Share Price Saudi Aramco And The Global Energy Narrative: A Guide For Indian Retail Investors

Introduction:

Rolex Rings, Incorporated in 2003, based in Rajkot, Gujarat, is one of the country's largest makers of forged and machined components. The business has established a long-term relationship with its clients.

Rolex Rings made a profit of Rs 86.95 crore for the fiscal year ended March 31, 2021, up from Rs 52.94 crore the previous year, its net profit at a compounded annual growth rate stands at 21.3%.

More than half of the company's revenue comes from outside the country, with 60 customers in 17 countries, including India.

Domestic and worldwide markets are spread across two-wheelers, passenger vehicles, commercial vehicles, off-highway vehicles, electric vehicles), industrial machinery, wind turbines, and railways, among other areas.

It produces a diverse range of bearing rings, that are appropriate for a wide range of end-users.

Some of the main worldwide and local names that Rolex Rings serves are SKF India, Timken India, and NRB etc.

About the IPO

The SME IPO is worth Rs.731 crore. The new issue is worth 56 crore rupees. This will be utilized to meet long-term working capital needs as well as other corporate needs. The promoters are given a sale offer for the remaining 675 crores. The issue opens on July 28, 2021, and will close on July 30, 2021. The issue is priced at 880 to 900 per equity share.

The IPO allocation is as follows:

About 50 per cent is kept for Qualified Institutional Buyers,15 per cent for non-institutional buyers, and 35 per cent for retail investors.

Objective:

The funds obtained through the IPO will be used in the following manner:

• To support the company's long-term working capital needs as for other corporate objectives.
• Rolex Rings intends to gain from the listing of its equity shares on stock exchanges
• the improvement of its brand name among existing and future customers the establishment of a public market.
• The net proceeds would be used to support the company's day-to-day operations to the tune of Rs 45 crore.

Key details

Rolex Rings IPO details

Subscription Dates: 28 – 30 July 2021

Price Band

INR880 – 900 per share

Fresh issue

INR56 crore

Offer For Sale

7,500,000 shares (INR660 – 675 crore)

Total IPO size

INR716 – 731 crore

Minimum bid (lot size)

16 shares

Face Value

INR10 per share

Retail Allocation

35%

Listing On

NSE, BSE

Strengths:

• Among the leading forging companies in India.
• Long-standing customer relationships
• Broad product portfolio
• Manufacturing capabilities giving scalability, flexibility,
• Location advantage
• Domain experts and management team
• Experienced promoters
• Strong financial performance track record

Risks:

• The company has resulted in a CDR because of debt
• Highly reliant on the performance of India's and other nations' automotive sectors.
• Impact of the COVID-19 outbreak.
• Substantial impact on operations, revenues, financial condition, cash flows.
• the government puts more focus on the electric car segment

Financials:

• For the past two years revenue falls by 16% per year. This stands at around 619.75 crores
• The company's total assets have increased during the same time span. 796.92 crore is the total asset for FY 20-21.
• Rolex Rings made a profit of Rs 86.95 crore in the previous fiscal year, up from Rs 52.94 crore the year before.
• In 2020-21, the company's operating sales were Rs 616.36 crore, up from Rs 666 crore the previous year.
• The firm has also increased its margins, which were 9.2 per cent in FY18 and 14.1 per cent in FY21.

Recommendation:

• The casting and forging industry is anticipated to increase at a rate of 13 per cent -14 per cent, up from 5 per cent -7 per cent now, thanks to the government's attempts to revive the economy.
• Infrastructure, oil and gas, mining, railroads, and defence are all projected to make significant contributions. The company's valuations appear to be appealing, with the IPO coming at a PE of 24x, compared to the industry average PE of 47x.

Conclusion

Rolex Rings, a global vehicle parts producer, is ready to launch its public offering as the comeback gathers steam.

By investing in renewable energy, the corporation hopes to lessen its reliance on changing electricity costs and lower its carbon footprint.

