Vivek Gautam Portfolio

(Vivek Gautam) #224

I have been sharing my picks specially newly entered here like Sheela Foams,MRSS,PFC/REC,DBL,Shankara Building & NBFCs.

I feel instead of running after new ideas its better to buy an existing stock of your portfolio averaging on upside forgetting Price Anchoring. You know the company like back of your hand so chances of committing mistake are less & your allocation also improves. Without proper allocation investing becomes just a time pass giving momentary thrills & not much.

Wealth is created if your allocation is more & you hold the stock for a long time as long as story is intact.Best returns come in 3rd or 4th year of investing specially where opp size is good,which requires lot of PATIENCE the single most important quality an investor needs.

I experienced the same with Avanti Shilpa Occl Garware Wall Shivatex Mana Bharat Rasayan which I continue to hold… I also hold different NBFcs other then MFIs.

In bull market everyone becomes an expert investor so caution and proper homework on stocks too is very important .

(csteja) #225

Hi @Vivek_6954, as you are familiar with bond markets, I wonder if you can help in answering the following,

Reg NSE N series,

  1. Whats the difference between ‘regular’ and ‘taxable’ in bond types column
  2. I see some having ‘%chng’ as “-100%” despite having valid maturity date. Why is that ? (eg: SREINFRA)
3. Is there any preference for a number in N series (i.e N3 > N9, ND > N9) apart from the fact each are issued at different times with varying coupons ? Also, in case of liquidation of the company, which bond would be given higher preference? I guess some ECL bonds should be riskier than other.

Do you hold any bonds now ? What do you suggest (for future) considering interest rates are at all time low ?

(Vivek Gautam) #226

I dont invest much in bonds. Only time I invested was in Feb March 16 as I felt that Modi govt wont allow issuance of more such bonds & interest rates were on downward trends.

Here I was getting opportunity to lock my funds at high tax free rates of 7.6 to 7.8% ie taxable rate of 10.6 to 10.8% for 15-20 years vs at max 5 years for bank FDs & that too taxable. I feel these bonds are still a better option to buy from secondary mkt due to above reasons only vs other fixed income options.

I have pledged all these bonds with NBFCs who give loan upto 92% of the face value at 10-11%. So at intt cost of 3-4% effective I invested in Manapuram at 30-40 , Shivatex at 100, REC at 80-90 and others buys last year. Overall I feel if I earn more than 3-4% interest I have to bear ,its a very lucrative option.In fact dividend yield of REC& manapuram itself were very attractive and much more at 6-7 to 10-11% at my acquisition price Of course one shud not go overboard with it & such leverage shud not exceed 10% of your total PF

I also use this LAS for opportunistic short term acquisitions in OFS, IPOs.

Any views on a new product being launced for first time IRB InvIT on 3rd of May?

Views Invited

(Alphin) #227

Imo, IRB invit is the worst of both equities and bonds.

Upside is capped depending on toll collection which maybe at 10-12%. And capital may go to zero as the toll may stop due to political as well as other reasons.

(Vivek Gautam) #228

Some marquee names have invested as anchor investors in IRB InvIT.

IRB InvIT Fund, the country’s first infrastructure investment trust (InvIT) fund, has raised Rs 2,094 crore from anchor investors ahead of its initial public offering which opens on Wednesday.
The investment trust, promoted by IRB Infrastructure Developers Ltd., allocated 20.5 crore shares at Rs 102 per unit, according to a stock exchange filing. The company plans to raise up to Rs 5,000 crore by listing its InvIT.
InvITs are mutual-fund like instruments that pool in infrastructure projects to raise funds from investors.
Also Read: IRB Infrastructure Will Be The First To List InvIT; Plans To Raise Up To Rs 5,000 Crore
The Government of Singapore, with just over 20 percent of the anchor investor allotment, was the biggest investor. Other anchor investors included Birla Sunlife Trustee Company Private Ltd., BNP Paribas Arbitrage, Monetary Authority of Singapore, Birla Sun Life Insurance Company Ltd. and HDFC Standard Life Insurance Company Ltd. Five mutual funds featured on this list as well.
The Securities and Exchange Board of India (SEBI) had in January allowed mutual funds to invest in InvITs. Other infrastructure companies, including Sterlite Power Grid Ventures Ltd., Reliance Infrastructure Ltd. and MEP Infrastructure Developers Ltd., have also filed for listing their InvITs.
IRB Infrastructure has set a price band of Rs 100-102 per unit for the offer. While the larger chunk of the issue will be in fresh equity, existing promoters will also offload some of their shareholding through an offer for sale.
The company plans to use the proceeds on six of its toll road assets in Maharashtra, Gujarat, Rajasthan, Karnataka and Tamil Nadu, all housed under the InvIT and operational. They collectively earned Rs 1,003.8 crore in financial year 2015-16, according to the draft prospectus.
Anchor Allocation IRBINVIT_Intimation to SE.pdf (260.9 KB)

(Vivek Gautam) #229



QIB response already 9 times so safety is there IMHO. can give handsome listing gain

(chets) #230

Hi @Vivek_6954,

I am planning to apply for HUDCO IPO as there are favorable sector tailwinds which may give good listing gains.
They have high NPA, but provisions for almost 70% NPA is present. 30% of loanbook is for housing finance. Plus there is a 2 rupee discount for retail category.

