Winning Strokes

Photos: Colossos

The Indian bourses got support at around near 9981, as mentioned to the Premium Members during the market hours yesterday. The pullback rally made the Nifty gain by 132.60 points or 1.33%. The Nifty is likely to get some resistance near 200-DMA, but the short term trend remains bullish.  

The stock of Reliance Infrastructure Ltd which was recommended around Rs.422 yesterday, moved to Rs.429.15 in the NSE before closing at Rs.424.80. Today, if the market remains buoyant, then we could see Rs.433-437 - 441-447 levels. 

The scrip of MCX Ltd (Rs.688.75) moved to Rs.698, after it was recommended around Rs.681, to the Premium Members. The company is likely to launch two more products in April 2018. In an interview to CNBC-TV18, Mrugank M Paranjape, MD & CEO of Multi Commodity Exchange of India (MCX) said that  the exchange is witnessing positive increase in volume in the 45-50 days of Q4. In January, this year SBI Mutual Fund bought 8,19,048 shares of Multi Commodity Exchange of India at Rs.840.50. We can look for targets of Rs.797-820 in the coming days.. 

The share of 3i Infotech Ltd yesterday moved to Rs.5.25 in the  NSE before closing at Rs.5.05. With the IT industry undergoing rapid changes in recent years, whether it is on, the software side or new business models, software companies are forced to adopt or make crucial changes to their overall strategies in order to stay relevant in the changing times. And that’s what the Mumbai based software product company 3i Infotech has done in recent years by planning and executing a three-stage business strategy of ‘protect-consolidate-grow.’ To a large extent, this strategy has been successful in helping 3i Infotech to revive and revamp its overall business, software product portfolio, customers, revenue, and growth. You can start averaging and we can look for targets of Rs.5.70-6.90-7.85 in the coming days.

Today, during the market hours I will recommend a short term momentum counter to the Paid Group members. Join the Premium Group or trade through my associated brokerage house with a minimum portfolio size of Rs.3 lakhs to get the name of the scrip; which is likely to cover your subscription charge. 

Also, note that I have decided to give Special discounts on the subscription charge, to the SMALL INVESTORS, till 15th April, 2018. So hurry up!! The market has become so competitive these days, that it is getting increasingly difficult to make money on a consistent basis even for the experts. 

Market Pulse

Key benchmark indices hovered with small losses in morning trade after a volatile start. At 10:18 IST, the barometer index, the S&P BSE Sensex, fell 30.97 points or 0.1% at 32,565.57. The Nifty 50 index dropped 23.85 points or 0.24% at 9,974.20. Market sentiment remained subdued amid fears of global trade war.

The S&P BSE Mid-Cap index fell 0.22%. The S&P BSE Small-Cap index dropped 0.27%. Both these indices underperformed the Sensex.

Overseas, Asian stocks edged lower amid fears that rising tensions between the United States and China could lead to a full-blown trade war. US stocks fell sharply on Friday, 23 March 2018 as investors assessed the possibility of a trade war brewing between the US and China.

Meanwhile, reports suggested that China and the US have quietly started negotiating to improve US access to Chinese markets, after a week filled with harsh words from both sides over Washington's threat to use tariffs to address trade imbalances.

Closer home, the breadth, indicating the overall health of the market, turned negative from positive. On the BSE, 1,298 shares declined and 809 shares advanced. A total of 118 shares were unchanged.

Telecom stocks were mixed. Reliance Communications (up 0.88%) and Idea Cellular (up 0.32%) advanced. Bharti Airtel (down 0.45%) and Mahanagar Telephone Nigam (down 0.26%) edged lower.

Cement stocks also witnessed a mixed trend. Shree Cement (up 0.91%), Ambuja Cements (up 0.51%) and ACC (up 0.17%) edged higher. Grasim Industries (down 2.13%) and UltraTech Cement (down 0.54%) edged lower.

Dr Reddy's Laboratories (DRL) was down 0.7%. The company announced that it has launched Palonosetron Hydrochloride Injection, 0.25 mg (base)/5 ml, a therapeutic equivalent generic version of Aloxi Injection approved by the US Food and Drug Administration (USFDA). The announcement was made during market hours today, 26 March 2018.

NHPC was down 0.19%. The company announced that it has fully commissioned a 50 megawatts solar power project in Theni/Dindigul District of Tamil Nadu on 23 March 2018. The announcement was made after market hours on Friday, 23 March 2018.

Lumax Auto Technologies gained 1.26% after the company's board of directors considered and approved a 5-for-1 stock-split of equity shares. The announcement was made after market hours on Friday, 23 March 2018.

Today's Calls:
#The risk taking traders can buy the shares of Reliance Infrastructure Ltd at around Rs.422, T: Rs.441, SL: Rs.415. The company has an order book of more than Rs.5000 crore and its share has a good value. It is strange why the stock is trading at such dismal levels. Also, after the completion of the deal of the sell of its power division, the company is likely to become debt free.

#Buy the shares of MCX Ltd at around Rs.681, T: Rs.797, SL: Rs.667. The other targets are Rs.939 and Rs.1129.

#Buy the shares of P C Jewelers Ltd at around Rs.321-322, T: Rs.341, SL: Rs.315. The ongoing marriage season is likely to boost up the share price of the P C Jewellers Ltd, apart from lowering of competition due to the demise of one of the most reputed brands like Gitanjali Gems Ltd. 

~~With inputs from Capital Market - Live News....

Market Pulse

16-Mar-18: Fresh selling in index pivotals pulled the key benchmark indices to intraday low in early afternoon trade.

At 12:30 IST, the barometer index, the S&P BSE Sensex, was down 276.96 points or 0.82% at 33,408.58. The Nifty 50 index was down 87.50 points or 0.84% at 10,272.65. Index heavyweights Reliance Industries (RIL), HDFC and ITC dropped. Metal and mining stocks declined.

Trading for the day began on a dull note as the key benchmark indices edged lower in early trade on negative Asian stocks. Stocks extended fall in morning trade. Key benchmark indices hovered near day's low in mid-morning trade.

The S&P BSE Mid-Cap index was down 0.27%. The S&P BSE Small-Cap index was down 0.13%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, turned negative from positive in early afternoon trade. On the BSE, 1,398 shares declined and 1,053 shares rose. A total of 142 shares were unchanged. Breadth was strong in early trade.

Tata Motors (down 2.56%), ONGC (down 2.18%) and Reliance Industries (down 1.49%) edged lower from the Sensex pack.

L&T fell 0.39%. The Railways Strategic Business Unit of L&T Construction's Transportation Infrastructure Business has signed a contract worth Rs 2864 crore with the Dedicated Freight Corridor Corporation of India (DFCCIL). The scope of work includes construction of single railway track including yards, 75 major & 588 minor bridges, 1 rail over bridge modification, 4 rail flyovers, 21 stations along with construction of all associated works. The announcement was made during market hours today, 16 March 2018.

