PR Ji, There is good grey market premium on intrasoft tech IPO. Should we apply for listing gain. Also what about NMDC? Selling or holding on lsiting. Regards, Manmohan...

hi, your scientific analysis of stocks is impressive,have you analysed Ankur drugs?it is avialable at very low valuations,what do think is the future of this stock?...

Chief, i am not much worried about rate hike.It seems that more than the markets,the analysts in cnbc is more worried about rate hikes.Don`t blame them , they have to run their shop.,IN 2008 when the market was at 21000 ,the repo rate was at 7.75%.Now even after the increase it is 5% only.A lot of room still left for upmove.I am not worried about inflation also.We can not keep the rate of of rice and onion at rs.5 forever.Let it increase and let the farmers also make some money.Think about inclusive growth.,In 80`s a cup of tea was sold at 10 paise per cup.Now it is 5 rs.per cup.How many of us stopped drinking tea because of this.,In US the same cup of tea is sold for 50 rs(converted to INR).When we start selling tea at rs.50 we will be called a `SUPER POWER`...

chief_kamani@ Well you can check my previous posted messages where you will get the answer and afterall I dunn have enough of quality time like you to comment on each n every thing. I dunn even keep on posting now n everytime like what u do, I dunn talk rubbish here rather always write with facts n views. Before commenting on each n everything first make yourself complete. Regards, Manish Bothra, Kolkata....

MOVING WITH THE LEVELS NIFTY HITS INTRA DAY HIGH OF 5269.95 FINALLY CLOSED AT 5262.80 REGARDS, Manish Bothra, Money_Mystery, Kolkata...

Jassi Khangura Fri, Mar 19 05:38 AM The controversial passage by the Upper House of the Women`s Reservation Bill providing one-third reservation for women in Parliament and state assemblies has exercised many minds. On the eve of the Rajya Sabha ruckus on this issue, I happened to hear numerous critical voices in the Central Hall — but none prepared to either go on record or convey their views to their own leadership! So much for testosterone. As a man, I wonder what choice India really had. As a father of a son and a daughter, I feel the same: for I am all too aware that the path for my daughter to enter politics would be much rockier than that my son would walk — assuming, that is, that either would wish to! And as an MLA, I wonder how we could have accepted for so long a system that delivers today in the Punjab Vidhan Sabha of 117 members just seven women — three in the ruling alliance, four in the opposition Congress. I also know that when my mother contested and narrowly lost the 2002 Punjab assembly election she was not the first choice; she only contested because, at the time, both my father and I were British citizens. But I also know that as a woman she was disadvantaged, treated as an underdog because her principal opponent was male. Of course, many female candidates have defeated men, but far more have lost. Hence, the real need for women-only contests. One argument against the quota is that it is "anti-meritocracy". But India`s political arena is hardly a fully fledged meritocracy. Criminals, members of "favoured families" and film stars gain tickets to stand, rather than those who have proven themselves in their respective parties over time. But why I really support the new bill is that in spite of 63-odd years of independence, India still remains an extremely male-dominated society. We have just not been able to ensure sufficient female participation in the institutions of state; and sex discrimination is as bad today as it was in 1947. Women are still expected to be good mothers, wives, teachers and nurses, but not to climb the ladders of governance. None of the remarkable women we think of first today might have achieved their position because of quotas; but we have to think how many women are simply excluded without those quotas. Excluded due to favouritism, nepotism or capitalism. The quota system may not mean that just any woman will be shovelled into a position as an MP or an MLA. But it does mean that those women who are already long-standing party members, or who wish to transit into politics from another field, can stake a claim to do so more easily. This bill may yet be undermined if the new female legislators commonly turn out to be wives of legislators, pushed by their husbands into a position where they will be "caretakers" of the seat until it is once again available to men. This bill must open the door to legislative participation to those families that have not been involved before. In any case, with fewer seats for men both main parties must ensure that those selected are from the better of the available options. As in India, internationally, politics and corporate life have a structure overwhelmingly biased towards men. India can lead the world with the passing of this bill, achieving an elected representative ratio that even the UK and the US do not have. It is indeed a bold and brave move, but it`s the kind of move that only a country like India would take. We don`t go by the "norms" here. We never have. And when it results in a bill like this being passed, I`m especially glad for our independent ways. Young women, in particular, should be inspired by this bill. Politics has suddenly become a genuine option for them. Half our population may now start to think differently about how this country is run. That`s a 100 per cent increase in brain power applied to our national issues. Let no one say that will only benefit the women who form 33 per cent of the House. The real test for the main political parties is whether they will now abolish their mahila wings and introduce a similar quota within their own party organisations. For good governance starts at home and the "tokenism" of the past has to be well and truly confined to the dustbin. If grown men cry as a result, they will have to wipe their own cowardly tears. The writer represents Qila Raipur in the Punjab assembly express@expressindia. com ...

