PSU stocks eroded investor wealth worth Rs 6,83,314 crore in 3 years; are they worth buying?

PSU stocks eroded investor wealth worth Rs 6,83,314 crore in 3 years; are they worth buying?

India slips to 106th spot in World Prosperity Index | Business Standard

India has slipped by five places to 106th spot, way below neighbouring Bangladesh, Nepal, Sri Lanka and China in the World Prosperity Index, largely due to poor 'safety and security' environment.

In the 'Prosperity Index' ranking of 142 countries compiled byLondon-based Legatum Institute, India dropped from 101st position last year, while Norway continues to remain at the top.

Besides, India has fallen down the prosperity index rankings consistently over the last five years, the report said.

The 2013 Legatum Prosperity Index evaluates nations in eight categories, including education, health, economy, safety and security.

India's position has dropped below neighbouring China (51), Sri lanka (60), Nepal (102) and Bangladesh (103).

At the top of the index, Norway defended its numero uno position for the fifth year. Switzerland is at second place, followed by Canadaat third, Sweden at fourth and New Zealand at fifth.

Besides, in the 'Ease of Doing Business' report by World Bank and International Finance Corporation (IFC) released earlier this week, India was ranked at 134th place while neighbours like China, Pakistan, Nepal and Bangladesh were placed at better positions.

According to the report, India has slipped in the safety and security category by 21 places to 120 "due to an increase in property being stolen, assault rates, group grievances, and drop in the perception of feeling safe walking home alone at night."

Besides, the country has dropped by 45 places to 100 on personal freedom segment "due to a drop in the tolerance of immigrants and a drop in civic choice variables."

Moreover, the country ranked low on health ground (109 in the index), entrepreneurship and opportunity (104) and education (97).

Meanwhile, on the lower end of the rankings Chad stood at 142, Central African Republic (141), Congo (140), Afghanistan (139), Pakistan (132) and Iraq (130).

The smart move in Indian banking - Cheque Truncation System

 History of Cheque

The spellings check, checque, and cheque were used interchangeably from the 17th century until the 20th century. However, since the 19th century, the spelling cheque (from the French word chèque) has become standard for the financial instrument in the Commonwealth and Ireland, whilecheck is used only for other meanings, thus distinguishing the two definitions in writing.

In American English, the usual spelling for both is check.

There have been suggestions that the word chek comes from ancient Pahlavi language which was used in the Achaemenid Empire in Persia.It may have spread from there to Arabic where saqq means a promise to pay a certain amount of money for delivered goods.

Traditionally, cheques have been the major non-cash payment instrument in India, towards payment and also used for official documentation. They are used as mutual agreement of payment and for easy remote transactions.

Indian Cheque

The Cheque was introduced in India by the Bank of Hindustan, the first joint stock bank established in 1770. In 1881, the Negotiable Instruments Act (NI Act) was enacted in India, formalising the usage and characteristics of instruments like the cheque the bill of exchange and promissory note. The NI Act provided a legal framework for non-cash paper payment instruments in India. In 1938, the Calcutta Clearing Banks' Association, which was the largest bankers' association at that time, adopted clearing house.

At the current outset in India, the clearing system is local and confined to a defined jurisdiction covering all the banks and branches situated in the area under a particular zone. The clearing house is a voluntary association of banks under the management of a bank where the settlement accounts are maintained. Wherever Reserve Bank of India has its office (and a banking department), the clearing house is managed by it. In the absence of an office of the Reserve Bank, the clearing house is managed by the State Bank of India, its associate banks and in a few cases by public sector banks.

Until the 1st of April 2012, cheques in India were valid for a period of six months from the date of their issue but currently validity period of Cheques, Demand Drafts, Pay Orders and Banker's Cheques will be reduced from 6 months to 3 months, from the date of issue of the instrument.

Cheque Truncation System

Truncation allows for the transmission of an electronic image of all or part of the cheque to the paying bank’s branch, instead of the cumbersome physical presentment.

Since our independence, Indian banking system has been evolved as one of the strongest business competing with the standards and functioning of developed countries. The RBI has taken many reforms for a safe and efficient electronic mode of payment, as well improved efficiency in the paper payment too. In this direction Cheque truncation system is a great mile stone. Amendments to the Negotiable Instrument Act and the Informational Technology Act have been made to facilitate the smooth functioning of the new technology.

On 1st Feb 2008, our banking industry in India launched a new online image-based cheque clearing system called the Cheque Truncation System (CTS) but this was first taken up as a pilot study at New Delhi and this was launched next at Chennai from 24th Sep 2011.After the successful launch in New Delhi & Chennai, it has been decided to operational this system across the country from the upcoming year 2013.  With CTS, a cheque is scanned when deposited and its electronic image, instead of the physical cheque, is transmitted throughout the entire clearing cycle.


