SNOWMAN LOGISTICS LTD. – IPO DETAILS

 

Company:-

• Snowman Logistics Ltd (‘Snowman’), founded in 1993, is a leading integrated player in a predominantly unorganised cold chain industry in India. The largest shareholder in the company is Gateway Distriparks Ltd (GDL), which owns 54.04% stake in the company. The other shareholders in the company are Mitsubishi Logistics Corporation (2.92%), Mitsubishi Corporation (12.57%), International Finance Corporation or IFC (12.40%) and Norwest Venture Partners VII-A Mauritius (13.78%).
• Snowman is engaged in cold chain warehousing and transport and value-added services for perishable goods. In transport business, the company offers services through primary and secondary transportation. Primary transportation is an intercity service while secondary transportation is an intra-city service.
• The company’s cold chain business currently has 21 warehouses across 13 locations in India and provides services to various industries such as seafood, poultry, fruits and vegetables, dairy, ice-cream, food processing, pharmaceuticals and some other niche segments.
• Total revenue increased from Rs.114.10 Crores in Fiscal 2013 to Rs.155.23 Crores in Fiscal 2014. The Net profit as restated increased from  Rs.19.88 Crores in Fiscal 2013 to Rs.23.23 Crores  in Fiscal 2014.
• Special Tax benefits available to the Company under Sec 35 AD:

The company is entitled to claim deduction under Sec 35AD, Subject to the fulfilment of conditions. The amount of deduction is 150% of capital expenditure other than investment in land incurred wholly and exclusively for the purpose of specified business carried on by it in the year in which the expenditure is incurred.

The Company is eligible for deduction under this section since it is in the business of setting up and operating cold chain facilities. It is eligible for deduction under this section for its new cold storage units set up after the date from which this deduction is applicable.

• Issue has been graded by CRISIL Ltd and has been assigned the “IPO Grade 4/5” indicating that the fundamentals of the issue are above average in relation to other listed equity securities in India.
• The shares will be listed on BSE and NSE.

Business Overview

The company commenced their business as a trader of frozen marine products and in Fiscal 1998, they commenced cold storage operations at 4 (four) locations. They have expanded their operations to become an integrated temperature controlled logistics service provider with an ability to service customers on a pan-India basis.

 The company operations can be classified into the following business segments:

1. Temperature controlled services; and

2. Ambient distribution.

 

In previous years they only operated in the temperature controlled services and ambient distribution business segments. In Fiscal 2014, company commenced ambient warehousing.

Company offer blast freezing facilities at their temperature controlled warehouses. Their integrated ‘Source to Stores’ operations comprise warehousing, primary distribution and secondary distribution and value-added services including kitting, labelling, sorting and bulk breaking.

As of March 31, 2014, company’s operations comprised 23 temperature controlled warehouses across 14 locations in India  including Serampore, Taloja, Palwal, Mevalurkuppam and Bengaluru capable of warehousing 58,543 pallets and 3,000 ambient pallets. Further, as of Fiscal 2014, they operated 370 Reefer Vehicles consisting of 307 leased and 63 owned vehicles.  As of March 31, 2014, they engaged a total workforce of 1,490 including 383 permanent employees and 1,107 on a contract labour basis.

Company’s distribution services comprise primary and secondary transportation. The primary transportation (long haul) generally facilitates inter-city transport of products. The primary transport service includes door to door service, customized Milk Runs and Part Cargo Consolidation. They also provide secondary transportation i.e. last mile distribution, supplying, amongst others, QSRs, retail outlets, restaurants and the hotels.

Company’s cold chain business currently has 21 warehouses across 13 locations in India with a capacity of 46,751 pallets and a fleet of 238 reefer vehicles (reefers). Also, its ambient (normal temperature) warehousing business has a capacity of 3,000 pallets. 11 of the 21 temperature controlled warehouses are on leased land. The company’s transport business has 175 leased reefers and 63 owned reefers. The company also offers value-added services such as labeling, grading, packaging and inventory management to some of its clients.

