Fixed 11.61% pa. [ Pre-Tax ] form Govt of India HUDCO Bonds [ Tax free 8.01% pa ]

We are pleased to share an opportunity to invest in Tax-Free Bonds issued by “Housing and Urban Development Corporation Ltd” (HUDCO) a public sector company fully owned by Govt. of India. TheInterest earned on these bonds is fully exempt from tax, irrespective of the amount or the investors’ Tax status. The bonds have been rated AA+ by CARE & IRRPL and carry an attractive tax-free coupon of 7.84%p.a. (10 Years)  & 8.01% p.a. (15 Years) for retail applicants. The TAX Free interest is payable annually.

Bond Details:

Details	Particulars
Issue Opening Date	09-Jan-13
Rating	AA+ by CARE & IRRPL
Issuance	Physical & Demat Mode
Listing	Proposed on NSE
Nature	Secured & Tradable

Series of Bonds	Tranche-1 Series I	Tranche-1 Series II
Tenure (in Years)	10	15
Coupon - Category I ,II, III & IV	7.34%	7.51%
Additional Coupon (p.a.) for Retail Category (IV)	0.50%	0.50%
Aggregate Coupon rate for Retail category (IV)	7.84%	8.01%

# Retail Category IV – Individual Investor who apply for Bonds upto 10 Lakhs.

Illustration of Pre-Tax Yield:

Retail Applicants	10 Years	15 Years
Tax Free Returns	7.84 %	8.01 %
Pre-Tax Yield	11.36 %	11.61 %

Assuming 30.9% tax bracket

Company Overview:

Housing & Urban Development Corporation Ltd. (HUDCO) is a public sector company fully owned by Govt. of India for financing of housing and urban infrastructure activities in India. HUDCO was incorporated on April 25, 1970 under the Companies Act 1956. The cardinal objective of HUDCO is to undertake housing and urban infrastructure development programmes in the country, provide long-term finance for construction of houses for residential purposes in urban & rural areas and finance or undertake, the setting up of the new or satellite towns and industrial enterprise for building material.

For application form or any clarification or assistance kindly revert back.

Technicals:: Rolta, Goodyear, Punj Lloyd, Wockhardt, Gateway Distriparks ::Business Line

Reliance Industries, Infosys, SBI, Tata Steel-- Pivotals near medium-term hurdles ::Business Line

Mid-cap Funds: Defensives help them steal the thunder ::Business Line

The performance gap narrowed down on a three-year basis, as most of the schemes surpassed the benchmark’s returns.

Even as the CNX Midcap Index raced ahead of the Nifty in 2012, funds focussed on mid-cap stocks managed an even better feat.

On a one-year basis, these funds on an average gained 40.2 per cent, compared with a 36 per cent jump in the CNX Midcap Index; the Nifty rose about 23 per cent. More than two-thirds of the 39 schemes fared better than the benchmark. The schemes that led the outperformance include SBI Magnum Emerging Businesses (52.7 per cent), Principal Emerging Bluechip (51.9 per cent), Axis Midcap (50.2 per cent), BNP Paribas Midcap (49.5 per cent) and Taurus Discovery (49.1 per cent).

HDFC Capital Builder (26 per cent), Sundaram Equity Multiplier (29.3 per cent), SBI Magnum Multiplier Plus 93 (29.9 per cent) and Birla Sun Life Small and Midcap (30.2 per cent) were the prominent laggards.

‘I wish corporate profit growth surpasses the long period average’ MOTILAL OSWAL ::Business Line

“If wishes were horses, beggars would ride. If turnips were bayonets, I would wear one by my side”, so goes a popular nursery rhyme. Nevertheless, I wish for 20 per cent plus returns from the stock market in 2013, following the 20 per cent plus returns in 2012. I wish FIIs continue to pour money into Indian equities and bring in over USD25 billion in 2013. If the DIIs too turned bullish and retail investors flock back into the stock markets, it would add the much desired icing on the cake. The cherry atop the icing would be allowing pension and gratuity funds to invest in equities.

The stock market performance during 2012 was in stark contrast to the prevailing economic realities — slowing industrial production, spiralling inflation and widening current account deficit. The mid-year economic analysis tabled in Parliament earlier this month lowered the GDP growth projection for the current financial year to 5.7-5.9 per cent. As experts often say, stock market performance is the reflection of expectations relating to the future. Perhaps, the market foresees an improvement in economic and business conditions. I wish for a return to the 8 per cent plus GDP growth rate, for inflation to decline below 6 per cent and for a 3 per cent drop in interest rates.

Golden run ::Business Line

This sounds clichéd, but jewellery stocks had quite the golden run this year. Usually lurking in relative anonymity, the jewellery sector turned so attractive this year that three jewellery companies made their market debut, raising over Rs 900 crore between them.

