. with whom you are staying. During address verification, the person whose name appears on the address proof document needs to confirm that you are staying at the same address.

Full answer of all FAQs about voting is here. After this, your job is over, Voter ID card will be ready after few days of submission of application.

Currently there is no requirement for Voter ID card for voting purpose (for 2009 Election), only your name should be there on voter list. Some state governments like Andhra Pradesh has provided the list of name of people on voter list online here.

If we are seeing disinflation rather than deflation, what does that mean?

Disinflation is a drop in the rate at which prices rise, and does not actually mean a price fall -- at least, on a sustained basis across-the-board. For example, the WPI rate was 0.44 per cent in the week to March 7, which means prices actually rose by a tiny percentage. We call that disinflation because the WPI has been falling almost continuously since August, 2008, when the rate nearly touched 13 per cent.

In the coming weeks, if the WPI goes into negative territory, and prices actually start falling, it would still be called disinflation -- as long as the fall does not continue indefinitely. On the other hand, the US, Western Europe and Japan are closer to deflation, as their inflation rates are down and economies are actually contracting .It is to counter the threat of deflation that their governments are shovelling trillions of dollars into the credit markets, into failing banks and industries like autos.

So what will tell us if we are really into a deflationary scenario? Experts says the first signal would be a contraction in GDP. "A contraction in output (GDP) is when there will be a worry on deflation. This is happening in the US, where prices are declining and output is contracting. GDP is not contracting in India; there is only a slower rate of growth."

This, however, does not mean we have no cause for worry, or that deflation will never happen. Experts belive "More than cutting rates, ensuring the flow of credit is important. If credit does not flow then any amount of interest rate cuts will not help. We have room for cuts, but cuts should be only a part of the plan. The main objective should be credit flow, which is not happening now."

It's disinflation, not deflation, we're facing now

Today inflation number came at -- a drop to 0.27 per cent in the wholesale prices index (WPI) -- brought more worries than cheers. That's because deflation -- a situation where prices, jobs and incomes keep falling on a sustained basis, and the economy keeps contracting -- has become a new cause for worry. Is India on the way of a debilitating deflation?

INDIA is not going through deflation, just disinflation. What we have now is inflation coming down. It is coming off a high commodity price base. Deflation is when prices fall very rapidly and we haven't seen that happening. In a deflation, people stop spending because they believe that prices will fall further. That is not the situation we are in.

Though WPI for all commodities is up 0.1% at 227 (WoW) in the week ended March 14, from 226.7 in the , CPI is still hovers around 9-10 per cent levels from the double digits of 10.75 per cent. The world over, inflation is measured in CPI, not WPI. The fact that CPI is up means that the price level is still very high. The prices of food, primary articles and housing have still not fallen much. So rather than talking about deflation, policy measures should concentrate on how to bring the CPI down.

THE RELIANCE RPL MERGER IN RATIO OF 16:1

The big piece of news from India’s corporate world this past weekend has been the merger of two companies under the Mukesh Ambani led Reliance Group. The news broke & developed over and was a done deal by the time the weekend was over. In every sense the affair has been handled in true Reliance style – quickly, efficiently and without making too much of a fuss. The integration of Reliance Petroleum Limited into Reliance Industries is being handled with a lot of care. Considering the ease with which Reliance has started to pull this off has been commendable.

The company has been careful enough to make sure that they do not get into the bad books of their shareholders.Tackling integration requires managing the priorities of both the companies being integrated. In this case the interests of the shareholders of both Reliance Industries and Reliance Petroleum have been safeguarded.

Mukesh Ambani in a statement was quick to point out that the deal would create “shareholder value”.

Shareholders themselves are pretty satisfied with the merger of Reliance Industries and Reliance Petroleum. They get to be part of a bigger entity with a much more simplified company structure.

Reliance Petroleum being the refining arm of Reliance Industries no longer needs to be kept separate from the company’s core business of oil and gas exploration and marketing.

