REPCO HOME FINANCE LIMITED IPO: all details

REPCO HOME FINANCE LIMITED
	*Non-Retail investors i.e. QIB and Non-Institutional Investors Bidding for more than 2 lac shall mandatorily use ASBA facility
Symbol	REPCO
Issue Period	13-March-2013 to 15-March-2013
Post issue Modification Period	16-Mar-2013
Issue Size	Public Issue of 1,57,20,262 Equity Shares of Face Value of Rs 10 Each
Issue Type	100% Book Building
Price Range	Rs 165 to Rs 172
Face Value	10
Tick Size	1
Market Lot	75 Equity Shares
Minimum Order Quantity	75 Equity Shares
IPO Grading	IPO Grade 3
Rating Agency	ICRA
Maximum Subscription Amount for Retail Investor	200000
IPO Market Timings	10.00 a.m. to 5.00 p.m.
Book Running Lead Manager	SBI Capital Markets Limited, IDFC Capital Limited, JM Financial Institutional Securities Private Limited
Syndicate Member	Sharekhan Limited, SBICAP Securities Limited, JM Financial Services Private Limited
Categories*	FI, FII, IC, MF, OTH, CO, IND, NOH and EMP
No. of Cities with Bidding Centers	243
Name of the registrar	Karvy Computershare Private Limited
Address of the registrar	Plot No. 17 to 24, Vittal Rao Nagar, Madhapur, Hyderabad 500 081, Andhra Pradesh, India
Contact person name number and Email id	Mr. M Murali Krishna, +91 40 4465 5000, repco.ipo@karvy.com
Prospectus	Click Here
Branches of Self Certified Syndicate Banks (SCSBs) where syndicate / sub syndicate member to submit ASBA form	Click Here
Ratios / Basis of Issue Price	Click Here

Outlook-Amara Raja Batteries, Nelco, Neyveli Lignite, DCB, Hero Honda, Strides Arcolab ::Business Line

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Please share your technical view on Amara Raja Batteries bought at Rs 207.

Kaushalendra Pratap Singh

Amara Raja Batteries (Rs 284.3): Amara Raja Batteries ceased its upward charge in January this year when it reversed lower from the peak at Rs 327. This decline ended after the stock lost 23 per cent from this peak with the bottom at Rs 249.

The significant point to note here is that the stock retraced around 30 per cent of the rally from the February 2011 low, during this correction. The stock has significant long-term support in the zone between Rs 230 and Rs 250. Long-term investors can hold the stock as long as it trades above Rs 230.

Sideways movement in the zone between Rs 230 and Rs 330 is possible for a few more months but this is conducive for the stock’s long-term prospects. It will imply that the stock could move beyond Rs 350 over the long-term.

Long-term supports below Rs 230 are at Rs 200 and Rs 170.

Please advise on the medium- and long-term outlook of Nelco. Can these be bought at current levels?

Anil

Nelco (Rs 42.1): The medium as well as the long-term trend in Nelco are currently down. The stock is, however, halting above key long-term support around Rs 40. Investors with a greater penchant for risk can buy the stock at these levels with stop-loss at Rs 36. Fresh purchases should, however, be avoided on a breach of this level since the target on a breach of this support is quite some way off, at Rs 21.

Key medium-term resistance is placed at Rs 65. Investors can offload part of their holding if the stock is unable to move beyond this level. Medium-term view will turn positive only on a close above Rs 80.

Kindly give your view on Neyveli Lignite Corporation bought at Rs 108 and Development Credit Bank at Rs 52. I can hold the stocks for six months.

P.S.R. Murthy

Neyveli Lignite Corporation (Rs 74.8): The trends along all time-frames are down for Neyveli Lignite Corporation. Investors can, however, draw solace from the fact that the stock is now close to its key support zone around Rs 70. This level has cushioned the stock twice already since November 2011.

Investors can, therefore, hold the stock only as long as it trades above Rs 60.

If the stock breaches this level emphatically and closes below it on a weekly basis, it will imply that the stock is heading lower to the October 2008 trough at Rs 44.

Medium-term resistances are at Rs 90 and Rs 110. The trend along this time-frame will turn positive only on a close above Rs 110.

Failure to do so will imply that the stock will continue to be under pressure. Targets on move above Rs 110 are Rs 124 and Rs 136.

New Companies Bill: More power to small investors ::Business Line

Some reasons why the new Companies Bill will make small investors smile.

When the prices of Satyam Computer’s American Depository Receipts crashed after its promoter admitted to cooking the books, the company’s overseas investors were quick to file a class action suit.

