ONGC FPO IPO: Review Analysis & Details of Oil and Natural Gas Corporation FPO IPO

It's the season of IPO's and FPO's - so the Government of India has also joined the party with an FPO of Oil and Natural Gas Corporation.
The much deferred, actually twice deferred FPO or Follow-on Public Offer of Oil and Natural Gas Corporation ONGC is now expected to come out on September 20, 2011 as per the latest news and reports. It is reported that the road show for the much awaited ONGC FPO will start on 6th September 2011 in New York and the opening of the ONGC FPO will be on 20 September 2011.
The FPO or follow-on public offer of the another government owned healthy company called ONGC or Oil and Natural Gas Corporation is expected soon. Investors who are interested in applying for this FPO or IPO should note that this is NOT an IPO, rather it is an FPO since the ONGC Shares are already listed on the stock exchanges.
In this article, we will look at the Review, Analysis and Details of the ONGC FPO and try to do the Review and analysis of Oil and Natural Gas Corporation FPO.

ONGC Oil and Natural Gas Corporation FPO: Review Analysis & Details

Some basic details first about the ONGC FPO, which are available as of now:

- The issue size of the ONGC IPO is Rs 12,192 crores INR
- There will be 5% shares sold through this ONFC FPO which will constitute around 428 million ONGC shares
- The prospects for the ONGC FPO is expected to be filed on September 5, 2011

What is the issue size of the ONGC FPO / ONGC IPO?
Issue size for ONGC FPO is Rs. 12,192 Crore Rs. Image sourced from ONGC website

What is the price band of ONGC FPO / ONGC IPO?
Although exact details are not known, but it is expected that the price band of ONGC FPO will be around Rs. 285 per share. Yesterday's closing price of ONGC was around 263 Rs (30th August 2011). It is currently not known whether retail investors will get any discount on the price, since this is an FPO. But general understanding is that usually all government company IPO's have a typical 5% discount, so it should be available. Things will become clear once the exact details are available.

How many shares will be sold in the ONGC FPO / ONGC IPO?
A total of 427.77 million shares will be sold through the FPO.

What is the trading symbol & exchange for the ONGC IPO
The symbol will remain same as this is an FPO from ONGC.

What are the IPO dates for ONGC IPO
The ONGC IPO FPO open dates are expected to be from 20 September 2011 to around 3-5 days period.

Any ratings given to ONGC IPO?
No information about that. However, this being one of the 3 largest companies by market-cap size and being a government owned company in the oil and gas sector, it is learnt to have strong fundamentals. It is usually always on high ratings and learnt to have strong fundamentals.

What are the analysts recommendations and business results for ONGC IPO?
Being a government owned company with one of the largest market cap in the oil and gas sector, it is recommended that investors can stay invested in this company shares for long term.
This FPO from ONGC is much awaited and has been deferred twice due to market conditions and various other reasons. Stock experts believe that this ONGC FPO will get good response from investors.
While there are good prospects for this company with recently resolved issues of Rajasthan Oil fields, there are still some open issues about subsidy sharing mechanism which need to be addressed. However, investors with long term view should not worry about these things.
Government stake in ONGC post this FPO will come down to around 69% from the current 74% approx.

CRISIL Gold Index-Track Gold ETF Price Performance

Details about CRISIL Gold Index: Details, Usage and Index Calculation Methodology.
As more and more Gold based ETF's and Gold based Funds are being launched in India, the tracking error problems, possible inconsistencies in pricing of the multiple gold funds and gold based ETF are expected to be imminent. To avoid these and to have some consistency in the pricing performance, to measure the performance of gold ETF prices in India, CRISIL has launched the CRISIL Gold Index.

Overall, this appears to be a good launch in the gold based product space. more importantly, this is the first ever such index to be launched by CRISIL in the commodities space, so looks like the rating agency is attempting for some real independent, and transparent mechanism for the mushrooming gold based products.

The question that will remain about how the Gold ETF prices be tracked by this index? Will (atleast) the closing prices of all the GOLD based ETF's match those of the CRISIL Gold Index? Will any deviation or descrepancy be attrbuted to the tracking error? Will this CRISIL Gold Index really succeed in becoming the benchmark for the Gold Based products in India, only time will tell. For the time being, the traders who are trading gold based products or investors investing in gold as long term investment product do have an index to check out the performance of their invested product.