By integrating the refinery business into the main fold they will be able to function as before with the petroleum wing being an internal subsidiary.

All that Reliance had to do was to simply re-purchase a 5% stake in Reliance Petroleum which until now belonged to Chevron. This being successful allows the company to increase its stake to seventy five percent in RPL thus making the merger a matter of detail.

RIL has agreed upon a price of Rs.60/share to buy Chevron’s stake in RPL. By no means has the company overpaid. In fact they’ve paid the IPO launch price for the stake. Shareholders can therefore be satisfied that the company has not overspent.

Reliance has also been fair with the share distribution ratio for RPL shareholders.The company has decided to fix the ratio of RPL to RIL shares at 16:1.

The ratio is a fair reflection of the current market value of both the companies.Therefore the shareholders have not been crossed in this matter as well.Small investors and fund managers alike agree on the ratio being a good deal thus the merger should not face any serious problems in the future.

RPL has just recently started commercial production. From a financial point of view it does depend on its parent company RIL for funds and easy credit access. The channel for credit being much simpler now that both companies come under the same name is a good move.

The RIL-RPL combine also catapults RIL higher into the list of the world’s biggest refining companies.Ironically RIL now replaces and gets ahead of Chevron which decided to exit its stake in RPL

India`s gold futures climb to new record

A weaker rupee makes the imported yellow metal expensive. The Indian rupee fell to its lowest in more than two weeks on Tuesday

Gold futures in India were trading above the psychological mark of Rs15,000 on strong global cues and support from a weak rupee. Internationally, gold prices continued their recent bull run as investors scramble for safe haven assets amid a worsening global economic outlook.

A weaker rupee makes the imported yellow metal expensive. The Indian rupee fell to its lowest in more than two weeks on Tuesday on expectations that FIIs would dump more local shares, while a stronger dollar overseas also dampened sentiment.

April-delivery gold gained as much as 2.9% to Rs15,131 per 10 grams on the Multi Commodity Exchange of India Ltd. (MCX), the highest since the bourse began trading the metal in November 2003. The contract had gained more than 3% last week.

Record high gold prices are serving as a major deterrent for gold buyers in India, notwithstanding the ongoing wedding season. Customers are postponing gold purchases due to record high prices and weak economic climate.

India is the world’s biggest consumer of gold.

India's import of gold this year may more than halve to 250 tons from 720 tons in 2008. India's gold purchases have declined for three consecutive months with imports in January slumping to about 2 tons from 24 tons in the year-earlier month, according to the Bombay Bullion Association.

Gold prices are up 30% in the past three months.

Funds are pouring huge amounts of money into gold and buying the metal at every support level. Gold in the SPDR Gold Trust, the largest exchange-traded fund backed by bullion, climbed to a record 985.86 metric tons as of Feb. 13, gaining 14% last week alone.

Meanwhile, gold for immediate delivery advanced 1.8% to US$959.05 an ounce, the highest level since July 22. It was trading at US$958.74 at 2:05 p.m. Singapore time.

Gold for April delivery in New York advanced to US$961.10 an ounce, the highest level for the most active contract since July.

Be(ar) Aware : From The Street

One of the biggest fears for an investor in a bear market is the fact that he is in a sense trapped.The value of his investments is very very low. At this point he has to make a choice – either stay the course till his investment posts a return giving him a PROFIT or pull out immediately thus accepting a certain degree of LOSS .

If he decides to stay the course then he has to contend with the bear market.A market that is ‘played’ by people who try to make money even in such a climate. Sellers not buyers call the shots and at such a time many traders get together to form infamous groups called ‘BEAR CARTELS’. The Indian stock market is not immune from attacks by such cartels. Many companies in the current marketplace have fallen victim to such cartels. Any of these companies could have been ones that you invested in and many companies you are investing in right now could fall prey to these cartels in future.