Total revenue increased from Rs.114.10 Crores in Fiscal 2013 to Rs.155.23 Crores in Fiscal 2014. The Net profit as restated also increased from Rs.19.88 Crores in Fiscal 2013 to Rs.23.23 Crores in Fiscal 2014.

The total revenue in Fiscal 2014 comprised Rs.151.86 Crores and Rs.1.55 Crores, constituting 97.83% and 1.00%, respectively, from each of temperature controlled services and ambient distribution business.

Brief Financial Details                                                                                  (Rs. In Crs)

Particulars	Mar’14	Mar’13	Mar’12	Mar’11
Share Capital	124.11	102.91	102.91	102.91
Reserves	97.20	25.52	5.64	0.72
Net Worth	221.30	128.43	108.55	103.63
Total Revenue	155.23	114.10	64.20	47.59
Revenue Growth (%)	35	85	36	—
Profit Before Tax	13.69	14.43	9.77	7.40
Net Profit	23.23	19.88	4.92	6.36
PAT as % to revenue	15	17	8	13
Earnings Per Share	1.96	1.93	0.48	0.62
Return on Networth(%)	10.50	15.48	4.53	6.13
Net Asset Value per Equity share (Rs.)	17.83	12.48	10.55	10.07

ISSUE  HIGHLIGHTS

 Issue Period                           Issue Opens On*: Tuesday, August 26, 2014
                                                Issue Closes On : Thursday, August 28, 2014
*The Anchor Investor Bidding Date shall be one Working Day prior to the Bid / Issue
Price Band                              Rs.44 – 47
Bid Lot                                    300 Equity Shares and multiple thereof
Issue Size                                Rs.185 – 197 Cr.
Lead Manager                         HDFC Bank Ltd
IPO Grade                               IPO Grade 4 / 5 by CRISIL
Registrar                                 Link Intime India Pvt. Ltd.

Issue                                       4,20,00,000 Equity Shares

QIB*                                          Not less than 3,15,00,000 Equity Shares – 75% of Net Issue
NIB                                           Not less than 63,00,000 Equity Shares – 15% of Net Issue
Retail                                       Not less than 42,00,000 Equity Shares – 10% of Net Issue

* Company may allocate up to 94,50,000 Shares of the QIB Portion, to Anchor Investors.

EQUITY FUNDS : CATEGORY PERFORMANCE

CATEGORY	AVERAGE  RETURNS  AS  ON  10TH  JUNE  2014
	1 W	1 M	3 M	6 M	1 Yr	3 Yr	5 Yr
Equity – Auto	5.74	19	35.7	49.8	78.9	29	28.8
Equity – Media	2.57	20.73	24.6	27.9	31.6	21.7	16.5
Equity – FMCG	1.27	2.68	7.79	11.4	7.16	21.4	27.3
Equity – Pharma	0.37	-3.26	-2.11	9.93	21.3	16.3	25.1
Equity – Diversified	5.97	18.36	27	32.3	40.4	14	14.6
Equity – Tax Planning	5.72	16.85	23.5	29	37.6	13.5	13.5
Equity Theme – Shariah	4.7	11.26	13.1	22.7	39.1	13	16
Equity – Banking	6.13	22.38	39.9	35.7	28	12.9	17.7
Equity – Infotech	0.75	0.03	-9.34	4.29	42.1	12.4	19.4
Exchange Traded Funds (ETFs)	5.84	17.65	26.5	25.7	31.6	12.2	12.8
Equity – Index	5.53	14.39	18.8	21.2	27.8	11.7	9.96
Fund of Funds – Equity	3.52	10.26	15.4	19.4	23.7	10.6	11.1
Equity Theme – Natural Resources	8.97	31.78	47.6	47.1	62.4	9.92	7.9
Global Funds – Expo’ on Foreign Equity	2.81	7.73	10	10.7	22.2	9.77	11.1
Equity Theme – Infrastructure	7.92	30.52	47.2	47.7	51.2	8.66	6.8
Global Funds – Expo’ on Foreign Mutual Fund	1.31	0.63	-0.72	1.85	10.2	4.01	8.15
Exchange Traded Funds (ETFs) – RGESS	5.3	13.84	19.8	22.4	29.4	–	–
* Returns Value Below 1 Year are Absolute and Above 1 Year are CAGR for Equity

INVESTMENT ADVICE FROM JOHN BOGLE

The founder of the Vanguard Group, John Bogle served Chairman and Chief Executive Officer until 1996 and Senior Chairman until 2000. An ardent defender of the common investor, his book ‘Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor’ was a bestseller and is regarded as a classic.