As available on the CRISIL website news section, here is the Chart of Historical Values of CRISIL Gold Index (sourced from CRISIL website):

Let's see some Details about the CRISIL Gold Index:
- The values of CRISIL Gold Index are starting from 1st January 2007
- Daily value of this CRISIL Gold Index will be calculated as price of 10 grams of gold in Mumbai market
- Methodology used for CRISIL Gold Index is same as the one which forms the basis for London Bullion Market Association (LBMA) fix price
- CRISIL claims that the method used for calculating CRISIL Gold Index values is according to the SEBI guidelines
- There are some fixing charges of LBMA (0.25 $ per gold ounce) and premium charges (1.5 $ per ounce)

The CRISIL Gold Index is expected to provide an independent benchmark for gold based products pricing in India.
Also, at the time of writing this article, CRISIL also provided the following details about the Returns of CRISIL Gold Index

How many Gold ETF are available in India for Gold trading?
As of now, it is reported that there are 11 Gold ETF's available in India for trading and investments

How many Gold based Fund (non-ETF) are available in India?
It is reported that currently 3 Gold based Funds or Gold Fund of Funds are available in India. We have covered them all in detail: Reliance Gold Savings Fund (See Review & Details), Kotak Gold Savings Fund and the recently lauched and currently open NFO for SBI Gold Fund NFO: Review Analysis & Details

Then, you can also trade E-Gold as a trading and investment product - Trade E-Gold on National Spot Exchange


If you are interested in looking at how Gold prices have performed historically, see Gold ETF: Historical Performace of Gold ETF

PrePayment Charges Calculation on Home Loan: How it affects you?

Continuing further from our first part on this series of articles on PrePayment Charges Calculation on Home Loan, here is the second part. Please read Part I Home Loan PrePayment Charges: With or Without PrePayment Charges Calculation Example, before continuing with this one.

Is it beneficial for the borrower to prepay his home loan as early as possible?
In short, the answer is YES.
Remember, the longer your loan tenure, the more money you repay to the bank for the same loan amount.
Also, something which cannot be quantified is the mental tension that one has to bear for the longer loan duration. Secondly, the loan borrower also carries the risk of increase in home loan interest rates over the longer period of time. So the shorter the loan period, the less you pay back to the bank, the less risk you take and the less tension period you have.
Have a look at these nos. Imagine you took home loan at 10% for an amount of 25 Lakh Rs. If you repay the loan in the mentioned time-periods, the lower money you pay back to the bank:
Loan Period - Total Amount Repaid
-----------------------------------
1 year - 26,37,477
5 years - 31,87,057
10 years - 39,64,522
15 years - 48,35,723

So the earlier you payback the better because the lower amount you have to repay. Please note that the above does not contain pre-payment charges

Related: Home Loan Tax Benefits and All Home Loan Articles

How does change in interst rate affect the prepayment of home loan?
This is the whole crux of the story - and is the central theme of this set of articles about which home loan you should take - one with prepayment charges or one without any prepayment charges.

Assume that you have taken a home loan from a bank for 25 Lakh Rs. for a period of 15 years at the interest rate of 10% per annum. So things go smoothly for a period of 1 year i.e. the home loan interest rate remains at 10% for a year and after that interest rates start to increase. In another 1 year, they shoot upto 12% per annum. With every change in interest rate, your bank will either increase the EMI amount or increase the loan tenure, or a mix of both. The first and the third scenarios are rare - almost all the banks by default increase your loan tenure.
As explained in previous section, increasing the loan tenure has adverse effect for the borrower both in terms of amount of loan to be repaid to the bank and the longer duration for EMI payments.
Now add to it the strict conditions applied by some banks and NBFC which do NOT allow prepayment of home loans, or charges heavily on prepayment charges. What happens in this case? Your loan tenure has increased - means you need to pay same (or more EMI) for a longer period of time. You can avoid that if you prepay some portion of your loan, but that may not be allowed by your home loan bank or NBFC or it may take prepayment charges for the same. So either way, you have to take the hit - either pay prepayment charges or pay more to the bank in long durations of repayment or higher EMI's.

Now what is the benefit if you take home loan from a bank which does not have any pre-payment charges?
Consider the same scenario discussed above - the interest rates increased causing a longer duration for your EMI payment or increased EMI's. Suppose that you have received some bonus amount from your employer, or you take money from your parents/relatives or sell any property and use that money to prepay your hoam loan. You can do so easily without any problems and without any pre payment charges - such early payments or prepayments of homeloans will ensure that your loan duration remains less and also the total amount of money to be repaid to the bank remains low.
So, definetely a bank offering home loan without prepayment charges is better than the one which is offering home loan with prepayment charges or limits on prepayment.
But do check in case the home loan offering bank or NBFC is having any hidden conditions attached.