Drug major Dr Reddy's Laboratories (DRL) fell 0.06%. DRL during market hours today, 16 March 2018 said that the company has launched levocetirizine dihydrochloride tablets USP, 5 mg, an over-the-counter therapeutic equivalent generic version of Xyzal allergy 24HR tablets, in the US market as approved by the US Food and Drug Administration (USFDA).

Levocetirizine dihydrochloride tablets are used for 24-hour relief of allergy symptoms such as watery eyes, runny nose, itching eyes/nose and sneezing. According to IRI sales data, Xyzal allergy tablets had sales of about $71 million in the US market for the 12-month period ended January 2018.

Metal and mining stocks declined. Vedanta (down 1.01%), JSW Steel (down 1.34%), Tata Steel (down 2.33%), Steel Authority of India (Sail) (down 1.86%), National Aluminium Company (down 1.52%), Hindustan Zinc (down 0.69%), Jindal Steel & Power (down 1.8%), Hindalco Industries (down 0.69%), NMDC (down 0.2%) and Hindustan Copper (down 2.02%) edged lower.

Copper edged higher in the global commodities market. High Grade Copper for May 2018 delivery was currently up 0.42% at $3.1405 per pound on the COMEX.

Neuland Laboratories rose 4.34% to Rs 732.50 after a domestic brokerage initiated coverage on the stock with a 'buy' rating and target price of Rs 1,065. The brokerage said in a report that Neuland Laboratories is likely to report a strong recovery in the next fiscal. It expects 19% compounded growth rate in revenue and 800 basis point margin expansion and seven times earnings over the fiscal 2018-2020, it added.

Indian Hotels Company was down 1.05% to Rs 131.60 after the company's promoters exchanged shares via bulk deals yesterday, 15 March 2018. Indian Hotels Company (IHCL) witnessed promoter holding rejig through open market transactions on 15 March 2018 on the BSE at an average price of Rs 130.40 per share. Sir Ratan Tata Trust sold 1.10 crore shares. Sir Dorabji Tata Trust offloaded 5.02 crore shares. Lady Tata Memorial Trust disposed of 1.77 crore shares. Tata Sons purchased 7.89 crore shares. Sir Ratan Tata Trust held 0.93%, Sir Dorabji Tata Trust 4.22%, Lady Tata Memorial Trust 1.49% and Tata Sons controlled 29.79% stake end December 2017.

Meanwhile, India's trade deficit for February 2018 was estimated at $11,979.21 million, 25.8% higher than the $9,521.73-million deficit reported during February 2017, government data released after market hours yesterday, 15 March 2018 showed. Exports during February 2018 stood at $25,834.36 million compared to $24,726.71 million during February 2017. Imports during February 2018 were pegged at $37,813.57 million, compared to $34,248.44 million in February 2017.

On the political front, Andhra Pradesh's Telugu Desam Party (TDP) reportedly pulled out of its alliance with the BJP-led NDA at the Centre. The N Chandrababu Naidu-led TDP, as well as other local parties, expressed their discontent over Narendra Modi led Union govt not giving special status to Andhra Pradesh.

Overseas, most Asian stocks fell as weak volumes in the US session overnight gave little impetus for traders ahead of next week's Federal Reserve meeting. US stocks ended mixed yesterday, 15 March 2018 as industrial and tech gains were offset by losses in the consumer and energy sector.

Today's Calls:

#The stock of 63 Moons Technologies Ltd recommended around Rs.85 and Rs.94, today made an intraday high of Rs.114.5. Book some profits and wait for dips to enter. Keep a SL at Rs.103.

#Central Bank Ltd which was recommended around Rs.67 and Rs.75, has hit Rs.87, intraday. You can book some profits and hold the rest with a SL at Rs.82.

#PAIR TRADE: Buy BANK_NIFTY FUTURES at around 24770 and Simultaneously SELL NIFTY FUTURE at around 10331; ENTRY SPREAD: 2.3955; SL SPREAD: 2.38; Target SPREAD: 2.4012; Duration: 1-2 days.

#Yesterday a Buy was given to the Premium Members in the counter of Lanco Infratech Ltd at around Rs.1.15 for short term targets of Rs.1.45 and Rs.1.82. The stock hit the upper circuits today and is now trading at this level. The company is expected to turnaround in FY19. The scrip of Lanco Infratech Ltd is likely to hit the Buyer Freeze today. 

#Intraday SELL IOC Ltd at around Rs.189, SL: Rs.191.25, T: Rs.185.5-183. Book FULL PROFIT at around Rs.184.80.

#Intraday short GOLD at around Rs.30245, SL above Rs. 30310, T: Rs.30140. A lower CPI does not augur well  for Gold Bulls.

#The stock of MCX Ltd recommended at around Rs.780, made a high of Rs.831.95, intraday. Those who have still not booked profit, kindly do the same and wait for dips to re-enter.

#The stock of RattanIndia Power Ltd (erstwhile Indiabulls Power) today made an intraday high of Rs.6.10. Those who are holding the same can accumulate on market dips, keeping a SL at Rs.5.60.

#Today, I will be recommending another small cap company from the Real Estate space to the Premium Group members. If you can online transfer the subscription amount, then I will instantly give you the name of the scrip; which I feel will cover up the subscription cost. 

~~ with inputs from Capital Market - Live News....

Winning Strokes

Yesterday, among secondary indices, the S&P BSE Mid-Cap index rose 0.49%. The S&P BSE Small-Cap index advanced 0.8%. Both these indices outperformed the Sensex. The breadth, indicating the overall health of the market, was strong.

On the BSE, 1,640 shares advanced and 1,045 shares declined. A total of 162 shares were unchanged. The total turnover on BSE amounted to Rs.5279.72 crore, higher than the turnover of Rs.3388.04 crore registered during the previous trading session.

Meanwhile, the Indian economy is set to revert to its trend growth rate of 7.5% in the coming years as it bottoms out from the impact of the Goods and Services Tax (GST) and demonetization, a World Bank report released on 14 March 2018 showed. India's GDP growth is projected to reach 6.7% in 2017-18 and accelerate to 7.3% and 7.5% in 2018-19 and 2019-20 respectively.

While services will continue to remain the main driver of economic growth; industrial activity is poised to grow, with manufacturing expected to accelerate following the implementation of the GST, and agriculture will likely grow at its long-term average growth rate, the report said.

In economic data, the producer-price index showed wholesale inflation rose 0.2% in February, down from the 0.4% advance in January. US retail sales fell 0.1% in February, the third straight monthly decline. However, sales grew 0.3% if autos and gas are stripped out.

