Financial Technologies – A buy even at 65 PE
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Emerging companies - Mid caps that can become large cap
Forum Discription: These are companies operating in growing markets having have certain niches or specific attributes like new sector plays. These are emerging multibaggers with high risks and high rewards.
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=224
Printed Date: 19/Apr/2024 at 7:55am
Topic: Financial Technologies – A buy even at 65 PE
Posted By: basant
Subject: Financial Technologies – A buy even at 65 PE
Date Posted: 26/Aug/2006 at 12:40pm
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Financial Technologies – A buy even at 65 PE The caption says it all. Financial technologies (C.M.P Rs 1252) are a unique concept where investors buying a 65 PE (trailing) stock would still make money. Financial technologies is another great buy in the buy what you see category stock . Peter Lynch would have been proud to own it the first time he would have looked at the trading terminal. Financial technology has many products working in the financial trading markets. . It has products like ODIN, Inet.net, iWin, FXDirect, etc. These cover all stages of trading – pre trade, trade and post trade. These products cater to Exchanges, Brokers, AMCs,, Depositories, Custodians, Banks, etc. The products finds applications in different market segments (Equities, Derivatives, Commodities and Forex) Financial Technologies would continue to be a major beneficiary of the growth momentum in domestic securities market. Financial technologies has set up two commodity exchanges Multi Commodity Exchange (MCX) and The total value of The growth will come both from increased volume per participant as well as a growth in the number of participants. Since the initial costs are already incurred the company will experience huge operating leverage. A major part of incremental revenue shall flow directly into the bottom-line. Globally the commodities markets are 70 times the spot market. In The MCX conducts trades of over Rs 5000 crores each day. It has entered into strategic alliances with global exchanges like Tokyo Commodities Exchange, Baltic Exchange, DGCX, LME, Chicago Climate Exchange, etc. International comparison: The
I am not sure as to what the revenues of MCX could be so I have not computed it in my calculations but indiainfoline estimates that MCX would have earned a revenue of Us $ 273 million in 2005.If we put international valuations to the 64% of MCX held by Financial technologies the per share value of exceeds the current market price That means that the .other business of the company shall be available free. Fidelity paid US $ 50 million to acquire a 9% stake in MCX. This puts the total value of the commodity exchange at Rs 2555 crores. The share of financial technologies works out to Rs 372.00 per share. This value shall be further enhanced due to two strong features: Ø Unlisted companies are always valued at discount to listed ones. Ø Significant time has elapses since the Fidelity placements and valuation of a growth business rises each quarter. Geographically it has an ideal location in being situated almost mid way between National Spot Exchange for Agri Produce (NSEAP): In association with MCX and NAFED Financial Technologies has set up the NSEAP, a national level electronic spot market for agriculture products. With the advent of organized retailing this Agri business initiative of Financial technologies shall receive a further boast. The company also has a majority interest in National Bulk Handling Corporation — an Recommendation: At a market cap of just over US $ 1.1 billion Financial Technologies is a multibagger in the making and investors take positions and keep buying at each decline.Once MCX is listed then depending on valuations investors shoud switch over to the same since the driving force in financial technologies is the MCX echange. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
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Replies:
Posted By: Vivek Sukhani
Date Posted: 26/Aug/2006 at 1:53pm
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Great article, you write so very well....even though I dont like buying expensive companies yet, I find your arguments so very fool-proof.Just 1 query, how did you arrive at the valuation of 372 per share based on fidelity's purchase price.
Os this the manner you arrived at it?
Value of MCX as per Fidelity's entry price:
(50/9*100)*45.5=Rs.25200 million= Rs 2500 crores(approx.)
Share of Financial Tech=64 p.c.
Value of Investment in MCX for Financial Tech=64 p.c. of 2500=1600 crores.
Share Capital of Financial Tech=8.8 crores.
No. of shares=8.8/2=4.4 crores( FV =Rs. 2 per share)
Per share value of investment=1600/4.4=Rs. 363 (approx. close to your figure)
Can you also provide for the value of Dubai Gold excvhange in the same manner.
But do you think, at this stage the total value of investments based on their market cap( deemed or actual) along with their accumulated reserves exceed the CMP of financial Technologies. Also remember, calculting value on market capitalisation is a very dangerous method. This is so because we may be inbuilding all the positives of the company in whuch the parent co. has an investment, and the head room may be fairly limited.I am not arguing against your case, but am trying to project my apprehensions.
