BGR Energy IPO Allotment Status

Friends,

The IPO allotment for BGR energy has been completed.
The status can be viewed at http://www.intimespectrum.com/site/ipo.asp

I am not the lucky one this time, none allotted to me (even after a 94K application).

Those of you who get lucky with the allotment, the stock is expected to list above INR750 (a neat profit in excess of 65%). I would suggest freeing up your investment by selling 40% of your shares and then keep the rest to see how it fares in future.

BUYING it at 750+ levels is something that I would **NOT** recommend (there are better stock stories out there to put that money into).

Cheers
Tarun

Important Updates - 24 Dec 2007

Friends,

Good Morning in India.

While it gets close to the freezing point every day in London, the stock markets in India seem to be feeling it as well. Anyway the last few days of December tend to be like that sometimes.


NEXT PICK
To start with my next LONG TERM pick is "KEC International". It has a good story behind it and will come out very good colors in under 2 years. In the meantime if the stock goes through a split then we will be sitting on huge gains. I would recommend an entry into the counter at the current levels of INR850. One can begin with an INR 10,000 investment.

YOUR TAX PLANNING
This is the time when the Tax saving mutual funds start doling out Dividends to woo customers. Let me explain in brief, the whole mechanism.

Assuming you buy Sundaram Tax Saver for INR20000 at INR44 per unit. You get INR20000/44 = 454.54 units. If you are in the 30% tax bracket you can claim a tax rebate of INR 6ooo. This will mean that your cost becomes INR 20,000 – INR 6,000 = INR 14,000.

If the fund declares a 30% dividend, you get 454 x 3 = INR 1,362 paid by the fund into your account. Which means in the end you actually parted with only INR 20,000 – (6000 + 1362) = Just over INR 12000.

If you were to believe me, this INR12000 over the next 3 years lock period will give you at least 25000 – 30000 in return. So go ahead and make your tax savings now.

My picks for ELSS are Principal Tax Saver, Sundaram Tax Saver and SBI Magnum Tax Gain.


TRACK THE WORLD
As a lot of you will know, the Indian markets take clues from the other world markets. As an informed investor you must know what’s happening around the world. To enable you keep an eye on the world markets performance, I have now added a Market Watch chart on the blog (showb below) . You can add the blog as a 'Favorite' to your browser for a single click access to track the world.




FINALLY, SPREAD THE WORD
One of the main objectives that I set out with, was to create more minds/hands that would contribute to the society 5% profits that they make from this blog. To keep that going I would like to find more people who would be willing to do just that.

It will do everybody a lot of good if you forward this to a friend(s), who you feel will contribute to the objective.

Please do NOT plain forward this, but do add a personal comment to make it more appealing to the friend.

Cheers
Tarun

Important Updates - 17 Dec 2007.

Hello Friends,

Here are a few general updates and a few Tax planning tips for all of you.

1. As expected BGR energy has been highly oversubscribed (112 times in all of which the retail portion is 46 times). We can now safely revise our profit and sell targets. Sell 50% only on listing day as the profits will be close to or more than 100%. The stock is supposed to be listed around 15 Jan 2008.

2. FORTIS HEALTHCARE has started buzzing, it has crossed 102 levels. I believe that if it breaches 108-110 levels then you can look adding more from a long term perspective.

3. ISPAT is doing wonders for you. The stock is likely to reach 100 levels in under 6 months level. Those of you who have a low entry price can look at adding some more at these levels.

4. Reliance Power IPO expected towards end of Q1 2008. Make sure you have money hanging around for this then.

5. Hotel stocks finding favour of the market.

6. Find a banking stock to buy for 2009, when the banking industry is completely opened to the world. I am analysing a few at the moment.

7. If you are aware, the size of savings last year by Indian residents was close to a Trillion rupees and at the rate that the economy is growing we need more financial companies to manage the money (not just savings but the whole financial framework) and hence it makes sense to keep stocks of a good financial powerhouse. I am analysing a few at the moment.


Since it is the tax declaration season for most of you in India it is about the right time for me to tell you a few important things.

1. Do invest in ELSS (Tax saving mutual funds). My favourites have been HDFC Taxsaver and SBI Magnum Taxgain, both growth option. Do remember that the money is locked for 3 years only after which you can invest the same money back and claim Tax rebate again. SO do this regaularly for 3 years and you will have a cycle of money being released every year that you can re-invest and claim Tax rebate. Buy MF’s on a day when the market is falling (place your BUY order before 1300 hrs to reap the benefits of the falling market)

2. Stick with LIC/ICICI for all your insurance policies as these are the best among Public/Private companies and at least that is what I would do.

3. It is a MUST for everyone to buy a pension policy. Believe me none of us ever plan for our old age and are suddenly taken aback financially when we reach there. You MUST buy a pension policy NOW (never mind what age you are) Buy the pension policy with ZERO DEATH BENEFIT. The pension policy gets you a tax rebate again.