This month John Bogle turned 85. Here is some timeless advice from him meted out over the years.

Bogle’s counsel for long-term investors in 2008 amidst market volatility and fear mongering.  

I think basically you should not be doing anything differently. I mean investment is a pretty simple thing.

You’ve got to say, “I know I’m not smart enough to get out at the high. I know I’m not smart enough to get back into the low, so I’m just going to stay the course,” as we would say at Vanguard, and hang on through all that.

Importantly, if I’m trying to accumulate money for retirement, or to buy a home or to educate my children, what you want to do is keep investing and say, “How could I keep investing the day if the market goes down 600 points?” That’s the greatest time in the world to invest, certainly better than doing it the day before it goes down 600 points.

I think people have lost sight of the fact that a sharp market decline is–of course it’s bad for sellers, but it’s good for buyers. Since the stock market is the interaction of sellers and buyers, it’s always good for somebody.

Bogle on the need for investors to stay focused on their own financial plan and not get distracted by market noise.

The focus, that investors have, is always on what’s done well. Our neighbor is doing better. He owned gold or he owned growth stocks, or value stocks did nothing. And the moment the temptation gets to its highest level, that’s the moment when people start to think I’ve got to change now, and that’s the worst time to do it. So I’m still a “stay the course” person. Own the stock market, own the bond market, as modified to meet your needs, and don’t peek. One of the greatest rules for investing ever made…

The stock market is a giant distraction to the business of investing. Stocks don’t produce anything. They are means of owning companies who produce something. And so if people would just get their arms around investing and stop speculating, they would definitely accumulate much, much greater.

CNBC requested Bogle to contribute his thoughts about compounding, a subject he has returned to many times over the years in his books and other writing.  

For as long as I can remember, compound interest has been at the center of my own investment thinking. The opening words in the very first chapter of my very first book were: “The Magic of Compounding. ‘The greatest mathematical discovery of all time’ is how Albert Einstein described compound interest … the value of $1,000 invested in stocks in 1872 would have grown to $27,710,000 in 1992 [when the book was published and the historical rate of return on stocks was 8.8%] … the magic of compounding writ large.”

Since a comfortable retirement is the principal objective of nearly all U.S. families, in my book, “The Battle for the Soul of Capitalism,” I use a 65-year time horizon, one that assumes a 45-year working career (to age 65) and a further 20 years of life (to age 85) based on today’s actuarial tables: “$1,000 invested at the outset of the period, earning an assumed annual return of, say, 8% would have a final value of $148,780—the magic of compounding returns.”

The principles of sensible savings and investing are time-tested, perhaps even eternal. The way to wealth, it turns out, is to avoid the high-cost, high-turnover, opportunistic marketing modalities that characterize today’s financial service system and rely on the magic of compounding returns. While the interests of the business are served by the aphorism “Don’t just stand there. Do something!” the interests of investors are served by an approach that is its diametrical opposite: “Don’t do something. Just stand there!”

Bogle on advice for someone new to investing.  

Rely on simplicity; own American or global business in broadly diversified, low-cost funds.

There is a rule of thumb I add to that. You should start out heavily invested in equities. Hold some bond index funds as well as stock index funds. By the time you get closer to retirement or into your retirement, you should have a significant position in bond index funds as well as stock index funds. As we get older, we have less time to recoup. We have more money to protect and our nervousness increases with age. We get a little bit worried about that nest egg when it’s large and we have little time to recoup it, so we pay too much attention to the fluctuations in the market, which in the long run mean nothing.