Home Loan PrePayment Charges: With or Without PrePayment Charges Calculation Example

Details & Comparison about Home Loans which are without pre-payment charges and with pre-payment charges - Calculations & Examples to show which one is beneficial to take
Axis Bank has recently launched a new ad for their home loans, and the pitch of the ad focuses around the "pre-payment charges". The theme is that a couple wins a lot of money in one of the TV shows and they plan to prepay their home loan using the prize money. The anchor asks them about prepayment charges, which are usually levied when someone pays up a loan before his loan schedule i.e. extra money reapid early over and above the usual EMI payment amount, so as to close the loan early. These pre-payment charges are for this kind of early payment of loan. Then the prize winner hits the punchline - "Paise chukane ke bhi paise lagenge" i.e. to pay back money, you need to pay money (charges). Then her hubby says that "Dont worry, our loan is with Axis Bank who do not have any pre-payment charges".
This ad clicks (atleast to me and my fellow colleagues) - the reason? It hits right into the current economic scenario where banks are raising the interest rates every now and then and people are either required to pay higher EMI's or their loan tenures are increasing or both. What that ultimately means? Your loan amount is same, but what you repay to the bank is increasing considerably.

Home Loan PrePayment Charges Calculator

Disclosure: One of the authors has a home loan from Axis Bank which is without pre-payment charges. This article is based upon calculations done on those inputs and scenarios where interest rates have changed very frequently

Let's start from the basics:

What are home loan prepayment charges? Why do home loan banks or NBFC take such a prepayment charge?
Home Loan Prepayment charges are those charges which have to be paid in case one decided to repay his/her home loan earlier than the agreed loan achedule. However, please note that some banks & NBFC do NOT have prepayment charges on home loans, some banks have it if the amount being prepaid exceeds a limit (say 20% of the outstanding loan amount each year), while some banks or NBFC have it mandatorily.
NBFC - Non Banking Financial Companies (These are not banks so they dont come under Reserve Bank of India regulations directly. E.g. are Indiabulls, LIC Housing Finance Company, HDFC Limited). One thing which is important to mention here is that although HDFC is known to be one of the largest home loan providers in India, the home loan division is not under HDFC Bank, but it is HDFC limited, an NBFC.

Why do banks or NBFC charge prepayment charges amount?
Because when you take loan for a specified period of time (say 25 Lakhs for 15 years at 10%), your EMI will come to 26,865 Rs. Banks know for sure that you will contine to pay this EMI amount each month for the next 15 years.
So in this case, you pay back the bank a total of 48,35,700 Rs. in total, over your tenure of 15 years (assuming no changes to interst rates).

But when you decide to prepay your home loan amount i.e. add more amount to the paid EMI, then the calculations change. Your loan tenure comes down from 15 years.
Say after 1 year of you taking home loan, you got a bonus of 2 lakhs, or you sold your old property and use that money to prepay your existing home loan. So now, because of this prepayment of 2 lakh Rs. after 1 year of you taking the home loan, your total amount paid back to the bank has come down to 43,13,050 and your tenure has also come down from 15 years to 12 years and 10 months. So, because of this prepayment, you managed to save 5,22,675 Rs. and your home loan tension period shortened by 2 years and 2 months. So this is beneficial to you.
However, for the bank, it is a problem. The amount that they were relying upon as a steady stream for 15 years has come down to a lesser amount as well as for a lesser tenure. That is something which hurts their profits, as well as cashflows. Hence, they impose a charge for such prepayments.

Related: Home Loan Tax Benefits and All Home Loan Articles

Is it beneficial for the borrower to prepay his home loan as early as possible?
In short, the answer is YES.
Remember, the longer your loan tenure, the more money you repay to the bank for the same loan amount. Continue to Part II - PrePayment Charges Calculation on Home Loan: How it affects you?

TD Power Systems IPO: Review Analysis & Details of TD Power Systems IPO

TD Power Systems IPO Details, Review, Analysis, Opinion and information on TD Power Systems IPO
The TD Power Systems Company which is in the business of manufacturing AC generators, is now coming out with its Initial Public Offering or IPO.
In this article, we will look at the Review, Analysis and Details of the TD Power Systems IPO.

TD Power Systems IPO: Review Analysis & Details

Some basic details first about the TD Power Systems IPO, which are available as of now: Image sourced as screenshot from official website of TD Power Systems

- The size of TD Power Systems IPO is around Rs 227 crore INR
- It is primarily in the business of manufacturing AC generators as well as handling projects for turbine generators
- There is also a subsidiary called DF Power Systems, which is into EPC business (engineering, procurement and construction) for boiler-turbine generator projects

What is the issue size of the TD Power Systems IPO?
Around 227 Crore Rs is the estimated size of the TD Power Systems IPO

What is the price band of TD Power Systems IPO?
The price band for TD Power Systems IPO is INR 256 to 261 Rs. per share.

