LIC - Keep some money for my policy maturity too please...

LIC buys 4.6% of the ONGC auction out of the 5% which was opened for auction by the Govt.
The Govt price was 290 Rs (already at a premium to market value).
The average bid by LIC came at 303 Rs (huh......)

LIC made a loss of 900 Cr in two day as shares of ONGC closed @ 280 Rs

Read:
http://www.moneycontrol.com/news/business/valuelic-investmentongc-dips-by-rs-900cr2-days_676359.html#toptag

So:
- We buy LIC policing trusting LIC to put it in sound savings
- Govt needs money (after our taxes)
- Govt directs LIC to buy these stakes
- LIC follows directives and loses money
- Net Net we lose money since its our investment

Is this bad?
No.

Then whats bad?
Govt may look for fiscal deficit every year and more and more stake will be auctioned (of PSUs)
If no one buys, guess who will buy?

uh oh.

Reminds me of some auto ad on TV where the guy looks in the mirror and slaps himself ....*slap*

RIL - Sirf naam hi kaafi hai

Assume you have a huge cash pile with you.

You can invest it
OR
You have the choice of investing or putting it in FD/NCDs till you decide what to do with it.

Person who opts for option 2 will be appreciated as being prudent.

RIL is doing just that.

Have a look @
http://economictimes.indiatimes.com/special-report/mukesh-ambanis-ril-not-buying-despite-its-huge-pile-of-cash/articleshow/11087027.cms

25 Bn USD of cash ----- uh

News:
RIL buys stake in Nuclear Design Company -
http://www.hindustantimes.com/business-news/CorporateNews/RIL-buys-stake-in-Terra-Power-US/Article1-785831.aspx

RIL buys stake in US Shale gas company
http://energybusiness.in/ril-acquires-stake-another-shale-gas-company/

It has many ventures

- RIL Pet Chem
- Oil, Gas and Refinery
- Retail (Includes Gold, Grocery, Shoes etc)
- Retail Outlets to sell Petrol
- Internet Telephony (4G)

RIL has the following unique problem:
What to do with so much cash?????

While other companies struggle with the following question:
Where to get cash from????

Isn't that an issue we all dream we should be in?

Will you buy RIL for the sheer cash size it has?

GAIL

GAIL -
This is the stock which we believe could be a huge one going forward. Why?
- As gas market grows in India, GAIL will be a big beneficiary.
- As output from KG Basin + ONGC basin etc increases, it will help GAIL
- GAIL will be working on TAPI pipeline and that will also benefit GAIL [http://www.financialexpress.com/news/gail-to-lay-tapi-pipeline/302677/1]
- Investments in Shale Gas [http://www.business-standard.com/india/news/gail-to-invest-1-bn-in-shale-gas-/454382/]
- CBM fields to generate more hydro carbon [http://www.business-standard.com/india/news/gail-arrow-consortium-spuds-first-core-well-in-cbm-block/322823/]
- Cash rich company
- Eyeing stake in Petronet LNG [http://www.firstpost.com/investing/gail-keen-on-buying-adb-stake-in-petronet-lng-for-about-rs-614-cr-97954.html]
- Eyeing stake in Gujarat Gas [http://articles.economictimes.indiatimes.com/2011-11-15/news/30401623_1_bg-stake-mahanagar-gas-city-gas-distribution-business]

What do you think?

DTC and effects on ELSS MF

DTC draft seemed to propose removal of Sec 80 C benefits for ELSS MF.
Since DTC will kick in from the next financial year, you can still buy them this year and get tax benefit under 80C this year.

However, if folks buy in Dividend re-investment option, not only will they be in a 3 year lock in (for every investment) but also not get any benefit [your new units are locked for a further 3 years].
With that in mind, change your dividend reinvestment option to a simple dividend or growth option.

My thoughts:
Most new investors used ELSS option to tap the market and get tax benefits.
Won't investors whose ELSS mature this year redeem and not invest next year?
Wouldn't this reduce the popularity of ELSS + reduce the assets?
Won't this have any effect on the performance of these funds?

For existing ELSS schemes, I would definitely want to try and change my option from Divident Re-investment to either Growth or Dividend payout.
Once 3 years lock-in period completes, exit.

Instead of investing in a new ELSS scheme this year, shouldn't we look at other options?
Await the DTC to become an act, see the impact and take a calculative decision?

