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LIC Endowment Plus Policy: Review Analysis & Details

This article contains LIC Endowment Plus Policy Review Analysis & details.
You must have seen the ad on TV about a kid asking his young elder brother about the kind of girl he wants to marry, and he replies that he wants to marry a girl who is in government job (with job security), so that atleast one person keeps earning forever. The kid then replies that instead of looking for such secure job girl, its better to take LIC Endowment Plus Policy. Let us see whether this Endowment Plus policy really helps to achieve the kind of financial security which the ad claims to offer or is there something better to do.

MCX IPO: Review Analysis & Details of Multi Commodity Exchange (MCX) IPO

MCX IPO Details, Review, Analysis, Opinion and information on MCX IPO
The MCX or Multi Commodity Exchange of India which is the leading commodity exchanges of India, has received approval from SEBI for it IPO and is now planning to come out with its Initial Public Offering or IPO. Once listed, MCX will be the first stock exchange in India which will have the prriviledge of being a listed stock exchange company. The approval from SEBI for the MCX IPO was received on date 9th September 2011.
In this article, we will look at the Review, Analysis and Details of the MCX IPO.

MCX IPO: Review Analysis & Details

Some basic details first about the MCX IPO, which are available as of now: Image sourced as screenshot from official website of MCX
- The size of MCX IPO is Rs. 661 Crores at the top end of the price band.

- Being a stock exchange, it derives its income from transaction fee, subscription fee, brokerage fee and similar related modes of a typical stock exchange.

- It is learnt to be the largest commodity exchange in India and sixth largest commodity exchange in the world

What is the issue size of the MCX IPO?
The issue size of MCX IPO is Rs. 661 Crores.

What is the price band of MCX IPO?
The price band for MCX IPO is Rs. 860 to Rs. 1032. Final price will be decided through 100% book building process. Face value of each share will be at the standard INR Rs. 10 per share

How many shares will be sold in the MCX IPO?
The total no. of shares to be sold through this IPO is around 64.3 lakh equity shares - that 6.43 million shares. That makes around 12.6% of the total equity of the company.

What are the IPO dates for MCX IPO
The IPO dates for MCX IPO are from February 22, 2012 to 24 February 2012.

How will the capital raised by MCX IPO be used?
MCX is currently held by many financial institutions. Among them, some like FTIL or Financial Technologies, GLG Financials Fund, State Bank of India, Alexandra Mauritius, Corporation Bank, ICICI Lombard General Insurance and Bank of Baroda are selling a part of their shares through this IPO.
FTIL which is the largest stockholder currently holding 31% shares will sell out a large portion of its holding and post IPO its share will come down to 26%.

How the capital raised through this IPO will be used is not known as of now - will be updated as soon as the details are available:

See List of All IPO Articles here

Any ratings given to MCX IPO?
Yes - CRISIL, the rating agency, has assigned a grade of 5 out of 5 to the MCX IPO, which indicates the best possible rating any company can get.

What are the analysts recommendations and business results for MCX IPO?
Stock exchange business is known to be profitable - they make money even if the market participants trading on their markets loose. So it is considered to be a very safe business. However, one must not forget the intense competition that is going on even in the stock exchange space. There are lots and lots of stock exchanges coming up in India, that too in the space of commodity trading.
A stock exchange can continue to be in business only if it provides a reliable platform for trading and manages to capture bulk of trading activities onto it. MCX curently has the lead position in commodity trading in India. Backed by the largest shareholder, Financial Technologies, it is well placed to scale upon the high volume of trading that is expected to expand in near future.
Apart from that, there are other requirements like lauchning of innovative products like e-gold, e-silver, etc. which any stock exchange will have to continously come up with. Same goes with launching of various indices, like sector specific, country-region specific indices, which form the basis of other financial products like ETF's and the exchange derives licence fee from the asset management companies which launch such products.
It is also learnt to have global as well as domestic alliances with other stock exchanges like London Metal Exchange, TAIFEX - Taiwan Futures Exchange, Baltic Exchange, New York Merchantile Exchange, etc.
Currently as well, MCX is the known to be the largest stock exchange for silver contracts trading in the world. For gold contract trading, it is the second largest stock exchange in the world.
Not all countries in the world have stock exchanges listed as companies. USA, UK, HongKong, Singapore, Australia and Japan are the only countries at present which have allowed stock exchanges as listed entities. India will soon join the league once the MCX IPO opens and MCX shares start trading.