How many shares will be sold in the TD Power Systems IPO?
The total no. of shares to be sold through this IPO is not known.

What are the IPO dates for TD Power Systems IPO
The IPO dates for TD Power Systems IPO are from August 24 2011 to August 26 2011.

How will the capital raised by TD Power Systems IPO be used?
The capital raised through this IPO will be used for the following:
- Repayment of Debt
- Fund expansion plans for their manufacturing plant in Dabaspet in Bangalore
- Rest will be for working capital requirements

See List of All IPO Articles here

Any ratings given to TD Power Systems IPO?
A rating of 4 out of 5 by CARE (rating agency) and this rating indicates 'Above Average'

What are the analysts recommendations and business results for TD Power Systems IPO?
The company seems to be well placed in their niche sector. Not just domestic, they has business in international arena as well in countries like Uganda, Kenya, Zambia and Philippines where they have taken up around 94 projects worth around 1910 MW of output capacity (including India).
As reported by the company, in June 2011, the order book stood at around INR 1095 Crore Rs.
The company management is bullish on the growth prospects as even in the current unstable market scenario, they are seeing huge demand from various sectors like sugar, paper, cement, etc. in both domestic as well as global markets.
Rating of 4 on a sacle of 5 indicates good fundamentals.
The company has also managed to get 5 anchor investors.

SBI Gold Fund NFO: Review Analysis & Details

Details about SBI Gold Fund: Review, Analysis, Details & Investment Opinion.
Gold, Gold, Gold - The world is going crazy with the Gold prices shooting up the roof with every single passing day. In India, several Gold Based products and ETF's are already available for investments and trading, yet many fund houses are coming with Gold based products to catch in this hike in gold prices. With Festive season ahead followed by marriage season, the gold demand in India is set to increase further.
The SBI Mutual Fund House is launching their SBI Gold Fund. In this article, we will analyze how good is this SBI Gold Fund NFO, whether this SBI Gold Fund offers anything new or unique for the investors and whether the investors should invest in SBI Gold Fund.

SBI Gold Fund NFO: Review Analysis & Details

Let's begin with some basic details about SBI Gold Fund.
What are the NFO dates for SBI Gold Fund?
The NFO period for SBI Gold Fund is currently open (from 22 August 2011) and will close on 5 September 2011. After the NFO period, the regular buying and redemption of fund units will start, but the precise date is not known.

What is so unique about this SBI Gold Fund?
Investors and traders would know that there is a Gold ETF already available in the market from SBI MF, it is SBI GETS-SBI Gold ETF . What this SBI Gold Fund will do is collect money from investors (either one time or multiple times through SIP or Systematic Investment Plan) and invest that money in SBI GETS - the Gold ETF from SBI MF.
So, this new Gold Fund from SBI will work exactly the way the Reliance Gold Savings Fund (See Review & Details) and Kotak Gold Savings Fund works. They too pool in money from investors, and invest in their own respective Gold ETF's.
In my honest opinion, I dont see any special benefits of such Gold Funds or Gold Savings Funds - (SBI has been good atleast not to use the word SAVINGS in their product, which I was not happy about with Reliance and Kotak). My take is that it is much easier for investors to directly invest in Gold ETF's rather than going through the Fund route.
The only advantage I see here is that the minimum investment amount is Rs. 100 and no demat account is required - and this might be the USP's for these Gold Funds or Gold "Saving" Funds - their target customers are those who are not (demat) computer savvy, do not understand demat-and all and are happy with investing small sums of money through paper applications.
Although the investment objective of the SBI Gold Fund is to generate returns similar to SBI Gold ETF, I wonder what actually this fund is going to really do instead of just being a channel to route investor's money into their own Gold ETF.

What are the other competitor products available in comparison to SBI Gold Fund?
The recently lauched Reliance Gold Savings Fund (See Review & Details) is the biggest and direct competitor to SBI Gold Fund - the two products from Kotak and Reliance Fund houses work in almost the same way.
Other than that, there are a lot of Gold based ETF's and Gold based Mutual Funds available:
List of Gold ETF India available for trading on NSE

Recently, HDFC came out with HDFC Gold ETF NFO: Review Analysis & Details

Then there is the good old Quantum Gold Fund (Gold ETF)

and ICICI Prudential Gold ETF, then SBI GETS-SBI Gold ETF NFO Review: SBI Gold Exchange Traded Scheme

Other Gold Schemes Currently Open: Quantum Gold Fund

If you are interested in looking at how Gold prices have performed historically, see Gold ETF: Historical Performace of Gold ETF

What are the risks of investing and trading SBI Gold Fund?
By investing in such a fund, you are taking the risk on overall Gold prices. If the Gold prices start going down, so will the price of SBI GETS Gold ETF and hence this SBI Gold Fund investments will suffer.

