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Manganese Ore India Limited (MOIL) largest producer of manganese ore and a 'Mini Ratna' PSU, is coming out with an IPO of 33,600,000 Equity Shares of Rs.10 each in the price band of 345-375. MOIL accounts for approximately 50.0% of India's total production of manganese ore and the company hopes to maintain its leadership position in the manganese ore market.

MOIL operates seven underground mines and three opencast mines to produce more then 1m tonnes of manganese ore. The company is well positioned to capture the growth potential of the Indian steel industry, due to its track record and strategic location of the mines. The key risk is that the Manganese ore and alloy industry has historically derived demand from the steel industry and hence is directly exposed to the volatility and the cyclicality of the global steel industry.

Details of the issue:

Issue Open: Nov 26, 2010 - Dec 01, 2010.
Issue Size: 33,600,000 Equity Shares of Rs. 10.
Face Value: Rs. 10 Per Equity Share.
Issue Price: Rs.340-375 Per Equity Share.
Listing at BSE and NSE.

The EPS for the year FY10 stands at Rs.28 and at the higher band of Rs.375 the company would be trading at 14 P/E, which is well priced. There is no direct comparable listed peer with which the stock can be compared with other than NMDC which trades at at 25 P/E.

With the expectations of robust growth in the domestic steel production, demand for manganese ore is likely to increase during the next few years. The domestic manganese ore demand to grow at a CAGR of about 9% during the next 2-3 years.

After the stupendous success of Coal India IPO, the MOIL IPO too, will evoke good response from institutional and retail investors. Hence, long term investors can apply for this issue and not for listing gains alone.

Despite President Barack Obama's recent election setbacks at home, his trip to India last week was met with a measured amount of success, according to both U.S. and Indian media. One of the biggest announcements that Obama made during his trip was his intention to support securing India a permanent seat in the U.N.'s Security Council. Although the chances of securing a seat are rather slim, Obama's endorsement is a big first step.

Most importantly, however, the U.S. president and Prime Minister set an agenda for improved trade between the two countries, signaling new opportunities for Indian and U.S. economic growth. Although many see the President's move to expand trade with India a politically risky one, considering how pervasive the misinformed notion of Indians taking jobs from Americans is, Obama addressed the issue straightforwardly.

A recent CNN article quoted Obama as saying:

"In 2010, trade between our countries is not just a one-way street of American jobs and companies moving to India. It is a dynamic, two-way relationship that is creating jobs, growth, and higher living standards in both our countries."

Obama unveiled a plan on Saturday November 6 to create over 50,000 jobs in the United States with $10 billion dollars in new contracts for the Indian government and private companies. Obama also urged India to loosen its trade and investment barriers in various different industries like retail and telecom, an appeal that went well with Indian officials.

After Obama's weekend visit, a New Delhi article published Tuesday November 9 reported that India asserted it was time to "seriously consider" making an agreement that would further open trade between the two countries. Although any new free trade agreements will likely take a long time to negotiate, Minister of Commerce and Industry Anand Sharma noted the importance of engaging "in negotiations for a comprehensive economic partnership agreement that encompasses trade, investment, and services."

The New Delhi article underscored the fact that while industry in India has long favored lowering barriers in trade and investment, for the first time the government is opening up to the idea. For both Indian and American investors, these talks could signal new global opportunities in a variety of industries.

By-line:
This guest post is contributed by Alvina Lopez, who writes on the topics of accredited online schools . She welcomes your comments at her email Id: alvina.lopez @gmail.com.

Power Grid Corporation of India,  India's biggest power transmission company is coming out with follow-on public offer of about 84 cr shares , which comprises a fresh issue of 42 cr shares and adding to that , an offer for sale of 42 cr shares by the President of India. The proceeds will be utilized for constructing country-wide high capacity power transmission corridors.

Details of the issue:
Issue Open: Nov 09, 2010 - Nov 12, 2010.
Face Value: Rs.10 Per Equity Share.
Issue Price: Rs.85- Rs.90.
Discount of 5% is available to retail investors.

The company's second quarter results were quite impressive. It announced a 41 percent increase in its net profit to Rs.651 crore and Rs.1,354 crore in first six months compared to the Rs.1,006 crore in 2009. The annualized EPS for the current year works out to Rs.6 and the FPO price of  85-90 makes the company available at 15 P/E, which is reasonably good. Currently the book value stands at Rs.40 and the offer is made at 2.25 times the book value.

Considering sound fundamentals, investors can subscribe to this issue with a medium to long term view. After the successful issue of Coal India, the Power Grid issue is also likely to be a hit.

