Adani Power ₹4,194 Cr Stake - Should You Buy or Hold in Your Portfolio?

A Mini Ratna (Category-I) Public Sector Enterprise – RailTel is an information and communications technology (ICT) infrastructure provider and is one of the largest neutral telecom infrastructure providers in India. The company was incorporated on 26 September 2000 with the aim of modernizing the existing telecom system for train control, operation, and safety and to generate additional revenues by creating nationwide broadband and multimedia network by laying optical fibre cable by using the right of way along railway tracks. As of 30 June 2020, its optic fibre network covering over 55,000 route kilometres and 5,677 railway stations across towns and cities in India.

Railtel provides telecom solutions and has an exclusive right to install optical fibre cables along the railway tracks. Currently, the optic fibre network set up by the company covers as many as 5848 railway stations in India. RailTel is one of the largest neutral telecom infrastructure providers in India. As of June 30, 2020, the company had the exclusive right of way along 67,415 route kilometres connecting 7,321 railway stations for laying optical fibre cable.

The company has over 55,000 route kilometres of optical fibre cable network and have connected 5,677 railway stations across towns and cities in India as of June 30, 2020. RailTel is also an implementing partner for the Bharat Net project to create optical fibre cable-based broadband infrastructure in laying optical fibre cable across 36,000-gram panchayats in India.

RailTel serves as a key network for the Indian Railways and provides a variety of services to the Indian Railways. The company is also working with the Indian Railways to transform railway stations into digital hubs by providing public Wi-Fi at railway stations across India. Company is currently in the process of bidding for the project in Africa that include supply, delivery, installation, testing and commissioning of goods and service for digital literacy in public primary schools in Kenya.

The company operates data centres in Gurugram, Haryana and Secunderabad, Telangana to host and collocate critical applications for customers including the Indian Railways. In addition, it undertakes various ICT projects for the Indian Railways, central government, and state governments, including various train control system projects for Indian Railways.

Competitive Strengths

• Among the largest neutral telecom infrastructure providers in India with a pan-India optic fibre network.
• Implementing partner for the Bharat Net project.
• A key partner to the Indian Railways in digital transformation.
• Plans to Expand services outside India.

Risk and Concerns

• There is almost no growth in the company's bottom line.
• Pure OFS wherein the company will not be getting anything.
• Timely payments from the PSUs are also difficult
• Very high receivables, almost 50% of revenue.
• RailTel is totally dependent on PSUs and Railways wherein getting timely projects is a cumbersome task.

Objects of the Issue:

The IPO proceed will be utilized towards the following purposes:

• To carry out the disinvestment plan.
• To achieve the benefits of equity share listing on the stock exchanges.

IPO Details:

Basic IPO details

Subscription Dates16 – 18 February 2021Price Band₹93 to ₹94 Per ShareFresh issueNilOffer For Sale87,153,369 sharesTotal IPO size₹810-₹819 CroresMinimum bid (lot size)155 Shares and in multiples thereofFace Value INR10 per shareRetail Allocation35%Listing OnNSE, BSE

Tentative Timetable

• Railtel IPO Price Band announced on 11 Feb 2021
• Railtel IPO Anchor List
• Railtel IPO Opens on 16 Feb 2021
• Railtel IPO Closes on 18 Feb 2021
• Railtel IPO Allotment Date: 24 Feb 2021
• Unblocking of ASBA 24 Feb 2021
• Credit to Demat Accounts 25 Feb 2021
• Railtel IPO Listing date: 26 Feb 2021

Financial Performance:

RailTel’s financial performance (in INR crore)FY2018 FY2019 FY2020 Revenue1,021.21, 038.31, 166.0 Expenses 835.18 20.69 31.9 Net income 134.01 35.4141.1 Net margin (%)13.113.012.1

Outlook:

Eyeing the growth in railway tracks and their monopoly in the market it is expected that Railtel is expected to do much better in the near future. The company is debt-free and has a CAGR growth of 7.47 from FY18 to FY20 revenue. However, the margins of the company are decreasing YoY. If the company can manage the margin then we may expect the company to perform much better in the near future.

In FY18 the net income was INR 134 cr while in FY20 the net income was INR 141.1 cr which grew marginally at a CAGR of 1.74%. The company has high cash and bank balance of around 368 cr. The company has a consistent track record of paying dividends. At an upper price band of INR 94 with an EPS of INR 4.40, the PE ratio stands at 21 and PB stands at 2.2. The valuation of the company looks very attractive at the current levels. Thus, We assign a “Subscribe” rating for the Railtel IPO.