Apparently, the Indian consumer was infallible, never mind Government action, spiralling gold prices, or inflation.

Prominent stocks — Titan Industries and Gitanjali Gems — soared over 50 per cent in the year to date. The lesser-known — Thangamayil Jewellery and Vaibhav Global — fired up more, doubling stock prices. Debutant Tribhovandas Bhimji Zaveri is up 87 per cent from its issue price. What helped was the rise in Indian gold prices, a result of the depreciating rupee, which boosted sales value even as underlying volumes dwindled.

Jewellers also banked on higher-margin diamond jewellery and a fall in diamond prices, both rough and polished, helped. Jewellers increased diamond lines with gusto, bringing out lower-priced collections.

So companies catering to the ever-faithful Indian consumer did better than export-heavy ones, such as Shree Ganesh Jewellery. Muted international gold prices and uninspiring demand in key export regions dampened the exuberance in their stocks.

How equity funds fared in 2012 ::Business Line

MOVERS AND SHAKERS OF 2012 ::Business Line

  

2012 turned market trends topsy-turvy ::Business Line

Unlike in 2011, gold lost sheen but equities partied this year. Only debt behaved on expected lines.

At the cusp of the New Year in 2012, equities never seemed more dreary, nor gold more lustrous. Well, what a faulty perception that was. For 2012 turned the trends of 2011 on its head, with gold going meek and stocks coming up with guns blazing. Only debt behaved itself and panned out more or less the way it was expected to.

EQUITIES SHINE

2011 was marked by one corporate governance lapse after the other, rising interest rates capping profitability, inflation relentlessly pushing up costs and of course, continuing global turmoil. Benchmark indices Sensex and Nifty sank 25 per cent each in 2011, while the wider market gauge BSE 500 dropped 28 per cent. Small-cap stocks nosedived, with their index down 44 per cent then.

2012 has been dogged by more or less the same factors, with the added trouble of sharply slowing GDP growth and industrial production. But FIIs rode to the market’s rescue, along with other titbits of what was taken as good news, such as freeing up the retail and aviation sectors for foreign investment.

Retail investors lean towards debt, gold ETF schemes ::Business Line

Indian investors don’t own enough equity ::Business Line

Could you talk about two sectors and stock picks that delivered very good returns for your funds in 2012 and why you bought them?

Pharmaceuticals, media and entertainment are two sectors that have particularly worked very well for us. Both the sectors are largely a play on the Indian consumption story and have been direct beneficiaries of fundamentally strong Indian growth.

For the past three years, pharma and consumer stocks, cash-rich companies and multinationals have delivered great returns. Will the same themes work in 2013?

India has inherently strong fundamentals due to favourable demographics, high savings rate and huge potential for an investment-led growth.

High growth sectors generally tend to perform very well in such economies. However, the last few years have been exceptional, due to the global crisis and certain domestic concerns. Companies in the defensive sectors such as FMCG and pharma and consumption-led sectors have done very well as a result. High interest rates have also resulted in companies with low leverage doing relatively well. However, with expectations of interest rates going down and with confidence slowly coming back into the system, we expect interest rate sensitive, capex-driven and growth sectors such as power, auto and banks to make a comeback.

Gold returns may not have earlier sheen ::Business Line

While gold will continue to benefit from a weak rupee, don’t expect the kind of returns that came by in 2008-11.

Markets in 2012 have rallied when least expected. What is the advice now to equity investors?

The valuations are still looking reasonable and we have not crossed the fair valuation of the market. From single-digit earnings growth now, earnings growth is also expected to be far better next year. Bloomberg estimates about 14 per cent growth in corporate earnings next year. So I think one should hold on. Besides, typically for an Indian investor, the asset allocation is generally weaker towards equity. Secondly, the pressure could ease out on most of the problems such as inflation and high interest rates. So from that perspective, though we may not expect 20-25 per cent growth, the downside is also not much. I think it would be a sideways market.

Look beyond short-term pressures on profitability ::Business Line

Look out for pockets of value in public sector banks and commodity stocks.

Can you talk about two sectors which delivered very good returns for your funds in 2012?

Our financial sector picks have done very well for us. Another sector that is not a big weight across portfolios, but was unique to us was media. Here we took a call that media internationally is a pretty big sector, but in India occupies a fairly small segment of the market. Some consumer names contributed too. This has been a year for stock selection. Through the year, we ended up reducing very large sector over-weight and under-weight positions and instead focussed on selecting the right stocks. That was a trend across portfolios.

We looked at sectors and companies that would enjoy good pricing power over the next two years. That led us to media, for instance, where average revenue per user (ARPUs) were pretty low and there was scope for them to improve.