#The stock of MCX Ltd recommended a couple of weeks back in this blog at around Rs.780, today
made an intraday high of Rs.834.50 before closing at around Rs.825.10. What are the next targets for the scrip?

#As expected the shares of Videocon Industries Ltd hit the buyer freeze at around Rs.16.15. Stay invested for some big gains going forward. 

#The stock of TV Vision Ltd is consolidating around the current price of Rs.17-17.5, though today it made an intraday high of Rs.17.75. You should accumulate on every decline. The company is running 5-TV channels and the share price is available at the price of dirt. 

#Those who are holding the shares of Sri Adhikari Brothers Network Ltd, should continue to hold as the stock is likely to hit some more buyer freezes going forward. Today it hit the upper circuit at Rs.20.20 in the NSE.

#Those who have entered the shares of RattanIndia Power Ltd (erstwhile Indiabulls Power Ltd), should accumulate on declines. Today the scrip touched Rs.5.95, intraday and  closed at Rs.5.85.

#According to Nigel D'Souza, Rakesh Jhunjhunwala's RARE ENTERPRISES bought 3 Cr shares of J. P. Associates Ltd yesterday at Rs.18.37. The Stock closed at Rs.19.20 yesterday up 17.43%. The scrip could touch Rs.22 in the short term.

#Both the small cap scrips which were recommended to the Premium WhatsApp Group members, hit their respective buyer freezes yesterday. Today, also it is expected to hit the buyer freeze. Join the Premium Service or trade through my associated brokerage house to get the names of such multi-bagger scrips. "Kuch Pane Ke Liye, Kuch Khona Bhi Padta Hai" (To get something, sometimes you have to lose something).

~~with inputs from Capital Market - Live News.....

Market Pulse

The stock market further trimmed gains in the mid-morning trade with the two key benchmark indices hitting intraday lows.

At 12.28 IST, the barometer index, the S&P BSE Sensex was trading at 33,847.59 up 100.81 point or 0.30%, while Nifty was seen at 10,399.15  up 40.30 points or 0.39%. 

Key indices opened the session on a stronger footing on firm global cues. Later, indices trimmed gains so far. Global stocks gained as worries about a potential trade war waned in the aftermath of US President Donald Trump's tariff announcement on steel and aluminum.

Among secondary indices, the S&P BSE Mid-Cap index advanced 0.59%, outperforming the Sensex. The S&P BSE Small-Cap index rose 0.28%, underperforming the Sensex.

The breadth, indicating the overall health of the market, was positive. On the BSE, 1,375 shares advanced and 932 shares declined. A total of 137 shares were unchanged.

Stocks of public sector banks edged lower. Bank of India (down 1.94%), Union Bank of India (down 1.19%), State Bank of India (down 0.57%) and Punjab National Bank (down 0.1%) declined. IDBI Bank (up 2.55%) and Corporation Bank (up 0.63%) gained.

Bank of Baroda was up 0.14%. The bank has kept its Marginal Cost of Funds based Lending Rate (MCLR) unchanged, applicable from 7 March 2018. MCLR for overnight loans will be 7.80%, for one month will be 7.85% and for three months will be 7.95%. The MCLR on 6-month loans will be 8.15% and for one-year loans the rate would be 8.30%, the bank said. The announcement was made after market hours yesterday, 5 March 2018.

Stocks of private sector banks advanced. IndusInd Bank (up 2.01%), Yes Bank (up 1.13%), Axis Bank (up 0.56%) and Kotak Mahindra Bank (up 0.35%) gained. HDFC Bank (down 0.2%) and ICICI Bank (down 0.03%) declined.

The Reserve Bank of India (RBI) stated on 5 March 2018 that it will inject additional liquidity of Rs 1 lakh crore in banks through longer tenor instruments to enable flexibility towards meeting their fund needs. This measure is to address additional demand for liquidity and with a view to provide flexibility to the banking system in its liquidity management towards March-end, the central bank said. This will be in addition to normal liquidity adjustment facility operations.

Realty stocks gained. Oboroi Realty (up 1.78%), D B Realty (up 0.99%), DLF (up 0.81%), HDIL (up 0.53%), Godrej Properties (up 0.49%) and Indiabulls Real Estate (up 0.39%) edged higher. Prestige Estates Projects (down 2.5%), Sobha (down 0.08%) and Unitech (down 0.14%) declined.

Jain Irrigation Systems rose 2.2% at Rs 113.95 after the company said it won an integrated drip irrigation project worth Rs 287.66 crore. The announcement was made during trading hours today, 6 March 2018.

Overseas, Asian stocks rallied, tracking gains in the US and Europe in the last session as concerns over a potential trade war faded.

US stocks rose yesterday, 5 March 2018, erasing earlier losses, as worries about a potential trade war waned. US President Donald Trump announced tariffs on steel and aluminum that sparked fears of a trade war.

Today's Calls:

#Yesterday,  the following news was sent to the Premium Members that the stock of Reliance Infrastructure Ltd had not broken the support of Rs.427. You can add the scrip for a short term target of Rs.470..Today, the stock of Reliance Infrastructure Ltd has made an intraday high of Rs.645.30 in the NSE and is now trading at around Rs.544. 

#HDIL (Rs.46.7), has bounced from its support of  around Rs.46, however it has broken a two year old support at Rs.47. So, the best price to average would probably above Rs.47. Or only if it gives a closing above Rs.47. Moreover, the derivative contracts (FUTURE & OPTION..BOTH) "FORTIS, HDIL, IDBI & ORIENTBANK" have crossed 95% of the market-wide position limit and are currently in the ban period. 

#Intraday  Sell NIFTY FUTURE at around 10435, SL: 10455, T: 10390. Target achieved at 10390 ==> Book Complete Profit. Call Closed!!

#The stock of MCX Ltd (Rs.781) has given a break out. Keep holding with a SL of Rs.777. This is for those who bought  yesterday at around Rs.770.

#Profit Booking was suggested in the share of P C Jewelers Ltd at around  Rs.348.  Wait for the dips to enter.

#TV Vision Ltd (Rs.16) bounced from its support. You can accumulate keeping Rs.15.7 as  the Ultimate Stop  Loss.

#Sell TATA MOTORS FUTURES at around Rs.355; SL  above Rs.359; T: Rs. 349. BOOK PROFIT at around Rs.352.4. Call Closed!!

#Intraday BUY BPCL at around Rs.443, SL: Rs.439.75,  T:Rs.449. Book PARTIAL PROFIT at around Rs.445.50

Join the Premium Service or Trade through my recommended BROKERAGE HOUSE with a minimum portfolio size of Rs.3 lakhs (to get Premium Service Free of charge) to stay ahead of others. 