In preparation for CTS, the local banking industry has adopted a new one-sized CTS cheque for both corporate and individual customers. These CTS cheques are being issued to customers ahead of the launch of CTS from all the banks as per RBI guidelines with a email/letter notification so that they would be familiar with using the new cheques. From 1^st May 2013, cheques that are not in the new CTS format will be no longer accepted by banks for deposit and payment.

RBI Sample Copy

New Changes(Indication)

 This CTS will completely change the method of Cheque clearing systems in India from exchange-clearing house based physical cheque to the recording and transmission of Cheque scanned images and data via electronic form between banks and the clearing houses. CTS enhance the operational work flow of banks by eliminating the need to move cheques physically from one bank to another and clearing house. This would enable the banks curtail extra cost and human power providing efficient, faster and safer transaction to its customers.

The introduction of cheque truncation and imaging will completely remove the physical movement of cheques and will reduce the total cheque clearance time, as well as eliminating the costs of physically moving the cheque. Truncation allows for the transmission of an electronic image of all or part of the cheque to the paying bank’s branch, instead of the cumbersome physical presentment. The payee is typically credited for the funds on the day of the deposit, and thus receives same day value, but may not be able to draw on the funds until the cheque has cleared.

Credit Analysis & Research Ltd- IPO "Subscription Preferred"

Credit Analysis & Research Ltd Registered Office: 4th Floor Godrej Coliseum,Somaiya Hospital Road Sion(E) , Mumbai - 400022 , Maharashtra , India. Phone : 91-22-67543456   Fax:91-22-67543457 Email :  investor.relations@careratings.com Website :  www.careratings.com Public offer of 7,199,700 equity shares of a face value of Rs10 each (The "Equity Shares") of Credit Analysis and Research Limited (The "Company") through an offer for sale by the selling shareholders for cash at a price of Rs[*] per equity share (including a share premium of Rs[*] per equity share) aggregating up to Rs[*] crores (The "Offer"). The offer will constitute 25.22% of the post-offer paid-up equity share capital of the company. Price Band: Rs700 to Rs750 per equity share of face value of Rs10 each. The floor price is 70 times the face value and the cap price is 75 times the face value. Issue Money Payable On Opens On Closes On Application Allotment 07-Dec-12 11-Dec-12 Rs 700.00-750.00 Rs 0.00-0.00 Minimum Application for shares in Nos : 20   Further Multiples of : 20 Rs Cr Lead Managers to the Issue Project Cost 0.00 DSP Merrill Lynch Ltd Edelweiss Financial Services Ltd ICICI Securities Ltd IDBI Capital Market Services Ltd Kotak Mahindra Capital Company Ltd SBI Capital Markets Ltd Project Financed through Current Offer 503.98 Post Issue Equity Share Capital 28.55 Issue Price Rs700.00

Objects of the Issue: The objects of the issue are to: 1. Carry out sale of 7,199,700 Equity Shares by the Selling Shareholders; and 2. To achieve the benefits of lisitng the Equity Shares on the Stock Exchanges.

(Credit Analysis & Research Ltd) CARE IPO Grading CARE, being a credit rating company in India, is exempted by SEBI from obtaining the IPO grading for its Initial Public Offer. None of the rating companies including CRISIL, FITCH or ICRA graded CARE IPO.

Company Overview:

CARE Ratings commenced operations in April 1993 and over nearly two decades, it has established itself as the second-largest credit rating agency in India. With the rating volume of debt of around Rs.44,051 bn (as on September 30, 2012) , CARE Ratings is proud of its rightful place in the Indian capital market built around investor confidence. CARE Ratings has also emerged as the leading agency for covering many rating segments like that for banks, sub-sovereigns and IPO grading.

CARE Ratings provides the entire spectrum of credit rating that helps the corporates to raise capital for their various requirements and assists the investors to form an informed investment decision based on the credit risk and their own risk-return expectations. Our rating and grading service offerings leverage our domain and analytical expertise backed by the methodologies congruent with the international best practices. Shareholding Pattern:

With majority shareholding by leading domestic banks and financial institutions in India, CARE’s intrinsic strengths have also attracted many other investors.

CARE was promoted in April 1993 by major Banks/FIs (financial institutions) in India. The three-largest shareholders of CARE are IDBI Bank Ltd., Canara Bank and State Bank of India. The other share holders include Federal Bank Ltd., IL&FS Ltd., ING Vysya Bank Ltd. etc.

