I own shares of Reliance Enterprises in physical form. I have not received any AGM report for the past three years nor any dividend. Please advise me on the status of the shareholding. Also, provide me the current address of the company. Is it listed on the stock exchanges?
Reliance Enterprises Ltd, a part of Reliance group, had raised money through a rights issue at a premium of Rs190 on a Rs10 paid-up equity share. It was clearly mentioned in the offer document that the company was not listed on the bourses and that it was intended to be listed.
You can reach the company at:
Avdesh House, 3rd Floor, Pritam Nagar, Ellisbridge, Ahmedabad. Pin: 380 006. Fax: +91-79-6578070.
I am not satisfied with the growth of an endowment assurance policy I hold with Life Insurance Corp. of India and plan to surrender it and instead invest in Bajaj Allianz’s life insurance equity growth fund. Is my decision correct?
It would be better if you separate your investments from insurance needs. Generally, insurance schemes are not very attractive investment options and one must decide on the purpose. If it is purely for insurance, then I think endowment policies should not be considered and term plans should be preferred. For investment, you can invest in mutual funds for better returns. About Bajaj Allianz equity growth policy, it may offer you better returns.
I hold shares in RPL (bought at an average price of Rs60), Bajaj Hindustan (Rs320), Action Construction (Rs390), Ispat Industries (Rs77) Hindustan Zinc (Rs1,100), National Steel and Agro (Rs24) , Morepen Lab (Rs11), Power Grid (Rs52), SysChem (Rs3.83), Indiabulls Credit Services (yet to be listed) and Bata India (Rs326). I am a medium-term investor with a horizon of two-three years. When should I sell these shares and at what price?
I think it would be better if you classify your stocks into three categories as per their fundamental strength. This will help you in taking decisions regarding averaging them as and when required. In the first category, you may keep Reliance Petroleum Ltd, Bajaj Hindustan Ltd and Power Grid Corp. Ltd. In the second category, you may keep Ispat Industries Ltd, Hindustan Zinc Ltd and Bata India Ltd and the rest in the third group. In the first lot, you may do liberal averaging on declines so as to bring your average acquisition price low, and should hold them for the longest period of time. In the next, you should plan to average your portfolio only on bigger dips and declines and should plan a budget to invest further in them. You may sell these stocks in small lots on recovering your price. As far as individual stocks are concerned, don’t sell any of the category 1 stocks for the next two years. You may expect a target of Rs424 for Bajaj Hindustan Ltd, Rs626 for Action Construction Equipment Ltd, Rs120 for Ispat Industries Ltd, etc. You may evaluate the rest on a periodical basis or on any major spurt or event related to them.
I have purchased 200 Moser Baer shares at Rs317 each. I am a medium- to long-term investor. Please suggest what course of action should I take.
Moser Baer is a good long-term buy and the stock is poised to touch substantially higher levels in the long term. You may buy more at this level to average your holding cost.
Kindly suggest two mutual funds I can invest for five years through systematic investment plans.
Two funds that could offer you good returns are DSP Merrill Lynch India T.I.G.E.R Regular and Reliance Growth-Growth. Since these funds have a track record of high and consistent growth, investments in them could prove fruitful. However, you must note that any investment in stock markets or mutual funds has substantial risk.
What is the outlook on Bajaj Auto Finance? The PE multiple of around 44 seems to be high, although book value is Rs280. I understand the Bajaj Allianz is part of Bajaj Auto Finance now. Is it a worthwhile investment at the current price or should one book profits if holding?
Bajaj Auto Finance Ltd has corrected significantly in the recent fall in the stock market and has again fallen to attractive levels. At the last close of Rs403, it has good potential for upward movement in short as well as long terms. You may consider investment in this stock, but with the time horizon clearly defined. If you are currently holding the stock, I think you should continue to hold it for a minimum of six months to expect decent returns.
I have bought 2,000 Reliance Petroleum shares at Rs244 each and I am at considerable losses now. Can you suggest what strategy would help me in this situation? Can I just stay invested for 6-12 months and hope losses will be covered or should I buy more to average the buy price?