The biggest of companies are susceptible to bear maulings. When a market turns from being bullish to being bearish then bear cartels start operating. A few traders get together and decide to co-ordinate their efforts so that they’re able to drastically bring down the price of a particular stock.They start selling or shorting mass quantities of a company’s stock thus driving the price down by significant numbers.

An operating bear cartel is very much like a mafia. They target a stock that they believe can be damaged and put out a ‘hit’ on it like a mafia. Ultimately they shoot the price of the stock down with similar cartels and end up achieving their goal of profit.

Some of India’s biggest companies have fallen prey to the actions of these vicious cartels.

A few months ago immediately after the crash of Lehman Brothers, ICICI Bank fell prey to a bear cartel. Rumors were spread that ICICI was involved and positioned with Lehman Brothers and that it too would share a similar fate to Lehman Brothers. People who believed this panicked and sold ICICI bank shares in huge numbers that caused a fall in the company’s share prices mostly in September. The situation calmed down only after the central government issued a statement that ICICI was a safe bank and that the rumors were false.

Similarly Unitech, one of the country’s biggest real estate developers was brutally mauled by the Bear cartel. It is true that Unitech is leveraged but not to the extent that the bear cartel made it out to be. The result was that on October 24th ,Unitech’s stock fell by over 50% in a single day and has not recovered since. Just this month another company Rolta was mauled in the same way but thanks to timely intervention by the company and positive growth reports, the damage was minimized.

Guidelines for execution of block deals on the stock exchanges

1. SEBI had issued a circular (reference no. SEBI/MRD/SE/Cir-7/2004) on January 14, 2004 on disclosures of details of “bulk” deals with a view to impart greater transparency to the market on such transactions executed on the stock exchanges. In terms of paragraph 1.1 of that circular, a “bulk” deal constituted of “all transactions in a scrip (on an exchange) where total quantity of shares bought/sold is more than 0.5% of the number of equity shares of the company listed on the exchange”. Thus the quantitative limit of 0.5% could be reached through one or more transactions executed during the day in the normal market segment

2. There is however a felt need of the market to execute large trades through a single transaction easily without putting either the buyer or the seller in a disadvantageous position. In order to facilitate execution of such large trades, the stock exchanges are being permitted to provide a separate trading window. A trade, with a minimum quantity of 5,00,000 shares or minimum value of Rs.5 crore executed through a single transaction on this separate window of the stock exchange will constitute a “block deal” as distinguished from “bulk” deal defined earlier.

3. A “block” deal will be subject to the following conditions :

a. The said trading window may be kept open for a limited period of 35 minutes from the beginning of trading hours i.e. the trading window shall remain open from 9.55 am to 10.30 am.

b. The orders may be placed in this window at a price not exceeding +1% from the ruling market price/previous day closing price, as applicable.

c. An order may be placed for a minimum quantity of 5,00,000 shares or minimum value of Rs.5 crore.

d. Every trade executed in this window must result in delivery and shall not be squared off or reversed.

e. The stock exchanges shall disseminate the information on block deals such as the name of the scrip, name of the client, quantity of shares bought/sold, traded price, etc to the general public on the same day, after the market hours.

f. There is no change in regard to the disclosure of trade details of ”bulk deals” as specified in the earlier SEBI circular reference no. SEBI/MRD/SE/Cir -7/2004 dated January 14, 2004, and such disclosures shall be continued to be made by the stock exchanges to the general public on the same day after the market hours.

4. The stock exchanges shall ensure that all appropriate trading and settlement practices as well as surveillance and risk containment measures, etc., as presently applicable to the normal trading segment are made applicable and implemented in respect of the proposed special window also.

5. The stock exchanges are advised to

a. make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision immediately.

b. bring the provisions of this circular to the notice of the member brokers/clearing members of the Exchange and also to disseminate the same on the website.

c. communicate to SEBI, the status of the implementation of the provisions of this circular in the Monthly Development Report for the month of September 2005.

6. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.