It is the time of the year when the salaried working-class go looking for tax saving ideas and tax-saving investment opportunities. If you are one of those people, now is a good time to consider ELSS (equity linked savings schemes). Investing in a ELSS Mutual Fund allows tax deductions of upto Rs.1.5 Lakhs under 80C of the income tax act. There are about 38 different ELSS funds. AMFI's website can give you the details of all there is to know about them. If we get around to it, we may write our thoughts on these funds before the end of the month. Keep checking in. Meanwhile, happy investing!
IN TODAY'S NEWSLETTER
News in brief
Cover story - How much would you pay? Part - 2 (Stock Valuation)
Quiz, thought for the day
In case you missed it - Your refund from Makemytrip.com
MARKET UPDATE (WEEK ON WEEK CHANGE)
Gold (per gram)
NEWS IN BRIEF
The finance ministry looks likely to infuse a lot of cash into banks that are currently under prompt corrective action with the RBI. About ₹14,500 crores, to be precise. The list of beneficiaries will include Indian overseas bank, UCO bank & Central bank of India and this capital infusion will see them get out of PCA. In another development, the RBI released IDBI bank from PCA this week following a review of its improved financial performance.
Please grow coriander, because it is starting to become unaffordable!Coriander futures prices are up by close to 25% since the beginning of the year. Price per quintal ( = 100 Kg) reached a high of ₹7,350 earlier last week. Chana prices are similarly up by about 16% since the beginning of the year in commodity futures. Just when RBI thought it had gotten rid of food price inflation…
Reports came out this week that Tesla is looking to partner with Tata Sons’ power generation unit, Tata Power, to set up charging stations for electric vehicles in India. Tesla is looking to import Model 3 into India later this year and start sales of its entry level EV in the country.
Amazon’s payments business in India, Amazon Pay, received a capital infusion of Rs.225 Crores from its parent earlier last week. This is just after it received Rs.700 crores earlier in October. A report by Credit Suisse indicates that digital payments will grow by 5X in the next 3 years and Amazon wants a slice of it. PhonePe and Google Pay now own over 60% market share in the space while Amazon Pay facilitates less than 5% of all transactions.
Greensill capital, one of the largest supply chain financing companies based in the UK, announced this week that it is filing for bankruptcy.Credit Suisse, which had invested some of its clients’ monies in Greensill’s short-term financing instruments, froze these funds earlier this month following doubts about the valuation of some of these assets. This eventually triggered Greensill’s bankruptcy.
GAME : PRICE IS RIGHT
This the Cessna C525 Citation CJ1 private charter jet. It can accommodate 5 passengers and take you from Bangalore to Delhi in 2 hours and 43 minutes. By private jet standards, it is considered 'economy'. You can hire it for a single journey, if you would like? Your job now, is to guess the price for that journey!
What is the networth of Tata Sons - The holding and promoter company of Tata group?
How much would you pay? Part - 2 (Stock Valuation)
How much would you pay for a stock of RACL Geartech – A gear shaft auto-ancillary listed on BSE?
RACL geartech is an auto-ancillary involved in the business of supplying gear shaft components to large OEMs across the world. They supply parts for passenger cars as well as motorcycles. It has been around for a long time, but it has made a lot of progress only in the last two decades. It is backed by an able promoter Gursharan Singh who has been with the business for the last 33 years! Export sales contribute to over 60% of revenue and it counts some of the most well-known OEMs as its clients including BMW, Kubota and Schaffler. Being a manufacturing business, it requires lots of capital and is particularly very working capital intensive. The cash conversion cycle is over 100 days in large measure due to linient customer payment terms as well as long shipping time of its products from India to its customer locations in Europe/elsewhere. Given that it is a microcap (Does sales of about Rs.200 crores & its current market cap is about Rs.260 crores), banks are less willing to fund the company’s expansion initiatives. Consequently, the business relies on raising equity capital through preferential share allotment. The promoters themselves have put money in and have participated in these fundraisings.
How much would you pay for a business like RACL Geartech? What is a fair price? What is its intrinsic value? Hit the link to find out.
When the pandemic started causing ruckus worldwide around March/April of last year, one of the very first industries that felt the pain was travel and tourism. Most others struggled too, but none like tourism. A year later, while much of the rest of the world has learnt to live and cope with the virus, the tourism industry has not.
Few companies had it worse than Airbnb which was almost on the brink of a collapse. Brian Chesky, its CEO, orchestrated a phenomenal turnaround. This article on the Wall Street Journal has the full story.
Airbnb reimbursed almost all of the bookings that had to be cancelled, set up a fund to help struggling hosts and rolled out generous termination support to all employees who were fired. And where did they find the money to do it? Well, they went to the bond market and raised funds at rather high-interest rates. With that money, Airbnb looked after its customers, its suppliers and its employees – extremely tactfully. Chesky turned a nightmare into an extraordinary PR opportunity (Read this letterif you haven’t already) which eventually led to Airbnb’s stock listing at a 113% premium to its IPO price on day 1 of trading. A story almost straight from an unwritten Harvard Business School case study.
Closer to home though, Makemytrip decided that they’d go in exactly the opposite direction. Hit the link to read more.
The risk-on rally across most risky asset classes this week aided Bitcoin. The cryptocurrency scaled back its previous highs and hit $57,679 this week just shy of its previous all-time high of $58,350. Its totak market value scaled $1 Trillion once again. Legendary investor Mark Mobius said this week, ‘I fear a decline of the Bitcoin price’. We do too 😀
US SEC continues to resist attempts by asset managers to launch a pure cryptocurrency focussed ETF. But Wall street is getting creative. A new ETF called Simplify US equity plus Bitcoin launched this week which will invest 15% of AUM in a Bitcoin trust without which will give investors exposure to the cryptocurrency without directly holding it.
ANSWER TO QUIZ
is the networth of Tata Sons - the holding and promoter company of Tata group. That mammoth number there is Rs.5.08 Trillion or about Rs.50.8 Lakh Crore. In summary, a LOT!
THOUGHT FOR THE DAY
Strong insights, Cuban 🙂
ANSWER TO PRICE IS RIGHT
is the price you'd have to pay to hire a Cessna C525 Citation CJ1 private charter jet to fly from Bangalore to New Delhi. You could do that, or you could just buy one of these second hand for a price of about ₹26 Crores online. Totally Depends on where you stand on the rent vs buy discussions 🙂
Went shopping to buy one thing and ended up buying a whole load of other unnecessary stuff? This video explains how one supermarket chain in the US gets you to do that. WSJ
So, what can people do actually do after being vaccinated? It is complicated and not even the experts agree. Scientific American
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