Company Financials:

Particulars	For the year/period ended (in Rs. Million)
	31-Dec-12	31-Mar-11	31-Mar-10	31-Mar-09	31-Mar-08
Total Income	2,171.93	1,722.55	1,520.26	999.31	549.11
Profit After Tax (PAT)	1,157.02	879.49	856.90	523.99	266.85

Outlook & Valuations:

The company has fixed the price band at Rs. 700-750 per share. Based on FY12 annual EPS of Rs. 40.55, CARE will be trading at P/E range of 17.27 x to 18.5 x. This is at a significant discount to peers like ICRA & CRISIL which are trading at 27 x and 35 x respectively. For FY12 the consolidated revenues from operation stood at Rs. 190 Cr with Net Profit of Rs. 116 Cr resulting in Net Margin of 61.05 % with EPS of Rs. 40.55 CARE has consistently maintained high PAT margin of 53 % with strong ROE of 34 %. It is a debt free company. 85 % of its revenue comes from ratings business. Fastest growing rating agency, huge long-term growth opportunity driven by higher private sector infrastructure spending, favorable regulatory developments & development of bond market, superior margins & return ratios and diversifying products & geographies are key value drivers for CARE Ratings in our view. CARE Ratings issue is quoted 21.4x FY13 annualized earnings. Rating business are traded at 35-37x in the market. We believe strong growth, better margins, superior return ratios and likely diversification should command valuation multiple closer to peers valuation. Hence we recommend subscribe to the issue with medium-term investment objective. We also expect 15 per cent listing gains on the issue from upper band.

Retail Investors can subscribe up to maximum of Rs. 2,00,000 per application. CARE has strong financial position and is high cash-generating business and which is available at very reasonable valuations.

In the valuation front, the company's IPO is priced quite low compared to its peers. Based on the FY12 financial numbers, CARE's IPO is priced at about 18.5times (on higher price band) its earnings compared to CRISIL and ICRA which are trading at 31 to 41 times of their earnings.

Also, even on P/BVPS basis, CRISIL and ICRA are trading at higher valuations compared to CARE. Hence, Broker’s and Investor Advisors are positive on the issue and recommend 'subscribe' on the IPO.

IPO Launch Data:

Rating agency CARE's initial public offer(IPO) received 4 per cent subscription on the first day of the public issue today. 

The IPO attracted bids for 2.56 lakh shares against 71.99 lakh shares on offer by 1700 hrs, as per data available with the National Stock Exchange. 

The category reserved for non-institutional investors received one per cent subscription, while shares reserved for retail investors got subscribed 10 per cent, data showed.

The offer period will close on Tuesday, December 11. 

Earth Hour......A Day Game

Earth Hour..next may be Sky Hour...but l wonder for celebrations and enjoyment we spend a day completely or more than..like frdship day, Ethnic Day,longer days of festival...but when we come for environmental protection and safety...why it's dropped for in a hour in the meter count....

When went about the Tsunami Bomb and Deadly missiles research carried out by US challenging nature na environment in early 1958's and still in the process in developing more dangerously in creating Tsunami...wonder US are playing a innocent game in this issue...and we neither think behind nor urge regarding this issues..We all follow  blind-folded..

Japan Tsunami_may be a US preplanned attack in the name of nature...doubted by the intelligent agencies with previous action of records..

Save Environment in a healthy way of Habits...Stop fighting across borders and rules..We need just peace and love///As we are said most intelligent species in the world...But I really doubt?

Think...

Happy Earth Hour..Save Earth

Vinay.C

This Sunday is not Holiday but a Holi-Day... Make sure to make it a Holy-Day

The Holi is the ancient Indian festival of colors and more taken with Krishna’s play and mischief, Holi is the sign of happiness, joy and growth engaging all age of people. The celebrations in India cut across section and religious conviction. This year with lot of worried and natural disasters across the globe with financial down trend the festival of color is making its entry this Sunday 20^th March. The festival of Holi and celebration of Holi though with struggling life people are taking in the positive nature in fighting back all as if it the devil. This festival is now also drawing a world attention and many countries are also celebrating the festival of colors and enjoying with sharing of sweets.., love.., peace and brotherly hood.

One of the most important festivals of India, Holi festival is the symptoms of colors of happiness. Holi is celebrated with enthusiasm and gaiety on the full moon day in the month of Phalgun which is the month of March as per the Gregorian calendar.

Holi festival may be celebrated known in different names among people of various states and would be following different rituals & traditions. But, what makes Holi so unique and special is the spirit and enthusiasm of it which remains the same throughout the country and even across the globe, wherever it is celebrated.

Traditional Background:

This festival celebrates the arrival of spring on Fagun sud Purnima. Also known as Falgunika, people celebrate the changing season and the beauty associated with spring blossoms by spraying color.

