THE MUCH AWAITED PUBLIC ISSUE FROM L&T GROUP IS FINALLY ANNOUNCED....
PLEASE FIND THE DETAILS OF THE SAME BELOW...
L&T Finance Holdings Ltd IPO
BOOK RUNNING LEAD MANAGERS:
JM Financial Consultants/Citigroup Global Markets/HSBC Securities and Capital Markets/Barclays Securities/Credit Suissue Securities/Equirus Capital.
Syndicate Members: JM Financial Services P. Ltd/SMC Global Securities Ltd/ Karvy Stock Broking Ltd/IDBI Capital Market Services Ltd.
Issue Period: July, 27 to July, 29, 2011
Issue Size : Rs. 1245 cr
Price Band: Will be announced two working days prior to the issue opens
Lot Size: Will be announced two working days prior to the issue opens
Employee Discount : Will be announced two working days prior to the issue opens
Registrar: Sharepro Services (India) Private Limited
QIB Book: 50% of Net issue size
HNI Book: 15% of Net issue size
Retail Book: 35% of Net issue size
Invest through ASBA
Watch this space for More iformation in the nere future....
Covering all the Daily Updates From The Indian Stock Market To Help You In Investing To Get Maximum Gains.
Monday, July 18, 2011
Tuesday, March 08, 2011
Introduction to Futures
A future contract is an agreement between two parties to buy or sell an underling asset at a certain price after a certain time frame. The time frame generally ranges from 1 month and beyond. Futures market is a remedy to the problems countered by the market players while participating in the forwards market. Future contracts are more standardized in nature and are traded on an exchange, compared to the forwards contract. The standardized contracts consist of an underlying asset with a standard specification like quality, quantity, location of settlement, and a definite time frame.
The noble laureate , 1990, Mr. Merton Miller says that financial futures represent the most significant financial innovation of the last twenty years.
To overcome the pertinent problem of ‘Credit risk’ in the forward contracts, a group of businessmen in Chicago formed the Chicago Board of Trade (CBOT) in 1848 with an intention to provide a centralized location to know the buyers and sellers. In the year 1865, CBOT went one step further and listed the first exchange traded financial derivatives called Futures Contracts. In the year 1919, a spin-off of the CBOT- Chicago Butter and Egg Board was recognized to trade in futures. Its name was later changed to Chicago Mercantile Exchange (CME). Both the CBOT and CME are recognized as the two largest Financial Exchanges of the modern era.
The ‘ Father of Financial Futures’, Mr LEO Melamed, then chairman of CME, was instrumental in launching the first financial derivatives in the year 1972, in the form of currency futures through the International Monetary Market (a division of CME). During the mid 80’s financial futures became most actively traded derivative instruments. In the recent years, market for financial derivatives has grown by leaps and bounds. In the class of equity derivatives, futures and options on stock indices have gained more popularity then individual stocks.
Futures Terminology:
To understand Futures one needs to be familiar with the terms given below:
a) Spot Prices: The price of the underlying asset in the market currently.
b) Futures Price: The anticipated price at which participants buy/sell the futures contract.
c) Contract Cycle: The term of the contract. Currently, India the exchange traded futures have a cycle like 1 month, 2 month and 3 month and terms generally used for the contract are Current Month, Near Month and Far Month, respectively. The contracts at NSE expire on the last Thursday of every month and a new contract bearing a 3 month expiry is introduced.
d) Expiry Date: This is the last date on which the contract is traded. Post this date the contract ceases to exist.
e) Contract Size: This is also called as the LOT SIZE of the contract. It signifies the standard quantity of the assets to be delivered under one contract.
f) Basis: It is defined as the Future price minus the spot price. In a normal market, if the future price exceeds the spot price it is assumed that the basis is positive and the underlying can reap better profits on the expiry and vice versa.
g) Cost of Carry: The relationship between the spot and the future price can be summarized in the terms of Cost of Carry. This measures the storage cost plus the interest that is paid to finance the asset less the income earned on the asset.
h) Initial Margin: It is the amount that must be deposited in the account at the time of entering (creating position) the future contract.
i) Marking-to-market: It is the difference of price between the closing prices of two trading days. This is settled everyday by the exchange. At the end of the trading day the margin account is adjusted to reflect the investor’s gain / loss depending in the future’s closing price.
j) Maintenance Margin: This is somewhat lower than the initial margin. This is set to ensure that the balance is the margin account never becomes negative. If the balance in the margin account falls below the maintenance margin, the investor receives a margin call and he is required to top up it with the shortfall. Before the commencement of the next trading day.
