Edelweiss IPO

Many brokerage firms have started to come in IPO's. Recently after, Motilal Oswal Financial and Religare Enterpirises , one more firm namely Edelweiss capital is tapping the market from today. Both the IPO's which had come earlier had seen a good result. So, may be the case of this IPO.

Edelweiss Capital is a company which is involved in the business of providing investment banking, institutional equities, private client broking, asset management and investment advisory services, wealth management, insurance broking and wholesale financing services to corporate, institutional and high net worth individual clients.

The ipo price range is Rs. 725-Rs. 825 per share. And minimum order quantity is 8. So one should apply in 8 lots. And the ipo is from Nov 15-Nov20.

CRISIL the rating agency has rated the ipo as 4/5 (above average). The IPO has been already subscribed 5.24 times on the first day.

The other brokerages already listed include Indiabulls Financial Services, Emkay Share and Stocks Brokers Ltd, Almondz Capital & Management Services Ltd, India Infoline, IL&FS Investmart and Geojit Financials.

IPO of Barak Valley Cements Limited

The Initial Public Offering (IPO) of Barak Valley Cements Limited is scheduled from 29-Oct-2007 to 01-Nov-2007. The issue price range is Rs. 37/- to Rs 42/-. The minimum order quantity is 150 shares and the market lot is 150 shares (i.e., you can order only in multiples of 150 shares.)

This company is located in the Barak Valley region of Assam. Because of its location in the north eastern part of our country, it enjoys various benefits offered by the government for that region. Some of the benefits are 100% central excise duty exemption, 100% central sales tax exemption and 100% income tax exemption. For more complete details of the benefits it enjoys, check here.

This company has been awarded Certificate of Excellence from Institute of Economic Studies (IES), Delhi. But, after reading this, I am not very much impressed with that award. Anyway, wait for the recommendations to decide about this IPO.

Stop-Loss Order

A stop-loss order, or stop order, is a type of advanced trade order that can be placed with most brokerage house. A stop loss order gives your broker a price trigger that protects you from a big drop in a stock. You enter a stop loss order at a point below the current market price. If the stock falls to this price point, the stop loss order becomes a market order and your broker sells the stock. If the stock stays level or rises, the stop loss order does nothing. This differs from a conventional market order, in which the investor simply specifies that he or she wishes to trade a given number of shares of a stock at the current market-clearing price. Thus, a stop-loss order is essentially an automatic trade order given by an investor to his or her brokerage. It will only become active and be executed once the price of the stock in question falls to the specified stop price stated in the investor's stop-loss order.To say in short, Stop loss orders are cheap insurance that protects you from a loss.For most stop-loss orders, the brokerage house normally looks at the prevailing market bid price (i.e. the highest price for which investors are willing to buy the stock at a given point in time), and if the bid price reaches the specified stop-loss price, the order is executed and the shares are sold. The bid price is used for stop-loss sell orders - instead of the ask price or the market-clearing price - because the bid price is the price a seller can receive presently in the market.

A stop-loss is designed to limit an investor's loss on a security position. Setting a stop-loss order for 10% below the price at which you bought the stock will limit your loss to 10%.

Positives and Negatives

The advantage of a stop order is you don't have to monitor on a daily basis how a stock is performing.
The disadvantage is that the stop price could be activated by a short-term fluctuation in a stock's price. The key is picking a stop-loss percentage that allows a stock to fluctuate day to day while preventing as much downside risk as possible. Setting a 5% stop loss on a stock that has a history of fluctuating 10% or more in a week is not the best strategy: you'll most likely just lose money on the commissions generated from the execution of your stop-loss orders.

There are no hard and fast rules for the level at which stops should be placed. This totally depends on your individual investing style: an active trader might use 5% while a long-term investor might choose 15% or more.

Another thing to keep in mind is that once your stop price is reached, your stop order becomes a market order and the price at which you sell may be much different from the stop price. This is especially true in a fast-moving market where stock prices can change rapidly.

A last restriction with the stop-loss order is that many brokers do not allow you to place a stop order on certain securities like OTC Bulletin Board stocks or penny stocks.

Not Just for Preventing Losses

Stop-loss orders are traditionally thought of as a way to prevent losses thus it's namesake. Another use of this tool, though, is to lock in profits, in which case it is sometimes referred to as a "trailing stop". Here, the stop-loss order is set at a percentage level below not the price at which you bought it but the current market price. The price of the stop loss adjusts as the stock price fluctuates. Remember, if a stock goes up, what you have is an unrealized gain, which means you don't have the cash in hand until you sell. Using a trailing stop allows you to let profits run while at the same time guaranteeing at least some realized capital gain. A Stop Loss Order can be placed only with a limit price.

ICICI Bank's "BankAtHome"

ICICI Bank launches new services to all its savings and current account customers namely "BankAtHome" service. It is a facility where we can give orders to the bank either through internet or phone, and they will come to home to provide the service. ICICI's bank's head Mahinder Juneja(Retail Liability group) says

"Bank@Home is like a courier service wherein the banking facility is made available at the customer's doorstep."

