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Sovereign Gold Bonds 6th Tranche opens on 30th August

Sovereign Gold Bonds
29/08/2021

The sixth tranche of the Sovereign Gold Bonds issue for FY22 (the last for H1) opens for subscription on 30-Aug and closes on 05-Sep. This SGB tranche is priced at Rs.4,732 per gram, which is lower than the fifth tranche. In addition, digital applications get an additional discount of Rs.50 per gram, so the effective price will be Rs.4,682 per gram.

Sovereign Gold Bond prices are linked to benchmark 24-carat gold prices in the Indian market and units equivalent to grams of gold are issued. The returns on gold bonds will depend on the price of gold but there is an assured interest of 2.50% per year payable semi-annually. The gold principal of SGBs and the interest are guaranteed by the government.

Also Read: Merit in Buying Digital Gold

Sovereign gold bonds can be held in physical certificate form or in your Demat account. These bonds have a maturity of 8 years but after 5 years the RBI offers a buyback window for investors. In addition, SGBs are also listed after a period of 6 months, although liquidity in secondary markets is quite thin. Only if SGBs are held till maturity, the capital gains are free of tax. Otherwise, gains will be taxed at non-equity rates. Interest will be fully taxable.

Investors can buy a minimum of 1 gram of gold equivalent and a maximum of 4 kg per person and 20 kg in the case of trusts in one year. However, multiple family members can each buy up to 4 kg in a year. These gold bonds can be purchased from designated post offices, from SHCIL, from the online broking platforms of BSE and NSE as well as through banks. However, payment banks and SFBs are not eligible to sell Sovereign Gold Bonds.

Since 2015, the government has sold gold bonds worth Rs.32,389 crore till date.
 

See: How to buy Digital Gold

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Bharti Airtel to raise Rs.21,000 crore via Rights Issue

Bharti Airtel Rights Issue
29/08/2021

The board of Bharti Airtel has approved the issue of rights shares to the tune of Rs.21,000 crore or about $2.83 billion. The company has announced that the rights will be priced at Rs.535 per share, which represents a discount of 9.78% to the closing price of the stock on 27-Aug. Normally, companies issue rights to existing shareholders at an attractive discount to make the subscription attractive.

Bharti Airtel is yet to announce the record date for the rights issue because the rights offer will only be made to shareholders whose names appear in the register of shareholders as on the record date. Normally, 2 trading days prior to the record date is considered the last cum-rights date and the day after that, the stock starts trading ex-rights.

The board has already spelt out terms of payment for the rights issue. eligible shareholders will only have to pay 25% of the amount at the time of application of rights and the balance 75% will be payable in two instalments within a period of 36 months. The instalment dates are yet to be decided. Existing shareholders will get 1 rights share for every 14 shares held.

This will be the single biggest rights issue in India after the Rs.53,000 crore rights issue by Reliance Industries in 2020, which also entailed paying the rights subscription in 3 instalments. That means, Bharti shares will also trade simultaneously under partly-paid and fully-paid categories.

Promoters will fully subscribe to their quota of rights and will also take up any rights not taken up by other shareholders. Bharti Airtel needs a continuous supply of funds to take on competition from Reliance Jio as well as to pay the AGR dues of Rs.20,000 crore that is still pending to the Department of Telecommunications towards AGR charges. Rights proceeds will be used to bridge the funding gap.

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Vijaya Diagnostics and Ami Organics IPOs to raise Rs.2,465 cr

Ami Organics & Vijaya Diagnostics IPO
30/08/2021

After a brief lull in the IPO markets, the action will return this week. Two IPOs; Vijaya Diagnostics and Ami Organics will open for subscription on 01-Sep, Wednesday and close on 03-Sep, Friday. Vijaya Diagnostics will entirely be an offer for sale while Ami Organics will be a combination of fresh issue and OFS.

Vijaya Diagnostics IPO

This South based diagnostic laboratory specializes in radiology and pathology testing. It is tapping the IPO market with an offer for sale of Rs.1,895 crore. The promoter Surendranath Reddy as well as Karakoram Fund and Kedaara Fund will take partial exit via OFS. The IPO has 50% allocation for QIBs, 35% for retail and 15% for HNIs. Retail investors can apply in minimum lots of 28 shares. The IPO price band is Rs.522-531.

Vijaya Diagnostic enjoys the robust ratio of B2C/B2B in the diagnostics industry at 93:7, which enabled better operating retention per customer and per test. Vijaya’s net margins and ROCE expanded sharply between FY19 and FY21. The IPO values the stock at 60 times P/E, which is better than industry standards.

Ami Organics IPO

Ami Organics is a Gujarat based pharma intermediates manufacturer with 3 plants at Sachin, Jhagadia and Ankleshwar. It supplies to pharma companies for their API business. The Rs.570 crore IPO consists of Rs.200 crore fresh issue and Rs.370 crore OFS. The IPO has 50% allocation for QIBs, 35% for retail and 15% for HNIs. Retail investors can apply in minimum lots of 24 shares. The IPO price band is Rs.603-610.