~~With inputs from Capital Market - Live News

Winning Strokes

Photo: Seeking Alpha

Today the Nifty as expected got support around 10400 range and closed at 10,492.85 down 61.45 points or 0.58%. The U.S. stocks gained Wednesday afternoon as Wall Street attempted to shake off a selloff in the previous session amid data that were seen as underlining strength in the economy, which is a good sign as the US is one the most powerful engines of world growth. I feel it is pertinent to mention here that the US interest rates will rise if and only if there is sudden uptick of the inflation, otherwise CY18 will be as usual with around 2-3 rate hikes by the US Federal Reserves. Therefore, all those talks that the US Federal Reserve may turn more hawkish and increase corporate borrowing costs to much higher level will not carry any value if the inflation remains steady.

Meanwhile, the Indian economy grew at 7.2% in October-December 2017, and is likely to expand by 6.6% in 2017-18, latest official estimates said on Wednesday, amid strong revival signs in consumption spending and investment activity. This is the best growth rate recorded in this year and much better than the Reuters poll of 6.9%. This has helped India regain the status of the world's fastest-growing major economy, replacing China. The Indian Economy is poised to move in a faster lane in the days ahead, recovering from the effects of demonetization and GST. The manufacturing sector grew 8.1% in the third quarter of 2017-18, from 6.9% in the previous quarter, and 8.1% in the same quarter of the previous year. The sector is projected to expand at 5.1% during the full year, inching towards last year’s 7.9% growth, indicating that factories and firms have moved on from the irritants caused by GST. We will definitely see positive movement in the markets tomorrow, especially in the auto sector due to such encouraging data.

#Those who are holding the shares of Tata Motors Ltd (Rs.370.20) should continue to add the scrip on every decline, because the transportation sector best mirrors the growth of any economy; as mentioned in my earlier write up. In Q3FY18, though it came out with disappointing set of Jaguar Land Rover earnings, it's standalone performance was strong. Analysts retained their ratings but slashed earnings estimates. It is to be noted that 85% of Tata Motors' revenues comes from its Jaguar Land Rover (JLR) unit. Tata Motors' passenger and commercial vehicle business performance was strong for the December '18 quarter, as standalone profit stood at Rs.183.7 crore in Q3 against loss of Rs.1,045.9 crore in same period last year.

#Today, a Buy was initiated in MCX Ltd at around Rs.780, SL: Rs.762,  T: Rs.820 on T+4 basis. Mrugank M Paranjape, MD & CEO of Multi Commodity Exchange of India (MCX) said that the bourse has started to witness positive increase in volume in the 45-50 days of Q4. He further said that volumes up 16% so far and Q4 average volume is close to pre-demonetisation levels.

“We used to clock about Rs 9,800 crore on bullion per demonetisation and that number throughout 2017 was roughly in the range of Rs 5,000 crore and that number has picked up by about Rs 1,000 crore in last 45 days. However, we have a good mix where we have energy, we have base metals and these two segments have done very well for us,” he said. Talking about products, he said we are hoping to get two more approvals from Sebi before end of FY18. We will look to launch two more products in April 2018, he added.

#Those who are holding the shares of Aban Offshore Ltd (Rs.171.05) can look for targets of Rs.191/206/218/230/247 in the coming days, as the strength of the US economy is likely to push up the crude oil prices above $65 per barrel within a short term.

Market Pulse

Buying continued unabated as key benchmark indices extended intraday gains and hit fresh intraday high in early afternoon trade. At 12:23 IST, the barometer index, the S&P BSE Sensex, was up 295.06 points or 0.82% at 36,093.07. The Nifty 50 index was up 103.20 points or 0.94% at 11,069.40.

Shares opened higher as positive leads from Asian markets and overnight gains on the Wall Street boosted investors sentiment. Both, the Sensex and the Nifty hit record high level in early afternoon trade. The Sensex crossed the 36,000 mark and the Nifty crossed the 11,000 mark.

The Sensex rose 309.06 points, or 0.86% at the day's high of 36,107.07 in early afternoon trade, its record high level. The index rose 65.97 points, or 0.18% at the day's low of 35,863.98. The Nifty rose 107 points, or 0.98% at the day's high of 11,073.20 in early afternoon trade, its record high level. The index rose 28.35 points, or 0.26% at the day's low of 10,994.55.

Among secondary barometers, the BSE Mid-Cap index was up 1.24%, outperforming the Sensex. The BSE Small-Cap index was up 0.63%, underperforming the Sensex. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1,556 shares rose and 1,177 shares fell. A total of 119 shares were unchanged. Breadth was quite strong in early trade.

Cement shares declined. Ambuja Cements (down 1.79%), ACC (down 1.25%) and UltraTech Cement (down 0.19%), edged lower.

Grasim Industries was down 0.82%. Grasim has exposure to cement sector through its holding in UltraTech Cement.

Telecom shares rose. Reliance Communications (up 5.57%), MTNL (up 2.11%), Idea Cellular (up 1.76%), Bharti Airtel (up 1.07%) and Tata Teleservices (Maharashtra) (up 0.14%), edged higher.

Telecom tower infrastructure provider Bharti Infratel was down 0.66%.

Rallis India fell 5.22% after consolidated net profit fell 1.6% to Rs 24.94 crore on 18.6% growth in net sales to Rs 390.16 crore in Q3 December 2017 over Q3 December 2016. The result was announced after market hours yesterday, 22 January 2018.

V Shankar, Managing Director and CEO, Rallis India said that the company's broad based portfolio of solutions and robust farmer relationship have been instrumental in driving its revenue growth during the quarter. The company's performance in the international business continues to be better than last year due to improving situation in key markets such as Brazil and strong demand for herbicides.

Overseas, Asian shares were trading higher following the stronger lead from Wall Street after US lawmakers reached a deal to end a government shutdown.

Japan's central bank kept monetary settings unchanged on Tuesday and offered a more upbeat view on inflation expectations than three months ago. The Bank of Japan (BOJ) maintained a pledge to guide short-term interest rates at minus 0.1% and 10-year bond yields around zero percent at its two-day rate review that ended on Tuesday. It also kept intact a loose pledge to buy government bonds so its holdings increase roughly at an annual pace of 80 trillion yen ($722 billion). The nine-member board also kept its price forecasts that project inflation to hit 2% around the fiscal year ending in March 2020.

US stocks ended higher after the Senate reached a short-term compromise to end a government shutdown that began last week. The stopgap bill approved by the Senate on Monday will keep the US government open through 8 February 2018. The House of Representatives subsequently voted and passed the bill to reopen the government, sending it to President Donald Trump for a signature. The Dow Jones Industrial Average gained 0.6%. The S&P 500 rose 0.8%. The Nasdaq Composite Index rose 1%.

Today's Calls  (given to my various clients): 

#Positional Buy ABB Ltd in the range of Rs.1570-1590, for  a target of Rs.1730-1770, with a SL below Rs.1515. Book Partial PROFIT at around Rs.1641.