Final Thoughts about SBI Gold Fund?
Nothing special, just another fun adding to the long list of Gold based funds already available in the Indian markets. If you are reading this article, that means you are aware about the computer and demat and things like that (no paper based application), so my advise will be to directly invest in SBI GETS ETF instead of this fund. Let the SBI Gold Fund be for those who dont want to get into the hassles of demat and such things or for those who are really looking for very small SIP investments like Rs. 100 and so on.

See List of All Mutual Fund and NFO Articles here

During NFO period each unit cost Rs. 10 per unit
Minimum investment Rs 5,000 and in multiples of Re 1 afterwards.

No tax benefit will be available in SBI Gold Fund

Mr. Raviprakash Sharma will be the fund manager for SBI Gold Fund.

Multiple options available for investments in SBI Gold Fund :
Growth Option
Dividend Option - Payout, Reinvestment facilities

SBI Gold Fund Entry Load: Nil
SBI Gold Fund Exit Load: 1% if exit within 1 year, NIL afterwards.
SIP or systematic investment plan? Yes with minimum 100 Rs. - that's what they are betting on.

Price of physical gold will be the benchmark for tracking the performance of SBI Gold Fund

Just Dial IPO: Review Analysis & Details of JustDial IPO

Just Dial IPO Details, Review, Analysis, Opinion and information on Just Dial IPO
The Just Dial Company which operates in a kind of search engine and directory services offering space including user reviews through multiple channels which includes internet, mobile internet, telephone (voice) and text (SMS), is now coming out with its Initial Public Offering or IPO.
In this article, we will look at the Review, Analysis and Details of the Just Dial IPO.

Just Dial IPO: Review Analysis & Details

Some basic details first about the Just Dial IPO, which are available as of now: Image sourced as screenshot from official website of Just Dial

- The size of Just Dial IPO is around Rs 360 crore INR
- It is primarily in the business of telephone directory services, where users call up their phone no. and ask for various information like location of nearest restaurent, dentist, doctor, and various other businesses, etc.
- Citigroup Global Markets India and Morgan Stanley India are the BRLM's or Book Running Lead Managers for the JustDial IPO issue

What is the issue size of the Just Dial IPO?
Around 360 Crore Rs is the estimated size of the Just Dial IPO

What is the price band of Just Dial IPO?
The price band for Just Dial IPO is not known as of now.

How many shares will be sold in the Just Dial IPO?
The total no. of shares to be sold through this IPO is around 106 Crores or 10.6 million shares.

What are the IPO dates for Just Dial IPO
The IPO dates for Just Dial IPO are not known as of now, they have just filed the draft red herring prospectus with some basic details. This section will be updated as soon as more details are available.

How will the capital raised by Just Dial IPO be used?
The capital raised through this IPO will be used for the following:
- To establish as a brand i.e. in brand building exercise where around 101 Crore will be spent over a period of 3 years
- Another 51 Crores will be spent in setting up local and regional offices across the country
- Another 99 Crores are expected to be spent for purchase of equipments, which includes computer hardware

See List of All IPO Articles here

Any ratings given to Just Dial IPO?
No info about that as of now.

What are the analysts recommendations and business results for Just Dial IPO?
The company seems to be well placed in their special sector with not much of clear competition. Recently, they also signed up Amitabh Bacchan for their TV ad campaign and the ads are coming up in prime time slot of Kaun Banega Crorepati. Looks like the company is all set to hit the stock market with all possible force. Interestingly, Amitabh Bacchan also is a shareholder for being a brand ambassador. He is reported to own around 63000 shares.
The company is currently held by private equity investors which includes SAIF Partners (21.58 %), Sequoia (12.73 %) and Tiger Global (21.84 %). VSS Mani is the company promoter and his family owns 42.79% shares.
In 2011, they report to have responded to around 180 million queries. As for the business results, the Profit After Tax (PAT) this year was around 28.6 Crore Rs. which is better compared to last year's 18.4 Crores.
As more analysts rating and expert opinions will be available once the IPO dates are finalized, this section will be updated accordingly

SRS IPO: Review Analysis & Details of SRS Limited IPO

SRS IPO Details, Review, Analysis, Opinion and information on SRS IPO
The SRS Company which operates in a very well diversified and varied pool of businesses which includes cinemas, food & beverages, retail shopping as well as manufacturing & retailing of jewellery, is coming out with its Initial Public Offering or IPO.
In this article, we will look at the Review, Analysis and Details of the SRS IPO.