It refers to a means of transfer of ownership or management, and control of public sector enterprises to the private sector. Privatization creates jobs and builds healthy competition in the market for the economy.it works for profit enhancement by improving customer services, and goods standards. India adopted Privatization as it was a part of the New Economic Policy or the LPG reforms.

Privatizations are instigated through various levels and phases and is considered profitable for the growth & development of a country, as it brings more efficiency and objectivity to business.

The stock of the previously publicly-owned company can no longer be traded in the stock market, and the general public is also banned from even holding a stake in such a company. Once privatization is completed, the company gives up the name 'limited' and starts using 'private limited' in its name. The main aim of Privatization is:

1. It provides a strong drive to the inflow of FDI
2. It improves the efficiency of public sector undertaking (PSU)

In the view for privatization, it is believed that the private sector and the regulation of free-market forces are a better incentive for businesses as they can be run efficiently and also achieve advancements in the field of economic welfare.

In the view against Privatization, it is considered to be an important supply-side policy that is designed in order to drive competition and improve productive and dynamic efficiency.it is also seen as a way of reducing the, share ownership and increase in investment, as privatized businesses were now free to raise finance through the stock market.

Concepts of Privatization in India

Some of the important concepts pertaining to privatization in India are discussed below:

Delegation

Delegation is the process by which the government delegates responsibilities to a private sector company via lease, franchise, contract, or grant. During this process, the government retains ownership and responsibility, but the private company handles all the daily activities; hence plays an instrumental role in delivering the end product or service. The state, however, remains an active participant in the entire process.

Divestment

Divestment is defined as the process of selling subsidiary assets, investments, or divisions of a company in order to maximize the value of the parent company. Companies can look for a divestment strategy in order to satisfy other strategic business, financial, social, or political goals. However, it still retains some ownership and remains a minority stakeholder in the company in order to remain a participant in the decision-making process.

Displacement

The process of displacement begins with certain deregulations. These deregulations will allow private companies to enter into a sector that was controlled and regulated only by the government. Once the private companies compete with the public-owned enterprises, then slowly and gradually, the public enterprises get displaced from that sector.

Disinvestment

Disinvestment refers to selling off certain as mostly a manufacturing plant, or product line. It Refers to the liquidation of a state-owned asset or a company and the process by which the Union government sells its stakes in a Public Sector Undertaking either fully or partially and the other way is they list it on the stock market.

Advantages

Now, let us take a look at some of the advantages and benefits of undertaking privatization:

• The private sector remains performance-oriented. Hence, it leads to higher efficiency of professionals and leads to better customer experience.
• A private limited company does not let any political factors affect its performance.
• A consistent managerial team allows the enterprise to make decisions in order to attain long-term goals.
• Privatization will increase competitiveness in the market that will allow the companies to boost their efficiency.
• It is beneficial for both the consumers and the economy.
• The government by implementing it, then ceases to be the sole owner of the entity or business and also increases revenue from the sale.
• It encourages shareholders to invest because of a good return.

Disadvantages

• It is bribery and corruption that hinders privatization. They are less transparent than government offices, which further results in a breeding ground for corruption.
• Inflexibility is one that can come with privatization. Governments sign lengthy contracts with private service providers, locking residents into one service provider as they take a large amount of time.
• Although privatization is usually on the basis it will reduce the consumers' costs, it can also drive the costs up.

Conclusion

Privatization is the process by which a piece of property or business from being owned by the government goes to being privately owned. Basic services, such as education, shouldn’t be subject to market forces. It will also help governments to save money and hence increases efficiency, whereas private companies can move goods in a much quicker way and more efficiently.

We’re going to run through how to analyze an annual report.

Well according to Wikipedia an annual report is an extensive report on the company’s exercises all throughout the former year. Yearly reports are planned to create investors and other individual’s data and about the company's exercises and its financial performance.

Let’s look on to some important contents of the annual report:

1. Vision and Mission: Both the vision and mission statements play a very important role within the organization. The mission statement provides the organization with a transparent and effective guide for creating decisions, while the vision statement ensures that each of the choice made is properly aligned with what the organization hopes to attain in future.

2. The information about the company: once you open the yearly report there is company's profile, the name of the company, the board of directors of the company, what percentage are the director, chiefs directors, promoter directors, and what number are independent directors then who are the auditors of this company, who are the company secretary of this company, who are the bankers of this company, who are the registrar and agency of this company and all sort of detail you get here.

3. Product overview: Here we can get details of items being made by an organization, fragment insightful execution in the most recent two years, key raw materials consumed, etc.

4. Director and the management: The director job is to address and serve the interests of investors by managing and accessing the Organization's methodology, and performance of its policies. The Administration Board are mindful of the choices and activities across Company's brands.

