Investor Accounts (Active with PAN) : 72,95,772
DP Service Centres : 7,086
Demat Custody Value  :48,94,140 (Rs.Crore) (US$ 1,242 billion)

Investments can be considered in the initial public offering of OnMobile Global, a telecom value-added services (VAS) provider, in the light of its track record in the Indian market and good growth prospects. The offer price, though, appears to be stiff given current market conditions and the valuation accorded to frontline telecom service and software players.

At the upper end of the price band (Rs 450) the stock would be valued at 44 times its estimated current year earnings, on the post-offer equity base. But the niche nature of OnMobile’s business, sustainable growth prospects, strong operating margins (45 per cent) and the absence of peers in the listed space make a strong case for investment. Value-added services (such as music downloads and gaming) augment the voice revenues of telecom players. The market for value-added services has strong growth potential in India where telecom players are grappling with falling realisations (ARPUs) and looking to generate higher revenues from subscribers.

OnMobile Global offers content aggregation and application development, which is software-packaged, to telecom service providers. The company retains the intellectual property rights to the platform and applications. OnMobile, with its established relationships with most of the dominant players — Bharti Airtel, Reliance Communications, and BSNL — appears well-placed to capitalise on this potential.

An expanding client profile to include media companies and handset manufacturers and an expanding South-East Asian footprint are positives for the company.

Integrated VAS Play

Among value-added services, short messaging service (SMS) continues to be the top non-voice revenue generator for telecom companies. But increasingly, services such as ringtone downloads, voice SMS, gaming and information services are also catching up and providing alternative revenue streams to operators. Other VAS include MMS (multimedia messaging service), USSD (unstructured supplementary service data) and WAP (wireless application protocol). OnMobile, with its positioning and experience, appears well placed to establish its presence in this space. Mobile Commerce, service that facilitates payment for movie tickets, utility bills, pre-paid recharge and shopping, is an area where OnMobile is expanding its offerings.

With players such as Reliance Communications and Bharti Airtel already having launched this service, the company could benefit from increased spending in this segment. Together, these give OnMobile a healthy service base.

Broadening client profile Moving beyond telecom clients, OnMobile is broadbasing its customer base by offering interactive services to newspapers, magazines, television and radio broadcasters. Clients in this segment include ESPN, Star, AOL and Buena Vista. With mobile contests, polling, voting, song downloads and other interactive services on the increase from media companies, OnMobile may see this segment contribute significantly to revenues. The revenue sharing arrangement is three-way between OnMobile, media clients and the telecom company. The company also works with handset manufacturers such as Nokia to market its products, creating a holistic business model.

Expanding Geographical footprint In addition to domestic presence, OnMobile has expanded its offerings to clients in the fast-growing South East Asian markets. The relationship here is with strong telecom players in this region such as Maxis, Optus, Bakrie Telecom and Banglalink. Some of these countries have higher ARPUs than India and also a high propensity to use value-added services. OnMobile stands to gain with any increased spend on VAS by these players.

In addition, OnMobile has acquired two companies — Vox mobili in France and ITFINITY in India — both VAS players. While the former is said to have 21 customers worldwide, the latter has good software products. These moves help in widening OnMobile’s offerings and client base.

Technology independence and 3G policy: OnMobile’s applications are claimed to be network-neutral. This means that services can be delivered to a 2, 2.5 or 3G phone or network.

In the Indian context, this becomes relevant as a vast number of users still have low-end phones. As operators upgrade the technology of their network, OnMobile’s products may not require substantial reworking to be commissioned in the network. The imminent announcement of the 3G policy, with many operators betting on increased offtake of high-end voice, data and video services, could provide a trigger to this business. OnMobile, with its offerings and operator relationships, may be able to tap into this high-margin market.

Risks Most of the revenues that OnMobile generates is outcome-based — a revenue share arrangement with the operator, based on offtake of services by mobile subscribers. The success or failure of an offering thus directly affects realisations.