SRS IPO: Review Analysis & Details

Some basic details first about the SRS IPO, which are available as of now: Image sourced as screenshot from official website of SRS

- The size of SRS IPO is around Rs 228 crore INR
- It is primarily in multiple diversified business stream which includes media entertainment, retail, etc.

What is the issue size of the SRS IPO?
Around 228 Crore Rs is the size of the SRS IPO, based upon the price band

What is the price band of SRS IPO?
The price band for SRS IPO is Rs. 58 to 65 Rs per share.

How many shares will be sold in the SRS IPO?
The total no. of shares to be sold through this IPO is around 3.5 Crores.

What are the IPO dates for SRS IPO
The IPO dates for SRS IPO are from August 23, 2011 to August 26, 2011.

How will the capital raised by SRS IPO be used?
It is reported that the capital raised through this IPO will be used for 3 purposes:
- To setup more cinemas and multiplexes
- To build more restaurents and food courts
- To invest more in the manufacturing and retailing business of jewellery
- To have more retail stores

See List of All IPO Articles here

Any ratings given to SRS IPO?
No info about that as of now.

What are the analysts recommendations and business results for SRS IPO?
The company seems to be well placed in the multiple diversified sectors. However, this diversity also sometimes may limit the profits - for e.g., if cinemas business goes well but jewellery business goes down, then the profits will be limited as compared to another company purely in cinams business. Anyways, businesses and diversification work their own ways.
As for the business results, the reported profits for FY11 had around 44% increase to 37.5 Crores and the income also was healthy - around 2078 Crores that's a 56% rise.
However, one should take the call as per the risk appetite. This issue may not provid quick gains on listing given the highly volatile stock market situations in India and abroad. Such diversified stocks may go either way on listing depending upon the market conditions as they are not focussed on one single area. One may decide to hold it for long run, as per his risk appetite

Tree House Education IPO: Review Analysis & Details of Tree House Education IPO

Tree House Education IPO Details, Review, Analysis, Opinion and information on Tree House Education IPO
The Tree House Education Company which operates in educational services sector, is coming out with its Initial Public Offering or IPO.
In this article, we will look at the Review, Analysis and Details of the Tree House Education IPO.

Tree House Education IPO: Review Analysis & Details

Some basic details first about the Tree House Education IPO, which are available as of now: Image sourced as screenshot from official website of Tree House Education

- The size of Tree House Education IPO is around Rs 114-129 Crore INR
- The name of the company is Tree House Education & Accessories Limited
- It is primarily in pre-schooling business across the country - currently it is reported to have around 223 preschools spread across 33 Indian cities
- It is also in the educational services to K-12 schools which have around 5000 students in four different cities

What is the issue size of the Tree House Education IPO?
Around 114 to 129 Crore Rs is the size of the Tree House Education IPO, based upon the price band

What is the price band of Tree House Education IPO?
The price band for Tree House Education IPO is Rs. 135 to 153 Rs per share. There will be a final discount of Rs. 6 available to retail investors, that will be once the final price has been decided by 100% book building process.

How many shares will be sold in the Tree House Education IPO?
The total no. of shares to be sold through this IPO is not known.

What are the IPO dates for Tree House Education IPO
The IPO dates for Tree House Education IPO are from August 10, 2011 to August 12, 2011.

How will the capital raised by Tree House Education IPO be used?
It is reported that the capital raised through this IPO will be used for 3 purposes:
- Another 100 pre-schools are planned to be opened through the money collected from this IPO
- There will be investments made in Gujarat and Rajasthan for building educational complexes
- Rest will be for debt payment of the company

See List of All IPO Articles here

Any ratings given to Tree House Education IPO?
No info about that as of now.