In 2012, three years after the scandal broke out, they received a settlement of $125 million. But Indian investors in the same Satyam stock have had to grin and bear as their shares crashed in value from Rs 182 to Rs 40.

When the companies they invest in fail or fall prey to bad governance, Indian investors have little option but to sell their shares at whatever prices they trade at. But the new Companies Bill has several provisions that may strengthen the hands of the small investor. This Bill, approved by the Lok Sabha in December, will soon be tabled in the Rajya Sabha.

Here are the key provisions.

CLASS ACTION SUIT

With increasing instances of corporate fraud, the new Companies Bill has laid down provisions for class action suits. Class action is a law suit brought by one or more individuals on behalf of a large group of people who have the same complaint. As per the new provisions, shareholders can file a suit on a fraudulent act by the company and claim for damages on the loss suffered.

Under clause 37 of the new Bill, a suit can be filed under grounds of misrepresentation or omission of facts in the company’s offer document. A suit can also petition against the business being conducted in a manner that is detrimental to the interests of shareholders (clause 245). However, the Bill requires at least 100 members for a class action. The good news is that when the petitioners have a favourable judgement, the company will have to reimburse the cost of arbitration.

The Companies Bill has also empowered the Serious Fraud Investigation Office by giving it the power to arrest the guilty (in case of certain offences) and asking the courts to treat the report of this office as a report by a police officer for framing of charges. This may help in bringing some quick relief to aggrieved investors.

EXIT OPTION

There have been a number of instances of companies using the proceeds of a public issue for purposes not disclosed at the time of the offer. Two companies — Bharatiya Global Infomedia and RDB Rasayans — were banned by the Securities and Exchange Board of India (SEBI) in 2011 from further accessing the capital market. This followed the former — an IT solutions provider — using the IPO money to settle an outstanding loan and the latter transferring it to a group company that was in financial distress.

There have also been instances of companies taking the legal route to changing the objects of the prospectus. Pradip Overseas, a home linen maker who raised Rs 100 crore from the market in 2010 to set up an SEZ, in six months shelved the plan and diverted the funds to an existing unit after passing a special resolution.

To alter the objects in the prospectus (offer document), a company currently needs to pass a special resolution and get it approved by three-fourth of members (who are present for the meeting). However, given that promoters control well over half the voting rights in most Indian companies, such resolutions become a sham.

The Ministry of Corporate Affairs has, however, now introduced a new provision in the Companies Bill (clause 27) that protects the interest of minority shareholders in cases similar to the ones above. It states that if a company has unutilised money from the initial public offer and is changing the objects for which the money was raised, it has to provide an exit opportunity to the dissenting shareholders. It further states that such an exit should be offered at a price that will be specified by SEBI. This clause will help the shareholders move out of the stock at a reasonable price. This protection may be important, given the tendency of Indian promoters to price their IPOs at stiff valuations, with many of them plunging below offer price soon after listing.

BOARD REPRESENTATION

The new Companies Bill mandates that minority investors should have representation in the board. Currently, appointing a director to represent the small investors is left to the discretion of a company. The Bill also states that listed companies should have at least one-third of the total number of directors as independent directors. An independent director is a person who is not related to the promoters or other members of the company. While having independent directors on the Board hasn’t proved to be a sure-shot method to deter companies from malpractices, increasing instances of institutional activism and the rise of proxy advisory firms may force greater accountability from independent directors.

In a recent instance, when ACC and Ambuja Cements proposed increasing royalty payments to their parent company, Holcim, before the board, the independent directors of both the companies objected to it on the grounds that it is against the interest of minority shareholders. This ultimately forced Holcim to agree to a lower hike in royalty than what was initially proposed.

To make shareholder meetings more meaningful, the new Companies Bill states that any shareholder meeting should have at least 30 members personally present (in case of companies with more than 5,000 members). If the quorum is not present, the company is supposed to adjourn the meeting.

PROTECTION FOR WHISTLE BLOWER

An independent director of the company or any employee who brings a company’s malpractices to light will be protected from unfair treatment. The new Companies Bill requires all listed companies to also establish a mechanism wherein employees can report their apprehension about the conduct of the business, its accounting methods or any other aspects, directly to the chairperson of the audit committee. The companies have to provide details of the above system in their Web site.

INSIDER TRADING

The Companies Act 1956 is silent on insider trading. Currently, all the regulatory requirements on insider trading are contained only in SEBI’s Prohibition of Insider Trading regulations. But with the new Companies Bill becoming a law, rules prohibiting insider trading will feature in the Companies Act itself, making it necessary for the compliance officers to actively monitor acts of insider trading in their companies.