See Latest Update: MCX IPO Grey Market Premium at 30% - February 18, 2012

Edelweiss Capital, Citigroup Global Markets India and Morgan Stanley India are the BRLM or Book Running Lead Manager to the MCX IPO

Tax Benefits on Home Improvement Loans: Home Renovation Loan Tax Benefits

Continuing our series of articles on Home Loan Tax Benefits, here are some important details about another important aspect of home loans - the Home Loans taken for Home Renovation or Home Improvements. This is a common scenario in case you buy some old resale property (see related Advantages Of Buying Resale Property, Disadvantages Of Buying Resale Property & Checklist for Resale Property Purchase), OR you inherit some property from your parents or family OR you get some old property as a gift from any of your relatives or friends. Being an old property, it needs some furbishing, some repair work, etc. but that cost is high for you to afford. So you decide to take a Home Improvement Loan or Home Loan for Renovation . The question is - is the home loan taken for Improvement or renovation eligible for any tax benefits? Who all can avail the home improvement loan tax benefit? Let's see some of these cases in this article

Home Improvement Loan Tax Benefit: Home Renovation Loan Details

What is home improvement loan or Home renovation loan?
The home loan which is taken for carrying on repair, renewal, reconstruction or renovation in any old house or residential property is called home improvement loan.

Who is eligbile for home improvement loan or Home renovation loan?
Any individual who is the owner or joint owner of the property can apply for home improvement loan or Home renovation loan. The bank providing the loan will decide the eligibility criteria for the individual.

Is Tax benefit available for the borrowers on home improvement loan or Home renovation loan?
Yes, you can get tax deduction benefit in respect of the interest payable on the loan taken for repair, renewal, reconstruction or renovation to the extent of Rs 1.50 lakh under section 24 of the Income-tax Act, provided the house is self-occupied. There is no limit on the tax benefit on interest if the house is on rent.
However, there are 2 limitations -
1) Only the interest portion of the Home Improvement Loan qualifies for tax benefit. The principle portion repayment amount does not provide any tax saving benefit.
2) Tax benefit can be availed only by the owners or co-owners (joint home owners)

Please note that this tax benefit is available on ALL investments and expenses you make under section 80C, and although the SUM TOTAL of all these can exceed 1.5 lakhs, the tax benefit can ONLY be availed on 1.5 lakhs maximum. See Tax Savings Section 80C: List of Qualifying Investments and Expenses

To see more on Home Loan related Tax Benefits, please check Home Loan Tax Benefits and All Home Loan Articles

Is Tax benefit available to co-applicants also for home improvement loan or Home renovation loan?
There is this new term called "co-applicants" which has been devised by many banks. This term basically refers to a person whose name banks take as co-applicants along with the actual home loan borrowers. Usually, Home loan provider banks take a name of co-applicant for 2 reasons

1) Security : In case the primary loan seeker defaults, the co-applicant can be approached
2) Nominee: In case of death of the primary loan seeker, the co-applicant is approached

However, Home loan co-applicants are usually NOT eligible for tax benefits on any kind of home loans. Only the owners & joint owners whose names appear on the property documents are eligible for home loan tax benefits. However, the definition of co-applicants may differ from one bank to the other. Please check with your home loan bank's legal department on the tax benefit eligibility for any kind of home loan. They should be courteous enough to provide that advice free of cost

Prakash Constrowell IPO: Review Analysis & Details of Prakash Constrowell IPO

Prakash Constrowell IPO Details, Review, Analysis, Opinion and information on Prakash Constrowell IPO
The Prakash Constrowell Company which is in the construction business of infrastructure development and civil construction in India, is now coming out with its Initial Public Offering or IPO. The IPO size is not that large, its a 60 Crore Rs. IPO.
In this article, we will look at the Review, Analysis and Details of the Prakash Constrowell IPO.

Prakash Constrowell IPO: Review Analysis & Details

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

- The size of Prakash Constrowell IPO is around Rs 60 crore INR
- It is primarily a construction company based in Nashik Maharashtra and has multiple streams of construction business - civil, infrastructure development, residential as well as commercial real estate development
- It has worked for many Government and semi-government projects
- Also worked on lots of projects on BOT - Build, Operate & Transfer basis using the PPP - Public-Provate Partnership model

What is the issue size of the Prakash Constrowell IPO?
Around 60 Crore Rs is the estimated size of the Prakash Constrowell IPO

What is the price band of Prakash Constrowell IPO?
The price band for Prakash Constrowell IPO is not yet decided, it will be available just prior to the IPO opening dates. Final price will be decided through 100% book building process.

How many shares will be sold in the Prakash Constrowell IPO?
The total no. of shares to be sold through this IPO is not known as of now

What are the IPO dates for Prakash Constrowell IPO
The IPO dates for Prakash Constrowell IPO are from September 19, 2011 to September 21, 2011.