The company now operates wind turbines with an installed capacity of 8.75 MW. The company is in the midst of extending its solar project capacity by 12 MW and has already placed purchase orders for the necessary equipment.

The automobile industry is slowly rebounding in 2021 after a tough ride in 2020. Auto sales are being driven by a number of factors, including the relaxation of lockout restrictions and pent-up demand.

Soybean is one of the primary commodities which is traded on NCDEX. These days vast blow has been viewed in its prices as trading around its all period high. It is because of the lack of supply in the physical market and the increase in demand.

Another reason is monsoon stipulations as excess rainfall has been seen within more than a few soybean producing states like Maharashtra where the sowing has been affected badly because of delay in monsoon the sowing in Madhya Pradesh also got affected.

But looking at the contemporary situation, it is anticipated to have good sowing in Madhya Pradesh in the near term because of ongoing monsoon conditions namely as each of these states makes a contribution in accordance with around 89% in the quantity produced.

WORLDWIDE SOYBEAN PRODUCTION (ACTUAL & FORECASTED)

YearUSBrazilArgentinaChinaIndia2021-2022 119.884144521911.22020-2021112.5491374719.610.452019-202096.667128.548.818.19.32018-2019120.515119.755.315.96710.932017-2018120.065123.437.815.2838.35

As per SOPA, the worldwide soybean production has been increased over the years and the 2021-2022 forecast has also been increased compared to the last few years.

Last year the prices surged because of the buying done from China’s end as because of fear of coronavirus cases China was continuously buying it to meet its domestic demand in future but as it got sufficient supply, the correction was seen in the prices of soybean.

In addition to this, soybean was used as feed for the cattle in the cattle industry and poultry farms but now it has been substituted with wheat and rice which also led to the low import of it. Since China is the biggest importer of Soybean and Soy complex so any action from their end has direct on the prices of soybean worldwide.

India's Major Soybean Producing States

As in the past few days or last week, multiple times circuit has been seen in the prices of soybean, SOPA said that it is completely taken over by the speculators, the end-users of soybean or soybean meal like poultry industry/aquaculture are extremely suffering because of such speculation activities.

To support its claim, SOPA said, "In the last seven trading sessions, the soybean futures contract on NCDEX has gone up by 21.77% and the upper circuit had to be applied 4 times." In addition to this SOPA also said that there is no physical stock in NCDEX warehouses and the demand and supply for oil in the year 2020-2021 were slightly tight.

"To curtail speculation, we request to increase margin money from current 25% to 50% for lean season contracts and that the circuit limit in lean season should be reduced to 2% a day, "said SOPA in a release.

But recently it came into the news that the exchange denied the SOPA request, as per the NCDEX there is no speculation and prices are trading fairly as there is non-availability of the soybean in the physical market and demand is increasing rapidly. So we can say that in the near term some more upside view can be seen in the prices of soybean.

Investment is something that gives you outstanding returns if done properly. If you have excessive funds lying in your bank account, save them wisely. You might have heard the above statement from every stock analyst who manages your wealth profile. This is because money is always measured in terms of time.

How to Make the Best Use of Your Excess Funds?

The time value of money states that the amount of money you have in present is worth more than that the same amount of money you will have in the future. Instead of letting your money sit idle, it would be much better if you park your surplus fund with liquid ETFs.

Liquid ETFs or Liquid Exchange Traded Funds are the mutual funds whose units are traded on the stock exchange. Unlike normal ETFs, the investment in liquid ETFs generally happens in overnight securities such as Repo or Reverse Repo securities, landing obligations and collateralized borrowings.

The primary motive of liquid ETF is to provide an income filled with low risk, at the same time gives a high liquidity level.

Investors who park their funds in liquid ETFs can earn significant returns on idle funds while at the same time remaining liquid to benefit from lucrative investment opportunities.

Liquid ETFs are only suited for large retail investors, portfolio management service (PMS) providers. Futures and Options (F&O) brokers and institutions invest directly in equities, HNI (High Net-worth Individuals).