 

FAQ’S ON FIXED MATURITY PLANS

Given below are the FAQ’s on FMP’s :-

When does the term of an FMP start, from the date of purchase or the date of closing of NFO?
The term of an FMP starts from the date of allotment which can differ from the closing date of NFO. The allotment process is usually completed within 5 days of closure of NFO and the units are credited to investors’ accounts.

How do I redeem after maturity?
You do not need to file a redemption request with the fund house at maturity of the scheme. AMCs are bound to transfer redemption proceeds within 10 days from the date of maturity. The amount you get will be determined by the scheme NAV on the redemption date. This amount will be automatically credited to your registered bank account if direct credit option is available with your bank or else redemption warrants will be issued to you.

Do I need a demat account for redemption of FMP?
You don’t need a demat account to get the redemption proceeds. However, you need one if you want to trade the FMP on exchange before maturity.

How are FMPs different from short-term funds?
Liquidity is the biggest differentiating factor between the two funds. While FMPs are closed-end, short-term funds are open-ended, meaning you can enter or exit short-term funds any time.

FMPs invest in instruments with same or lower maturity than the scheme. This means that regardless of change in interest rates, the returns that would be realised are known. Short-term funds, though, can invest in instruments with varying maturity, depending on the fund manager’s outlook for interest rates. So if a short-term fund has invested in bonds with longer maturity it can suffer interest rate risk.

I want to invest in current FMPs through secondary market. How do I go about this?
All FMPs have to be compulsorily listed on exchange. If you are able to find a seller for the FMP you want to invest in, you can buy units of the scheme from the stock market like you buy an equity share. It is highly unlikely that you will find sellers and therefore low liquidity.

 (Courtesy : Value Research )

INDIA ELECTIONS – SINCE 1951

SIX STAGES OF A BULL MARKET

NIFTY & ASTROLOGY – MAY, JUNE & JULY 2014

May Sensex-Nifty 2014 Predictions

The planetary positions for the month of May are:

• Jupiter in Gemini
• Saturn and Rahu in Libra
• Sun, Mercury and Ketu in Aries
• Mars in Libra
• Venus and Harshal in Pisces

According to the Sensex-Nifty predictions 2014, Sensex will go high in the beginning of May. The sectors that are linked up with Sun, Mercury, Mars, Saturn and Rahu will receive huge profits. During this phase, the sectors that will gain high profits are oil industry, Indian Oil, steel industry, leather, electrical equipment industry, tea & coffee industry, shipping organizations, heavy engineering industry and ONGC. On the other hand, some fluctuations in Nifty, might also be there. Improvement will be witnessed in Reliance, film industry, leather mills and woolen mills. Some of the sectors that might undergo downfall from 5th of May are Telecom companies, spinning mills, computer software technology firms, courier companies and automobile companies. In accordance with the 2014 Sensex-Nifty predictions, from 23rd of May, Nifty will undergo one sided downfall. The dates, which can prove out to be extremely lucky for the stock market are 1st, 3rd, 7th, 8th, 15th, 16th, 22nd, 23rd, 27th and 28th. Sensex will go up on 5th, 6th, 10th, 12th, 13th, 17th, 19th, 20th, 21st, 26th, 29th and 31st, predicts Sensex-Nifty Predictions 2014.

June Sensex-Nifty 2014 Predictions

The planetary positions for the month of June are:

• Sun in Taurus
• Mars in Virgo
• Mercury and Jupiter in Gemini
• Venus and Ketu in Aries
• Saturn and Rahu in Libra

The 2014 Sensex-Nifty Predictions are on the negative side for the stock market in the month of June. Consequently, pharmaceuticals, software companies, public sector, vegetable oil companies, IT companies, perfume & cosmetics industry, Reliance, film industry and banking & finance will undergo one sided deflation. In accordance with the Sensex-Nifty Predictions for 2014, the sectors for which the downfall in Sensex-Nifty will go away on 20th of June are banks, vegetable oil companies, tobacco industry, ITC, rubber industry, finance companies and GTC. The month of June will witness a rise in Nifty on 3rd, 4th, 9th, 10th, 12th, 16th, 23rd, 24th and 26th. On 1st, 2nd, 6th, 11th, 13th, 16th, 18th, 19th, 20th, 25th, 27th and 30th,, Sensex might undergo downfall foresees 2014 Sensex-Nifty Predictions.