What are the analysts recommendations and business results for Tree House Education IPO?
The company seems to be well placed in the education sector. One needs to have a long term view on such stocks for good returns. However, if you look at the stock experts and market experts opinions, there is a mixed response:
SMC brokerage house says that the issue is correctly priced, but maintains a neutral stance on the issue in terms of returns and performance.
Another brokerage house says that this issue should be avoided as the pre-school education sector is heavily crowded and there is a lot of competition for the K-12 schools as well.
There are some opinions about subscribing to this issue, but with a long term perspective, based upon the growing population of India and need for good quality education.
However, one should take the call as per the risk appetite. This issue may not provide quick gains on listing given the highly volatile stock market situations in India and abroad. Investors may need to wait for long term for good fruitful returns on this stock

Edelweiss Select Midcap Fund NFO: Review Analysis & Details

Details about Edelweiss Select Midcap Fund: Review, Analysis, Details & Investment Opinion.
The Edelweiss Mutual Fund House is launching their Edelweiss Select Midcap Fund which will be a new entry in the mutual fund space from the brokerage house of Edelweiss. Edelweiss has been in news for their growth and expansion plans, which are expected to be beyond the usual trading and brokerage business, and the lauch of this Midcap based Mutual fund is a step in that directions.
In this article, we will analyze how good is this Edelweiss Select Midcap Fund NFO, whether this Edelweiss Select Midcap Fund offers anything new or unique for the investors and whether the investors should invest in Edelweiss Select Midcap Fund.

Edelweiss Select Midcap Fund NFO: Review Analysis & Details

Let's begin with some basic details about Edelweiss Select Midcap Fund.
What are the NFO dates for Edelweiss Select Midcap Fund?
The NFO period for Edelweiss Select Midcap Fund is currently open (from 4th August 2011) and will close on 18th August 2011. After the NFO period, the regular buying and redemption of fund units will start, but the precise date is not known.
What is so unique about this Edelweiss Select Midcap Fund?
We've covered a lot about Mutual Funds and ETF's in detail with examples of returns calculations in our articles like Example of Nifty based ETF. However, please note that this is NOT an ETF, it a normal mutual fund which will be based upon the End of the day NAV pricing for mutual fund units.
This new Mutual Fund from Edelweiss is expected to work the same way as any other mutual fund - Collect money from investors, pool it together, purchase shares from mid-cap sector belonging in the midcap range of top 101-300 stock and attempt to generate the returns.

So in essence, there is nothing very unique about this Edelweiss Select Midcap Fund. Just another mid-cap based mutual fund in the Indian Stock market giving more choices to the investors to bet their money on the mid-cap sector (as well as on the stock picking skills of the Edelweiss fund manager)

The asset allocation for Edelweiss Select Midcap Fund will be as follows:
80% to 100% will be invested in the Equities in the mid cap company stocks of top 101 to 300 companies by market capitalization.
Rest 0-20% will be in debt and money market instruments for unit redemption and creation purposes.

What are the other competitor products available in comparison to Edelweiss Select Midcap Fund?
As mentioned above, there are lots of other mid cap funds available in India for investment. Here are a few Standard Chartered Small and Mid cap Equity Fund, an ETF in midcap space Motilal Oswal MOSt Shares M100 ETF-Fund, IDBI Nifty Junior Index Fund, etc.

We also have a comparative article on the performance of the Mid cap sector v/s large cap sector with some calculations, as explained in this article: Large Cap ETF v/s Mid Cap

The Edelweiss Select Midcap Fund will track the standard benchmark index BSE Mid-Cap Index for tracking its performance.

What are the risks of investing and trading Edelweiss Select Midcap Fund?
By investing in such a fund, you are taking the risk on overall midcap market. If the midcap sector collapses, then so will be the fate of your investments in this fund.
Along with that, you are also taking the risk on the performance of your fund manager. If the fund manager is not able to replicate the stocks in the same proportion as that of underlying index, your returns might suffer (it might perform better than benchmark also, although a rare case)
You are also taking the tracking error risk. Since not 100% of your money will get invested in this fund (only 80%-100%), the tracking error comes in.

Final Thoughts about Edelweiss Select Midcap Fund?
Nothing special, just another midcap based fund adding to the long list of midcap funds already available in the Indian markets.

See List of All Mutual Fund and NFO Articles here

During NFO period each unit cost Rs. 10 per unit
Minimum investment Rs 5,000 and in multiples of Re 1 afterwards.

No tax benefit will be available in Edelweiss Select Midcap Fund

Mr. Paul Parampreet and Nandik Mallik will be the fund manager for Edelweiss Select Midcap Fund.