What is more, the new Bill prohibits insiders of a company from trading directly or indirectly in shares both in the cash and futures market. The latter was excluded from the purview of SEBI’s earlier insider trading regulations. Any person who violates the clause will be punished with a cash fine or imprisonment or both.

Consider short straddle on NTPC ::Business Line

NTPC (Rs 149): The long-term outlook for NTPC remains negative. However, in the short-term, it is likely to move in a narrow range. It finds near-term resistance at Rs 154 and support at Rs 143 and the next one at Rs 138. A close above the resistance has the potential to lift the stock towards Rs 166.

F&O pointers: NTPC witnessed accumulation of short positions on Friday. Options are not that active. However, a little cue available indicates a neutral view on NTPC as both call and put of 150 strike witnessed unwinding of open interest positions.

Strategy: Consider short straddle on NTPC. This can be initiated by selling 150 strike of both call and put. While the call closed at Rs 2.65, the same strike put closed at Rs 3.05.

Short straddle strategy is best suited when one expects narrow movement of the underlying. While this strategy entails only a limited profit to the extent of premium collected, loss could be unlimited if NTPC swings wildly in any one of the directions, i.e., either up or down.

Maximum profit occurs if NTPC closes at Rs 150 at the time of expiry. In that event, the profit would be about Rs 11,400. Traders are advised to consider this strategy till expiry. The position will start pinching traders if NTPC moves above Rs 155 or closes below Rs 144.

Follow-up: Last week, we advised traders to consider a short on IndusInd Bank. As the counter surged strongly, we advise traders to exit immediately.

Pre-market: Nifty seen opening soft; may test 6,000 levels::ET

The 50-share Nifty index is expected to open soft on Monday tracking mixed Asian markets and the index is likely to test its key psychological level of 6000 in trade today. 

At 07:30 a.m., Nifty India stock futures in Singapore were trading 6.5 points higher at 5972.50, indicating a soft opening on the domestic market. 

Nifty has managed to recover more than 300 points in the last 4 trading sessions, and Sensex has rallied close to 900 points. The BSE Sensex closed at 19,683.23, up 269.69 points over the previous close and the NSE Nifty closed at 5,945.70, up 82.40 points on Friday. 

"According to our Elliot prediction, markets have managed to take support at the zone of 5600-5700 levels and met with the first target of 5821 and then 5920 on Nifty spot levels," says Swati Hotkar, Technical Analyst at LKP Advisory. 

"After the breaking levels of 5920, markets saw a flurry of short covering and long build-up leading us to believe that in the next couple of days, the support of 5920 could be a very crucial support for the indices," she added. 

Hotkar is of the view that with a strong performance from the frontline stocks, this rally looks sustainable, provided there are no major surprises arising in the global markets. 

On Friday, US stocks edged higher with the Dow Jones Industrial Average set a fresh record for the fourth straight session supported by solid jobs data. 

"The Labor Department reported that the economy generated a net 236,000 new jobs in February, far more than expected, pulling the unemployment rate down to 7.7 per cent from 7.9 per cent," AFP reported. 

The Dow Jones industrial average rose 67.58 points, or 0.47 percent, to 14,397.07, a record closing high. The Standard & Poor's 500 Index added 6.92 points, or 0.45 percent, to 1,551.18. The Nasdaq Composite Index gained 12.28 points, or 0.38 percent, to end at 3,244.37. 

Asian shares eased after surprisingly strong U.S. labor jobs data showed economic recovery there gaining traction. 

"Data over the weekend showed China's uneven economic recovery signaling a looming dilemma for policymakers, as inflation stood at a 10-month high in February," said a Reuters report. 

U.S. crude was down 0.3 percent at $91.64 a barrel. 

Japan's Nikkei 225 index was trading 0.8 per cent higher at 12,395.17 and Hong Kong's Hang Seng index was trading 0.45 per cent higher at 22,194.12. 

South Korea's Kospi index was trading 0.04 per cent lower at 2004.45. China's Shanghai index was trading 0.3 per cent lower at 2,311.12. 

Nifty F&O Cues: 

Nifty futures shed 48,100 lk shares in OI 

Nifty 5700 call shed 6.5 lk shares in OI Nifty 5800 call shed 10.3 lk shares in OI Nifty 6000 call shed 9.8 lk shares in OI Nifty 6200 call added 7.6 lk shares in OI 

Nifty 5800 put added 12.7 lk shares in OI Nifty 5900 put added 26 lk shares in OI Nifty 6000 put added 12.9 lk shares in OI 

SGX Nifty 5,982.00 +16.50 ; Markets to open up again

SGX Nifty 5,982.00 +16.50 ;
Singapore Exchange
8:50 AM India time
Markets to open up again
March 11, 2012