These are several liquid ETF funds that are readily available to trade. These liquid funds can be traded immediately.

Equity market investors and traders have a habit of making continuous profits from transactions. However, sometimes they even face a loss but these are part of daily work.

The investors who have a tremendous amount of money, always find a better alternative so that they can increase their profit to a greater extent. One such alternative is liquid ETFs. Investing in ETFs enables investors to earn extra profit from excessive funds.

NSE and BSE are the funds that are available for trading where buyers and sellers quickly perform the transactions during the stock market hours on any stock trading days.

ETFs are gaining a lot of popularity these days as many investors consider liquid ETFs as the best instrument that can do wonders with their money.

However, if you are deprived of several benefits of investing in liquid ETFs or exchange-traded funds, this blog will help you out.

ETFs are Preferred Because of their High Liquidity

ETFs are not for long term investment. They are for short term investments and provide high liquidity, these are always preferred by high profile investors. Like other stocks, these funds are also listed in stock exchanges which are traded during the day. These funds are inter-linked with intraday trading and therefore the prices of the ETF heavily depend on the intraday trades.

For instance, if the intraday rates of the underlying assets change, the ETF prices also change. ETF investors are the experienced ones, and therefore they know what they have paid and what they will receive at the selling.

With liquid ETFs, investors move money from one place to another, construct strategies around their investment and manage intraday portfolios. Investing in ETFs allows investors to successfully invest in a diversified portfolio such as stocks, bonds, commodities, derivatives.

Smooth Fund Management

ETFs are passively managed funds that are specially designed to offer low-risk returns and high liquidity. Investors invest in an ETF when they sell equities from their portfolio. Many stockbrokers enable investors to reinvest 100 per cent of the proceeds into an ETF that too on the same day.

The stock market follows a settlement cycle of T+2 days, i.e. ETF units will get credited to investors’ accounts on the settlement day.

ETFs offer many benefits as in this type of scheme, individual investors hold their investment until they find a better alternative to move their funds. Another advantage of ETFs is that investors can forward the funds as a pledge against cash margins if investing in derivative segments.

Many brokerage houses accept ETFs as a cash margin if they want to trade in the derivatives segment.

Portfolio Diversification and Risk Management

Liquid exchange-traded funds offer investors better portfolio management by allowing them to invest in various sectors, industries, and country categories. They provide investors easy exposure to desired stock market segments.

ETFs are now available in the major asset classes, thus making them a good investment option. Also, investors can select to trade ETFs during stock market volatility or continue to invest based on their financial plans to earn profits.

Reduced Costs

The cost of investing in ETFs is quite less than mutual funds as the lower the costs, the higher the returns. Operational costs are an integral part of the structured investment as these costs include portfolio management fees, marketing costs, administrative expenses, distribution costs and more.

Here, lowering the costs means non-involvement of fund managers which means lower expenses of the funds. ETFs have lower expenses in transfers, monthly statements. Unlike open-ended funds, brokerages do require to send regular updates to the investors.

Tax Advantages

Mutual funds have more taxes than ETFs. This is because ETFs have a lower capital gain. The rate of capital gain tax applied to ETFs is also less as compared to mutual fund investments.

Returns

Liquid ETFs have only one dividend option. The daily earned dividends get reinvested into ETFs. Some ETF funds will credit bonus to its investors account weekly or monthly. Since the stock trading returns are low, brokerages waive off brokerage fees and depository participant changes on these funds.

Conclusion

Mutual funds and ETFs are similar investment types. However, the difference lies in the services they provide. ETFs provide higher liquidity than mutual funds and are also convenient to tap when cash flow is needed.