Thu, Mar 18 03:04 PM For foreign universities, which haven`t yet recovered fully from the aftershocks of the worldwide recession, India presents, to quote a word re-introduced into the English vocabulary by Tim Burton`s Alice in Wonderland , a `frabjous` opportunity. More than 100,000 students leave Indian shores annually to study at universities abroad. Their presence has made foreign universities wake up to the incontrovertible fact that there`s another `creamy layer` below these students abroad whose families are prepared to pay upwards of Rs 2.5 lakh a year for quality education. Profs debate Foreign Univ Bill What foreign universities Bill can`t do International students are the economic mainstay of foreign universities, but these institutions are not in a position to meet the demand for the education they provide on their own campuses back home. This untapped market makes the business of overseas campuses that much more lucrative. For over a decade, foreign universities have been lobbying hard for the passage of the Foreign Education Providers Bill, which has been a pet project of HRD minister Kapil Sibal. The most recent of these exploratory visits was that of Robert A. Brown, president of Boston University, who was in the Capital in January to plan collaborations with leading universities here. He said there was an insatiable appetite for quality education in India and collaborations would mutually benefit both countries. US`s Georgia Institute of Technology announced its plan to set up campuses in Hyderabad and Visakhapatnam as soon as the Bill gets Parliament nod. Central Michigan University, meanwhile, has taken another route to plant its flag in India. It has been offering a collaborative MBA programme with the Jawaharlal Nehru Institute of Technology, Hyderabad, for the past five years. Experts associated with these universities explain the economic logic of their plans for India: the proliferation of private institutions in the country-especially in engineering, medicine, management and law - that charged fees upwards of Rs 2.5 lakh a year was evidence of the vast market waiting to be tapped. These institutions attract the second layer of the country`s higher education market. These are students whose families can`t afford foreign education (upwards of Rs 15 lakh a year), but want to be in the top four favourite streams. India, according the now-defunct National Knowledge Commission, needs 1,500 universities, compared with about 350 now, to raise the enrollment numbers from 7 per cent of the population aged 18-25 to developed country averages. But even before the Bill got the cabinet`s nod, Indian universities had initiated the process of collaborating with their international peers to offer degrees or diplomas. A National University of Educational Planning and Administration (NEPA) report in 2008 pegged the number of these institutions at more than 130. For Bangalore University vice- chancellor A. N. Prabhu Deva, collaboration is the way forward. "It will help a higher education institution rise to the standards of its foreign partner," he says. But for this collaboration to become meaningful, says R. Govinda, NEPA V-C, teaching must go hand in hand with research. "Only then will quality education and foreign collaborations be meaningful," he says. Either way, for foreign universities, this is a winwin situation. Narayanan Ramaswamy, executive director of the management consultancy KPMG, points to the "massive demand supply gap" driving the international higher education market. Reproduced From Mail Today. Copyright 2010. MTNPL. All rights reserved ...

Hi Manmohan!

