CDSL IPO Review

Most awaited Central Depository Services (India) Limited (CDSL)  IPO hits the market next week. Incorporated on 12th December 1997, CDSL is the Leading Securities Depository in India by incremental growth of Beneficial Owner (“BO”) accounts over the last 3 Fiscals and by the total number of registered Depository Participants (“DPs”), as at the end of Fiscal 2016. CDSL offer services to the Depository Participants and Other Capital Market Intermediaries, Corporates, Capital Market Intermediaries,  Insurance Companies and Others.

CDSL IPO Details:

Price Band : Rs.145 - 149
Issue Size ( Rs.) Rs.509.92 Cr - 523.99 Cr.
Issue Size: 700,000 Equity Shares.

Bid Lot: 100 Equity Shares and in multiples thereafter.
Offer Period;  Monday, June 19 - Wednesday, June 21, 2017.

CDSL has a wide network of DPs, who act as points of service for their investors, operating from over 17,000 sites across the country. As of April 30, 2017, CDSL has 589 DPs servicing across 29 States and 7 Union Territories including 2 Overseas Centres. CDSL will continue to diversify their product and service offerings depending on investors' needs. They have received the LOI to register as a Warehouse Repository.  CDSL has also planning to expand their NAD project to include more Educational Institutions in the future.

At Rs. 149 per share, company's market cap will be Rs. 1,557 crore, with EV of Rs. 1,009 crore. This translates into EV/EBITDA multiple of 8.4x and 7.3x based on FY17 and FY18E earnings, and a PE multiple of 18x and 17x respectively, which is not expensive.

Giving sound fundamentals, sector tailwinds and inexpensive pricing, the issue is good for long term.

Read More

3 Big Data Challenges Your Business Will Face in 2017

3 Big Data Challenges Your Business Will Face in 2017

One of the biggest challenges companies face is balancing competing demands, such as security versus accessibility, data management, and data mining. These problems are only compounded by the sheer amount of data businesses are collecting; we are collecting masses of data without clear understanding regarding how it is used to improve the bottom line and suffer impaired productivity trying to sort through it all. This isn’t the only problem companies face today. Here are the four Big Data challenges your business will face in 2017.

Data Storage

While computing power doubles about every eighteen months according to Moore’s Law, the amount of data we generate is increasing 40 to 60 percent per year, depending on the business. This is separate from the indexes used to try to track the files where the information is stored and backups of the backups demanded by various government regulations or contractual requirements.

Companies are considering “data lakes” that store masses of data in unstructured formats, but now the problem of finding and converting data to usable information becomes even bigger.

Making Use of Data

Data takes the form of raw numbers and entries. Information is what you have when data has meaning attached. Knowledge occurs when you can use information to your benefit and we are throwing so much data at knowledge workers they are struggling to make use of it. Businesses face the challenge of finding people who can mine big data to generate the information knowledge workers need to make good decisions at the time they need it. This is a problem foreseen by management guru Peter Drucker, but at a far greater scale than what he imagined.

This challenge is multiplied by the various locations where data resides and conflicting data formats. And that is why Big Data analytic experts are paid such high salaries. The democratization of predictive analytics could potentially reduce this problem, but that is still in the future for most business cases, since data is becoming both more complex and disparate.

Security

Security is a major problem for big data companies. The cloud storage used to host the masses of data at a low cost per terabyte also gives many different people access. Even when the cloud server is relatively secure, backups and backups of backups to minimize disruption have to be protected and not always are. With the internet of things, security is often a distant third or fourth concern compared to data collection and sharing, though this information can be used against consumers.

Security can also be difficult when recovering lost data. Unfortunately, third-party data recovery services absolutely have to have access to crucial information when performing data recovery. This is why you should only work with SSAE 16 certified data recovery service such as Secure Data Recovery. You should also consult a secure data recovery expert from the start when setting up your databases.

Data storage has long been a problem for companies. Technology has kept up to date, but the internet of things and demands for 100% uptime make this a greater problem. Mining the massive, disparate, scattered and complex data sets to make use of it remains a serious challenge. This is in conjunction with the significant resources necessary to perform data mining. Securing data across many different platforms is an ongoing issue that is all too often neglected.

Read More

What Is The Difference Between Exchange Traded Funds (ETFs) and Mutual Funds (MFs)?

ETFs vs. Mutual Funds.

It’s important for investors to understand the key differences between traditional mutual funds (open-end) and exchange-traded funds (ETFs). Each has its advantages and disadvantages. This knowledge can translate into making informed investment decisions.

ETFs can be bought or sold just like stocks through stock exchanges anywhere across the country. While, mutual funds do not see price variation during trading hours as the Net Asset Value (NAV) is set at the end of each trading day. This gives an added advantage to ETF over traditional funds.

