The note on Public Issue of Tax Free, Secured, Redeemable, Non-Convertible Bonds to be issued by “Housing & Urban development Corporation Ltd” (HUDCO).

The Company has filed Draft Shelf Prospectus with SEBI on 11th January 2012. Issue is expected to be launch by end Jan. ie 27th Jan 2012.

We will update you about the exact issue dates and coupon rate once tranche Prospectus is filed.

The issue will be open for NRI investors on repatriable as well as non-repatriable basis.

Being rated AA+ the interest rates,commercials will be better off as compared to IRFC Tax Free Issue which will be open on more or less similar timelines.

Housing and Urban Development Corporation Limited Profile Snippets
Housing and Urban Development Corporation Limited (HUDCO) was established in 1970 as a wholly owned Government company with the objective to provide long term finance and undertake housing and urban infrastructure development programmes. HUDCO’s sustained performance and profitability earned them Mini-Ratna status conferred in FY 05. HUDCO had sanctioned loans of Rs. 37,464 cr for housing and Rs. 84,906 cr for urban infrastructure on a cumulative basis up to Dec 2011.

Salient features of the bond issue

• The Bonds are issued in the form of tax-free, secured, redeemable, non-convertible Debentures and the interest on the Bonds will not form part of the total income.
• In case of over-subscription; allotment shall be on first cum first serve basis up to the date falling 1 day prior to the date of over-subscription and on proportionate basis on the date of over-subscription, in the manner specified in the Tranche Prospectus.
• CARE has assigned a rating of ‘CARE AA+’ to the Bonds. Instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. Fitch has assigned a rating of ‘Fitch AA+ (ind)’ to the Bonds.
• The bonds are secured by way of floating first pari passu charge on the present and future receivables of the company to the extent of amount mobilized under the issue. The security cover will be at least 100% of the outstanding Bonds at any point in time.
• HUDCO shall pay [xx] % p.a. for Tranche 1 Bonds as interest on the Application amount retained.HUDCO shall also pay [xx]% p.a. on refund of application amount. Such interest shall be paid along with the monies liable to be refunded.
• Bonds will be issued in Dematerialised form or physical form as specified by an Applicant in the Application Form. The bonds will be listed on NSE and BSE both and will be available in Demat form facilitating trading of these bonds.
• Investors can pledge or hypothecate these bonds to avail loans.

Financial Summary

Business Overview
The business is broadly classified into the following two business platforms:

• Housing finance:  HUDCO finances dwelling units in the urban and the rural areas. HUDCO has sanctioned Housing Finance of Rs 36,110 cr (30.65% of total financing activities as on March 31, 2011).  
• Urban infrastructure finance:  HUDCO finances projects relating to social infrastructure and area development, water supply, sewerage and drainage, roads and transport, power, emerging sector, commercial infrastructure and others. HUDCO has sanctioned Urban Infrastructure Finance to the tune of Rs 81,691 cr (69.33% of total financing activities as on March 31, 2011).
• In addition, HUDCO also provide consultancy services in the field of urban and regional planning, design and development, environmental engineering, social development, government programmes and others.

Operational and Financial Performance

Strengths

• Strong financial position: HUDCO has been operating its financing business profitably since inception.
• Rich Parentage: Their business is funded through equity from the GoI & market borrowings. Relationship with the GoI provides them access to lower cost funding & enable them to source foreign currency loans.
• Pan-India presence:- HUDCO has extended finance for housing and urban infrastructure projects to customers in 33 states and union territories covering around 1,800 cities and towns.
• Established track record:- HUDCO has 41-years of experience in the housing financing market. As on Dec 31, 2011, the Company had provided finance for over 15 mn dwelling units and over 1,600 urban infrastructure projects in India.
• Wide spectrum of consultancy services:- As part of consultancy services, up to Dec 31 2011, they had appraised 1,236 projects with a project cost of Rs 27,515.34 cr under JNNURM.
• ‘CARE AAA (SO)’ rating for HUDCO’s unsecured bonds: – CARE has assigned a rating of ‘CARE AAA (SO)’ to the unsecured bonds issued by HUDCO aggregating to Rs 1,036.4 cr as on Oct 10, 2011. The rating of ‘CARE AAA (SO)’ was primarily based on credit enhancement in the form of ‘Letter of Comfort’ from the then Ministry of Urban Employment and Poverty Alleviation.
• Loans backed by Govt. guarantees: Most of HUDCO’s loans to various state entities are secured by guarantees from the relevant state governments to repay outstanding debt facilities or mortgage of properties with a minimum security cover of 125% of the total loan amount. Further, loans to entities in the private sector are secured by mortgages of the respective project properties providing a minimum security cover of 150% of the total loan amount, personal guarantees and contributions by promoters, as deemed fit by HUDCO.