#Intraday Sell Tata Motor DVR around Rs.238.5, SL 241, TGT; Rs. 235-232.

#Sell DHFL at around Rs.623, T: Rs.604, SL: Rs.627. 

#Sell Aluminium at around Rs.142.50, SL above Rs.144, T: Rs.140 on  T+3 basis. Book Partial PROFIT and keep a trailing SL to cost price.

#Short Term buy Chambal Fertilizer at around Rs.157-158, SL below Rs.151; T:Rs.168- 172.

#Buy HDIL at around Rs.60.70, for short term targets of Rs.65-72. The budget is likely to bring some goodies for the Real Estate space. In the last budget, the Affordable Segment was a huge beneficiary, with it being granted Infrastructure status, along with other incentives, such as lower interest rate for loans up to Rs.12 lakh, area being increased and an increased time for construction. Land acquisition is one of the single highest cost contributors to a real estate project. Moreover, since margins in affordable housing are thin, it becomes increasingly difficult for affordable housing developers to buy land at prevailing cost of capital. The Government should make land available at a cheaper cost of capital to promote the affordable housing sector -- one of the expectations of the upcoming budget.

Over and above the high cost of land, GST and other taxes, the end consumer also pays about 5% - 6% Stamp Duty on its purchases in a state like Maharashtra. This varies across different states as a result of which, the consumer pays an additional 18% approximately only in taxes to the government (including GST and Stamp Duty). The government must look at reducing this cost and rationalising and uniforming stamp duty rates across the country. The taxes and stamp duty are a major hindrance to development today.

Now coming to the GST alone, despite input credit being passed on to the customer, with GST @ 12%, there is a marginal increase in the overall cost impact to the consumer. This needs to be revised downwards, to benefit the consumer, leading to a further push in sales volumes. These are some of the measures which is needed to kick start the growth of the now moribund real estate sector.

#The call of NDTV Ltd was given to various clients at around Rs.45-46, banking on the better prospects of the company in the next couple of years. However, I am looking for a short term target of Rs.51-57, for the stock.

#One thing, I would like to mention here is that: wealth will be created in the long term only, provided you follow some basic protocols of equity market, among them is the disciplined use of Stop Losses. I mean if you buy a share based on certain theory and keep on holding with daily or weekly reviews on the same, you will gain more than these daily tit-bits,which most of the stock market participants are interested. Therefore, I always suggest less of daily or short term trading but more of investment based play in the market. 
However, what I find is that most of my clients (and friends) barring say 20% from the group, are more interested in this short term game of buying and selling, which are very risky and in the process they lose wealth at the end of day instead of gaining. 
Yes, short term trading is also necessary and an earning of Rs.1200-1500 on daily basis on a seed capital of Rs.2 lakhs is not bad, however this should not eclipse your main objective of making good profit from your investments through delivery based medium to long term play only. Therefore:
1. Buy a stock based on a story - turnaround stories gives best returns.
2. Check the sector outlook on a regular basis.
3. Keep eye on the changing fundamentals of the sector and of the company (if any).
4. Review your investment decision on this stock, at the end of each day or week. 
5. Exit at the Stop Loss, if the SECTOR OUTLOOK turn SOUR and the stock does not show much improvement in price actions. 
Eg: 
a) The scrip of MCX Ltd at around Rs.844, is likely to face stiff competition from its peers and has more chance of going down or stay range bound, than some giving some meaningful positive returns on the upside. Hence, it is no use of buying the share of Multi Commodity Exchange of India Ltd  (Rs.844.20) for the long term, unless and until there is marked improved in the future SECTOR outlook.
b) The stock of 3i Infotech Ltd (Rs.7.35) is currently in a sector, whose outlook has turned positive according to some brokerage houses. I mean the sector outlook has changed towards better, which means the shares in this sector would show marked improvement in fundamentals going forward; if we follow the standard protocols of equity investing. 
Moreover, this company which is in the CDR scheme, is also showing positive developments in the fundamentals. Hence, what should you do? You should buy the scrip of 3i Infotech Ltd on everyday declines with a SL at Rs.6.70 and keep holding. I am sure you would thank me after a couple of years.
c) The stock of Federal Bank Ltd (Rs.103), should be accumulated. Why? Because after implementation of the new Insolvency and Bankruptcy Code, 2016 (IBC), the outlook of banking sector has turned positive. 
You can see this from the share price of Punjab National Bank Ltd, which is ruling at Rs.186, having made an intraday high of Rs.187.8. Its share price came up from around Rs.162 to the current market price within a few days --- you can check this from the historical prices. Therefore, any concern with asset quality of banks, is likely to come down in future, due to strict implementation of the IBC by the authorities. Hence, you need to accumulate the scrip  of most banks and hold. 
Moreover, if the stock of ICICI Bank Ltd can jump from ~Rs.305 to Rs.364, within a couple of week, the same can happen in this reasonably well managed private sector bank, known as Federal Bank Ltd, which additionally has come out with good set of Q3FY18 numbers. Similar is the case for Central Bank Ltd (Rs.74.5) and Dena Bank Ltd (Rs.26.40).

Today's Calls

1. Buy 63 Moons Technologies (Financial Tech) at Rs.82, T: Rs.93, SL: Rs.79.63 Moons Technologies, formerly Financial Technologies (India),  earlier set up an investment committee and has  now a new policy to protect the company’s wealth. The company, is sitting on around Rs .2,000 crore cash after selling its stakes in various firms.. 63 Moons Technologies, formerly Financial Technologies India, has introduced a trading platform for the equity markets. The platform uses artificial intelligence, social, mobile, analytics and cloud, cognitive computing and natural language processing.
Named Odin Voice and Odin Bot, the conversational user interfaces could disrupt the way people transact. “This technology will revolutionise brokerage services and be the trendsetter in financial technologies,” said Keshav Samant, president and chief executive officer, brokerage technology solutions, 63 Moons Technologies.
63 Moons Technologies has been offering financial technology solutions for over two decades. Its innovations include products and platforms such as Odin, iWin, Net.net, STP Gate, MCX, IEX, SMX & DGCX.

2. Those who are holding Punj Lloyd should now keep.a SL of Rs.21.40 and keep holding for targets of Rs.27-29.

3. Those who are holding Rolta Ltd should book profit at Rs.64.40 and exit the counter, the stock.is not performing.

WINNING STROKES: THINK DIFFERENT

Rolta India Ltd moved and moved today as it touched Rs.125.30 intra-day while closing near the day's high at Rs.122.85 in the BSE and Rs.123.40 in the NSE, up more than 6% in both the exchanges. The scrip will again be moving towards Rs.170-180 ranges and hence stay invested. It is not only because Bharat Electronics Ltd-Rolta India consortium bagged the Ministry of Defence’s (MoD) development agency order for the Battlefield Management System (BMS) project, worth over Rs.50,000 crore, but due to inherent strength of the company. The BMS project, categorised as a "Make in India" programme under the DPP, will be one of the largest solutions to be indigenously manufactured for the Indian Army.