Intrasoft Technologies is in the electronic greeting cards business as it owns 123Greetings dot com, which is a popular e-greeting card website.

There are no listed peers in the exactly the same line of business. However, if we were to compare web-based companies in other lines of business, we can take an example of naukri dot com that is listed as Info Edge (India) Ltd. The share price is at 42 PE of its TTM EPS of Rs.21.

Another pure web based company net4india is trading at 28 times its TTM EPS of Rs.3.26.

If the company`s half yearly Net profit of Rs.3.09 crores is annualised, on post-issue equity of Rs.14.73 crores the EPS will be Rs.4.20. Even if PE of 40 is applied, realistic price should not be much above Rs.168.

You have to be careful if grey market premium is too high, in which case it is unrealistic.

In case the share lists at a price much higher than Rs.168, it may not be able to sustain at those unrealistic levels for long.

Soon, it may come correcting down, like Texmo Pipes that closed at unrealistic price of Rs.137 on listing day and is drifting down each day....

Hi Manmohan!

I will be selling NMDC shares IMMEDIATELY on listing (there are no second thoughts about it) as the share price may not sustain at high levels thereafter.

Reply to your query on Intrasoft Tech IPO is on its messageboard....

Hi bhai!

Thanks for the kind words.

The reply to your query is on Ankur Drugs messageboard.

Regards....

Hi Bhai!

This is in reply to your query.

Ankur Drugs and Pharma Ltd. has been one of India’s leading contract manufacturers for formulations since 2003. The company, which was founded in 1997, has three locations in Baddi and Damanand and currently produces more than 400 different medications for Indian, Asian, and African pharmaceutical markets. It has most major pharma companies as its customers.

Romaco of Germany has developed Siebler StripTabs™ line for ANKUR Drugs and Pharma Ltd. This new technology is used to manufacture and package pharmaceutical orally dissolving strips, which is an innovative drug delivery system that offers an alternative for pain treatment and hormone therapy.

In 2006, group company Vaibhav Healthcare was merged with ADPL that lead to increase in the capacity of Ankur.
Romaco, a German company, has developed `Strip Tabs` for Ankur. StripTabs are extremely user-friendly thin starch films containing the medication. When kept in the mouth, they dissolve, disintegrate and are absorbed at rates almost as good as an injection. This is an innovative means to deliver drugs. If it gets popular, this dosage form has the potential to dramatically change and expand the present traditional forms of drug delivery
Ankur also manufactures transdermal patches by which medicine is absorbed through a patch stuck on skin. The medicine is released slowly & steadily all throughout the period of application (minimum being 24 hours).

The company is going to produce injectables, effervescent tablets and powders, eye & ear drops and balms.

The company allotted 3.26 lakh equity shares at Rs 165 to Merrill Lynch Capital Markets on 13th November 2009. In May 2009, it had allotted 4 lakh shares at Rs 175/- per share to Mr. Purnandu Jain, the Chairman and Managing Director of the company.

The matter of concern is that promoters have pledged nearly 42% of their 37.42% stake in the company. Also, while the profits have been rising for the last four quarters, the quarterly sales sales have been nearly flat at about Rs.260 crores.

The share price has been consolidating for last six months and its present price is same as what it was six months back, on 22 September 2009. However, the present price is close to a good support at Rs.186. Hence,the present price is a good point for purchase.

Historically, the share price has seen Rs.469 in July 2007, on TTM EPS was only Rs.29 (PE of 16). During January 2008 when the previous bull market peaked, the share price peaked at Rs.423 at a PE of 10.

If the company maintains its performance for March 2010 quarter, it will be able to report full year EPS of Rs.53.82 for FY 2009-10 on expanded equity of Rs.19.67 crores. This year, pharmaceutical companies are expected to do very well. Hence, even if the company gets close to a PE of 10 on an EPS of Rs.54, the share price has much room for improvement.

It may just be the right time to buy this share.

...