Investment Options

*Allotments to the maximum extent, as possible, will be made on a first-come first-serve basis and thereafter on proportionate basis
 
Tax Benefits

1. The income by way of interest on these Bonds shall not form part of total income as per provisions under section 10 (15) (iv) (h) of I.T. Act, 1961;
2. There shall be no deduction of tax at source from the interest, which accrues to the bondholders;
3. As per provisions under section 2 (29A) of the I.T. Act, read with section 2 (42A) of the I.T. Act, a listed Bond is treated as a long term capital asset if the same is held for more than 12 months immediately preceding the date of its transfer.Under section 112 of the I.T. Act, capital gains arising on the transfer of long term capital assets being listed securities are subject to tax at the rate of 20% of capital gains calculated after reducing indexed cost of acquisition or 10% of capital gains without indexation of the cost of acquisition;
4. Wealth Tax is not levied on investment in Bond under section 2(ea) of the Wealth-tax Act, 1957.

 Financial Summary

Dear All,

Please note that Tree House Education & Accessories Limited IPO  will opens for subscription from Wednesday i.e 10th August, 2011  and  closes on Friday ,12th August, 2011

Tree House Education & Accessories Limited  -Issue Details

Issue Program: -

• Issue Opens on – Wednesday ,  10th August, 2011
• Issue Closes on – Friday, 12th August, 2011

Price Band: –                 Rs. 135/- to Rs. 153/-
 
Retail applicants are eligible for a discount of Rs 6/-.

BID lot:-                          40 Equity Shares & in multiples there of

India – Victim of collateral damage again!

S&P downgrades US credit rating

In a now historical move, global credit ratings agency, Standard & Poor (S&P), downgraded the US credit rating by a notch from AAA to AA+ just a few days after two other global credit ratings agencies, Fitch and Moody’s had affirmed the US credit rating at AAA but with a warning of a downgrade possibility in the future if the US deficit does not come under control.

S&P, however, has taken a tougher stance as is reflected in the statement released by the agency, which read, “The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.”

Implications for the US

A ratings downgrade would typically lead to an increase in borrowing costs for the country, as well as for its corporates and the consumers. Thus, this event would not only add to the expenditure bill of the US government and put pressure on the deficit of the country, which is already facing debt problems, but would also affect the spending pattern of US consumers, which would ultimately be reflected in the form of slower growth of the US GDP.

Moreover, more than this event itself, it is the timing of the event that could create some problems for the US as the economic recovery was already in question (with a certain faction of the market even predicting a recession soon), and this move would only increase the challenges for the government to prevent another recession.

However, it seems unlikely that based on this event, the world would take a harsh view towards the US immediately in the near-term as is seemingly evident from the fact that major economies like Japan, China and Australia have already affirmed their faith in US treasuries despite the downgrade. Moreover, it needs to be borne in mind that two other global ratings agencies, Fitch and Moody’s, have maintained their AAA rating though with a negative watch.

Implications for India

As is well known, India is a domestic consumption story built around its 1.2 billion people. Exports form 15-20% of the country’s GDP and within this too; the Middle East and other Asian nations are important contributors with less than 50% of exports being contributed by the US and the European Union. Thus, the impact of a US slowdown is expected to be limited and temporary in nature on the Indian economy. To put this in perspective, post the sub-prime crisis in 2008, while India’s GDP was affected for a couple of quarters in 2HFY2009 wherein the quarterly GDP growth went below the 6% mark, it bounced back equally sharply and within the next two quarters it was back above the 8% growth mark.