How will the capital raised by Prakash Constrowell IPO be used?
The capital raised through this IPO will be used for the following:
- Investment in subsidiaries
- Purchase of construction related equipments
- Rest will be for working capital requirements

See List of All IPO Articles here

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

What are the analysts recommendations and business results for Prakash Constrowell IPO?
The company is in the real estate business in multiple streams - Government/Civil projects, residential and commercial real estate space. Overall, the development of business and related companies within this sector is heavily dependent on the economic conditions and these businesses are highly rate sensistive (as listed in the Interest Rate Sensitive Stocks & Sectors List). With the current scenario of high interest rates and unclear economic situation both at the domestic as well as international markets, the work and business growth in this sector is difficult to predict.
Although the company is reporting to have robust growth - around 69% of annual growth rate from 2007 to 2011 - the income from operations has grown from Rs. 26.4 Crores to 126.9 Crores in the same period.
Profit after tax or PAT has increased from 3.06 to 10.65 in the same period, which indicates the annual growth rate of around 51.47%.

All nos. look good, but as investors are aware that past performances are no guarantee for future returns. Many IPO's are coming out even in these volatile times - some are taking big hits (like the Brooks IPO), while some are generating mediocre profits.
Ultimately investors need to take the call as per their risk appetite. Real estate sector has its own ups and downs.
Other market expert opinions will be updated here as and when the details are available, as the IPO dates come to close.
Intensive Fiscal Services is the BRLM or Book Running Lead Manager to the IPO

Online Motor Insurance Renewal: High Cost Low Value: Beware & Check

It was somewhere around this time last year (2010) when we had written about this business of Online Renewal of Motor Insurance Policy in our article ICICI Lombard Motor Insurance: Online Renewal: High Cost, Low Value, where I ended up renewing the policy from ICICILombard at the click of a button, just to later realize that I have paid a high price compared to what was available elsewhere.
So this year again, my motor insurance policy was about to expire, and I got to check it online for renewal. And here are the findings. In summary, the last year trend continued - the cost of motor insurance renewal was still higher than that of a new insurance policy, that too with a low Insurance Value (IDV).

Online Motor Insurance Renewal: Cost Comparison

Then, I also compared the online quotes from other insurance companies and found that their IDV value higher and their premium is lower, which clearly indicates that blindly Renewing your Motor Insurance Policy Online may not be the best bet. Although it may differ from one insurance company to the other, but this is the case which I've observed with ICICI Lombard for 2 consecutive years.
Here are the findings:
First something about the terms used:
IDV - Insurance Declared Value - This is the amount of money you will receive in case something happens (theft, fire, accidental damage) to your vehicle during the insurance period - subject to pro-rata basis.
Premium - this is the charge you pay for buying your motor insurance policy
In essence, one should look for Policies with less Premium and high IDV values.

Online Renewal of Old Motor Insurance Policy from ICICILombard website:
So when I generate the quote for renewing my insurance policy online, like last year (See those details here ICICI Lombard Motor Insurance: Online Renewal: High Cost, Low Value), I again saw a low IDV and a high premium (something not desirable). Going by last year's experience, I was not surprised. Here is the screenshot of what came up on the renewal for motor insurance - IDV of just 20707-00 and a insurance premium of 876-00. What I was also surprised at that this amount of low IDV and high premium was despite they offering the so-called No Claim Bonus or NCB. This is the bonus you are eligible for in case you have not made any claims in your old policies. Since I have a no-claim record for last 4 years, I was eligible for a whooping 45% NCB . But even after that discounted bonus amount factored in, the IDV value was only 20707 and net insurance premium was high - 876.

Online New Motor Insurance Policy from ICICI Lombard for same vehicle:
So, to make a compare of Renewal v/s New Policy purchase, I generated a new policy quote for the same vehicle from ICICILombard.com website. Like last year, it was showing HIGHER IDV 20757 and LOWER premium charge of only 721-00 compared to those for the renewal policy option, for the same old vehicle.
I was mentally prepared for this as this was what I observed last year as well. But again, the question is if a loyal customer is renewing his policy with the insurance company that too on his own through internet (with no effort from the insurance company agents), should he be charged a higher amount or should he be given some discount??
May be I am missing something here as I am not an insurance expert, but I do understand things from a customers' perspective.
If I go for online renewal from ICICILombard, I am being charged higher insurance premium and get a low value IDV.
If I go for new online policy, I am charged a compartively less insurance premium and get a slightly better IDV.
What do we call this - easy insurance renewal at the click of button, or fooling around with loyal customers?

Anyways, I decided to check on some other insurers. Here is what I got on other insurance websites:

Online Motor Insurance Quote from IFFCO-Tokio general Insurance company:
I generated the quote for the same vehicle from IFFCO-Tokio insurance website. And here is what I got:
For the same vehicle, IFFCO-Tokio provided an IDV value of 27,400-00 and the net premium was 806 Rs.
I then added the No Claim Bonus (NCB) of 45%, since there was no claims made by me in my previous ICICILombard Policy in last 4 years, and with the same IDV value of 27400-00, the net insurance premium came down to just 632 Rs.