Rate of Return: Most of the ETFs track a particular index and are considered to have lower expenses than actively managed mutual funds. However, when investing in an ETF, an investor needs to pay commission to the broker. Investment in ETFs works out to be cheaper when compared with traditional mutual funds or index funds in terms of fees and other expenses.

Sales Load: ETFs do not attract any sales load or there are no minimum investment, where as traditional mutual funds, may have both.

ETFs does not attract Taxation ETFs are considered more tax efficient when compared to mutual funds.

While mutual funds and ETFs are different, both can offer exposure to a diversified basket of securities and can be good vehicles to help meet investor objectives. What is important is for investors to pick the best choice for their specific investing needs, whether an ETF, an open-ended mutual fund, or a combination of both.

Read More

Key Traits Every Good Investor Must Have

We’ve covered a wide range of subjects about investing and trading here on Master and Student. While the best tips and resources can help you succeed more as an investor, there are still some basic, important skills that you must have in order to stay ahead of the market. Having these key skills will not only make you a better investor, but also help you cope with market challenges in any circumstances. What are the key traits every good investor must have?


Cover Both Sides

For many beginner investors, making the decision to enter the market is a lot easier than deciding when to exit. In reality, however, having a good exit strategy is often more important than knowing when to invest. You need to know exactly what to do under different situations in order to stay successful.

The market can either go your way or turn against you; no matter how well you’ve calculated everything, there is still a possibility that one of these two outcomes may happen. You need to plan your exit before entering the market and anticipate both possibilities.

Let’s say you’re trading EURUSD and the market turns due to unexpected news. You can either remain in your trade, take active steps to manage your risks or decide to pull out at the right moment. Depending on the amount of margin you have and other crucial factors, the right decision can turn what would be a loss into a profitable trade.

Critical Thinking

There are a lot of data that needs to be analyzed before you can make wise, calculated investment decisions. A lot of independent investors are actually going back to school, taking advantage of programs from reputable universities such as Brandeis University to further strengthen their critical thinking and analytics abilities.


Proactive Learning

There are some interesting programs to take, too. The online MSMPP program, while mainly designed to help you become a better project manager, can help you master essential skills that will turn you into a good leader and decision maker. The project and program management degree also comes with a series of knowledge and skills that will make managing trades and investments a lot easier.

Going back to school is not a bad idea if you’re an active investor, because the third trait every good investor must have is proactive learning.

Yes, having the eagerness and ability to learn a must. The market is changing rapidly and you need to be able to understand the changes that are happening to fully understand what’s going on. The only way you can do that is by learning more about the governing aspects, as well as other details about the investment opportunities you’re approaching.

The same can be said for strategies and tactics. Investing in new instruments requires a lot of learning. You also need to learn from your past investments, especially the mistakes you’ve made in previous trades. Actively learning new things, along with the ability to think outside the box and to cover both sides, will make you an even better investor.

Read More

New IPO Allotment Rules - SEBI

How IPO shares gets allotted to retail investors.

Usually for any IPO that seems good value proposition and got hype in the market, retail investors become bullish and fascinated towards it. Retail investors are those who apply shares up to Rs 2 lakh for single application while the minimum application amount is Rs 10000-15000. Some retail investors who recently applied for IPOs are confused because they did not receive even a single lot of shares despite subscribing to the full quota of Rs 2 lakh.

In order to understand the rationale behind the allocation, we need to look at the guidelines issued by Sebi. 

In case of retail investors, the total number of applications received in the RII category is grouped together to determine the total demand in this category. If the aggregate demand in this category is greater than the allocation in the retail portion, then the maximum number of RIIs who can be allotted the minimum bid lot will be computed by dividing the total number of equity shares available for allotment to RIIs by the minimum bid lot, this is known as ‘Maximum RII Allottees’.

Assuming that there are shares worth Rs 10 lakh to be allotted in retail segment and the minimum lot size is worth Rs 10,000. Thus only a maximum of 100 applicants will be receiving the minimum lot of Rs 10,000. Since Sebi says that no RII will be allotted less than the minimum bid lot, in case of over subscription, allocation of shares lower than the minimum lot is not possible. In this case, the Maximum RII Allottees are 100.

In case there is a small oversubscription then first the minimum lot is distributed among all participants and then the balance available equity shares in the retail portion shall be allotted proportionately to the RIIs who have bid for more than one minimum bid lot.
But in case the number of RIIs is more than Maximum RII Allottees, the RIIs (in that category) who will then be allotted minimum bid lot shall be determined on the basis of draw of lots. The draw of lots is now a computerized process and thus there is no room for partiality.

source: BS

Read More