Further, now in the backdrop of this US event and interest rates in India at a decade high, a silver lining is that it may force the RBI to re-think its strategy of raising interest rates further, if over the next few days/weeks visible signs emerge that the US growth is in further jeopardy and consequently India’s growth could get affected to a certain extent in the short-term. Note, any pause in interest rate hike by the RBI will be a huge relief to the market and a big positive for the Indian economy. Further, relatively, India’s resilience and economic strength in a weakening global environment will get visibly highlighted in the years to come and will lead to some shift in the global investment pattern in favour of India.

Implications for the Indian stock market

Akin to 2008, wherein India was not a party to the sub-prime crisis, but was affected because it was financially integrated with the world, this time too, some repercussions of this event could be felt in India too, especially on the FDI and FII fronts as US is an important source of liquidity.

Thus, considering the FII inflow angle, the Indian stock market may witness some correction over the next few days/weeks as jittery FIIs turn risk averse. However, the extent of nervousness is debatable as the possibility of a US credit downgrade was being built into the global markets as is evident from the 5-10% witnessed across equity markets this week, especially in the US and Europe. Moreover, even in the past, while Indian stockmarkets have corrected sharply over short periods of time because of the high dependence on FII flows, the recovery has been equally swift. While historical trends are no guarantee of replications in the future, it is important to bear in mind the value proposition that Indian equities offer.

Notably, while historically India Inc. has registered a Net Profit CAGR of over 15%, even if we assume that the growth over the next couple of years would be curtailed, still, at the current level of 17,300 the Sensex is trading at about 13x FY2013E EPS, which is below its historical valuation of about 15x. Moreover, every correction will only make Indian equities more attractive for medium-to-long-term investors. Thus, one must make selective investments into Indian equities and considering the volatile times prevalent, a systematic investment approach is all the more advisable.

Introduction – Gold has shown a powerful rally since October 2008’s lows of $681 per ounce, and certainly one could argue that a correction would vicious sooner or later. However, the fundamentals for Gold are only getting stronger as US inflation is climbing above 8.5% real rate and interest rates continuing to drop. This is creating a “negative” real interest rate environment amidst a continuing weaker US dollar. Besides Debt Turmoil of US and Defaulting countries are certain to surge up after Greece, Portugal now Italy, Spain and the list goes on. Hence it is hard fundamentally to argue against Gold at this time, creating difficulty in forecasting the intermediate highs and lows. With that said, assuming QE3 or some form takes place soon then our projections of Gold to touch the new high of $1800 is quite likely to be hit this year itself before we can look for any genuine correction in the precious metals.

You can click here for more Detail.

Dear All,

India Infoline Investment Services Limited (IIISL) is a downstream subsidiary of India Infoline Ltd and has holdings in India Infoline Housing Finance Ltd (license received in 2009), Moneyline Credit Ltd. (an NBFC) & India Infoline Distribution Co. Ltd.

IIISL is coming up with a NCD (Non Convertible Debenture) issue on 4th Aug 2011 and issue closes on 12th Aug 2011 The coupon is 11.70%-11.90% depending upon series (1, 2 & 3) selected.

The base issue size is Rs 375 Crore with a greenshoe option of Rs 375 Crore making the Issue size to be Rs 750 Crores out of which 40% is reserved for the Retail Category.

The Issue is Rated AA- by CARE and AA-/Stable by ICRA indicating stable outlook.

There is a 40 month premium on redemption option in Series 2 (cumulative option) which is fairly attractive considering the fact that the issue is going to be listed on NSE/BSE and hence offers better tax adjusted returns (Gains in listed NCDs for a holding period of more than 12 months are treated as Long term capital gains).

Given the attractive yields and current state of equity markets the issue is likely to be oversubscribed in first 2-3 days. Request planning in advance for the same.

Online Applications:
Online option for existing clients will be made available; wherein client can place orders online using the Insta plus Login.

Attached product note

Dear Investor,
Below mentioned are the links of the Annual Report 2010-2011, for the various schemes of Reliance Mutual Fund.
Please click on the link to download the Annual report of the respective scheme.