This apart, a substantial number of new subscribers may have come in because of offers such as ‘life-time recharge’, ‘chota recharge’ and so on. These are typically low ARPU subscribers and may not use value-added services in a significant way. This has adverse implications for OnMobile. Competition from other (unlisted) players in the same segment such as Bharti Telesoft, IMI Mobile and Servion Global may create pricing pressures on OnMobile. Vendor rationalisation from players such as BSNL may force OnMobile to work with a smaller pie.

Issue details The company proposes to issue 1.09 crore shares at a price band of Rs 425-450, for purchase of office equipment, repayment of loans and working capital requirements. The offer is open during January 24-29. Deutsche Bank and ICICI Securities are book running lead managers to the issue.

Source : Hindu

The National Bank for Agriculture and Rural Development (NABARD) on Saturday launched rural bonds that will be issued at Rs 1,000 each.

Subscribers have to apply for a minimum of five bonds and thereafter in multiples of one bond, a press release stated.

The NABARD bonds will be of five years tenure and carry a coupon rate of 8.25 per cent for general public and 8.75 per cent for senior citizens.

The bonds can be held in both physical as well as in demat form.

Subscription to these bonds will be eligible for deduction under Section 80 (C) of the Income Tax Act, 1961, the release said.

HDFC is the collecting banker for the issue.

The Investors’ Grievances Forum, a body that represents small investors, has blamed “faulty policies being implemented by SEBI” for the recent market mayhem.

In a letter to SEBI Chairman M Damodaran, the forum has particularly castigated the policies governing F&O market and called for an immediate course correction.

The forum has also demanded that Sebi, NSE, BSE and brokers compensate for the losses incurred by lakhs of small investors since the regulators have not left retail investors with any cushion against the market crash. “Indian stock market is different from overseas markets.

We have a substantial retail participation unlike the foreign markets where institutions/funds have a major presence. Retail investors have to be provided a security back-up against market crash,” the letter by the forum read.

Addressing mediapersons on Thursday, forum president and former MP Kirit Somaiya said the feeling among thousands of retail investors in Mumbai, Ahmedabad, Delhi and other major urban centres was that “they have been cheated”.

Mr Somaiya said the finance minister, Sebi chairman and the government kept boasting about the healthy economic growth when the market was cruising. “But when the Sensex crashed, there was no one to take responsibility,” he said.

“In Mumbai metropolitan region only, around 3 lakh small investors have lost between Rs 1 to Rs 5 lakh each in the market meltdown. On January 21 and 22, NSE and brokers unilaterally cut-off F&O positions of small investors without giving them any chance to keep their transactions operational. Brokers’ terminals went off during trading hours on both these days. This is not a small technical problem. There are systemic flaws that have brought this disaster upon the small investors,” Mr Somaiya said.

The forum has observed that no new purchase orders were accepted by the brokers from retail investors and only big investors and FIIs were allowed to purchase when the index level was 15000 or so.

“When the Sensex was around 15,000, many retail investors wanted to buy scrips of blue chip companies which were available at low rates. But they were not able to do so since the terminals of thousands of neighbourhood brokers stopped functioning. At the same time, domestic and foreign institutional investors, some high net worth individuals and companies were allowed to buy scrips,” he said.

Elaborating, Mr Somaiya said that in the cash transactions, period of two days (T+2) is given to the investor for settling his account but no such facility was given to retail investors who had put their money in the F&O market. As the market crashed, retail investors lost either their shares or cash which they had kept as margin with the brokers, he said.

“The forum wants to know who bought these margin shares and who are the brokers who sold them to square off the deals,” Mr Somaiya said. The forum has also held non-introduction of physical settlement in F&O segment responsible for market volatility and crisis. “Since on-line cheque clearing system is not in place, lakhs of investors who wanted to keep their deals alive by paying additional margin money were not able to do so before that particular day’s trading hours were over,” he said.

