Debt Deep to Fly High..?

A sneak peek at the Top Airlines of India

 

Rank	Airlines	Market Share	Year of Est.	Passengers	Key People
1	Jet Airways	24.8%	1993	55.88 lakh	Naresh Goyal( founder chairman)
2	Kingfisher	16.7%	2003	63.06 lakh	Vijay Mallya, Chairman
3	Indian Airlines	16.6%	1953	41.97
4	Air India	16.6%		1,98,949
5	Air India Express	16.6%	2005	1,76,549
6	IndiGo	19.6%	2006	46.16 lakh	Aditya Ghosh,President
7	Spicejet	16.1%		31. 87 lakh	Kapil Bhatia,Executive chairman
8	GoAir	5.3%	2004	16.51 lakh	Jeh Wadia, Managing Director

Recently, Kingfisher was in news for its high worth of debt of around 7,500 crores.
Air India too has had the same story.

But thats not the case with the LCC's ie Low Cost Carriers..

If we look at the data of their operating profits we see:-

OPERATING PROFIT FOR:-           (figs. in crores)
YEAR	JET	KINGFISHER	SPICEJET
2007	27.94	-419.58	-70.74
2008	-253.06	-188.14	-132.39
2009	-253.06	-1,608.83	-340.44
2010	-467.64	-1,647.22	67.03
2011	9.69	-1,027.40	101.16

 

Red - Kingfisher

Blue- Jet

Green- Spicejet

That Low cost airlines such as Spicejet are still flying better.

The prime reason for this is the price of crude which is more than $100 per barrel.
Eventually Mr. Mallya has asked from govt to import it on his own to save sales tax.

But is it that in India LCC’s can only afford it survive and high end dare to see the light of the day..?

Seeing the trend of operating profit over the years and ever increasing air traffic we can hope to see some good news from them..!               

 Sources- 

http://www.google.com

http://www.money.rediff.com

Some Famous IPO's

As Facebook is coming with its Initial Public Offer(IPO) worth $100 Billion,it has a new meaning not only because it is likely to set new records for IPOs, but because it will occur during one of the most impoverished economic times in Economic history still making over 1000 direct associates and former employees millionaires overnight.

Lets take a look at some of the famous IPOs..

Walmart
In 1970, Walmart offered 300,000 shares of its common stock to the public at a price of $16.50 per share. Walmart shares began trading on the New York Stock Exchange Aug. 25, 1972 under the symbol WMT.

Apple
Apple went public on December 12, 1980 at $22.00 per share. The stock has split three times since the IPO so on a split-adjusted basis the IPO share price was $2.75.
When Apple went public, it generated more capital than any IPO since Ford Motor Company in 1956 and instantly created more millionaires (about 300) than any company in history. Several venture capitalists cashed out, reaping billions in long-term capital gains.
Apple common shares are traded on The NASDAQ Global Select Market under the ticker symbol AAPL.

Microsoft
When Microsoft went public and launched its initial public offering (IPO) in 1986, the opening stock price was $21; after the trading day, the price closed at $27.75. As of July 2010, with the company's nine stock splits, any IPO shares would be multiplied by 288; if one was to buy the IPO today given the splits and other factors, it would cost about 9 cents

Google
Google's initial public offering (IPO) took place on August 19, 2004. The company offered 19,605,052 shares at a price of $85 per share. Shares were sold in a unique online auction format using a system built by Morgan Stanley and Credit Suisse, underwriters for the deal.The sale of $1.67 billion gave Google a market capitalization of more than $23 billion.The vast majority of the 271 million shares remained under the control of Google, and many Google employees became instant paper millionaires. Yahoo!, a competitor of Google, also benefited because it owned 8.4 million shares of Google before the IPO took place.

Reliance Power
On January 15, 2008, the company attracted $27.5 billion of bids on the first day of its initial public offering (IPO), equivalent to 10.5 times the stock on offer, thereby, creating India's IPO record. The upper cut off price for the bid was Rs. 450. The proposed IPO was to fund the development of its six power projects across the country whose completion dates are scheduled from December 2009 to March 2014.

Coal India
Coal India opened its Rs 15,000 crore mega issue for the biggest initial public offering (IPO), on Monday, Oct 18,2011 and up to 0.5 billion IPO was covered 0.11 times in the first hour of the very opening day.
The issue has been priced in the range of Rs 225 to Rs 245 a share and has been expected to be the prime attraction for retail investors.

Lets study GOLD

No one is unaware of the price Gold is reaching at.
Though since beginning it was a precious metal,

But what has made its price rise so 'enormously after 2007'..??

 See the trend.
 It had humble beginnings at 5000 per 10 grams.

Till 2002, the price was around 5100 per 10 grams (or 510 per gram approx.)
In 2007, avg. was around (or 9000 per 10 grams approx.)
The prices shot more in 2008.
The avg was around 12700 per 10 grams.(approx.)

In 2009 avg. price of - 15230/ 10 grams (approx.)
In 2010 avg. price of - 18000/ 10 grams(approx.)

In 2011,avg. price of 23740/ 10 grams (approx.)

Now, going back to the question..
What has made its price rise so 'enormously after 2007'..??

We see the prime reason for this can be the Economic Recession.

While everything seems to be getting poorer, gold is considered as a 'safer bet'.
Moreover, Gold has a value independent of the stock markets.

And definitely the Law of Demand and Supply apply to this commodity.
So, as the demand is increasing, so are the prices.

If you have any idea about how far these prices will reach let me know too!



References-
www.google.com
http://goldpricenetwork.com
http://www.facebook.com/EconomicTimes

Which is Better..???

Fixed Deposits or Short term Bonds.

Depends on 3 factors.
Income of the investor.
Duration of the Investment.
Risk taking of the Investor.

Can be summarized as follows:-

Parameter. Fixed deposit Short term bonds 1.Interest rate 8 to 8.50 percent.  4.50 to 5 percent. After tax. But this is before tax. Suitable for:- With comparitively higher income. For those who do not fall . in higher tax slabs 2.Tme period. For short time period too. Atleast fixed for 8-12 months. Implications. But premature penalty is charged. Exit load is charged  which may eat up all returns. Risk Ability Low risk  Risk is higher Assured Returns Returns depend on the  Interest rate prevaling in  the market.(Set by RBI in India).

Retail And FDI

Percentage of Retail sector in Indian GDP is 22%.
Not Bad.

But this mostly because of the unorganized retail sector in India.
Organised sector has less percentage ie few players but all BIG..!
As like as Future Group, TATA, Reliance, Vishal, Subhiksha etc.


So what this step of FDI in Retail will have an impact at..?

Large, already established players
                  Or
Small Kirana shops which will always too be a need in your neighborhood.


 Can the  big international brands like Walmart, Tesco, Carrefour etc.meet the needs of Indian Consumers in the times of Inflation by eradicating middle men's role in supply chain and thus reduce prices.
Is it a step deliberately taken by the GOI in order to fight sky high inflation.

Or they would not be able to impress the Middle Class Indian Consumer who might not be very comfortable with experimenting with new foreign brands.

Lets see.

But as soon as this news was circulated Market mood was happy and there was a rise in the shares of these Indian Retail brands.
Reason..?

Particularly the idea of making the retail sector more organized would be favorable for them and for Government too in terms of revenue from them through taxes would be certainly better than what the unorganized sector pays..!

General Insight

The various sectors you can invest in are :-

Banking & Finance
Technology
FMCG (Fast Moving Consumer Goods)
Oil and Gas
Power
Pharmaceuticals and many more.


You need to just select your favorites depending on how you think they have potential to grow in coming times.
And this requires just Common Sense!