The services being offered to the customer through BankAtHome includes cash pick-up and delivery, cheque pick-up, demand draft and pay order delivery. This service would be available to customers across 28 locations and 294 branches. Currently only few places this service is offered, and they are planning to extend the service to all branches in all destinations.

SBI to offer reverse-mortgage-loan

State Bank of India is launching reverse mortgage loan for the senior citizens from october12 called the "SBI reverse mortgage loan" available to all citizens above 60 years. The loan would be given to spouse provided if he/she is above 58 years, which carries the interest rate of 10.75% p.a which would be reset at the end of every 5 years along with the revaluation of the security and re-adjustment of loan instalments, if necessary. There is no upper limit of the loan, which means the customer could avail loan for any amount.

Reverse Mortgage Loan is a new concept in India, where the customers can avail loan using their homes as collateral security. They can opt lumpsum payment at the beginning or monthly or quarterly payments.

Here the borrowers need not repay the loan and can continue living in the house, during their lifetime. Thereafter, their legal heirs have to repay the loan, or the bank will sell the property and liquidate the loan, and the surplus amount, if any would be repaid back to the heirs.

LIC is also ready with the product and plans to launch it soon, Says SK Mitter, director and chief executive of LIC Housing Finance said,

“Reverse mortgage product is on our agenda. There is a market for reverse mortgage. We are ready with the product as per the guidelines issued by National Housing Bank and will launch it in some time."

Other Banks which offer this concept are DHFL and Punjab National Bank.

Public Provident fund

Public Provident Fund popularly known as PPF, is the scheme introduced by central bank in the year 1968. The scheme enables the people to invest in the fund and obtain tax benefits. At the moment it is EEE (Exempt Exempt Exempt - the money you invest, the interest earned, and the final withdrawable amount are all tax exempt). The main features of the fund are as follows.

1. Any individual and individual on behalf of minors are eligible to open the account.
2. The minimum investment is Rs. 500 and you can invest upto a maximum amount of Rs. 70000.
3. Duration of the account will be 15 years.
4. Only one account can be opened in the name of a person
5. 12 deposits can be made in a year.
6. Loans can be availed from the 3rd year and the amount is limited to 25% of at the end of two years preceding.
   
7. Interest is charged at the rate of 1% if prepaid within 36 months and at 6% on the outstanding loan after 36 months.
8. Withdrawal is permissible from seventh financial year from the year of opening, limited to one in a financial year.
9. Amount of withdrawal is limited to 50 % of balance at the end of the fourth preceding year less amount of outstanding loan or 50% of balance at the end of immediate preceding year of withdrawal less amount of outstanding loan, if any whichever is less.
10. A subscriber can close the account in the 16^th financial year. The account can also be continued with or without subscription, for further blocks of 5 years.
11. Deposits are qualified for Income Tax rebate under section 88 of Income Tax Act.
12. Deposits completely exempted from wealth tax. Interest is completely tax free under section 80 of IncomeTax Act.
13. Interest rate is 8% tax-free compounded annually.
    

Let's say you put in Rs 60,000 in the first year. You will earn Rs 4,800 as interest rate. The next year, your interest rate will be computed on Rs 64,800 (Rs 60,000 + Rs 4,800) as well as whatever fresh amounts you deposit.

The interest rate on the PPF has been gradually lowered over the years (much to the dismay of millions of investors).

It was intially 12% per annum. It dropped to 11%, then 9.5% and is now 8%. This rate of interest is fixed (and changed) by the government.

In short, the main advantage of PPF is that you can be assured of money, as it is a government-backed scheme and it has an attractive interest rate, and also it also has tax benefit. To say the disadvantages, the interest rates keeps on changing with the change in the economy.

PowerGridCorporation IPO List Price

Power Grid Corporation has been listed today. It got listed at Rs. 90 Vs. 52 in National Stock Exchange and Rs. 85 Vs. 52 on Bombay Stock Exchange.

Power Grid Corporation IPO allotment

Power Grid Corporation is the biggest power-transmission company. Nearly half of the power generated in india is transmitted by pgcl, holding a sort of monopoly. Power Grid Corporation was created by the Government of India in 1992 by combining all interstate and inter-regional transmission assets in the country.

Along with its own transmission infrastructure, Power Grid Corporation also has a few power transmission joint ventures with companies like Tata Power (Tala Transmission project) and Torrent (Torrent Powergrid Limited). On a small scale, Power Grid Corporation also offers consultancy services to power transmission projects in India and abroad.

It came up with an IPO on sep10-13 with the price range of Rs.44-52. It was an attractive price to be applied. The main objective of the ipo was the proceeds of the IPO would be utilized for the company's transmission projects. 15 different projects will get fresh fund infusions.

And it was oversubscribed at 64.82 times with retail portion of 6.76 times. The issue price has been fixed at the higher range of Rs. 52. Any people who have applied for it would have listing gains from this IPO. Listing date is on october 5th 2007.

Allotment has been made now and result is out. You can check the allotment status in many sites including http://203.199.177.158/kristel/pgcipo.asp, www.chittorgarh.com