With Best Wishes
Reliance Mutual Fund

1. Reliance Growth Fund
2. Reliance Vision Fund
3. Reliance Regular Saving Fund – Equity Plan
4. Reliance Tax Saver (ELSS) Fund
5. Reliance Long Term Equity Fund
6. Reliance Diversified Power Sector Fund
7. Reliance Equity Advantage Fund
8. Reliance Equity Fund
9. Reliance Equity Opportunities Fund
10. Reliance Infrastructure Fund
11. Reliance Natural Resources Fund
12. Reliance Monthly income Plan
13. Consolidated Equity Scheme
14. Condolidated Debt Scheme

Dear All,
Please note that L&T Finance Holdings Limited IPO will open for subscription from Wednesday ie 27th July, 2011  and  closes on Friday ,29th July, 2011

L&T Finance Holdings Limited -Issue Details

Issue Program: –             Issue Opens on – Wednesday ,  27th July, 2011
Issue Closes on :–           Friday, 29th July, 2011

Price Band: –                  Rs. 51/- to Rs. 59/-

BID lot:-                          100 Equity Shares & in multiples thereof

Clients can  apply online through www.rsec.co.in

This is heads-up.  Some details below. Wait for more….

• Large IPO – upwards of 1500 crs – largest for this year till date.
• 3 weeks back, pre-IPO placement of 330 crs took place @ 55/a share to US PE Capital Interest.
• IPO period – July 27th – 29th
• IPO band will be known on Monday, July 25th

Please keep  updated and ready to apply on this one.

The economy is one big arena where all commodities depend primarily in the ups and downs of gas or oil prices.  Once gas prices goes up, all the rest of the basic commodities will as well follow its trend.  The same is true if the price of gasoline falls down, the basic products in the market will somehow mark low or bring down its prices.  Meaning to say, gas price dictates the flow of all the rest of other products.

Why do gasoline prices undergo fluctuation?  Well, economists and other monetary and investment experts agree to the following reasons why gas price fluctuates.  First reason is due to the reality of the supply and demand principle.  This economic principle quickly changes the prices of gas and oil.  The second reason why oil or gas prices occur is due to the so-called market speculation or simply put the analysis from the business experts such as the Forex monetary institute on whether the value of a country’s money will be high or low.  Thirdly is the expense or budget needed in bringing forthgasoline from crude oil through the process called refining.

In view of the reality concerning the supply and demand of the gasoline, it is obvious that the effect of which is direct in as much as the price of crude oil is concerned.  It is a fact that every time the supply is high, then it goes without saying that the price of gasoline will eventually be low as a consequence.  On the contrary, if the supply gets low, meaning to see there is not enough oil supply, then the oil price will definitely be quite expensive or the current price will go up, to the great advantage of the businessmen.

What will happen then if gasoline prices will fluctuate? Well the people primarily the consumers will really be hit hard and they too will tighten their belts so as to survive.  We therefore should work hard together so that the prices this most precious commodity will remain stable.

Best Reading:

• How To Save Petrol
• Inflation – How To Minimize Its Impact

As a conclusion, we therefore should do our part in making the oil or gas prices stable so that in the end we will not be able to face the consequences of having a low return of our investment.  This is something difficult and crucial to do simply because of the fact that we are quite preoccupied and busy with a lot of stuff.  We must therefore work hand in hand so as to get the dreams that we aspire for in view of our family and also in view of all our relatives friends and the entire society as well.  Only then can we truly say that as a country we did help each other in putting everything into its proper perspective.  This is one tall order which may not be easy to do alone but in unity we surely will be able to make this a reality.

The economy is once again in turmoil and our money is in its roller coaster ride.  As interest rates climb, most bond owners are shaking their heads. The price of existing bonds falls when rates are on the rise. There is a way to offset the decline. You can invest in bank loan funds, also known as floating rate funds. There is a risk to these funds, but they can be a rewarding alternative to traditional fixed-income investments.

Obviously, bank loan funds are made up of loans made by banks or other financial institutions to companies. They are often below investment grade. They aren’t really fixed income; there is the potential of losing money. The funds can provide a return equal to or better than high-yield money market accounts. The loans that make up the funds are short-term. This allows the lenders the opportunity to frequently raise the interest rate. This helps the funds keep pace with interest rate changes and helps keep the principal more stable than with a typical bond fund.