Reliance Petroleum Ltd is a very good stock for long-term investment. But, since your holding price is high, you may average out it for lowering down the cost. As a matter of fact, you should never buy or sell your entire lot at one go and one rate—you should always spread it over a spectrum of prices. This logic applies not only to initial investment but also for averaging. You may start averaging your stock around current levels, but in small lots. There is a strong resistance for Reliance Petroleum at Rs183. If this level is broken, then the stock may cross Rs200 and then may touch Rs208. As an option, you may do a major chunk of your averaging when the stock breaks the above resistance and keep buying in small lots until then. I am hopeful that with some averaging done, you should be able to make some money from your investment in the time period you have mentioned.
I have recently invested Rs70,000 each in three mutual funds— Reliance Diversified Power Sector Fund, JM Financial Services Fund and Tata Infrastructure Fund (all in growth options). How good is my investment and what can be the likely returns over two-three years? Also, I want to invest in life insurance schemes and long-term savings schemes for my two-year-old son to cover his education and other financial needs. Please suggest some insurance-linked mutual funds.
Regarding your first query, I think you have made a fairly good investment decision and you can expect decent returns.
You have investment in all three hottest sectors. As far as returns are concerned, all I can say is it most likely will be better than market returns. Since it is difficult to say where the market would be two-three years down the line, it would be rather not feasible to put a figure.
Regarding your insurance needs, as a financial adviser, I can only say that your should segregate your investment from your insurance needs.
For Insurance, you should prefer term plans and for your son, investments in mutual funds through systematic investment plans would be best. Since investment for him would be spread over a very long period, the effect of compounding of returns could make it a very good investment eventually.
I want to invest in mutual funds, but I am getting confused over diversified equity funds, sector funds, tax saving schemes, balanced funds, income funds, liquid funds, etc. Is it better to invest in new funds such as Reliance Natural Resources and ICICI Fusion Series III or in already existing ones?
Before picking any investment option, including mutual fund, it is essential to know your requirement. The options may differ depending on the requirements such as tax saving, parking funds that are lying idle, or some other specific needs.
You must define your objective first and then plan to invest in mutual funds. Regarding Reliance Natural Resources and ICICI Prudential Fusion Series III, both are good and offer you good opportunities in long term (two years and above).
I own 2,950 shares of Spice Communications at an average price (rupee cost averaging) of Rs44.39 and 600 shares of Electrosteel Castings at an average price of Rs82.91. What do you think are the short-term and long-term prospects? Should I continue accumulating these shares, since they are trading below my average cost price?
Jimmy C. Mathews
Spice Communications Ltd is in consolidation phase after correcting substantially from its highs. It has a strong resistance at Rs43 and a strong support at Rs33. A break on either side could see more movement in that direction. I would not advise buying more at this level unless the stock breaks upwards.
From the long-term perspective, the stock may see rebound in near term and then may move up. Close above Rs61 would confirm a change in sentiment in this stock. However, for long-term investment decisions, a periodic review is essential at regular intervals.
Regarding Electrosteel Castings Ltd, the stock has corrected considerably and is still in bear grip. You can expect lower levels for averaging in short term. While in long term, it is likely to do well.
What is the outlook on DCB and Shasun Chemicals, purchased at Rs152.50 and Rs90 a share, respectively?
Development Credit Bank Ltd is a good investment, despite the fact that it has corrected considerably. The stock is not likely to break its recent low, touched on 22 January. You may continue to hold this stock for six months to one year and most probably you will make some money from your investment in this stock.
Shasun Chemicals and Drugs Ltd is currently in a consolidation phase and is likely to move up if it closes above Rs65. In the short term, the target for the stock is Rs75, while in the long term, it is Rs122. You can buy more of this stock to average the cost of your investment.
I had purchased Southern Petrochemicals Industries at Rs42 a share, Creative Eye Ltd at Rs40 and JCT Ltd at Rs17. Please advise?
Your cost of acquisition in Southern Petrochemicals Industries Corp. is near its 52-week high. The stock has corrected considerably and is likely to move up in medium term. You may have to hold this stock for a year before taking a fresh call. Creative Eye Ltd is also well below your acquisition cost, which is also near its 52-week high. It may take a while to bounce back and given the current price, it is advisable to hold it. JCT Ltd is also south bound and you should continue to hold it.
Answers are based on a technical analysis of the markets and individual stocks. The views expressed on this page are not the newspaper’s opinion and are provided for information purposes by Vipul Verma. Readers are requested to do their own research before participating in the stock markets. Neither the paper nor the information provider will be responsible for any outcome based on information provided here.