These are my thoughts? I could be wrong....what do you think?

Pipavav Defence.....

Pipavav Defence.....

http://www.livemint.com/2011/09/12134610/Mazagon-Dock-Pipavav-to-joint.html

. Picked by state-run Mazagon Dock Ltd as its joint venture partner to build warships for the Indian Navy.

. Plans to list company overseas

. Will float an independent company to be named Mazagon Dock Pipavav Ltd (I don't like this until existing shareholders get a stake)

. Company will be executing the current order book of Mazagon Dock worth Rs1 lakh crore (Rs1 trillion) and look for new orders jointly

. Pipavav Defence owns India’s biggest dry dock used for building and repairing ships and has a licence from the government to build warships

. The company proposes to convert an existing wet dock into a second dry dock to enhance its capability to build warships for the Indian Navy and the export market

. Pipavav is currently executing orders worth a combined $1.5 billion, with defence work accounting for some 42% of the total value

Rakesh JhunJhunwala has a stake in this company.
In Pipavav, Rakesh Jhunjhunwala and his family holds 10 mn convertible warrants issued at Rs 78 a share

What more does one want? Will you invest?

UPDATE (13th Oct) -
As per
http://www.moneycontrol.com/news/business/i-t-searches-at-pipavav-group-firmmumbai-delhi_598355.html#toptag

It seems the fate of the JV is unclear.

Health Care -- A good investment?

I was at a famous hospital (in Blore) for a lot of time last 2 weeks.
Have been frequenting there and visiting doctors for some health issues.

Couldn't believe the rush......costs of blood tests, xrays have grown...no complaints
Consultations fees of doctors in OPD go close to 300 Rs for a couple of minutes...
Credit cards get swiped one after the other...people are in queue waiting to pay.....drawers full of cash...500 Rs notes seem so little .....wads and wads of them....

Made me wonder....shouldn't health care stocks be on everyone's radar?

Just like when I got hit by a bolt of lightening when I realized the kind of money made by titan (tanishq).
Its the same bolt now.....I think I made a good decision by buying Titan... unless gold goes to such high levels that people stop buying...
Will it happen in India? Could be ....one never knows.

Going forward...people will still make families...and with growing income people will go to hospitals
And the way the hospitals are charging..they will break even and make profits...

Health care stocks now are appealing to me....something like Fortis HealthCare.

I will hope some schools (not everonn/educomp) come in IPOs ...they are minting money and will be a good investment.....

Till then..I will look @ Fortis Health Care a bit more closely.
What do you think?

Debt Instruments or FD - Use as Retirement plan?

Debt Instruments or FD - Use as Retirement plan?

Have heard many times the statement that -- "if you are a ling term investor with a horizon of 10+ years, you will reap benefits."
OR
"In the long term invest in equity MF"

But all of us would like to have a debt (read fixed guarantee) income scheme as well isn't it?

Here is what I was thinking and need your opinion on the same. (I haven't taken the taxation part into account.)

Fixed Deposit as a tool for retirement plan:

SBI current term deposit rate is 9.25%
20,000 INR invested now will give you close to 50,000 INR in 10 years.

Picture this:

Make a FD of 20,000 INR every month (till interest rates are high).
10 years later, you will get 50,000 INR per month (guaranteed) + your additional income at that time.


Recurring Deposit:

An RD of 2K per month for 10 years @ SBI (@ 9.25%) will generate income of 4L odd after 10 years.

Make a RD of 2K (or 1K) per month for 10 years @ SBI (assume 12 RDs)
Yearly - 24K (or 12 K). -- 2k * 12 or 1K * 12
At the end of 10 years, monthly one will get 4L (or 2L) per month for the next 12 months + your additional income at that time.

Debt MF:

Pick a MF with more or less guaranteed income
e.g. HDFC Monthly Income Plan - LTP - Dividend Re-investment (Monthly)
This scheme gives 0.06 INR per month as dividend.
Buy 17000 units (each @ 12.5 means 2.12L).
Monthly dividend on 1000 INR which can be re-invested.
This is 5% return

But after this, without doing anything, due to consistent dividend (note: if it continues that way)...
After 10 years one would have 28690 units.
Even if the NAV is same, it comes to 28690 * 12.5 = 3.58L
That comes to 6.8% yearly + any gains due to rise in NAV

What do you think? Makes sense?