The March effect

This message is not to give any stock idea or make any good investment proposal. It is just to make us all aware of a phenomenon that exists in debt markets, that can be exploited to suit investor preferences. It is only a matter of convenience and, in any case, it does not make the investor significantly richer.

March is a peculiar month for debt investors for two major reasons.

First, March is a time when most companies are tight on cash mainly due to factors like the need to pay advance tax, etc. (much like most of us are short of funds by month-end). As a result, companies quite often borrow for short term from the money markets by issuing instruments like certificates of deposit (CDs) and commercial papers (CPs). The rates they are willing to pay on such instruments shoot up due to their urgency for money. For example, CP rates have moved up to 5.98% and CD rates have moved up to 5.35% from 4.83% and 3.45% respectively in January 1. This is a VERY REGULAR and PREDICTABLE phenomenon EVERY YEAR MARCH. Hence, starting March, Liquid Funds (that have very short lock-in period of JUST ONE DAY or more) can give good annualised returns of almost 5.5% maybe all the way from March to June.

Secondly, March offers the opportunity to invest for just over a year, say 13 months – from March 2010 till April 2011 and get Double Indexation benefit.

`Double indexation benefit` means getting cost indexation benefit on Long Term capital gains for two financial years, by holding an asset for just over one year. This benefit is not available in case of fixed deposits and bonds, but are available to Fixed Maturity Plans (FMPs) of Mutual Funds, making them a much better option over one year FDs.

Fixed Maturity Plans offered by mutual funds, is a type of debt mutual fund for a fixed duration, just like bank FDs. The units of this plan mature on a predefined date and are hence called Fixed Maturity Plans. They are close-ended schemes meaning that they are not bought and sold on a daily basis. Their maturities range from one month to three years.
The money collected from you is invested in fixed-income instruments like Commercial Paper (CP), Certificate of Deposit (CD), money market instruments, corporate bonds and even bank fixed deposits.

After the FMP matures, say in April 2011, if the option is Growth Option, the profit on redemption is a Long Term Capital gain as you have held the FMP for more than one year. The profit will be taxed at 10% flat or at 20% with indexation benefit. You SHOULD TAKE the indexation benefit as it helps you get `double indexation benefit`.

Say, an investor invested Rs.100 in March 2008 when cost inflation index was 551 for FY 2007-08. When he withdraws the money in the FMP after 13 months in April 2009, he would be able to use cost inflation index for FY 2009-10 which was 632 and not just 582, which is cost inflation index for FY 2008-09.

If he had invested Rs.100, his cost of investment can be considered as Rs.100 multiplied by 632(CI Index of FY2009-10) divided by 551(CI Index of FY 2007-08), which is Rs.114.7. Hence, he needs to pay tax only if he earned more than 14.7% in his debt MF. As a result, his entire 7% appreciation in the FMP is available to him TAX-FREE! In fact, he can show a LONG TERM CAPITAL LOSS of 7.7% and offset some long term capital gains against this.

The possible yield of 13 months FMPs is likely to be around 7%. Presently, the highest 1 year FD rates by banks is 7.25% being offered are by Federal Bank, Karur Vysya Bank and South Indian Bank. For a person in the highest tax bracket, 7.25% interest on FD is ONLY 5.07% interest after tax is cut.

Particularly if you belong to the highest tax bracket and you are looking at a one year FD, applying for FMPs (there are PLENTY of them open now) before 31st March 2010 is a good option from appreciation and taxation point of view....

After delivering superb returns of nearly 100% in two months flat, the share price is showing signs of exhaustion on the charts.

The proposed increase in iron ore prices and consequent increase in steel prices can have negative impact on forging industry as well.

The upmove can afford to resume, but probably after a consolidation/correction that may last few weeks at least.

...

Manugraph India Ltd., is India’s largest manufacturer of web offset presses - printing presses that use paper rolls and not individual paper sheets. These presses are normally used for high volume publications. It is presently India`s largest manufacturer of web offset presses with 60% market share.

