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Coffee Day Enterprises (CDEL) is entering the market with an initial public offer (IPO) to raise Rs 1,150 crore at a price band of Rs 316-328 per equity share. The company owns the popular coffee chain – Café Coffee Day – and is the largest coffee retail company in India. The company also has diversified business interests through its subsidiaries across segments like logistics, financial services, hospitality, and technology parks.

The entire issue is for fresh equity which would be used by the company to finance the expansion of its coffee business, repayment and pre-payment of loans to the parent company as well as subsidiary and utilise the rest for general corporate purposes. At present, its promoters hold 63.3 per cent stake in the company; post-issue the shareholding will come down to 52.6 per cent.





Issue Details:

 Issue Open: Oct 14, 2015 - Oct 16, 2015
 Issue Size: Equity Shares of Rs. 10
 Issue Size: Rs. 1,150.00 Crore
 Face Value: Rs. 10 Per Equity Share
 Issue Price: Rs. 316 - Rs. 328 Per Equity Share
 Market Lot: 45 Shares
 Minimum Order Quantity: 45 Shares
 Listing At: BSE, NSE

At the higher end of the issue price, adjusting for the valuation of the listed plays (SLL and Mindtree) along with IT play, the coffee business is available at 25-26x its FY2015 EV/EBITDA which is in line with some of the listed comparable companies and thus is not cheap. However, given the strong brand image, extensive distribution reach and growing disposable income in India, the company is an attractive play on urban discretionary consumption and investors could look at it with mid-to-long term investment horizon. There may be listing gains, which risky traders would want to take to.

Speciality Restaurants is coming out with its IPO plans to raise about Rs 171-181 crore and this issue is open for subscription from May 16 to May 18. Speciality Restaurants is the owner of restaurant brands such as Mainland China, Sigree, Machaan and Oh!Calcutta among others.

The company plans to use the proceeds of IPO for developing new restaurants and partial repayment of debt. About 80 per cent of the proceeds (Rs 131 crore) would be used for the development of 45 new restaurants.
 
Issue Details:

Issue Open: May 16, 2012 - May 18, 2012.
Issue Size: 11,739,415 Equity Shares of Rs. 10.
Issue Price: Rs. 146 - Rs. 155 Per Equity Share.
Market Lot: 40 Shares.
Listing At: BSE, NSE.

Fundamentals:

For the fiscal Years 2010 and 2011 the company  reported an EPS of  3.92 and 5.48 respectively .  For the full year 2012, the EPS could be around Rs.4.25 and at the upper band, the IPO is done at 36 times the 2012 earnings. The book value of the company stands at Rs.32 for the reported year 2011 and the issue is being done at 5 times the book value. The company is growing at 30% and considering the appetite for such companies in food industries segment, the issue is worth  looking at. The only deterrent is the weak market condition and over pricing of the issue, in such market conditions. The company might do well post-listing, if not immediately.

Could be another Jubilant Foods ? Let's wait and watch.

What is Dividend Yield?

Dividends are payments made by a company to their shareholders and these payments are paid out of the profits made during the year. Dividend yields are returns from dividends, which can be calculated by dividing the dividend per share by the current market price of the stock. For e.g., a company quoting at 200, declares a dividend of 10, the dividend yield works out to 5%. High dividend yield stocks are for those investors who are looking for regular income as well as capital appreciation over a longer period of time.

These stocks can be picked up during market down trend or when market trend is not clear. In a downtrend, dividend yields of such companies goes up as the stock prices fall. Before investing in companies that provide high dividend yields, care to be taken that these companies have sound fundamentals, regular dividend paying and  enjoy healthy cash flows. We have picked few stocks which have high dividend yields in the range of 6-9% and with a low P/E ratio. Though the earnings growth of these companies may not be among the highest in the industry, they manage to deliver good results across business and economic cycles. During this time of the year, the companies declare their annual results and dividends. Hence, before investing in these companies, watch out for their annual results and performances as well.




The stocks that are picked have been limited to CNX 500 Index and of course, there are few other stocks outside this index with better yields also. While investing in the above stocks, an investor should limit their exposure to about 15-20% of their portfolio, since dividend-investing alone should not be anyone's investing strategy. If you find any other such high dividend yielding stock which might have missed our attention, please inform us or post them in the comment section.

With Indian economy moving on an up cycle during FY10, FIIs infused $20bn in Indian capital markets, and retail participation has also improved through direct investments through stock brokers,  insurance and mutual fund route. There is a significant jump in number of online trading by retail traders and this trend is likely to continue its upward journey. So let us throw some light on this brokerage sector, albeit cyclical in nature.

Corporate fund raising activity (through QIPs, IPO, and debt syndication) has gained momentum during FY10, along with the secondary capital market volumes which has clocked a growth of 60% yoy.  This has aided capital market intermediaries’ fee-income substantially. Operating cost of capital market intermediaries is largely variable in nature but still cost effective distribution model - franchisee and online trading through portals helps in keeping a check on operating cost. And, thus operating and net profit margins are likely to remain stable.

India Infoline, Edelweiss Capital and Motilal Oswal  are the prominent listed stocks in this sector. Post correction, these stocks are trading at discount to the benchmark index valuations. The valuations are reasonable, which make them stocks to watch on any declines.

Rajesh Exports (REL), in a potential game-changing move for the industry, announced plans to sell products at per-gram rate, the buyer paying no wastage, making and other hidden charges. REL said the initiative, promoted as Gold Revolution, would be launched at its Shubh retail outlet showrooms.

Contrary to the general practice of all jewellery stores, Subh outlets will not charge any additional charges like wastage, making charge, value addition charge, etc. REL will sell 22 carat gold jewellery and coins with Hallmark of 100 per cent guaranteed purity.

For example, if a customer buys 10 gms of gold at a price of Rs 1,600 per gm, he actually pays 15 per cent 20 per cent more than the Rs 16,000 jewellery due to various hidden charges. But Subh will charge only 3 per cent or Rs 48 more per gram towards its various costs.

In next 3 years REL plans to open 250 Subh showrooms in various cities in the country, a ten fold jump from 25 at present. This will help the company increase its presence in jewellery retail space which now accounts only for 2 per cent of its revenue. Going by these developments REL is a definitely a stock to watch, in the coming days.