July Sensex-Nifty 2014 Predictions

The planetary positions for the month of July are:

• Mars in Virgo
• Sun and Mercury in Gemini
• Venus in Taurus
• Saturn and Rahu in Libra
• Jupiter in Cancer
• Ketu in Aries

In accordance with the Sensex-Nifty Predictions 2014, there will be instantaneous fluctuations in Nifty in the month of July. 2014 Sensex-Nifty Predictions foretell that in the beginning of July, vegetable oil industry, software & IT companies, finance industry, shipping corporations, oil industry and rubber industry will undergo the period of boom in the stock Market. From 13th of July, improvement will be witnessed in the fertilizer industry, steel industry, tea and coffee companies, construction and heavy engineering companies. Other industries such as Hindalco, leather, Indian Oil, ONGC, coal industry, and AVV will also undergo approving results. From 17th of July, there will be one sided rise in Sensex-Nifty. On the other hand, 2014 Sensex-Nifty Predictions foresee that the sectors like Reliance, perfume & cosmetics firms, software companies and IT sector will undergo inflation. According the 2014 Sensex-Nifty predictions, the traders can expect a boom in Sensex-Nifty on 1st, 2nd, 3rd, 7th, 8th, 9th, 10th, 16th, 17th, 20th, 21st, 22nd, 23rd, 28th, 29th, 30th and 31st. The share market can be expected to go down on 11th, 14th, 18th and 26th of July.

 

                                                                                                                                                                         — Courtesy mykundli.com

SREI INFRASTRUCTURE FINANCE LTD – SECURED NCD ISSUE

CREDIT  RATING :- CARE AA-              &           BWR AA

FOR  3  YEARS

MONTHLY INTEREST 11.40% p.a

ANNUAL INTEREST 12% p.a

CUMMULATIVE Rs 1405.40 ( MATURITY  VALUE  OF Rs 1000 )

FOR  5  YEARS

MONTHLY INTEREST 11.40% p.a

ANNUAL INTEREST 12% p.a

CUMMULATIVE Rs 1762.90 ( MATURITY  VALUE  OF Rs 1000 )

OPENS 9TH MAY 2014 CLOSES 9TH JUNE 2014 – FIRST COME FIRST BASIS

EVEN POLITICIANS HAVE INVESTED IN MUTUAL FUNDS

As the government and regulators try hard to convince the common man to invest in mutual funds, a large number of politicians, including Sonia Gandhi, Rahul Gandhi and Arun Jaitley, have already pumped in lakhs of rupees in these investment products.

Those having invested in mutual funds also include Varun Gandhi, Amar Singh, Shazia Ilmi, Jyotiraditya Scindia, Ambika Soni and Shashi Tharoor, as also new entrants on the political scene from other areas namely ex-banker Meera Sanyal, former Infosys executive V Balakrishnan, former India soccer team captain Bhaichung Bhutia and ‘dream girl’ Hema Malini.

An analysis of election affidavits filed by those fighting the ongoing Lok Sabha elections shows that a large number of contestants have invested significant amounts of money in mutual funds along with other investments.

Most of such contestants have invested lakhs of rupees in mutual funds while for a few, such investments run into crores of rupees.

At the same time, there are also those with mutual fund investments worth a few thousand rupees only, while those not having invested in these products include BJP’s prime ministerial candidate Narendra Modi, Aam Aadmi Party’s Arvind Kejriwal, BJP President Rajnath Singh, former Army Chief V K Singh, Samajwadi Party supremo Mulayam SinghYadav and BJP’s firebrand leader Uma Bharti.

( Courtesy – Business  Standard )

FRANKLIN INDIA FEEDER – FRANKLIN EUROPEAN GROWTH FUND

New Fund Offer closes on 9th May 2014.