It was the first Indian company to have begun exporting Indian manufactured printing machines to advanced countries such as Germany, France, UK & USA as early as in 1994-95.

In Nov 2006 the company too over US-based press manufacturing firm Dauphin Graphic Machines Inc. (DGM). and renamed it Manugraph DGM Inc. With this acquisition, Manugraph is now No.1 single width, single circumference press manufacturing company in the world.

In fact, the same year the share price of the company almost consistently had traded above Rs.1000 on Rs.10 face value. The face value of the share is presently Rs.2.

The worldwide slowdown of the economy that began in January 2008 hit the company the hardest as customers began to cancel or postpone orders. In January 2009, the company had to reduce operations in its two Kolhapur units as poor market conditions caused inventory to pile up.

However this year, with the improving economic scenario and order book position, in January 2010 the company has begun normal capacity operations at both the manufacturing units at Kolhapur. Last month (February) it sold 32 printing unit modules to a Gujarati newspaper by the name Gujarat Samachar Daily.

In FY 2008-09 the company had posted a full year EPS of nearly Rs.12 on a small equity of Rs.6.08 crores. The year prior, in FY 2007-08, this was Rs.20.40.

The improvement of the economy and the good prospects of print media companies should ensure better orders for the company in the days ahead. The small equity of Rs.6.08 crores would ensure that when the situation improves, the Net profit and EPS should grow well.

I chose to wait and write about this stock today as it is now available close to strong support levels at Rs.45.

A sound company for long term gains....

Hi dilip54!

It was a smart move to sell off Tide Water Oil when you got the news that Andrew Yule may not sell its Tide water oil stake.

Government of india holds 94.42% and Bank of Baroda holds 4.25% in Andrew Yule and only 1.33% is public free float. Such low free float can create a situation wherein the stock price is held artificially high at illogical levels (as was and,perhaps, will be the case with NMDC).

However, the fear (as with the case with NMDC) seems to be spreading that the FPO, if any, will be at steep discount to traded price. Hence, the share price has been taking a plunge into an abyss - from Rs.91.55 on 19th January to Rs.45.85 when traded last - a LOSS OF 50% in LESS THAN TWO MONTHS!

Andrew Yule seems to have repaid a loan of Rs 73.76 crore to the Government by selling its stake in DPSC and Phoenix Yule. It seems to become increasingly evident that stake sale of Tide Water Oil may not be necessary.

The only glimmer of hope is that the NMDC debacle, in which Government had to bail itself out, may cause a rethink about selling overpriced Government company stocks.

In any case,with a plethora of wonderful stock available in the universe of stocks to take a pick from, it may be better to give a miss to this stock for the time being till the clouds of uncertainty are dispelled.

Regards.

...

In the same way as majority is not always right, oversubscriptions do not indicate the profitability of a public issue for its subscriber.

There was a HUGE IPO which got fully subscribed in ONE HOUR of opening and by 10 times on closing day in which millions of investors lost crores of money as the stock price today is less than half of its issue price. I think it is still the best perming IPO in terms of oversubscription - yeas, I am talking of Reliance Power IPO.

You must apply for public issues based on the discount to intrinsic value and discount to prospective valuation they perform. I differentiated the two because quite often, the prospective valuation on listing (like in the case of NMDC)may be higher than intrinsic and realistic valuation.

I only look at oversubscription from one point of view - I apply only on last day of the issue after checking that the oversubscription as at 1700 hrs on the penultimate day does not exceed 20%. This `thumb rule` indicates that the IPO retail portion may not get too oversubscribed finally. This is to avoid money going and coming back without any allotment due to heavy oversubsciption.

About Pradip Overseas. Its sales for nine months ended December 2009 were Rs 1216.83 crore and net profit being Rs 51.10 crore. The company expects to report Net Profit of Rs.70 crores for FY 2009-10 indicating EPS on post issue of about Rs 17.5. At the offer price band of Rs 100- Rs 110 per share, PE works out to 5.7-6.29 times. In comparison, Welspun India ( a much better managed company from similar industry segment) is trading at P/E of 5.45 times TTM EPS.