Axis Mutual Fund has launched an open-ended Gold ETF, Axis Gold ETF. This is yet another Gold ETF similar to already existing Gold Bees and other ETFs. During the new fund offer (NFO) period, retail investors can apply for minimum of Rs.5,000 and multiples of Re.1.

After the NFO period, the fund will be traded on the National Stock Exchange and traded like equity shares. The fund will be open for subscription from October 20 to November 3.

Why Gold ETFs ?

Gold ETFs lets you buy Gold without the necessity of taking physical delivery and without the associated risks of physical storage and impurities.

Is Gold a good investment opportunity even at this prices?

Gold has seen a steady rise since last 5 years with an annualized return of about 24%, currently trading about Rs.2000 per gram. But over 15-20 year period it tends to average less than 10% . Currently high price rise in Gold prices is due to global risk-aversion and supply constraints, as production has dropped.

Is this price rise sustainable and how much one can invest in these funds?

For the past 2 years investments in Gold has yielded more than 50%,  this doesn't mean gold will tend to keep on rising further to get sustainable returns.  Any investment in gold can be considered as an insurance and diversification only.  Therefore investors need not allocate their entire amount or large junk of their portfolio in such Gold Funds. One could invest about 10% of their portfolio only , if they haven't already invested in earlier such schemes.

Coal India Limited, a Navratna PSU, is entering the capital markets with a public issue of 63 crore equity shares. This issue, slated to be the largest primary market offering in the history of the Indian Stock Markets, will garner around Rs. 15,000 crore.

Coal India is the world’s largest coal producing company, as well as the world’s largest coal reserve holder. The company has 471 mines across the country and manages over 80% of India's annual coal demand.

Details of the issue:
Issue Open: Oct 18, 2010 - Oct 21, 2010.
Issue Size: 631,636,440 Equity Shares of Rs. 10.
Face Value: Rs. 10 Per Equity Share.
Issue Price: Rs.225 - Rs.245 Per Equity Share.
Listing At: BSE, NSE.


Fundamental Details:

For FY10, the company reported total income of Rs. 52,592 crore with net profit of Rs. 9,834 crore, resulting in an EPS of Rs. 15.5. Comparing with NMDC, around a P/E of 16-17, the announced price band  of  Rs.225-Rs.245, is a  reasonably good price to invest for long term investors. A 5% discount offered for retail investors could add as an extra cushion factor. Investors can apply for this issue with a long term view and not for listing gains alone.

Both the premier exchanges BSE and NSE are to kick off pre-open call auction section, soon. The pre-open call auction session will be for 15 minutes between 9 am and 9.15 am. The session would work as follows: The first eight minutes will be reserved for order entry, modification and cancellation, the next four minutes will be kept for order matching and trade confirmation. The remaining three minutes will be the buffer period to facilitate the transition from pre-open session to the normal market.

Initially, the call auction session will be applicable for Nifty-50 scrips and Sensex-30 scrips. More scrips will be gradually added to the list. Normal trading in other stocks will begin as at 9.15 am.

What is this pre-open session all about?

Indian markets have seen huge volatility, particularly during open trades. In the past few years, indices have hit the down circuit quite a few times and up circuit once. Call auction at pre-open will help arrive at a proper price, removing volatility and freak trades.

How does this order matching works?

In a Call Auction market, orders are gathered for execution at predetermined times when the market is called. At the call, all buy orders are aggregated into a downward sloping demand function and all sell orders are aggregated in an upward sloping supply function.The logic of order batching which is core to the Call Auction mechanism is well explained here.

Call Auctions across the world have been applied to various sessions during the trading day at the Open, Close and during trading halts. So, hopefully no more freak trades of abnormal highs and lows.

The international derivatives exchange EUREX, jointly operated by Deutsche Bourse AG and SIX Swiss Exchange, organizes markets globally. Since 2007, Deutsche Bourse holds a five percent stake in the Bombay Stock Exchange. EUREX is home to the Euro zone interest rate and equity index benchmark derivatives.

EUREX will be the first exchange to launch Indian equity index futures and options outside India. Offering futures and options on one single platform allows market participants to use combined trading strategies (for example volatility trades) and permits cross margining between the two contracts.

With the launch of SENSEX derivatives EUREX, it provides new opportunities for customers seeking an appropriate hedging tool for Indian exposure or arbitrage trading EUREX SENSEX Futures and Options will be denominated in U.S. dollars and settled in cash.

More details about the contracts are available at Sensex Futures And Options