अमेरिकी फेड की नरमी से सोना -चांदी तेज़।

सोना दो सप्ताह के उच्च स्तर के पास पहुंच गया है और 21 मई के बाद से अपने सबसे बड़े साप्ताहिक बढ़त के साथ कॉमेक्स में 1830 डॉलर प्रति औंस के स्तरों पर है। कॉमेक्स वायदा चांदी के भाव भी 26 डॉलर के करीब पहुंच गए है। अमेरिकी फेडरल रिजर्व द्वारा पिछले सप्ताह की बैठक में संकेत मिले है कि छोटी अवधि में संपत्ति की कमी शुरू करने और ब्याज दरों में वृद्धि की संभावना नहीं है।डॉलर जो सोने के विपरीत दिशा में चलता है, एक माह के निचले स्तरों पर पहुंच चुका है। पिछले सप्ताह अमेरिका से जारी होने वाले बेरोज़गारी के आंकड़े भी फेड के अनुरूप रहे जिसमे बेरोज़गारी दावों में बढ़त दर्ज की गई है। एसपीडीआर गोल्ड ट्रस्ट में पिछले एक महीने के बाद 0.6 प्रतिशत की बढ़त दर्ज की गई है। घरेलु वायदा बाजार में सोना सप्ताह मे निचले स्तरों से 1000 रुपये तेज़ हो कर 48200 प्रति दस ग्राम रुपये के स्तरों पर है।  चांदी पिछले सप्ताह निचले स्तरों से 2300 रुपये तेज़ हुई है और इसके भाव 68200 रुपये प्रति किलो के करीब रहे। 10 साल की अमेरिकी बांड उपज निचले स्तरों 1.25 प्रतिशत पर ही बनी हुई है। जिससे सोने और चांदी के भाव को सपोर्ट है।‍

महत्वपूर्ण आंकड़े

‍इस सप्ताह के महत्वपूर्ण आर्थिक आंकड़े जिनमे सोमवार को अमेरिकी आइएसएम मैन्युफैक्चरिंग पीएमआई, बुधवार को एडीपी नॉन फार्म एम्प्लॉयमेंट चेंज, आइएसएम सर्विस पीएमआई, गुरुवार को ब्रिटैन की मौद्रिक नीति और शुक्रवार को अमेरिकी पैरोल के आंकड़े प्रमुख है।

तकनिकी विश्लेषण

‍इस सप्ताह सोने और चांदी में तेज़ी रहने सम्भावना है। सोने में 47800 रुपये पर सपोर्ट और 48500 रुपये पर प्रतिरोध है। चांदी में 66000 रुपये पर सपोर्ट और 69000 रुपये पर प्रतिरोध है।

Introduction:

Glenmark Life Sciences is a wholly-owned subsidiary of Glenmark Pharmaceuticals Ltd. Incorporated in 2011 and is situated in Maharashtra, India. Glenmark Life Sciences IPO is in news these days because it is open for a subscription (Initial Public Offering) from 27th July 2021 till 30th July 2021.

About the company:

The company is responsible for manufacturing and supplying high-quality APIs for gastrointestinal disorders, cardiovascular disease, pain management, and diabetes, anti-infectives, central nervous system disease and other therapeutic areas. The revenues it has generated in India in the last two years have grown at 71.62%. While revenues generated internationally since 2019 have grown at 25.61%.The major competitors of the Glenmark Life sciences IPO within the API market contain Laurus Labs, Divis Labs, Shilpa Medicare, Aarti Drugs, and Solara Active Pharma Sciences.

What are its objectives for raising an IPO?

• Paying off outstanding purchase considerations
• For funding capital expenditures
• Geographic expansion
• Growth in API and CDMO business

Financial highlights:

• Sales that are the total revenues stands at Rs 1885.98 crore for FY21
• PAT of FY21 is Rs 351.58 crore
• Net margin dropped to 18.64% from 20%. in FY21
• The debt to equity ratio is 1.27 times.
• Return on net worth is 46.71% for 2021.
• Net cash generated from operations was for FY 21 is Rs 388.11crore, for FY20 is Rs 195.01 crore, and FY19 is Rs 10.35 crore.
• Earnings Per Share is around Rs.32.61
• The price/earnings ratio is about 21.31 – 22.08
• Net Asset Value stands at Rs.69.82 per share