Since most IPOs tend to list higher that their true worth and then drift down, you may get some profit on listing.

If you ask me, IL&FS Transportation Networks Limited is a MUCH BETTER IPO with better risk reward ratio. As the retail protion is only subscribed 0.1356 times and tommorow Monday, 15th March is the last day. It may be a smarter choice to apply in it for better chance of allotment as well....

Hi Satish Gundewar!

I am replying to your query at a more appropriate messageboard as well.

Review your company`s performance every quarter based on the quarterly results.

You would already have some future projection of the company`s net profit and EPS at the time of buying the share.Check if the company`s performance matches with that.

Get the TTM (Training Twelve Month) EPS based on each quarter`s results and apply the relevant PE for the sector (like PE of 20 for power, PE of 6 for textiles, etc.) and revise your price target for the next year based on futuristic EPS if the present performance is maintained. For companies that are seasonal like tea, sugar some of the quarters have huge profits and others have low profits or losses. So, comparisons should be YoY (Year on Year - that is to compare with the corresponding quarter of previous year)and not QoQ (Quarter on Quarter - that is to compare with quarter that has just passed).

The price target you set could get attained earlier if the whole industry PE gets re-rated (I expect the industry PE of mid-cap pharma and textiles to be be re-rated upwards this year). In this case, revise your price target based on newly revised PE.

There are ratios like PEG (Price Earnings to Growth ratio) which was much used during the infotech boom days and are now extinct. In early 2000s, PEG of 1 was considered for infotech shares as infotech companies were growing extremely fast. This meant that if a company like Infosys had a 100% sustained growth YoY (Year-on-Year) then it was considered reasonable (at that time) to have a PE of 100. This meant PE of 100 divided by Growth of 100%, so a PE by G ratio of 100 divided by 100 equals to 1. In fact, PEG of 1 was used across infotech shares at that time.

Pricing of companies, setting price targets, etc. is a subject that can be discussed at length. There are many IFs and BUTs that are applied.

I just gave a jist of what occured immediately to me.

Regards....

Hi Kushal!

I can understand your predicament what with innumrable choices in the market.

There are innumerable products that focus on Children and they are primarily two types:

1. MUTUAL FUND SCHEMES that invest for the child, which are all basically Balanced Funds (except for UTI Children’s Career Plan Bond Option which invests only in debt).

2. INSURANCE COMPANY PRODUCTS that either:
traditional plan in which the insurance company takes all the investment decisions on your behalf and the return on the policy is in the form of bonus payable on maturity.
ULIPs.

I am not convinced yet about the Insurance company products that make repeated advertisemnts on TV noawadays promising that the child can becomes what he likes in life – all that he has to do is just take a child policy (apparently he even does not have to work or study hard!). I would suggest that you SHOULD NOT INVEST IN ANY, I REPEAT `ANY`, CHILD POLICY by ANY INSURANCE COMPANY.

Child Products by Insurance Companies are to be avoided because-

1. There is no need for an insurance component in a Child Plan as they are young and parents are not dependednt on their income. However, the only consolation is that they may have an option where in the target amount is paid even if the parent passes away,but you pay through your nose for such an option (as it is, if you have your own insurance policy, you do not need this option either).

2. The deductions from your premium paid is HUGE and they have VERY HIGH costs. All those repeated advertisements you are seeing on TV and the incentives to agents who will chase you to join their schemes are all cut from YOUR PREMIUM and only the rest is invested. I read from Hindu BusinessLine just today of an investor who asked why he got back ONLY Rs.11,000 from a ULIP product after he had put Rs.1,00,000 in it after his retirement in 2006.

So I will skip ALL Child Plans by Insurance Companies AS THEY ARE A BAD CHOICE.