Online Motor Insurance Quote from Bajaj Allianz Insurance:
Here is what I got from Bajaj Allianz Insurance website for my vehicle insurance policy:
IDV value: 23171, Insurance Premium: only 624 Rs. with 45% No Claim Bonus (NCB).

If you have any questions/queries/concerns regarding this article, 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

Conclusion about renewing your insurance policies online:
In essence, it all looks sweet and easy to use - Just login to the insurance website, click a few buttons, make payment and there you have your policy to print. But the fact is that being a customer, you need to look for better value (High IDV amount) with less money (low premium amount). To reiterate again, I'm not an insurance expert but I am surely an insurance policy customer. My experience with ICICILombard for their online renewal mechanism has not been positive one - as a customer, I want to pay less and get more. Online Renewal isn't allowing that to happen. It's a kind of surprise that from the same insurance company, the renewal charges are higher with less IDV as compared to buying a new policy. That is not what a loyal customer would like.
So finally I settled for one of the other insurance provider - one that was providing me higher IDV with low Insurance Premium. I dont know how will they treat me next year and quite possible that I might again get into the same situation with them as I have observed with ICICILombard in this and previous year. But that's something which will come up next year.
So One thing is certain - I will definitely check and shop around for a better deal - Always! And that too can be done online, no need to run around with you vehicle from one insurance company office to the the other. Hope the readers also do the same.

PG Electroplast IPO: Review Analysis & Details of PG Electroplast IPO

PG Electroplast IPO Details, Review, Analysis, Opinion and information on PG Electroplast IPO
The PG Electroplast Company which is in the business of Electronic Manufacturing Services (EMS) provider for Original Equipment Manufacturers (OEMs) of consumer electronic products in India, 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 PG Electroplast IPO.

PG Electroplast IPO: Review Analysis & Details

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

- The size of PG Electroplast IPO is around Rs 120 crore INR
- It is primarily a EMS provider, i.e. Electronic Manufacturing Services (EMS) provider for Original Equipment Manufacturers (OEMs) of consumer electronic products
- Post IPO, the promoters shares in the company will come down to 65%

What is the issue size of the PG Electroplast IPO?
Around 120 Crore Rs is the estimated size of the PG Electroplast IPO, taken at the upper price band of the IPO issue

What is the price band of PG Electroplast IPO?
The price band for PG Electroplast IPO is INR 190 to 210 Rs. per share.

How many shares will be sold in the PG Electroplast IPO?
The total no. of shares to be sold through this IPO is 57.45 lakh or 5.745 million equity shares.

What are the IPO dates for PG Electroplast IPO
The IPO dates for PG Electroplast IPO are from September 7 2011 to September 12, 2011.

How will the capital raised by PG Electroplast IPO be used?
The capital raised through this IPO will be used for the following:
- Repayment of Loans and Debt
- Fund expansion plans for their manufacturing plant in Ahmednagar and Greater Noida
- Rest will be for working capital requirements

See List of All IPO Articles here

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

What are the analysts recommendations and business results for PG Electroplast IPO?
The company operates across multiple products - right from plastic moulding to electronic items like DVD Players, CTV assembly, CFL manufacturing, PCB Assembly and even Water Purifier Assemblers, they are diversified across the product lines.
Manufacturing facilities are spread across multiple states - from Maharashtra to Uttarakhand to Uttar Pradesh.
This being a small IPO there is not much of expert advice available. The stock markets across the globe are reeling under the pressure. Yesterdays listing of Brook's Lab IPO was a big setback for its investors where the stock fell around 40% from its issue price. Taking a call on IPO's in these times with accurate prediction is not possible for anyone. One must look for a long term investment horizon.

Although some expert advices have started popping in since this IPO is now open. There are some concerns raised with regard to the product diversification and the corresponding profit share this company has from each of those product segment. For e.g., it is learnt that around 77% of company's income is from color TV. Which means a big dependency on this particular segment. The color television market is shrinking continously because of LCD/LED/Plasma televisions.
Valuation wise, this company looks a bit costly compared to its competitor like MIRC Elctronics, which is trading at 11 time the PE multiple, while PG Electroplast is reported to be 17 to 19 times of its FY11 earnings.
CFL business is reported to be used less than 45% of its full capacity, and water purifier segment there have been hardly any sales.
The company has a small client base and the contracts are reported to be short term rather than long term. Margins are also reported to be on the weaker side.
Almondz Global Securities is the BRLM or Book Running Lead Manager to the IPO and Karvy Computershare is the Registrar to the issue