After a couple of European fund-of-fund launches in January 2014, and one fund house changing its existing fund strategy to invest in Europe, it is now the turn of Franklin Templeton India to launch a feeder fund that will invest in the European growth story. The Franklin stable, which is not known to come up with NFOs too often, clearly sees a need to diversify its international fund offerings to investors through this European fund. The new fund called – Franklin India Feeder – Franklin European Growth Fund will invest in the parent fund called Franklin European Growth Fund. The NFO will close on May 9, 2014. Why Europe? If you wish to diversify your portfolio beyond Indian shores, then there may be a few reasons why Europe could be a part of your diversification strategy: – As a region, the European Union is the largest economy. Europe accounts for 24% of the world’s GDP. Its sheer size means that it cannot be ignored. – Europe also accounts for 23% of the world’s market cap. India, in contrast, accounts for just 2%. European companies are known to be export-oriented. Europe’s exports as of September 2013 was $7032 billion as against North America’s $2001 billion. That means Europe’s growth story is not merely internal. It gains from other countries’ growth as well. – Correlation between Indian markets and Europe (MSCI India and MSCI Europe) was between 0.4 to 0.45 in the last 1,3,5,7 and 10 year time frames, suggesting that Europe could be a good market to diversify when you hold an Indian portfolio. – The above low correlation is evident in the performance of these markets. In 2011, when Indian markets fell 38%, Europe fell less than 14%. In 2013, when Indian markets lost 5.3%, Europe delivered a good 22%. Of course, in good years for India such as the one in 2012, Europe underperformed India. Why Now? – Europe was much slower than the US in terms of recovering from the financial crisis in 2008. While earnings of companies in Europe declined by 2-2.2% in 2010 and 2011, it rebounded to 7.2% in 2013. – Similarly, the huge debt in the books of European companies also steadily declined in 2013. – While the valuation in US markets quickly factored the improvement and rallied, European markets’ Price to Earnings Ratio still remains below their 15-year averages. – As a result, the dividend yield of European stocks (MSCI Europe) at 3.4% is higher than the US’ S&P 500 yield of 2%. – Sectors such as technology and financials which have rallied in the US are still available at lower valuations. For instance, the price to book value of technology stocks is still 23% lower than their 15-year averages, while it is 33% lower in the case of financial stocks. The Fund Franklin India Feeder – Franklin European Growth Fund will invest in the parent fund. The latter has been in existence since 2000 and has delivered over 20% annualized returns in the last 5 years, comfortably beating the MSCI Europe Index.

Consumer discretionary, industrials and financials were among the top sector exposures. UK, Netherlands, France and Switzerland are among the top countries the fund is exposed to. Given the persisting troubles with emerging Europe and the bounce back in the developed European markets, the exposure appears to be a balanced one. Currently, JP Morgan, Religare Invesco and DWS are the fund houses offering exposure to European markets through the feeder route. Our comparison of the parent funds in the above schemes suggests that Franklin European Growth, with a longer track record, has also delivered superior returns over a 5-year time frame, when compared with other parent foreign funds. Suitability If you are looking to diversify into international markets, funds taking exposure to developed markets and markets less correlated with India – such as US and Europe – may present good options. While these markets may not deliver as much in the long term as emerging markets such as India would, they may help curtail volatility; such as the present one in India since 2008. If you are trying to take a call between US and Europe; US might seem a bit expensive at this stage. That said, we would still say that both US and Europe could complement each other well in your portfolio. While US could offer exposure to new-fangled sectors and themes that may enjoy the first wave of re-rating, Europe could provide exposure to well-established companies with sound balance sheets that may not be available at a similar scale in India. If you decide to have say a 10% exposure to international funds, then you could consider an equal exposure to both regions. Do note that although investing in equities, international funds will be treated like debt funds for tax purposes alone. Also, any appreciation in the Indian rupee against foreign currencies such as the euro or the dollar may pull down the returns of such funds. To this extent, there is a currency risk involved in these funds. However, for those building a portfolio for spending in foreign currency – such as children’s education in Europe, this could be a good currency hedge strategy. Disclaimer: Past returns are not indicative of future performance.