Also, coming to the business, organised futures trading in commodities has a long distance to cover. I beleive, the first exchange which will be a better service provider when it comes to warehousing and real time spot trading, will take away the major share of growth in business. NCDEX carries with it a big legacy....
Actually, its like this, I find value when I see the upside not being built in the price, so taling into account all the positives, what is your opinion and kindly explain the dynamics of how its growth will get pathed out in the coming future.
Kindly throw your views, and continue with this discussion.
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Posted By: basant
Date Posted: 26/Aug/2006 at 2:21pm
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Right that is how I got it.FT remians a high risk high reward stock as do all the stocks that I have recommended on this forum
http://www.theequitydesk.com/forum/forum_posts.asp?TID=135 - Pantaloon Retail
http://www.theequitydesk.com/forum/forum_posts.asp?TID=29 - Tv -18
http://www.theequitydesk.com/forum/forum_posts.asp?TID=103 - Trent
http://www.theequitydesk.com/forum/forum_posts.asp?TID=142 - Educomp Solutions
http://www.theequitydesk.com/forum/forum_posts.asp?TID=180 - Gitanjai Gems
http://www.theequitydesk.com/forum/forum_posts.asp?TID=37 - ENIL - Radio Mirchi
They are all multibaggers in my opinion. I have not calculated the value of MCX on the basis of Chicago Mercantile Exchange if I do that then valuations in Fy 08 will be mind boggling. ANother erasons for recommending such stocks is that even though they are costly today there is a very good chance that they will become cheap after 12 to 18 months.
If you buy just one wou could lose money because one out of 5 may fail;. No one knows which one. SO I have a basket of my portfolio into these stocks and then wait for them to go up. remmeber the maximum you can lose in each stock is 100% whereas the gains could be multifold. SO even while one of these may get bankrupt (very strong word to use) the others will carry you through very well. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Vivek Sukhani
Date Posted: 26/Aug/2006 at 2:53pm
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Actually, Mr. basant, this way of looking at things is a little bit risky.In India, we will find a lot of difference when compared with US. Per capita consumption of most of the things will be very high in US when compared with that of India. So, if we try to inbuild that rationale into our propositions, we will get very frivolous results.So, you have rightly avoided using the computauin based on CME's valuations.
Also, I think in order to be called a growth stock you should grow both QoQ as well as YoY....thats how I define a growth stock. (I know you will say seasonality can have a role when it comes to QoQ, but then to me such a stock cannot be growth stock).However, Financial Technologies has not done well on YoY front. That to me is a little bit suspecting factor. YoY decline in turover and profuts in case of a very sunrise company, is something which makes me ponder about...
What do you say?
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Posted By: basant
Date Posted: 26/Aug/2006 at 3:27pm
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I am not sure if they show the consolidated results q on q because MCX is a subsidiary normally consolidated results are presented just once. MCX is the real engine in financial technology everything else is just like a product company an iflex or a nucleus just that this is domestically driven. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Vivek Sukhani
Date Posted: 26/Aug/2006 at 3:29pm
| I am talking of standalone results.The sales as well as profits for the quarter ended 30.06.2006 are down when compared YoY. |
Posted By: basant
Date Posted: 26/Aug/2006 at 3:37pm
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The growth is in MCX so stand alone could be misleading. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Ajith
Date Posted: 26/Aug/2006 at 11:23pm
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I concur.
Apart from the value of the commodity exchange will the basic business also grow.As the business transacted grows exponentially I think the sales of Financial Technologies will grow,revenues being transaction-based,I think
but am not sure.