The only schemes worth considering are from Mutual Funds.Some of the prominent Mutual Fund Schemes are:-

1. Prudential ICICI Child Care Plan: It offers a Study Plan and Gift Plan. Study Plan invests 85-100% in debt and 0-15% in equity, the Gift Plan invests 65-100% in equity and 0-35% in debt. This fund has NO LOCK-IN PERIOD and investors can withdraw money any time. However, early redemption is discouraged by charging an exit load of 2.5% if investments are redeemed within three years. The fund will levy an exit load of one per cent, for investments held for three years, but withdrawn before the beneficiary child attains 18 years of age.

2. HDFC Children`s Gift Fund : It too has two options: Savings Plan and Investment Plan. Savings Plan invests 0-20% in equity and 80-100% in debt and Investment Plan puts 40 - 75% in equity and 25-40% in debt. It is optional to take a lock-in period which is until the child attains the age of 18 years or until completion of 3 years from date of allotment , whichever is later. There is no Entry Load, and exit load for investors who take a lock-in option. However For units not subject to Lock-in Period there is exit load of 3% if redeemed within 1 year, 2% if redeemed between the first and second year and 1% if units are redeemed between the second and third year, nil thereafter. No Exit Load shall be levied on bonus units and units allotted on dividend reinvestment.

3. Principal Child Benefit PlanCareer Builder Plan : It invests minimum of 65% and maximum of 75% in equity and rest in debt. It has no Entry Load but Exit Load – is 1%, if redeemed on or before 1 year from the date of allotment.

4. Templeton (I) Childrens Asset Plan. It has choice of 2 plans: Education Plan and Gift Plan and in both schemes the units are lcoked-in till the child attains 18 years of age. Education Plan can be used for meeting regular expenses for children`s education. Dividends can be withdrawn 4 years from the date of first investment. Gift Plan has Dividend & Growth options.

5. Tata Young Citizens Fund in which around 50% of the funds are invested in equity and rest in debt.It has two options : Anytime Exit Option and Lock-in Option. Under this Anytime Exit Option redemption is permitted before the child attains 18 years of age. However, Exit Load is 3%, 2% and 1% if redeemded within 3 years, 3 to 7 years and more than 7 years respectively. Under Lock-in Option, investment will be locked in till the child attains 18 years of age.

6. UTI Children’s Career Plan: It has two plans : Balanced Plan that invests maximum 40% in equity and Bond Plan that does not invest in equity at all. The Bond Option has not entry or Exit Load. However, the Balanced Plan has Entry Load of 2% and Exit Load of 3%, 2%, 1% and 0% if exited after less than 2 years, 2 to 4 years, 4 to 5 years and more than 5 years respectively.

To be continued.....

Continuing from previous message...

Normally, reversal from Bull market to Bear market is marked by high interest rate regime due to good demand for money and goods. So, when the markets reverse, the interest rates begin to fall, albeit this occurs only after at least 3 months of equity market/economic declines.

In case of bonds, the relationship between bond prices and interest rates is inverse. When interest rates fall, bond prices go up and vice versa (I can explain this but will avoid it to save time). So, the switch can be made from Balanced Fund to any Gilt Fund that invests in Government Bonds. The sensitivity of bonds to interest rates is more if the average maturity period of the bonds is higher. So, when you do the switch, select an MF that has Government Bonds of highest maturity period.

Here again, the dividend option is better as it is tax free (however, the MF pays 14.1625% ( 12.50% as Dividend Distribution tax + 10% surcharge + 3% education cess).

The fall in interest rates is the main kicker for Gilt Funds. So, when interest rates plateau out, you should be out of Gilt funds to pure Income/Liquid Funds, waiting for 200 DMA to be pierced again from below, for the markets to turn from Bear market to Bull market.

This is a good investment plan for your pension nest egg that I have devised with my experience.

The main thing in this whole process is NOT to pull out any money from this nest egg (you are only permitted to add more, but not to withdraw) as you are saving all this for your retirement age.

Regards....