5. Annual general meeting: It is the Social occasion of the directors and of each consolidated firm, legally necessary to be held each schedule year.

6. Management report: The executive’s statements contain just numbers that are their greatest shortcoming. The administration conversation will give you data about what the organization has been doing, and may likewise give more data behind a portion of the numbers in the financial information. Any new organizations, ventures, effects of administrative or serious environment, and so on will be referenced.

7. Report on corporate governance: Key things to look at here are organization's governing body, sub-boards and attendance records of directors during gatherings, related compensation which is paid to directors with benefits procured by the organization. Investigate whether the profile of independent directors coordinates with the necessity of the organization according to the area of an organization.

8 . Information on shares of the company: This part gives data on recorded execution of offer value, Shareholding Pattern of the organization, pledging of shares by promoters during the year, split of shares, Bonus shares distributed, etc. and so forth.

9. Auditors report: an auditor's report gives an assessment of the legitimacy and unwavering quality of an organization or association's financial statements.  The objective of an auditor's report is eventually to record sensible affirmation that an organization's financial summaries are liberated from the material mistake. This segment gives data on remarks by auditors on the financials of the organization. You look out for who are auditors for the company and any qualifications by the auditors on internal processes. The data on the change in accounting strategy if any will be featured in this segment.

10. CAG report: they show the findings of the transaction audit and performance audit.

11. Financial statements: there are three financial statements specifically, the profit and loss statement, balance sheet, and cash flow.  Financial Highlights contains the superior view on how the organization's financials look for the year passed by. . The data in this part can be presented as a table or a graphical showcase of information. This part of the yearly report usually makes a multi-year examination of the working and business measurements.

12. Balance sheet the corporate balance sheet is the yearly report and a significant manual for settling on sound speculation choices. The balance sheet presents a synopsis of what the organization was worth on the most recent day of the financial year, and you will locate the previous year's figure for comparison.

13. Footnotes and schedules are to be taken for a superior comprehension of the financial reports one must be able to recognize the signs that the company is providing regarding any disaster or growth ahead it is essential to scrutinize the annual report for the information before making any investment decisions.

Where do you find the annual report?

Stock Screener for Indian Stocks. Click on this site: screener.in

Enter the company name. Next page below u will get access to the annual report

If you are one of them who doesn't follow the stock market or stock trading much, GameStop is the name that could be heard in the past week. If you are keeping an eye on the news, you may have heard about Gamestop and how its stock price rose?

This is because the gaming and game device company, which was valued at 3.25$ per stock a year ago, saw its stock market rise by 8000 percent within 6 months. On January 26, 2021, the stock closed at $145.60, then increased to $345 the next day, peaking at $469.42 on 28 January 2021. But where did it all start?

Read the Full Story Here:

GameStop is a gaming company that specializes in the trading of game and game devices. So how did a struggling company with an old-fashioned business model suddenly become a hot topic about stocks?

The primary reason behind the sudden shine of GameStop is r/wallstreetbets, a subreddit on an internet forum called Reddit who was responsible to raise the stock price by 1700 per cent.

Swastika explains how GameStop is grabbing all the attention of all the investors.

What is GameStop?

GameStop is a brick and mortar company, specializing in trading of games and game devices. Before making a high buzz on everyone’s Tweet feeds, over the last few days, GameStop has had a poor record since 2017.

Furthermore, the retailer company also has hit the news for all the wrong reasons. In 2017, it came into limelight because of its Circle of Life policy. Circle of Life is a rating system that GameStop uses to convince customers to buy games, trade old ones and ensure that the money that customers get back goes towards buying more pre-owned games.

Employees were given scores to represent how they fared and anyone with low scores would likely find their job on the line.

Wallstreetbets Vs Wall Street Traders -

Before we take dig deep into GameStop’s stock, there is some lingo which would probably help to familiarize the GameStop controversy.

Day Trading:

Day trading refers to the buying and selling of stocks multiple times during the day. The primary goal is here, to make small incremental profits that add up as they trade. As you might have guessed, day trading is quite risky and is used by a lot of scam artists.

Short Selling:

Short selling is the process of selling stock and buys back the stock to return it to the lender. Short sellers are betting that the stock they sell will drop in price. For example - Company A’s stock is trading at Rs 250 and you know that after some time, the shares of a particular stock will fall. For instance, it will fall to Rs 150.

Suppose you sell a share worth Rs 250 at the market price and after a while, you may notice that the price drops to Rs 150. Now you can buy that stock at the lowered stock. Now, you return the share to the broker at the lowered price. As you sold the first share at Rs 250 and bought the same share at Rs 150 before returning to the broker, you are left with Rs 100 as a profit.