Rasoya Proteins Ltd closed at Re.0.50 up more than 11.11% in the NSE. It hit the upper circuits in both the exchanges. The as I mentioned umpteen number of times, this stock will give superb returns going forward. This is an A-group company and hence the investors should accumulate it in all declines. 

My recommended Hindustan Oil Exploration Ltd today moved to Rs.39.75, before closing at Rs.39.30 up 3.59%. There were earlier media reports that Sun Pharma Ltd's promoter may pick up major stake in the company. The scrip should cross Rs.50 in the next few days, as the Crude Oil prices heads north. 

Gitanjali Gems Ltd moved to Rs.43.55, before closing at Rs.42.90. It is a common perception among the analyst fraternity that USD might rise if the US Fed hikes interest rates and hence outlook for the gold could remain subdued in the next 9-10 months. However, the geo-political situation is fast changing and might help a rise in the gold prices. The rise in the dollar may also provide a cushion to domestic gold prices. Even if the price of gold declines in dollar terms, the weakening of the rupee will keep prices high in rupee terms. Hence, buy the stock is Gitanjali Gems Ltd in all declines and keep holding. 

Veer Energy and Infrastructure Ltd today moved to Rs.3.37 before closing at Rs.3.28. The stock will invariably move towards Rs.5, in the coming days, as the government talks of providing more focus to the renewable energy sector. India’s wind power target of 60 GW by 2022 is easily attainable but solar target of 100 MW requires cost-effective support to be met, says a study report. 
In case of Nifty, today, it was expected that the market could rally, as the market was not only looking oversold but also, FIIs selling looked synthetic, due to rallies in the primary market. Today, the Sensex rallied 479 points while the Nifty posted the biggest daily gain in 2 months. The investors snapped up beaten down blue-chips after the Lower House of Parliament approved the 2015/16 Finance Bill on Thursday. Foreign institutional investors (FIIs) were net buyers in the equity segment worth Rs.605.3 million on both BSE, NSE and MCX-SX on May 04, as per provisional data available at the BSE. They bought equities worth Rs.51.05 billion and sold equities worth Rs.50.45 billion. While domestic institutional investors (DIIs), which include banks, DFIs, insurance and MFs, were net buyers in the equity segment worth Rs.1.46 billion. They bought equities worth Rs.12.53 billion and sold equities worth Rs.11.07 billion.

Updates on some of my recommendations

1. Granules India Ltd, was recommended around Rs.110-112.50.

The scrip touched an all time high around Rs.940.55 on 22/09/2014 (on my birthday). 

2. Multi Commodity Exchange of India Ltd (MCX Ltd) was recommended around Rs.255-270. The scrip made a high of high of Rs.895, on 21/07/2014.

3. B F Utilities Ltd was recommended around Rs.129-130. The scrip made a high of Rs.817.95 on 22/07/2014.

4. Mannapuram Finance Ltd was recommended around Rs.15.50--17.70. The scrip made a high of Rs.31.60  on 19/09/2014.

5. Opto Circuits Ltd was recommended around Rs.25.50-26. The scrip made a high of Rs.44.50 on 22/05/2014.

6. HCC Ltd was recommended around Rs.12.70-12.80. The scrip made a  high of Rs.49 on  01/07/2014.

7. P C Jeweler Ltd was recommended below Rs.88. The scrip made a high of Rs.278 on 23/09/2014.

8. Sarda Energy and Minerals Ltd was recommended around Rs.107.60. The scrip made a high of Rs.402.60 on 21/08/2014.

9. A2Z Maintenance and Engineering Services Ltd was recommended around Rs.11.45. The scrip made a high of Rs.36.40 on 25/07/2014.

10. Prakash Industries Ltd was recommended around Rs.49-50. The scrip made a high of Rs.123 on 21/07/2014.

These are some of scrips which gave good returns to the investors over a period, apart from others like IVRCL Ltd, Entegra Ltd, SBTL, Gitanjali Gems Ltd, IRB Infrastructure Ltd, Ahmednagar Forgings Ltd, etc. 

Today, while Pipavav Defence Ltd (Rs.39.15) and Resurgere Mines and Minerals Ltd (Rs.1.65) hit the buyer freezes; Gitanjali Gems Ltd (Rs.63.15) also closed above some crucial levels. 

Pipavav Defence and Offshore Engineering Company last year announced a new order for offshore vessels from a European client. The order was worth Rs.595 crore with an option to supply two more specialised vessels valued at Rs.1200 crore. The global market for specialised offshore vessels stands at US$10 billion. The company, with its well diversified order book among the defence, commercial and offshore segments, intend to focus on the defence and offshore vessel segment. The defence segment holds around 50% of the order book followed by the commercial segment and offshore segment. New orders in the offshore segment coupled with repairs and maintenance orders augur well for the company as it reduces exposure to the commercial segment. Pipavav Defence and Offshore Engineering Company spanning over 861 acres of land with two dry docking facilities of 662 m x 65 m (Dry Dock-1) and 750 m x 60 m (Dry Dock-2 under construction) is one of the largest “modular” shipbuilding facilities in India. The shipyard is capable of accommodating 400,000 dwt capacity ships along with construction and repair of a wide range of vessels starting from coastal and naval vessels together with repair and fabrication of offshore platforms and rigs. It also has a dedicated offshore yard with 175 m x 16.89 m quay consisting of both launching and loading platform together with installation of bollard and mooring rings. 

WINNING STROKES: THINK DIFFERENT

Shares of Financial Technologies Ltd (Rs.228.30) surged to Rs.235, intra-day after the company stated that it concluded renegotiation of technology supply agreement with Multi Commodity Exchange of India (MCX). There was a big crash in it's share price after the NSEL scam. The stock, should be crossing Rs.300 in the coming days. In other words, Financial Technologies should come back to focus again after a re-agreement with MCX for technology supply.