Multiple options available for investments in Edelweiss Select Midcap Fund :
Growth Option
Dividend Option - Payout, Reinvestment facilities

Edelweiss Select Midcap Fund Entry Load: Nil
Edelweiss Select Midcap Fund Exit Load: 1% if exit within 1 year, NIL afterwards.
SIP or systematic investment plan? No concrete info, but expected to be avaialble post NFO period.
No tax benefit will be available in Edelweiss Select Midcap Fund
BSE Mid-Cap Index will be the benchmark index for tracking the performance of Edelweiss Select Midcap Fund

NRI Home Loan & Property Purchase in India: Details, Procedure, Tax Benefits & Requirements

Details about how NRI (Non-Resident Indians) can purchase property in India and also take home loans from Indian Banks for their property buying

It has now become a common scenario for many Indians - they work for IT or some similar sector companies and their employer sends them abroad to work at client site for long term. Usually this is accompanied by payroll transfer for long term onsite assignment, and hence the employees take the NRI status to avoid double taxation. However, the future still remains uncertain - where to settle down, where to buy property, how to buy it if buying in India, can I get a home loan in India from an Indian Bank or NBFC if buying a property in India, what are the requirements for purchasing property on home loan in India by an NRI. In this article, we will attempt to address these common questions.

NRI Home Loans: Procedure, Details and Tax Benefits

What are the major differences for home loans for NRI as compared to that of a resident Indian?
Usually, there are no differences for home loans for NRI and that of a resident Indian. However, the loan amount, eligibility, tenure and interest rates charged may be different and that differs from one home loan providing bank to the other.
- Usually, the interest rate charged for NRI Home loans are sometimes higher than that charged to resident Indians - around 0.25% to 0.5% higher
- Maximum Tenure is also usually shorter, but still NRI can get loans for upto 15 years
- Eligibility calculation basis is same as that of resident Indians
- Repayment for EMI's can be made with ECS or post Dated cheques (PDC) or standing instructions on Non-Resident Ordinary (NRO) account or the NRE accounts

What are the home loan tax benefits available for NRI Home loans?
This is a not that tricky, although it appears to be.
Here is the simple scenario for NRI home loans:
1) If you are an NRI, and have income ONLY in foreign country (i.e. no income in India), then you CANNOT get any tax benefit on the home loan you take in India. The reason - you can claim tax benefit in India as per Indian IT rules. Since you do not have any income in India, you need not pay any taxes in India and hence you cannot get that tax benefit.

2) You are an NRI and along with your foreign income, you also have some income in India (say a part of your salary coming from Indian employer or you getting rental income from a property in India). Then, you can claim tax benefit on the NRI home loan you took in India.

For more details, please see Home Loan Tax Benefits.

What are the additional requirements for an NRI to take NRI home loan in India?
There are a few additional requirements for NRI to take home loan in India:
- Any NRI with a valid Indian passport can purchase property in India on NRI home loan
- Home loan amount shouldn't be 85% of the property value
- Individual amount should be from a legal clear channel, if the funds are being sent from abroad - i.e. it should be routed through a clear bank transaction from abroad
- Power of Attorney to a localite in India: NRI taking home loans have this need - they need to provide power of attorney (POA) to a local relative before the home loan is processed and approved. The reason for this requirement is for bank safety as well as for legal formalities. For e.g., it makes it easier for the bank to track down and communicate with a local representative in case of any concerns or queries. Also, for under contrcution properties, there might be legal formalities required multiple times like signing on releasing a portion of funds to the builder, etc. If the power of attorney is there with a local person, it becomes easier to process these steps for NRI Home loan.

What are the tax implications of this property purchase by NRI in the foreign country where they are residing?
The tax implication for the NRI's depend upon the country where they are residing. From whatever we are aware of here are the country wise details:

Related: Home Loan Tax Benefits and All Home Loan Articles

- USA tax implications for NRI property in India:
USA allows for tax deductions if the the house is taken on home loan and there is rental income from the home after the NRI receives the possession and puts it on rent. Remember, US laws require NRI's to pay taxes on their global income, so an NRI in USA having rental income in Indian property needs to pay tax in USA on that income.
One can claim dedcutions for registration charges, agent commission, stamp duty, proeprty insurance, maintenance charges, etc. in USA

- UK tax implications for NRI property in India:
UK does not necessarily require an NRI to pay taxes on global income. It depends upon your domicile, residential status, etc. NRI can claim deduction on the interest on the loan taken for the purchase of the property.

If you have any questions/queries regarding home loans, Insurance or HRA claims, the FT Times team will be happy to address them. Please post your questions in the comments section by clicking on the link "Post a Comment" at the end of this page

- Australia tax implications for NRI property in India:
Like USA, Australia requires you to pay tax on global income. Interest payable on home loan is deductable and all expenses like registration charges, agent commission, stamp duty, proeprty insurance, maintenance charges, etc. can also be deducted.

- Gulf countries tax implications for NRI property in India:
Gulf countries like Dubai (UAE), etc. do not have any tax requirement for global income