BASIS OF ALLOTMENT FOR Tata Steel Limited FPO

The issue price of Tata Steel Limited FPO is Rs 610/- per equity share.

Download BASIS OF ALLOTMENT FOR Tata Steel Limited FPO

NTPC Company Update; Results hinting at change in grossing up again; Hold; Target: Rs 190

NTPC

Reco: HOLD

CMP: Rs188

Target Price: Rs190

Results hinting at change in grossing up again

·      APAT of Rs23.2bn (prior year sales not adj.) is higher than est. of Rs20.6bn - we see change in grossing up again to full tax rate led by 25.6% tax rate in the qtr (project delays)

·      Detailed analysis of Q310 & Q311 numbers indicate that Q311 APAT should have been lower byRs5.7bn, had NTPC followed MAT rate grossing up but actually its lower by only Rs450mn  

·      Though this might increase our FY11E earnings by ~10% but we believe that NTPC in all probabilities is likely to fall under MAT rate in FY12E - thus no change in FY12E earnings

·      Valuations at 2.2xFY12E Book value, reasonable on core ROE of 25%; to review earnings post the concall tomorrow; Maintain Hold

LIC Housing Finance Company Update; Valuations comfortable; upgrade to BUY; Target: Rs 210

LIC Housing Finance

Reco: BUY

CMP: Rs174

Target Price: Rs210

Valuations comfortable; upgrade to BUY

·      Recent increases in the lending rates to take care of NIMs atleast for next two quarters. We are already building in 20bps pressure in spreads/NIMs next year

·      Developers' loan portfolio only on pause now, to start disbursing fresh loans from Q4FY11 onwards. The proportion of developers' loan to remain steady at 11% of total

·      Developers' loans portfolio NPAs are minimal. The loans under investigation at Rs3.9bn which are all performing assets

·      Valuations at 1.7x/1.4x FY11E/FY12E ABV – valuations attractive looking at 22% avg RoEs despite higher provisions and building lower NIMs. Upgrade to BUY with TP of Rs210

Most Bought & Most Sold stocks by MF in December

Most Bought & Most Sold stocks

Mutual Funds in December picked stocks ranging from Agriculture, Electric Utilities as well as the IT sector. Coal India and Manganese Ore India Ltd saw entry into the maximum number of portfolios in December 2010. In all, 15 AMCs added Coal India to their portfolios and seven added MOIL Ltd.

Top 10 most bought stocks by MF in December

S No	Company	Sector	No of Shares Added
1	Coal India Ltd	Coal	16,464,171
2	MOIL Ltd	Mining	2,494,310
3	Usher Agro	Agricultural products	1,705,268
4	Suzlon Energy Ltd	Heavy Electrical Equipment	1,586,991
5	NTPC Limited	Electric Utilities	1,027,002
6	Industrial Development Bank of India	Financials	919,842
7	Wipro Ltd	Information & Technology	904,355
8	APL Apollo Tubes Ltd	Iron & Steel Products	900,000
9	NVC Lighting Holdings Ltd	Lighting	857,000
10	Dena Bank Ltd	Financials	841,711

Source: Product Research & Information Desk

Mutual Funds in December sold stocks in the financial companies including banks signaling concerns over the macro environment. Hindustan Construction was pared by fund houses for the second consecutive time and was the seventh most sold stock on the list

Top 10 most sold stocks by MF in December

S No	Company	Sector	No of Shares Sold
1	GVK Power & Infrastructure Ltd	Electric Utilities	7,454,251
2	South Indian Bank Ltd	Financials	4,963,511
3	Welspun Corp Ltd	Construction & Engineering	2,804,973
4	K S Oils Ltd	Edible Oils	2,581,328
5	Development Credit Bank	Financials	2,385,000
6	Standard Chartered PLC	Financials	2,100,000
7	Hindustan Construction Co. Ltd	Construction & Engineering	2,004,631
8	Camlin Ltd	Non-Durable Household Prod	1,322,138
9	Escorts Ltd	Commercial Vehicles	1,168,026
10	Rashtriya Chemicals & Fertilizers Ltd	Fertilizers	1,156,424

Source: Product Research & Information Desk

FPO: Tata Steel, Following on the restructuring path; Subscribe; Price Band: Rs 594- 610

Tata Steel

Reco: SUBSCRIBE

Price Band: Rs 594- 610

Following on the restructuring path; Subscribe

·      Tata Steel announced to issue 57 million shares as follow on public offering including 1.5 million shares for the employees

·      At the higher and lower ends of the price band, the company would mop up Rs 34.8 billion and Rs 33.9 billion respectively

·      On fully subscription, there would be an equity dilution of 6.3% and at the extended equity base the promoters' stake would come down to 30.5% from 32.5%

·      At our target price of Rs 712, on the upper end of the offer price band the stock has a potential upside of 17%. Recommend SUBSCRIBE