Ami Organics has completed pre-IPO placement of Rs.100 crore with marquee institutions. Ami Organics saw sharp improvement in net margins and RONW between FY19 and FY21. As 70% of the IPO will be used to reduce debt, this should help ROCE in future. Its top pharma intermediate products have 70-75% market share in their respective segments. The IPO is priced at 41 times P/E, better than peer group.

 

Also Read:

1.   IPOs in September 2021

2.  Upcoming IPOs in 2021

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5 Stocks to Buy Today: 31st August

by 5paisa Research Team 31/08/2021

Every morning our analysts scan through the markets universe and chose the best momentum stocks to buy today. The stocks are recommended from a wider list of momentum stocks and only the best ones make it to the top 5 list. We also update on the performance of earlier recommendation every morning to help you with your trading journey. Here is a list of five stocks to trade today. The average holding period could be between 7-10 days on average.  

Stock Recommendations - August 31

 

Stock

Current Market Price

Stop Loss

Target 1

Target 2

CAMS

3,588

3,490

3,700

3,850

Strong momentum likely to continue

Holding Period: 1 week

 

Stock

Current Market Price

Stop Loss

Target 1

Target 2

DIVISLAB

5,104

4,970

5,260

5,400

Upmove supported by strong volumes

Holding Period: 1 week

 

Stock

Current Market Price

Stop Loss

Target 1

Target 2

POLYCAB

2,033

1,970

2,165

2,300

Stock has crossed previous resistance

Holding Period: 10 Days

 

Stock

Current Market Price

Stop Loss

Target 1

Target 2

GREAVESCOT

139

134

150

-

Double bottom pattern on chart

Holding Period: 5 Days

 

Stock

Current Market Price

Stop Loss

Target 1

Target 2

IOLCP

557

540

594

-

1) Contrarian trade

2) Small exposure can be created with strict stoploss

Holding Period: 10 Days

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A New Addition to Rakesh Jhunjhunwala's Portfolio?

Rakesh Jhunjhunwala to Invest in Syska LED
31/08/2021

For a long time, Syska LED has been a prominent advertiser in the mass media. Syska LED is currently a privately held company, with the promoting Uttamchandani family controlling the business. In a recent development, it emerges that ace investor Rakesh Jhunjhunwala has invested in Syska LED through RARE Enterprises. 

Also Read: Rakesh Jhunjhunwala's Portfolio 

Will Rakesh Jhujhunwala Invest in Syska LED?

While the details of the size of the stake or the deal value are not yet made public, what has emerged is that the term sheet has already been signed between the Uttamchandani family and RARE Enterprises. Rakesh Jhunjhunwala’s flagship has already made 15% of the committed investment and the balance amount is slated to be invested in Syska LED over the next 60-days.

The Uttamchandani family started off as distributors of T-Series Audio cassettes and CDs but subsequently diversified their focus into electronic product categories like LED, Personal Care Appliances, Mobile accessories, home appliances etc. The underlying theme of Syska LED has been to focus on products that are environment friendly and also save electricity bills for the average households in India.

This is one more in the long list of private investments that RARE Enterprises plans to diversify its investment portfolio beyond the realm of listed stocks. It may be recollected that last month, Rakesh Jhunjhunwala had also announced investment in launching an airline company. The association will also help catapult Syska into the next phase of growth.

For Syska LED, this association brings three distinct advantages. Firstly, it gives them the much needed funds and 360 degree expertise for scaling up their business. Secondly, this association would automatically make a number of marquee qualified institutional investors also interested in Syska LED. Above all, this could pave the way for eventual IPO and listing of the company in the coming years.

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Ola In Talks With Investment Bankers for $2 Billion IPO

Ola IPO Price, Date
31/08/2021

With the IPO season ready for digital plays, big boys like Ola cannot be too far behind. It is reported that Ola is in advanced discussions with Citigroup, Morgan Stanley, JPM and Kotak Mahindra Capital to lead manage its proposed IPO. The final list of BRLMs will be finalized ahead of the DRHP filing. Ola is expected to file for an IPO in the range of $1.5-2.0 billion around October this year.

Ola IPO Initial Details

An issue size of nearly Rs.15,000 crore would put its IPO on par with Paytm which is also planning to tap the IPO market in the current fiscal year. With the IPOs of Zomato and CarTrade getting a good response, a slew of digital plays like PolicyBazaar, MobiKwik, Paytm and Nykaa are preparing for IPOs. All these IPOs are expected to happen during the current fiscal.

Also Read: Upcoming IPOs in September 2021

Ola is a cab hailing service which was launched in 2010 by Bhavish Aggarwal on the lines of Uber in the global markets. Since 2010, Ola has raised nearly $4 billion and the proposed IPO is likely to look for valuations of $8-9 billion. During the pandemic, Ola had to let go many of its staff as services were shut. However, now its cab hailing is operating normally.

In July this year, Ola had raised $500 million from Temasek and Warburg Pincus. Ola counts some formidable names like Softbank, Tiger Global and Steadview among early investors. While the dates for the IPO are not yet known, the filing of DRHP is expected in October. That means, the actual IPO could happen either by December this year or in the early part of next year.

The phenomenal success of the Zomato IPO has given confidence that loss-making digital plays have an institutional and retail appetite in India. However, Ola could consider a simultaneous listing in India and abroad.

Read Now: Upcoming IPOs in 2021

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