IMPORTANCE OF THE DERIVATIVE MARKET IN AN ECONOMY
Derivatives market help in increase savings and investment in the long run for the economy. The derivatives market has to bear a lot of criticism and fear in the economy but it performs a no of economic functions. These can be read as below:
1. Prices in an organized derivative market reflect the perception of the market participants about the future and lead to price discovery of the underlying asset. The prices of the derivatives converge the price of the underlying at the expiration of the contract term. This helps in discovery of not only the future price but also the current price of the asset
2. The derivatives market helps to transfer risk.
3. The derivatives help the spot market in witnessing higher trading volumes as there are more number of participants.
4. This market helps in shifting the speculation to a more controlled environment. In the absence of an organized derivative market, speculators trade in the underlying cash markets. Margining, monitoring and surveillance of the activities of various participants become extremely difficult in this kind of mixed market.
5. Existence of an organized derivative market helps the economy by acting as a catalyst for new entrepreneurial activities. It often energizes others to create new businesses, new products and new employment opportunities in an economy.
Sunday, February 06, 2011
Invest in IPOs, The ASBA route...
Investment through the Initial Public offering (IPO) has been flair of the investors in India, for decades. This is also the primary step where in the investors learn investing in the stock market. Over the past decade it is observed that the participation of the retail investor for IPO has taken a large leap as they are proving to be an avenue to make quick money as the IPOs list at high premium to the issue price.
Retail investors are subscribing IPOs hand to hand and their increased participation is making the IPOs a success for the issuing company. Mostly the IPOs are oversubscribed i.e., more applications for the shares offered for sale by the company. It is almost certain that due to oversubscription, the investors will not get the number of shares they apply for in an IPO – most of the time two lots are alloted for four applied, one lot for five and sometimes nothing at all! Running in the race to apply for the shares in an IPO, investors run out of cheque leaves and also experience that the balance in the savings account has dip below the minimum balance required. Banks mostly charge penalties to the account holders who do not maintain a minimum balance. The securities market regulator and watch dog of the investor community in INDIA, the Securities and Exchange board of India (SEBI) has formulated a smarter way of investing in IPOs wherein you can make applications for IPOs with the amount residing in your account till the allotment is finalized. This way is called as “Application Supported by Blocked Amount” (ASBA). This facility can be an ‘Icing on the cake’ for the investors in the country.
ASBA- Application Supported by Blocked Amount is an application that authorizes the banker to block a specific sum of money in an individual's bank account for an IPO and debit the account only to the extent of the shares allotted to the individual. However, even as the blocked amount will not be available for use of the customer and he will continue to earn interest on it.
The benefits that an investor can derive from ASBA are
a) Cancelling and revising the bid is also possible.
b) The application amount is not debited from the savings account.
c) Keep earning interest on the amount parked in the Savings account.
Unlike the normal procedure where the debit happens immediately and the applicant needs to wait for refunds on a partial allotment, the ASBA route provides interest and saves time.
Now the question arises, how does one apply for ASBA?
Applying for ASBA
To bid in an IPO, the investor has to take either the e-route via on-line trading account or fill the physical form and submit it with his banker/broker. In the first scenario, taking an online investor into consideration, the process is very simple, he needs to just check the ASBA check-box in his screen (top brokerage houses provide ASBA facility for their online clients) and rest of the process is taken care of automatically. Whereas, if the investor takes the traditional way of applying to IPOs still, he needs to approach his banker (ASBA application forms can be downloaded from the NSE/BSE Web sites too) for an ‘ASBA Bid cum Application' form.
The applicant has to fill in basic details that include bank account number, PAN number, demat number, the bid quantity and bid price and submit the form with the banker (if the applicant is a Net banking client, he may be able to do this online itself). The banker then uploads details of the application in the bidding platform and simultaneously blocks the amount in the client's account. What is to be noted here is that not all banks have ASBA facility; only self certified syndicate banks (SCSBs) offer this.
List of SCSBs is given as a link below. To name a few, State Bank of India, HDFC Bank, AXIS Bank, ICICI Bank, Bank of India, Kotak Mahindra Bank, Standard Chartered Bank etc., are among those offering the facility. The best thing in this way of applying is that currently most brokers and bankers offer this service free of cost for their clients. They collect the selling commission or the processing fee from merchant bankers of the issue.
With ASBA applications just kicking off, there has been queries as to whether one can apply at the cut-off price and if the place bids can be revised. The answer is: Yes, one can do that. “The investor has the option of revising and even cancelling the bid till the cut-off time on the last day of the issue”. The process is simple and doesn't require much of a doing.