Fresh equity shares up to a total of Rs 1,060 crore will be issued. Under this public issue, the issue particularly includes an offer for the sale of 63 lakh equity shares by Glenmark Pharma. In this way, a total of Rs 1,513.6 crore will be available at the upper level of the price range under the SME IPO. The company had planned to issue fresh equity for Rs. 1160 cr but then the issue size got reduced to Rs. 1060 cr. Even to the astonishment of investors, the shareholder quota was totally skipped. It then was termed as investor unfriendly move as it sent wrong signals in the primary market. The equity trading of the corporate is going to be listed on BSE and NSE. Glenmark shares are available at a premium of ₹300 within the grey market, that's from the difficulty price of ₹695 to ₹720 about 40 per cent higher. GMP is very volatile because the Glenmark shares were available within the grey market at a premium of ₹200 to ₹205. So, the share market trading is predicted to reply strongly to the public issue.

Strengths:

• Strong growth in top-line, bottom-line expansion
• Strong margins
• It has a great financial performance track record and it provides return ratios
• It holds leadership in APIs and has a strong relationship with global generic companies.
• High-quality product manufacturing.

IPO Details:

• Glenmark Life Sciences IPO details
• Subscription Dates:27 – 29 July 2021
• Price Band: INR695 – 720 per share
• Fresh issue: INR1,060 crore
• Offer For Sale: 63,00,000 shares (INR437.85 – 453.60 crore)
• Total IPO size: INR1,497.85 – 1,513.6 crore
• Minimum bid (lot size): 20 shares
• Face Value: INR2 per share
• Retail Allocation: 35%
• Listing On: NSE, BSE

Whom to Invest and How Much to Invest

The reservation was kept in the following manner half of the total issue is for qualified institutional buyers, 35 per cent is kept for retail investors, and the remaining 15 per cent is for non-institutional investors. Glenmark Life Sciences has reduced its IPO size as compared to earlier. Also, if you want to invest in it, then at least 14 to 15 thousand will have to be spent. The company has made a lot of 20 shares. A person can buy at most 13 lots. The company will pay its expenses and borrow from the money earned from this IPO.

Conclusion:

Grey market observers are attracted by Glenmark shares. API business is expected to reach USD 306 bn by the year 2027 due to the coronavirus. The second reason being we are becoming independent as of now in China so we don’t plan to export drugs from China. The issue when compared to its peers is reasonably priced in terms of price to its earnings ratio. Hence, we recommend subscribing to the IPO.

The term "debenture" comes from the Latin word “debentur,” meaning "they owe." In simple terms, debentures represent a company's debt. They are one of the most popular ways for companies to raise money, along with bonds.

When a company or the government needs funds from the public, they often issue debentures. These are essentially loans that the company must repay after a certain period. In return, the company pays the debenture holder a fixed interest at regular intervals—such as quarterly, monthly, or annually.

Key Features of Debentures

• Acknowledgment of Debt: A debenture is a document that acknowledges a company's debt.
• Issued with a Company Seal: It is issued under the company’s common seal.
• Can Be Secured or Unsecured: Debentures can either be backed by the company’s assets (secured) or not (unsecured).

Types of Debentures

Companies can issue different types of debentures based on their needs. These can be classified according to security, tenure, interest rate, redemption terms, and more.

The two main types of debentures are:

1.   Convertible Debentures: Convertible debentures give investors the option to convert their debenture holdings into equity shares of the issuing company. This conversion is based on specific terms outlined at the time of issuance, such as the conversion ratio (the number of shares one debenture can be converted into) and the conversion period (the time frame during which conversion is allowed). Investors are often attracted to convertible debentures because they offer the potential for capital appreciation if the company’s stock price increases, in addition to the regular interest payments. However, because of this conversion option, the interest rate on convertible debentures is usually lower than that on non-convertible debentures.