Hedge Funds:

Hedge Funds are a group of investors usually controlled by a money manager. These hedge funds are designed to make profits by short selling stocks on falling stocks. A big hedge fund has a pool of investment money which allows investors to invest aggressively and make complex investments for a bigger payout.

Till 2019, the stocks of the GameStop had been continuously falling. Reddit users heavily noticed about the heavily short hedge funds selling the stock, particularly the $13 billion hedge fund Melvin Capital.

In mid-2019, a Reddit user named (Roaring Kitty) posted that it had made an investment of $53,000 in the GameStop. Though the post didn't receive any intentions then, however, the users frequently tweeted about the GameStop investment and retail store.

Last week, the news came into the limelight and the retail store caught the attention of many young online traders. This in result, the share price rose to unwarranted levels.

According to the source, short-sellers lost an estimated $23.6 billion on GameStop. Melvin Capital lost 30 per cent of the $ 12.5 billion it invested in managing shorted stocks.

Concerning the whole situation, Wall Street demanded that short selling be made illegal, even though it is majorly used by the traders. To stop further stock crashes, many popular trading apps such as Robinhood stopped the purchase of Gamestop stock on their stocks.

Nureca is a B2C company engaged in the business of home healthcare and wellness products, which offers quality, durability, functionality, usability and innovative designs. The company enables its customers with tools to help them monitor chronic ailments and other diseases, to improve their lifestyle.

Nureca is a digital-first company wherein it sells its products through online channel partners such as e-commerce players, distributors and retailer. It also sells products through its own website drtrust.in. Nureca’s product portfolio is currently classified under the five categories including -

1. Chronic Device Products – products such as blood pressure monitors, pulse oximeters, thermometers, nebulizers, self-monitoring glucose devices, humidifier and steamers.

2. Orthopaedic Products – which includes rehabilitation products such as wheelchairs, walkers, lumbar and tailbone supports and physiotherapy electric massagers.

3. Mother and Child Products – which includes products such as breast pumps, bottle sterilizers, bottle warmers, car seats and baby carry cots.

4. Nutrition Supplements – which includes products such as fish oil, multivitamins, probiotics, biotin, apple cider and vinegar.

5. Lifestyle Products – which includes products such as smart scales, aroma diffusers, and fitness tracker.

Competitive Strengths

• Diversified product portfolio.
• Experienced promoter and management team.
• Strong online distribution network.
• Premium quality healthcare and wellness products.

Objects of the Issue:

The IPO proceeds will be utilized towards the following purposes:

• To meet the working capital requirements of the business.
• To meet general corporate purposes.

IPO Details

Subscription Dates 15 – 17 February 2021 Price Band ₹396 to ₹400 Per Share Fresh issue INR100 crore Offer For Sale Nil Total IPO size INR100 crore Minimum bid (lot size) Coming soon Face Value INR10 per share Retail Allocation 10% Listing On NSE, BSE

Tentative Timetable

Feb 15, 2021 - IPO Open Date

Feb 17, 2021 - IPO Close Date

Feb 23, 2021 -Basis of Allotment Date

Feb 24, 2021 -Initiation of Refunds

Feb 25, 2021 - Credit of Shares to Demat Account

Feb 26, 2021 - IPO Listing Date

Financial Performance -

Nureca’s financial performance (in INR crore)FY2018FY2019FY2020H1 FY2021Revenue20.162.099.5123.0Expenses15.753.190.974.3Net income3.16.26.436.2Net margin (%)15.410.06.429.4

Risks-

• Company depend on third parties to manufacture products. If these organizations are unable or unwilling to manufacture our products, or if these organizations fail to comply with FDA or other applicable regulations or otherwise fail to meet our requirements, a business will be harmed.
• Company depend heavily on channel partners such as third party e-commerce players, distributors and retailers and failure to manage the distribution network efficiently will adversely affect performance.
• Company is dependent on the maintenance of existing product lines and service relationships, market acceptance of new product and service introductions and innovations for revenue and earnings growth.
• The company faced intense competition and may not be able to keep pace with the rapid technological changes in the health product devices industry.

Outlook -

Nureca is a digital-first company wherein the company sells the products through online channels partners such as e-commerce players, distributors and retailer. Further, the company also sell its products through the company’s own website drtrust.in. Currently, 95% of revenues for the Company comes through digital channels (e-Commerce).

As part of this tie-up, Nureca will sell products from its Dr Trust and Dr Physio brands at 30 Croma stores across the country. There are numerous other market players, like Dr. Morepen, Health Sense, Agaro, Lifelong, Omron, Philips, Johnson and Johnson, Roche, Bayer. The company doesn’t have any listed player.