The forum has claimed that the composition of F&O market in India greatly differed from the F&O segment in other markets. World-wide, F&O is a specialised market where only mutual funds, insurance companies, and institutional investors put their money, the forum has observed. “But Sebi has failed to appreciate that the composition of F&O market in India is dominated by retail investors. It has failed to update its policies to keep up with this profile,” the forum has claimed.

Mr Somaiya also blamed Sebi for not keeping the margin percentage stagnant at 20 in the F&O market. Though the Sensex kept going from strength to strength, Sebi refused to raise the margin percentage gradually and soon after the crash hiked it to 50%, he pointed out. “Similarly, when F&O was introduced, the upper limit for trading in any scrip was kept at Rs 2 lakh. But even as the market size increased, this ceiling was not revised upwards,” he said.

Source : India Times

Investment recommendations are expressed as ‘buy’, ‘hold’ or ‘sell’ and are based on an assessment of the fundamental factors, the current pricing of the security and the likely appreciation on price over a specific time horizon. Thus , investment recommendations carry out a detailed evaluation of the ‘market factors’ (liquidity, demand supply, valuation etc.) as well.

On the other hand, IPO grading is a relative comparison of the assessed fundamentals of the graded issue and does not take cognizance of the price of the security, its valuation compared to peers or the possible gains over a specified time period. Rather, it is designed to be only an additional input to the investor in his decision making process.

Grading of Initial Public Offerings (IPOs) is a service aimed at facilitating assessment of equity issues offered to the public. The Grade assigned to any individual IPO is a symbolic representation of rating agency’s assessment of “fundamentals” of the issuer concerned relative to other listed securities.

IPO Grades are assigned on a five-point point scale, where IPO Grade 5 indicates the highest grading and IPO Grade 1 indicates the lowest grading, i.e a higher score indicates stronger fundamentals. An IPO Grade is not an opinion on the price of the issue, pre- or post-listing.

IPO Grade 5: Strong fundamentals
IPO Grade 4: Above-average fundamentals
IPO Grade 3: Average fundamentals
IPO Grade 2: Below-average fundamentals
IPO Grade 1: Poor fundamentals

Why is IPO grading necessary?

An investor in a hitherto unlisted company may either have limited access to information on it, or may find it challenging to appropriately assess, on the basis of the information available, its business prospects and risks. An IPO Grade provides an additional input to investors, in arriving at an investment decision based on independent and objective analysis.

In recent times, with the stock market participation of new and foreign investors increasing, there is need for greater value-added information on companies tapping the capital market and their intrinsic quality . In this context, IPO Grades, being simple, objective indicators of the relative fundamental positions of the issuers concerned, could help in both widening and deepening the market.

IPO Grading is NOT a recommendation to buy sell or hold the securities Graded. Similarly, it is NOT a comment on the valuation or pricing of the IPO Graded nor is it an indication of the likely listing price of the securities Graded.

What are the issues that are assessed while arriving at the grading?

The emphasis of the IPO Grading exercise is on evaluating the prospects of the industry in which the company operates , its competitive strengths that would allow it to address the risks inherent in the business(es) and effectively capitalise on the opportunities available as well as the company’s financial position.

In case the IPO proceeds are planned to be used to set up projects, either greenfield or brownfield, rating agency evaluates the risks inherent in such projects, the capacity of the company’s management to execute the same, and the likely benefits accruing from the successful completion of the projects in terms of profitability and returns to shareholders. Due weightage is given to the issuer company’s management strengths and weaknesses and issues , if any, from the corporate governance perspective.

Accordingly, IPO Grading methodology examines the following key variables:

• Business and Competitive Position
• New Projects—Risks and Prospects
• Financial Position and Prospects
• Management Quality
• Corporate Governance practices
• Compliance and Litigation History

SEBI does not play any role in the assessment made by the grading agency. The grading is intended to be an independent and unbiased opinion of a rating agency.

How long the rating is valid?