IVRCL Ltd (Rs.15.85) was recommended today as a fresh buy at Rs.15-15.50, for a target of Rs.21. The scrip surged to Rs.16.30, intra-day. The company has an order book of  more than Rs.20, 000 crore and it is implementing the CDR package. 
Pipavav Defence and Offshore Eng Ltd today closed flat at Rs.38.40. According to the media reports, the government of India is mulling various options, which include lower bank interest rates, infrastructure status to shipyards, a separate fund and also special subsidy to shipbuilders who source raw material and parts locally. It is a company whose promoter is Nikhil Prataprai Gandhi, a person having very good rapport with Senior Ambani. Moreover, Nikhil Gandhi, chairman, Pipavav Shipyard told CNBC-TV18 at the beginning of this year, that the private ship-builder is in talks with a French company for a strategic stake sale. He says this partnership is primarily aimed to bring in the technological know-how and proprietary knowledge of military hardware into the country. The promoter stake after the deal might come down to 41% from 45% initially. SAAB AB of Sweden has already a stake in Pipavav. SAAB AB and the new partner, if the stake sale goes through, will together own 15 percent in the company, says Gandhi. The company has an order book of around Rs.12, 000 crore and is trading near the 52-week low price of Rs.30.55, hence the downside is limited. Besides, Rakesh Radheshyam Jhunjhunwala and Rekha Rakesh Jhunjhunwala, respectively holds 2.11% and 1.30% stake in the company. Also,  the uncertainty over the fate of subsidy payments for shipbuilders such as Pipavav Defence and Offshore Engineering Co. Ltd, ABG Shipyard Ltd and Bharati Shipyard Ltd could lift soon, with the government looking to extend the payment timeline for a scheme which ended seven years ago.

Gitanjali Gems Ltd (Rs.65.50) which got badly hammered, was recommended today at Rs.65, just a month ahead of Diwali. This is a sure shot recommendation for  a target of Rs.79-80, in the short term. Shares of jewellery makers should rise on expectations of pick up in sales in the festive season. Meanwhile, according to the Business Standard, September 3, 2014:  Amid expectations of a turnaround in global jewellery purchases and a revival in ornament exports, Indian diamond processors participated aggressively in the De Beers’ sightholders contract registration to ensure supply of rough diamonds till 2018. “The basic raw materials remain the same. Exports cannot decline beyond a point. Therefore, raw material surety is required. De Beers processes only 40-42 per cent of the rough diamonds they mine and, hence, Indian processors should take a long-term view,” said Sabyasachi Ray, executive director, GJEPC. Mehul Choksi, managing director of Gitanjali Gems, a De Beers’ sightholder, said the current fall in exports was a seasonal trend. “Exports decline in the July-August period. But so far, this year has been good. We anticipate the economic recovery in the US will yield positive results on jewellery exports,” he said. The US accounts for 38 per cent of global jewellery consumption.

My earlier recommended Genera Agri Ltd today rose by more than 15% and closed at Rs.8.24. The intra-day high for the scrip was Rs.8.48.

The Nifty has closed with a weekly loss of 152 points in the last week. On the other hand, the level of 7850 showed buying interest on Friday, from where the Nifty reversed as was expected. Today, the small cap index was strong since the start. 

Financial Technologies Ltd: What are its Future Short Term Targets?

Some points need to be highlighted here:

(i) According to NDTV Profit, August 27, 2014: 

Jignesh Shah-led FTIL asserted that promoters of MCX-SX did not conceal facts while seeking extension of recognition of the exchange in 2009 from capital market regulator Sebi.
The Bombay High Court did not find anything illegal in the buyback arrangement.
"...it was expressly held that the said buy back arrangement is not in violation of the Securities Contract Regulation Act (SCRA), 1956, and the Securities Contract (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) Regulation, 2006 (MIMPS)," it said.
This Bombay High Court order was challenged by Sebi in the Supreme Court.
"The Supreme Court passed a consent order. Finally, Sebi granted permission to MCX-SX to undertake the business for all segments in addition to currency derivative segment after being satisfied that MCX-SX has complied with all the legal requirements."
"Thus the matter regarding the alleged violation of SCRA and MIMPS regulations stands adjudicated at the highest judicial level and cannot be re-opened," the statement said.
Regarding alleged irregularities in grant of extension to MCX-SX, FTIL said promoters of the exchange had always believed that the inter-se arrangements amongst the shareholders were legal.
"Further at the time of extension of recognition of MCX-SX in the year 2009, we understand that MCX-SX only sought time from Sebi for reducing the shareholding to comply with applicable Sebi regulations."
"We understand that at that point of time, no statement/representation was made by MCX-SX to Sebi in its application for extension that it was in compliance with all the relevant Sebi regulations. Therefore, the question of concealing certain facts by the promoters of MCX-SX does not arise," FTIL said.
Stating that the application for extension of recognition was made by MCX-SX and not by FTIL or Mr Shah, the company said it was surprising that promoters of MCX-SX and Jignesh Shah are being implicated in the FIR for certain alleged non-disclosures in the application.

(ii) The Bombay High Court recently appointed a three-member committee to audit NSEL and liquidate assets of its defaulting borrowers to facilitate a refund of investors’ money. Authorities claim they have attached properties worth about Rs.5,000 crore of the defaulting borrowers. 

(iii) Justice AM Thipsay of the Bombay High Court, said the transactions in question were being entered through brokers who had knowledge of the commercial market. He said: "Those terming themselves as investors were actually traders". And, so, the judge also questioned whether the Maharashtra Protection of Interests of Depositors (in Financial Establishments) Act was at all valid in this case.

The judge says the fact that transactions in question were not genuine ones of sale or purchase was known to both sides. The so-called investors and their brokers were pursuing high returns without bothering about the legalities of the trades in question. That these trades were fictitious were quite clear to the investors, too, said the judge, and they’d “entered into the transactions purely as financial investments”.

“Going by the broad probabilities of the case, it cannot be accepted that the persons who are now crying foul, were not aware of the fact that their transactions were not genuine. They were looking at these transactions clearly as an investment of their monies yielding safe returns,” the court said.

(iii) Merging NSEL with FTIL, according to the experts would be difficult to undertake, given that FTIL was a publicly-listed company and such a move may be opposed by minority shareholders.

(iv) According to Forbes India, 4 September, 2014:

As in some financial market scams, investors entered into these contracts through registered brokers, lured by expectations of capital growth. 
How much did (Jinesh) Shah know about this and what could he have done? His closest friends and business associates told Forbes India that while he expanded operations to Southeast Asia, the Middle East and Africa, he began losing the plot. Shah had spent years battling with regulator Securities and Exchange Board of India (Sebi) to acquire a stock licence for his newest exchange, MCX-SX. He won that mandate, but probably did not bother to monitor what was unfolding at NSEL. 
The imbroglio also revealed more about Shah’s personality. Some friends and associates, seen as part of Shah’s “inner circle”, revealed that he could have actually walked out of the mess with his head held high. There were at least two possible corporate suitors, who were in talks for a potential bailout of FTIL, if Shah had agreed to move out. But ego and the need for control perhaps prevented him from going ahead with the deal. 
Also, unlike most previous cases, several investors who lost money in the NSEL scam were well-off. As an investment consultant told us he had “no sympathy” for investors who–keen on making quick bucks and higher returns-lost money. They did not do their due diligence. 