Moreover, according to many portfolio managers, the way the loans are structured removes a lot of the risk to investors. The loans are secured by cash or assets. The funds are not independently rated, but experts say the bank should be able to show you the performance of the fund. The bank will package the loans and sell them, and the funds come into play.

Ban loan funds are senior loans. If the company defaults, senior loans must be paid back before bond holders are. You may not receive enough to cover your initial investment, but something is better than the nothing you could receive with a high-yield bond. Typically, in the case of default, the investors will recover 75 to 80 cents on the dollar.

The change of losing principal is reduced because the interest rates on the loans reset very quickly. Short-term interest rates rise and fall in response to the Federal Reserve. That, combined with the short terms of the loans, makes for a fund that responds quickly to the rise and fall of interest rates.

Many brokerages, including Merrill Lynch and Eaton Vance, sell bank loan funds. In certain asset classes there may be a high expense ration. Make sure that you check every fund out carefully.

Best Reading:

• What is Balanced Mutual Fund Class?
• What is Hybrid Mutual Fund Class?
• What is Gold Mutual Fund Class?

As a conclusion, many funds in this group allow investors to buy shares at any time. There are some funds that will allow you redemptions at any time, while others will restrict you to monthly or quarterly redemptions. Martin Lukac represents RateTake Refinance Rates marketplace. RateTake matches consumers with multiple lenders offering low rates. Got too much credit debt? Get Debt Help and you’d be surprised what we can do together.  Thus, there is still hope to solve all our credit debts no matter how plenty and huge they maybe.  Just be honest and confident enough that you can manage all your money.

It is very interesting to note that in this world of money, we simply need to become aware of a lot of things lest we fall into the trap of bankruptcy.  Let us now talk today about money market funds class.  Well, certificates of deposit and Money Market Funds Class (MMF) fall within the same asset class. They both can be classified as Income Options – an asset class that offers moderate return with limited risk. The returns from these two products are both higher than returns from cash options and are less risky than growth options.

Indeed, money market funds are a type of mutual fund that use short-term debt instruments like bonds, debt securities and other money-based funds for investment. The objective of these funds is to insulate the investor from major financial risks while providing a better hedge against inflation.

Furthermore, the objective of Certificates of Deposit is to attract funds for a specific period for use by a financial institution. These funds would normally have a fixed, guaranteed interest rate with the capital assured as well (up to certain limits). The rates CDs offer differ based on different factors such as savings period and initial capital.

As CDs and MMFs belong to the same asset class, it is often necessary to choose one over the other. The choice of a financial product should be premised on your needs and circumstances. However, there are a few justifications for choosing money market funds over CDs.

Liquidity: Money market funds have far more liquidity than Certificates of Deposit. This does not suggest that you cannot retrieve money from a CD if you really need it though. CDs normally bear stiff withdrawal penalties for withdrawal before maturity. MMFs offer the investor the possibility to buy and sell shares daily, with no withdrawal fees.

Uncertainty over investment period: For short or medium term investment horizons, MMFs are better suited. Sometimes an investor needs to keep a certain amount of money fairly secure until it is needed by a certain period. He may not be certain exactly when it is required (the uncertainty could span months). In such circumstances, setting a time period for a CD is difficult, so the MMF is the safer option.

Emergency funds: Given the inherent nature of an emergency fund, a CD would be a poor financial instrument for it. Money market funds allow your emergency funds to at least maintain their real value while providing the requisite liquidity necessary.

Best Reading:

• Which is the most suitable for you: Index or Diversified Funds?
• Concept of Mutual Funds

In conclusion, it is good to note that there are a few reasons to choose money market funds over CDs do not indicate that money market funds are better. With the economic downturn of 2008, money market fund yields have fallen while CD rates have generally remained stable. Based on their regulations, losses in the MMFs are rare, but technically, not impossible.What this suggests is that there could be a few reasons to choose Certificates of Deposit over MMFs as well. Still, if you are faced with investment-horizon uncertainty, selecting an emergency fund or need a balance between liquidity and returns; the MMF should prevail.