The assigned grade would be a one time assessment done at the time of the IPO and meant to aid investors who are interested in investing in the IPO. While the grading itself is valid for a period of 6 months from the date of issuance, the grading letter will have a validity of 2 months from the date of issue and would need to be revalidated subsequently- there would not be any additional charges for the revalidation. Rating agency however reserves the right to change the grading after the same has been assigned should the circumstances so warrant.

Start Date : 4 Feb 2008
End Date : 8 Feb 2008
Issue Size : 4000000
Security Type : Equity shares
Face Value (Rs.) : 10.00
Price Band (Rs.) : 85.00 – 95.00

Market Lot : 70
Tick Price (Rs.): 1.00
Minimum Price (Rs.) :85
Minimum Bid Qty : 70
Maximum Bid Qty : 3999940

Book Running Lead Manager/s :

• Karvy Investor Services Limited
• Centrum Capital Limited

Start Date : 1 Feb 2008
End Date : 05 Feb 2008
Issue Size : 5700000
Security Type : Equity shares
Face Value (Rs.) : 10.00
Price Band (Rs.) : 80.00 – 85.00

Market Lot : 75
Tick Price (Rs.): 1.00
Minimum Price (Rs.) :80
Minimum Bid Qty : 75
Maximum Bid Qty : 5700000

Book Running Lead Manager/s : Almondz Global Securities Limited

Bombay Stock Exchange (BSE) and OMX today have signed an agreement under which OMX will deliver trading and clearing systems to strengthen BSE’s derivatives and securities trading capabilities.

Under the agreement BSE will implement a system from OMX that will serve as their new trading and clearing platform for derivatives and cash securities. The trading platform is part of BSE’s ongoing efforts to transform its exchange IT infrastructure to match the growing needs of the marketplace. The first phase of the system roll-out is targeted for launch by mid 2008

The launch of BSE’s new trading platform is part of its strategy to enhance the volume capacity in the cash market, but also to offer a more robust derivatives platform to the Indian market. The clearing system will allow BSE to clear a wider range of products, as well as offer a new set of clearing services to its members. In addition to the technology implementation, the agreement encompasses a business partnership with the joint objective to drive and grow business at the BSE.

“In our selection of a new trading platform we were looking for a partner that could bring proven technology along with strong system capacity and functionality. OMX fits this profile perfectly, and has demonstrated a strong commitment to delivering a platform that we are confident will provide an enriching experience to the market intermediaries and investors in doing business with BSE,” said Rajnikant Patel, Managing Director & CEO, BSE.

“Needless to say we are very excited about delivering technology to one of the largest and most active stock exchanges in India,” said Magnus Böcker, CEO at OMX. “Through transforming its trading and clearing infrastructure, BSE will be able meet the escalating volume capacity needs of the marketplace, putting them in a prime position for further growth.”

Also involved in the project are subcontractors Headstrong and HCL Technologies, who under the agreement will deliver a range of components and services inside the project.

About BSE | Established in 1875, BSE is the oldest Stock Exchange in Asia. Earlier an Association of Persons (AoP), the exchange is now a corporatised and demutualised entity. BSE reaches to around 450 cities and towns in India and has more than 4,800 listed companies on the boards, with over 7,500 scrips being traded. The companies listed on BSE command a total market capitalization of more than USD 1.7 trillion. The Exchange offers trading in the equity (cash and derivatives) and debt (corporate and government securities) segments. For further information please visit: www.bseindia.com

About OMX | OMX is a leading expert in the exchange industry. The OMX Nordic Exchange comprises over 800 companies including its alternative market First North. OMX provides technology to over 60 exchanges, clearing organizations and central securities depositories in over 50 countries. The Nordic Exchange is not a legal entity but describes the common offering from OMX exchanges in Helsinki, Copenhagen, Stockholm, Iceland, Tallinn, Riga, and Vilnius. OMX is a Nordic Large Cap company in the Financials sector on the OMX Nordic Exchange.

For more information, please visit: www.omxgroup.com