Financial  Technologies Ltd

CMP: Rs.254.80

24 August 2014: Jignesh Shah, founder and promoter of Financial Technologies Group, who was out of action following the Rs 5,500- crore National Spot Exchange scam, has secured bail. 

Shah's high-profile friends may have deserted him, but his core team-his friend and cofounder of Financial Technologies Dewang Neralla, brother Manjay Shah and cousin Paras Ajmera-is said to be conducting business in his absence.

In fact, insiders say it is Ajmera, who is carrying out all crucial behind-the-scene operations. Some in the market believe that Ajmera is a master strategist and close to the broking fraternity. 

Such is Ajmera's hold that he is said to have even controlled the salary of every employee in the company. Last November, Ajmera resigned as a director from the Board of MCX, but sources say he was the architect in signing the deal with Kotak Mahindra Bank for selling Financial Technologies' 15-per cent stake in the Exchange for Rs 459 crore.

Courtesy: Mail Online

FTIL to 'highlight correct facts' of MCX-SX buyback to CBI

Photo: Business Standard

27 Aug, 2014: MUMBAI: Financial Technologies (India) or FTIL has clarified to the BSE that it would make a representation to CBI "highlighting the correct facts" with regard to the "alleged illegality" of the buyback arrangement between itself and a nationalised bank of MCX Stock Exchange's shares. 

CBI on Monday lodged an FIR against three serving officials and a former one of Sebi, and Jignesh Shah, promoter of FTIL — the erstwhile promoter of MCXSX — alleging that the promoters of the bourse had entered into a buyback arrangement with a nationalised bank, in violation of relevant rules, and "in connivance with Sebi officials, deliberately suppressed this material fact" while applying for an extension of recognition of MCX-SX, to conduct trade in currency derivatives in 2009. 

The FTIL stock closed down almost 5% at Rs 259 apiece on Tuesday. 

FTIL in its clarification pointed out that the Bombay High Court found "nothing illegal in the said buyback arrangement" while hearing a petition filed by MCX-SX against a Sebi order of 2010 declining to give it permission to operate as a full-fledged stock bourse, other than for offering currency derivatives. 

Further, at the time of the extension of recognition of MCXSX in the year 2009, "we understand that MCX-SX only sought time from Sebi for reducing the shareholding to comply with the applicable Sebi regulations. 

We understand that at that point of time, no statement/representation was made by MCX-SX to Sebi in its application for extension that it was in compliance with all the relevant Sebi regulations. Therefore, the question of concealing certain facts by the promoters of MCX-SX does not arise," said FTIL. 

It further added that as required by law, the application for renewal/extension of recognition was made by MCX-SX and not by its promoters (i.e. FTIL) or Jignesh Shah. 

Courtesy: The Economic Times

NSEL: Jignesh Shah’s fall from grace and why he will weather it

Photo: Live Mint

Aug 5, 2013: One question that has risen ever since troubles at National Spot Exchange emerged is: what will happen to Jignesh Shah and the empire he built on his entrepreneurial spirit?

Jignesh Shah's has been a story of both backward and forward integrations. He started off in the business of exchange technology, went on to set up exchanges, both commodities and equity, and also ventured into many related businesses.

The growth of his flagship company Financial Technologies (FT), which is also the holding company, has been envious.

Initially a technology services provider for stock exchanges, FT set up Multi Commodity Exchange, which went on to dominate the Indian commodity futures trading market.

Under a weak Forward Markets Commission, which did not have much power, commodity futures trading in India was thriving, with turnover running into trillions.

For FT, MCX was a money spinner. The exchange offered lower transaction charges as the technology that it used for trading came from its own parent company.

Shah spotted business opportunity around MCX and was quick to cash in on those.

He set up National Bulk Handling Corporation (NBHC), National Spot Exchange and even a real time market data provider TickerPlant.

Initially, NBHC set up warehouses for those commodities traded on MCX. Later on, it saw a bigger business opportunity by offering warehousing services to farmers and also started facilitating bank credit to farmers.

According to a report in Business Today magazine published in 2009, as a facilitator of farm credit, NBHC got two-way fee - 25 basis points from farmers and 25-75 bps from banks.

With the government allowing trades in warehousing receipts, it is not only NBHC that got a boost, but NSEL too got advantages.

Warehousing receipts are the receipts that farmers got while storing their produce in NBHC warehouses.

(Ironically, these are the very instruments that have come into focus in the present controversy involving NSEL. It has been found that the spot exchange, where short sales are not allowed, had actually permitted warehouse receipts trading, without checking whether the trader had the underlying commodity in the warehouse.)

NSEL thrived in a regulatory vaccum. While FMC regulated the futures market, the spot exchanges came under the state government. There was no clarity as to who regulated the spot markets. It was an exemption from the Union ministry of consumer affairs that enabled the NSEL to launch a product that had characteristics of forwards contract.

After launching NSEL, FT set up the real-time data platform even as plans were on to roll out a stock exchange. The data service had to be scaled down and the equity exchange, MCX SX, was launched after much delay because of Sebi's reservations and the legal battle that ensued.

According to the Business Today report, the vision behind all these moves was financial inclusion.

"FT's strategy is based on driving financial inclusion by reaching out to the bottom of the pyramid as this will drive future business," the report quotes Sanjeev Patkar, Director (Research), Dolat Capital, as saying.

Clearly, Shah aimed higher. As part of his strategy to take his business international, he started the Dubai Gold and Commodity Exchange (DGCX) in partnership with Dubai Multi-Commodities Centre (DMCC).

As the old adage goes, the higher you go, the steeper the fall.

The share prices of Financial Technologies fell a sharp 70 percent, in just two days after the troubles at NSEL emerged.

According to a report in the Business Standard, in the boom year of 2007-08, Financial Technologies was valued over Rs 13,000 crore. Now, it is down to just about Rs 700 crore.

According to an Economic Times report, Shah himself witnessed a wealth erosion of about Rs 1000 crore.

There are many theories-including conspiracy angles-about what resulted in the down fall.

Sudip Bandyopadhyay, managing director and chief executive officer of Destimoney Securities, sums up it all in a report in Mint.

"He (Shah) has probably bitten off more than he can chew."

According to him, Financial Technologies' troubles started with MCX-SX. "The problem started when the group tried to get into the stock exchange business," he has been quoted as saying in the report.

The BS report says trouble may be brewing at DGCX as DMCC has taken technology of Cinnober, another exchange technology provider, instead of FT's. It also says FT may be planning to sell off its 44 percent stake in DGCX.

But is it all over for Financial Technologies and Shah? Many are of the opinion it is not.

"I never quite liked his style. But he has that ability to come out of difficulties," PH Ravikumar, former CEO of NCDEX and once an arch rival of Shah, has been quoted as saying in the ET report.

Courtesy: Firstbiz