In the Gita (10/35), Shri Krishna proclaims spring as the foremost season and one of his Vibhutis -forms: Rutunaam kusumaakaraha

The ritual of offering roasted grain to Agni - fire-deity is known as Navaanineshti. In Sanskrit, roasted grain is Holaakaa, from which the Hindi 'Holi' is derived. Since Vedic times people availed the newly harvested grain only after offering to the devas. This offering of new grain is Holi.

The Bhavishyottara Puran associates Holi both with man and yagna. Therefore the yagna performed for man's salvation is Holi.

Eco Friendly/Safe Holi

In an ideal world, the joyous celebration of Holi is meant to celebrate the arrival of Spring while the colors used in Holi are to reflect of the various hues of spring season. But unfortunately, in modern times Holi does not stand for all things beautiful. Like various other festivals, Holi too has become ruthlessly commercialized, boisterous and yet another source of environmental degradation and health problem.

Toxic Elements/Chemical in Holi Colors:

According to many research and previous studies related on Holi color products, the pastes contain very toxic chemicals/elements that can have severe health effects.

Few examples of color and the chemical content with their few health effects on human and environment :
    

Color	Chemical	Health Effects	Environmental Effects
Red	Mercury Sulphite	Highly toxic can cause skin cancer, Allergic reactions, resulting in skin rashes	Causes Water, Soil Pollution-Lead & Mercury effects   water organisms by entering the food chain and also plants may be effected and act as carriers of Lead & Mercury poisoning to man.
Yellow	Lead Chromate	Decrease IQ level, Effects Nervous System
Black	Lead oxide	Low IQ, Renal Failure, Mental Retardness.
Green	Copper Sulphate	Eye Allergy, Puffiness and temporary blindness
Blue	Prussian Blue	Contract Dermatitis
Silver	Aluminium Bromide	Carcinogenic, Skin irritation

Harmful Chemicals in Gulal & Harms of Wet Holi Colors

The dry colors, commonly known as gulals, have two components a colorant that is toxic and a base which could be either asbestos or silica, both of which cause health problems. Heavy metals contained in the colorants can cause asthma, skin diseases and adversely affect the eyes.

Wet colors, mostly use Gentian violet as a color concentrate which can cause skin discoloration and dermatitis.

These days, Holi colors are sold loosely, in the market and traders are also unaware about source of the holi color products as it comes from a group of networked people/sellers exchanging hand to hand from different parts of the country. In few instants, the colors comes wrapped that specifically say for industrial purpose/use or without any origin/manufacture details.

Make your own Holi colors

Holi festival lovers will be thrilled to know that it is possible to make simple natural colors in one's own kitchen. Here are some very simple recipes to make natural colors:

Color	Preparation
Yellow	1) Mix turmeric (haldi) powder with chick pea flour (besan). 2) Boil Marigold or Tesu flowers in water.
Yellow liquid Color	Use pomegranate (Anar) –soak overnight.
Brownish/Red Color	Use Tamarind-soak it overnight/early morning
Orange - red paste	Henna leaves (mehndi) can be dried, powdered and mixed with water.

Safe-Guarding Water:

In the current scenario, when India and rest of the world is facing acute water shortage, the water wastage in the name of Holi at the extreme, is also being unjusticable. It is usual or general using buckets of water during Holi but please keep in mind that you are not only wasting water resource but also polluting it the water with harmful and toxic chemicals. If a single person uses 2 liter of water on Holi on splashing/playing just imagine the number of liters of water used across India with a 1.15 billion population approximately.

So, make sure we don’t waste and pollute water which is most needed for our coming generations too.

Important aspect to make it a Holy Festival:

• Use homemade natural and safe colors-Learn the art of preparing the colors yourself and enjoy teaching your younger’s and your neighbors too.
• Use natural, skin-friendly and herbal colors or the ones made by reputed companies using natural products.
• If you opt to buy/purchase colors commercially be sure to purchase naturally made products from reputed companies also ensure about the source.
• Apply a nice layer of oil to your hair before playing Holi so that residue from the dyes does not get stuck to your hair and scalp.
• Ensure that your eyes remain protected at all times. Wash with plenty of clean water should any color get into your eyes accidentally. See a doctor if the irritation still persists.
• If you are playing Holi, apply a thick layer of coconut or any oil on your body and hair until they glisten and you become slippery.
• Wear dental caps if possible to protect your teeth.
• Avoid flashing on face and as well protect your face from the Holi colors.
• Wear clothes at the maximum to cover your body.
• Apply an oil/cream of good quality to protect your skin.

HAVE A HAPPY & SAFE HOLI


Take Care,
Vinay Kumar.C