What is your opinion on HUDCO?

(Vivek Gautam) #231

Yes may be for listing gains. Tailwinds also there for sector due to PMAY scheme.Many PSUs perf well under Modi govt. but isnt REC a better option?

(Vivek Gautam) #232

MRSS Extra-ordinary fantastic results. Half yearly results: The revenue increased from 5.73 to 13.45 crores, a growth of more than 100% and net profit increased from 1.12 to 2.94 crores, a growth of more than 100%. Yearly results: Total revenue increased from 11.12 (FY16) to 22.93 crores (FY17) and net profit increased from 1.9 crores to 4.63 crores. EPS increased from 5 to 10.54 year to year. What a wonderful results MRSS had posted. 100% growth in the last two years.

Hopefully it will migrate to main board as it completes 2 year of listing in July 17 becoming the first listed Mkt research firm where opp size is huge .

Discl- AS revealed earlier in the thread invested since Dec 16 since [email protected]

(chets) #233

REC is definitely better! However as you mentioned, no harm in applying for HUDCO for listing gains.

(Sd) #234

Hi @Vivek_6954,
Following you for long and appreciate your approach with use of common sense.
Advanced Enzymes have split / reduced FV to 2 from 10. Should we believe that this will improve liquidity and attract investors with lower price tag? Is it right time to buy more?

I hold with avg price of some 1500.

(JKS) #235

Vivek. PFC came out with disappointing Q4 results. The provisioning shocker and no dividend will perhaps accelerate further downfall. Keen to know your view. I think I pulled the trigger too early when I bought in last few days. Thx

(Vivek Gautam) #236

I am away on vacations. Cud not check much. Is it mostly due to rbi
directives n one off ? Would things be back to normal in sometime?

(JKS) #237

RBI norms certainly seemed to have influenced provisions but even otherwise it would have been a flat result. Question is - at these depleted rates, how will stake sale happen?

(JKS) #238

I went through the finer aspects of the PFC results. Yes. Its the RBI norm. Hoping that will clarify more during the concall
I won’t be able to attend though

Note 3d below has to be read and re-read …the RBI letter was received in April and hence this is the new norm

(Vivek Gautam) #239

Whats your take on PFC concall n REC results? I wasnt much clued in as i am away on vacations.

(JKS) #240

I wasn’t able to attend to either of the calls. But, a friend sent me a whatsapp forward from PFC call. I was not able to xcheck it but have sent that forward in the personal mail here Vivek, to you…thx

(hemtan100) #241

PFC Q4 FY17 concal:

Due to re-alignemnt with RBI norms - 59kcr of assets were downgraded.
Total impact on profit in Q4 = 3786 cr.
All 59kcr of assets were government/state owned - generational projects. All are being serviced with no dues as of 31st

March 2017.
23kcr downgraded to npa out of these 59kcr. The top 3 accounts out of these worth 18k cr would be upgraded to standard in

CY17 itself. All of these projects have been commissioned.
Recovery rate on these 59k cr projects = 100% (except 4cr - Meghalaya project).
58% of the restructured assets will reverse in fy18 as these projects have already been commissioned.
13% will commence in fy18.
10% will commence in fy19.
All these restructured assets are being service regularly and will be reversed to standard assets over a period of time.
All these projects have FSA’s in place.
We do not see any stress in these 59kcr of assets and are likely to turn standard in the next 2-3 years.
In the track record of PFC, government projects have never been declared NPA except Sikkim (now standard) and Ratnagiri.

FY17: Decreased NPA’s. 4 loan accounts of 920cr upgraded to standard category. 1 asset 442cr downgraded to NPA.
With RBI Impact: GNPA: 12.5% NNPA: 10.55%
Without RBI norms: GNPA: 3.01% (3.15% in FY16) NNPA: 1.68% (2.55% in FY16)

Balance restructured group (over and above the ones after RBI impact) = 19500cr.
Despite UDAY prepayment of 28400cr, loan asset growth was positive to the tune of 3%.

CAR at 19%. Tier 1 = 16%

Private sector projects outlook getting better. Coal linkages falling in place.
10.5% is the yield on the overall book.

See no impact on credit rating as the new restructured assets are all government owned and recovery rate is 100%.

Net-net my take: with all the upgradation slated to come through in FY18, PFC should be in a position to restore the
dividends back to 8 bucks or thereabouts.

(Vivek Gautam) #242

Well 2017 is turning out to be a wonderful year for stock pickers .

Mine X of 2012 is now 9.25 X now by Gods grace & interaction with smart investors here & other places.

PF up 30% from 31 March 2017.

Old strategy of investing in quality small & midcaps run by ethical passionate entrp(first gen or other wise) with strong tailwinds & good ROCE working nicely.

How has been the performance of other investors ?

(Rudra Chowdhury) #243

Congratulations Viveji doing a 56%Cagr (10x in 5 years) at your level of capital is truly outstanding.

What has been the average holding period ? And how much emphasis would you give to upward averaging in this return ?