Process to be complied:
The investor need to have a current/savings account with one of the SCSBs to be able to apply via ASBA route in IPOs. While accessing this route the investor should ensure that he makes sufficient amount is available in his account while making the application. Once the process is complete, the banker sends in an acknowledgement which should be filed and kept for future reference.
Recently, brokerage houses have also been given the ‘green' signal by SEBI to distribute ASBA forms. So now you needn't even walk up to the bank for an ASBA application; you can send it through your broker (not all brokerages currently offer this service).
Important Links:
ü List of SCSBs (including details Controlling Branch & Designated Branch)
ü To register with the Exchange the self certified syndicate banks has to submit an undertaking as per the prescribed format.
ü Investors, wishing to apply the E-route or Online trading account click here
Retail investors are subscribing IPOs hand to hand and their increased participation is making the IPOs a success for the issuing company. Mostly the IPOs are oversubscribed i.e., more applications for the shares offered for sale by the company. It is almost certain that due to oversubscription, the investors will not get the number of shares they apply for in an IPO – most of the time two lots are alloted for four applied, one lot for five and sometimes nothing at all! Running in the race to apply for the shares in an IPO, investors run out of cheque leaves and also experience that the balance in the savings account has dip below the minimum balance required. Banks mostly charge penalties to the account holders who do not maintain a minimum balance. The securities market regulator and watch dog of the investor community in INDIA, the Securities and Exchange board of India (SEBI) has formulated a smarter way of investing in IPOs wherein you can make applications for IPOs with the amount residing in your account till the allotment is finalized. This way is called as “Application Supported by Blocked Amount” (ASBA). This facility can be an ‘Icing on the cake’ for the investors in the country.
ASBA- Application Supported by Blocked Amount is an application that authorizes the banker to block a specific sum of money in an individual's bank account for an IPO and debit the account only to the extent of the shares allotted to the individual. However, even as the blocked amount will not be available for use of the customer and he will continue to earn interest on it.
The benefits that an investor can derive from ASBA are
a) Cancelling and revising the bid is also possible.
b) The application amount is not debited from the savings account.
c) Keep earning interest on the amount parked in the Savings account.
Unlike the normal procedure where the debit happens immediately and the applicant needs to wait for refunds on a partial allotment, the ASBA route provides interest and saves time.
Now the question arises, how does one apply for ASBA?
Applying for ASBA
To bid in an IPO, the investor has to take either the e-route via on-line trading account or fill the physical form and submit it with his banker/broker. In the first scenario, taking an online investor into consideration, the process is very simple, he needs to just check the ASBA check-box in his screen (top brokerage houses provide ASBA facility for their online clients) and rest of the process is taken care of automatically. Whereas, if the investor takes the traditional way of applying to IPOs still, he needs to approach his banker (ASBA application forms can be downloaded from the NSE/BSE Web sites too) for an ‘ASBA Bid cum Application' form.
The applicant has to fill in basic details that include bank account number, PAN number, demat number, the bid quantity and bid price and submit the form with the banker (if the applicant is a Net banking client, he may be able to do this online itself). The banker then uploads details of the application in the bidding platform and simultaneously blocks the amount in the client's account. What is to be noted here is that not all banks have ASBA facility; only self certified syndicate banks (SCSBs) offer this.
List of SCSBs is given as a link below. To name a few, State Bank of India, HDFC Bank, AXIS Bank, ICICI Bank, Bank of India, Kotak Mahindra Bank, Standard Chartered Bank etc., are among those offering the facility. The best thing in this way of applying is that currently most brokers and bankers offer this service free of cost for their clients. They collect the selling commission or the processing fee from merchant bankers of the issue.
With ASBA applications just kicking off, there has been queries as to whether one can apply at the cut-off price and if the place bids can be revised. The answer is: Yes, one can do that. “The investor has the option of revising and even cancelling the bid till the cut-off time on the last day of the issue”. The process is simple and doesn't require much of a doing.
Process to be complied:
The investor need to have a current/savings account with one of the SCSBs to be able to apply via ASBA route in IPOs. While accessing this route the investor should ensure that he makes sufficient amount is available in his account while making the application. Once the process is complete, the banker sends in an acknowledgement which should be filed and kept for future reference.
Recently, brokerage houses have also been given the ‘green' signal by SEBI to distribute ASBA forms. So now you needn't even walk up to the bank for an ASBA application; you can send it through your broker (not all brokerages currently offer this service).
Important Links:
ü List of SCSBs (including details Controlling Branch & Designated Branch)
ü To register with the Exchange the self certified syndicate banks has to submit an undertaking as per the prescribed format.
ü Investors, wishing to apply the E-route or Online trading account click here
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