Eyeing the brand recognization and their focus on healthcare products we may see some attraction in the IPO. The innovation of products along with the enhancement of technology would be interesting to see in the near future. One should continuously look at the margins of the company in the next few quarters. Looking at short business history, inconsistent margins, and high debt on books. We assign an "AVOID" rating for the NURECA LIMITED IPO.

Dixon Technologies India Pvt Ltd has progressed into something past electronic manufacturing service (EMS) association. Settled in Noida, Dixon is the greatest Indian EMS provider, focused on conveying top-notch practical arrangements in the homegrown buyer gadgets, lighting, set-top boxes (STBs) and home machines spaces. The differentiated item portfolio fuses:

• Customer hardware like LED televisions
• Home apparatus like clothes washers
• Lighting items like LED bulbs and tube lights downlighters and CFL bulbs
• Cell phones and CCTV and Computerized Video Recorders (DVRs)

It has 10 collecting units in Noida, Dehradun, and Tirupati, similarly to the greatest TV, garments washer, and bulb get together plants in India. The association is recorded on BSE and NSE since its first offer of stock in 2017 It is one of just a small bunch not many Indian EMS players with full-scale capacities in the thin plan, overall procurement, turnkey gathering, coordinated and strong back-end support. Dixon is a completely coordinated start to finish item and arrangement suite to unique gear producers Overseers of Dixon Innovations (India) restricted are Manoj Maheshwari, Poornima Shenoy, Sunil Vachani, Keng Tsung Kuo, Atul Behari Lall, Manuji Zarabi.

The leading body of Dixon technologies endorsed stock split under which the organization will give five offers for every one held.  The board affirmed that the subdivision/stock split of existing face  Value Portion of the assumed worth of Rs. 10/ - each completely settled up into 5 (Five) face Value Portions of Rs. 2/ - each completely settled up, subject to shareholders approval,  Dixon shares were exchanging 5% higher at 15850 in late exchange. The association said the stock split will "empower more broad help of little theorists and to update the liquidity of the value shares at the securities exchange."

Very good news for retail investors. Dixon Technologies Approves Stock Split In 1:5 Ratio Finally it will have more liquidity.  In a 1:5 split, shareholders get one share for every 5 old shares. So after a 1:5 split, for example, a stockholder with 16000 shares will open his account screen to find that he now holds 3705.

Dixon foresees that the cycle should be complete in 2-3 months, including the time required for support of the speculators. In the quarter completed December 31, 2020, its incomes jumped 120% to 2,182 crores while net advantage overflowed to 62 crores, a bounce of 134% when it stood out from a comparative quarter of the prior year.

Shares of Dixon Technologies (India) Ltd last traded in BSE at Rs.15172.25 as compared to the previous close of Rs. 14129.9. The total number of shares traded during the day was 14428 in over 6707 trades. The stock hit an intraday high of Rs. 15450 and intraday low of 14191.8. The net turnover during the day stood at Rs. 214673763.

Dixon Technologies has a very strong client base like Xiaomi, Samsung, Voltas, LG, Flipkart and Foxconn. The company also has plans to hold investor meetings with ICICI Prudential, Motilal Oswal AMC, and others.

Valuation

Company Valuation Services:

The organization's consolidated net arrangements for the year completed in 2017 (FY 2017) expanded 77% to Rs 2456.76 crore. The deals of lighting division expanded by 28% to Rs 550.80 crore, customer equipment by 10% to Rs 844.54 crore, home machines by 44% to Rs 188.03 crore, invert calculated by 60% to Rs 62.69 crore and mobiles phones more than 999% to Rs 810.71 crore. The OPM decreased by 50 bps to 3.7%. The net advantage after a bit of accomplice and MI have expanded by 18% to Rs 50.38 crore. At the lower value band of Rs 1760 for each worth part of Rs 10 expected worth, the P/E works out to 39.6 times the FY2017 joined EPS of Rs 44.5 (on post-Initial public contribution esteem) and at the upper band of Rs 1766, P/E works out to 39.7 times FY2017 consolidated EPS of Rs 44.5 (on post-Initial public contribution esteem).

Dixon Innovations shares experienced an important advancement as the bits of the association hit another week high of Rs 12,538.7 on the BSE against a condition of 275 in the convention of S&P BSE Sensex.

The supplies of the association will have a Capex of Rs 125-150 crore in 2021. Its revenue remains at 3,680.70 crores (US$520 million) (2020) Also, its Operating income Stands at 177.51 crores (US$25 million) (2020)