2.   Non-Convertible Debentures (NCDs): Non-convertible debentures do not offer the option to convert the debenture into equity shares. These debentures are purely debt instruments, meaning the investor is only entitled to receive fixed interest payments and the principal amount upon maturity. Because they lack the potential upside of conversion to equity, NCDs typically offer higher interest rates compared to convertible debentures. This makes them an attractive option for investors seeking steady income with less exposure to equity market risks. NCDs are often considered safer investments compared to convertible debentures, as they do not depend on the company's stock performance.

There is also a lesser-known type called Partially Convertible Debentures, where only a portion of the debenture can be converted into company shares.

Registered Debentures:
Registered debentures are recorded in the company’s register of debenture holders. This means that the company keeps a record of the name, address, and details of the debenture holder. Because these debentures are registered, the transfer of ownership is formalized through a transfer deed, and interest payments are made directly to the registered holder. The benefit of registered debentures is that they provide a secure form of ownership, as the interest and principal repayments are assured to the individual whose name is on the register. However, this also makes them less flexible compared to bearer debentures, as they cannot be as easily traded.

Bearer (Unregistered) Debentures:
Bearer debentures are not registered in the name of any individual or entity in the company's records. Instead, they are transferable simply by delivering the debenture certificate to the buyer, making them more like cash instruments. The person holding the physical debenture certificate (the bearer) is entitled to receive the interest payments and the principal amount upon maturity. Because of this, bearer debentures offer a high degree of anonymity and ease of transfer but come with increased risk, as they can be easily lost or stolen. The ease of transferability makes them a popular option for those who want flexibility in their investments, though they are less secure than registered debentures.

Redeemable Debentures:
Redeemable debentures have a specified maturity date, at which point the issuing company is obligated to repay the principal amount to the debenture holders. These debentures may offer fixed or floating interest rates and are considered safer than equity investments, as the repayment date is predetermined. Redeemable debentures provide a clear exit strategy for investors, as they know when they will receive their capital back. Companies often use redeemable debentures to finance projects with a finite timeline, aligning the repayment date with expected cash flows.

Irredeemable (Perpetual) Debentures:
Irredeemable, or perpetual, debentures do not have a fixed maturity date. Instead, they exist indefinitely and are only repayable at the company’s discretion, usually upon liquidation or under specific circumstances outlined in the debenture agreement. These debentures provide a steady stream of interest income for investors but do not offer a guaranteed return of principal at a set time, making them more suitable for investors with a long-term investment horizon. Because of their perpetual nature, the interest rates on irredeemable debentures may be higher to compensate for the lack of a defined repayment date. They are often used by companies with stable cash flows looking for long-term financing without the pressure of repayment deadlines.

Why Companies Use Debentures

Companies issue debentures mainly to raise funds for growth, research, and other business needs. They prefer debentures over equity shares for two key reasons:

1.   No Ownership Dilution: Issuing debentures does not dilute the company’s ownership, unlike issuing new shares.

2.   Lower Cost: Raising funds through debentures is often cheaper than raising funds through equity shares.

In some cases, companies issue secured debentures to protect investors' money.

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The Importance of Debentures in Financing

Debentures are important for companies with steady earnings, as they can easily service the debt and offer security with their assets. Companies must manage their debt-to-equity ratio carefully to maintain financial health.

Recent developments in the debenture market have made them more attractive:

• Support from Investment Institutions: Organizations like LIC and UTI invest public funds in debentures, boosting confidence among investors.
• Trustees for Debenture Holders: Institutions now act as trustees to safeguard investors' interests, providing more security for their money.
• Investor Preference: High-yield, low-risk securities like debentures are increasingly popular among investors.

Conclusion

Debentures play a crucial role in corporate financing by providing companies with a way to raise funds without diluting ownership. For investors, debentures offer regular interest payments, and in the case of convertible debentures, the potential to become shareholders.

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