4. All your income from shares is taxable. As per the law it is your duty to show your income from shares on your IT return and pay tax to the government. Anything that you sell after one year of buying comes under Long Tem Capital gains and is taxed at 10% while everything sold earlier is charged at the slab you are in.

Finally a look at how is the portfolio doing.


With that neat 114% return in less than 4 months I am beating most of the top funds and fund managers. May be someday I launch a fund and get investors to invest a lac each and give them these returns.

Happy winters in India.

Cheers
TG

Alert - BGR Energy IPO Closing today

Hello All,

Please note that the BGR Energy IPO is closing today, 12 Dec 2007.

As mentioned earlier you can apply for INR94080 (196 shares x 480 Cut off price) for listing gains. I expect this one to give us at least 50% return on Day 1 of listing at which point we should sell in the following manner.

i) 60% stocks if the return is 75%
ii) or 70% stocks if the return is 50%

Remember this is an IPO gain investment and hence I am not recommending a long-term hold on full investment.

The share may appreciate after listing - correction - consolidation - renewed interest and hence am recommending a 30%/40% hold (as per the conditions above). Of course you can improvise the levels as per your comfort.

The IPO has already been over-subscribed by 12.73 times already as at 1700 Hrs IST, 11 Dec 2007. It will mostly end up oversubscribed over 20 times tomorrow, being the last day.

So here's a good chance to make some quick money for the new year.

Happy investing.

Tarun

Believe this? Your investment grew 25% in one day today!

Oooooooh......

Hope all of you will now agree to spend the 5% profits for someone's welfare.
ISPAT has ROCKETED 25% today (05 Dec 2007).

From a recommendation at INR 14 levels, these levels of INR68 mean almost a FIVE fold increase in about 3 months. Just imagine had you put in One Lac it would have grown to Five lacs today.
:)

Anyway here are some important updates/notes.

1. You must research banking stocks and pick at least one good bank to hold for the next 2-3 years to get a more than 100% return (ICICI Bank is one of my choices and am looking for more).

2. Apply for the BGR Energy IPO closing on 12 Dec (with One Lac application) for listing gains. I am expecting at least 50% return on listing day. This translates into a 50% return in about 30-35 days, if you are allotted shares.

3. Invest in mutual funds. Those in India must invest in TAX SAVING mutual funds also called ELSS schemes. Any investment made in these qualifies for tax rebate in the 1 Lac rebate bucket while they give a decent return of at least 30% per year. Some of mine have given me 150% return per annum. Thankfully the lock-in is 3 years only compared to 5 years on other Tax saving instruments.

4. Did you know that BRIC countries (Brazil, Russia, India and China) contribute 50% of the world's GDP? Question - Remember what is GDP? Go back to the text book and look it up.

5. You must invest at least 20% of your savings (remember SAVINGS and NOT salary) into stocks, while another 20% in Mutual Funds. If there are no major liabilities at home then go in for 30% - 10% ratio. The remaining 60% of your savings should be spread across RD's, Real Estate.

6. Get adequately insured. DO NOT BUY policies that give you MONEY BACK/CHILD's FUTURE/REGULAR CASHBACK, as these are rip-off's for people like us who know that the paltry 7-8% from these policies is peanuts compared to 400% in under 4 months in ISPAT. BUY ‘Term Insurance’ and Accidental Death policies.

7. Read Business Magazines, watch NDTV Profit, NDTV AWAAZ, Google for things like "Turnaround Story"/"Expansion plans"/"Growth Plans"/”Hidden Gem”/”Insider Information”, etc.

8. REMEMBER - buying a TV/New mobile/Car/Bike is NOT an investment but EXPENDITURE. So get your basics right on INVESTMENTS and EXPENSES. Create more investments than expenditures.

9. Banking, Engineering, Alternative Energy and Education are sectors to watch out for next year.

10. Generally avoid TEXTILE companies, as nothing is happening there for the last few decades except very rare exceptions.

11. Move ahead, do not stick to a job role for more than 3 years, either change the company or change the role after three years (unless you are a research material).

12. Work across multiple cultures (After UK I wish to work in US before I come back to India in 2009).

13. Believe me - INDIA IS THE PLACE TO BE IN. It's rocking and will rock for the next 20-25 years easily.

Sometimes I feel giving up writing this blog as there are instances when I feel that there are already so many news channels/broking houses/individuals like me giving advice on stock picking, but I do not know somehow or the other I do come back to post a message for everyone who reads the blog.

Anyway if some day you stop hearing from me do not be surprised, as that will be the day I would have given up writing this blog (only to move to a more passionate occupancy).

Cheers
Tarun

"I have a problem with money. I can't find enough to invest, the more I invest the more returns come in and I end up with a deeper crave to invest more."