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Posted By: basant
Date Posted: 26/Aug/2006 at 10:57am
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The basic business being volume based should grow but there is no real charm there. The growth engine is MCX and once it gets listed we could sell out Fin tech and buy MCX. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: deepinsight
Date Posted: 18/Sep/2006 at 9:07pm
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The parent company may well continue to be the value driver -as FT will continue to own MCX 50% post IPO, will own the Dubai Gold and Commodities Exchange (40% directly and 10% via MCX), owns 80- 100% in other entities, namely, IBS Forex Ltd, National Spot Exchange for Agricultural Produce, National Bulk Handling Corporation, ATOM Technologies, Tickerplant Infovending & Riskraft Consulting. From their web site this is what they say in their presentation: "@MCX –Already profitable, revenues expected to double every year for next 3 to 5 years. @DGCX –The International Commodities Exchange that will be profitable from day 1. @NSEAP & NBHC to be fully operational in FY 2006-07. @ATOM Technologies, Tickerplant Infovending & Riskraft Consulting to contribute from FY 2007-08. @IBS Forex to scale up substantially from 2006-07. FT to Immensely Benefit From A Spectacular Growth In the EntireEco-system." Their recent announcement to create a new exchange in the Asia Pacific region is also likley to be via FTIndia. Furthermore, Mr Jignesh Shah, will be the owner only in FTIndia directly. ------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: deepinsight
Date Posted: 18/Sep/2006 at 9:12pm
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For
investors having interest in FTIndia –they should read the following article
with the founder Jignesh Shah. http://www.rediff.com/money/2005/oct/13spec.htm ------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: basant
Date Posted: 18/Sep/2006 at 9:30pm
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Jignesh Shah and Kishore Biyani are the new breed of Indian entrepreaneurs who say " Let me try and see If I can!". Whether they succeed or not their sheer belief and conviction to get things right is worth appreciating. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: deepinsight
Date Posted: 18/Sep/2006 at 10:02pm
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Mr. Basant: Have you plugged in any projections on what the company is expected to earn on a consolidated basis in 07 & 08? ------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: vijinat
Date Posted: 18/Sep/2006 at 10:43pm
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Will the shareholders of FTI be given pref allotment of the shares of MCX? |
Posted By: basant
Date Posted: 18/Sep/2006 at 11:26pm
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Mr. Basant: Have you plugged in any projections on what the company is expected to earn on a consolidated basis in 07 & 08?
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It is really tough to project an EPS for Fin Tech that is because MCX could be hived off (partially) and also the sheer pace of growth makes such projections go off track. I would assume that in FY 07 Fin Tech should do an EPS of Rs 30 - Rs 35.
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Will the shareholders of FTI be given pref allotment of the shares of MCX? I would not think so. This is because Fin tech would like to have control over MCX. But nothing is decided yet. Once MCX is listed I would shift from FIn Tech to MCX (depending on valuations of course) because that is the growth engine.In case MCX is listed at crazy valuations Financial Tech will also be bid up as it would hold majority stake in that company. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: catchsudipto
Date Posted: 10/Oct/2006 at 6:59pm
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Dear Sir, Will someone still make money by investion in FT ( at this price and valuation)? ------------- Make your Life as simple as possible. |
Posted By: chic_1978
Date Posted: 10/Oct/2006 at 8:45pm
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grt job dude
this is one of the best interviews i have ever read
keep it up JIGNESHBHAI !!!!!!!! ( YOU MAKE GUJRATIS PROUD)
------------- happy & wise investing |
Posted By: catchsudipto
Date Posted: 10/Oct/2006 at 11:39am
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Dear Sir, Thanks for the advice. I have bought some quantity of Fintech today. Thanks again ------------- Make your Life as simple as possible. |
Posted By: basant
Date Posted: 11/Oct/2006 at 12:01pm
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But do not hurry up on this,if it declines you can should add and if it does not we shall make profits in our existing holdings. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: catchsudipto
Date Posted: 11/Oct/2006 at 2:54pm
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Dear Sir, Thanks again for the timely suggestion. Yes i will try to follow it. Sir today Tv-18 launched a new site : indiaearnings.com. But the entry is restricted. Sir as u have a direct one-to one link with the management can u ask them to give shareholders ( small) like us a login account, as it is restricted now only to HNI, foreigh brokerage, brokerages. I feel Tv-1 must allow his shareholders to access this site for information. Thanks sir ------------- Make your Life as simple as possible. |
Posted By: basant
Date Posted: 12/Oct/2006 at 7:34pm
I think at these points we need to look at the market cap. Whenever the market cap is below US 2 billion for the sector leader and the whole market is more then US $ 100 billion we should not be perturbed by how much can it be affected by competition. See because there is confusion and suspicion investors have an oppoortunity of making a multibagger. No one can make a multibagger in ITC today or in Reliance because it is all discounted in the price. http://www.theequitydesk.com/forum/forum_posts.asp?TID=488 - Jignesh Shah is waiting for the foreign holding part to be liberalised by the Govt. before he brings his MCX IPO. Once there is a foreign partner in the business the whole equation will change.
These companies have very standard risk reward ratios 40%-50% on the downside and multifold on the upside.Althgough an exchange is like a commoditised business it is very difficult to take away market share from an established exchange. unless the exchange does not do anything stupid.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: catchsudipto
Date Posted: 12/Oct/2006 at 7:45pm
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Dear Sir, Thanks for the prompt reply, I came to know a lots of things from U. You told that whole market place is a $100 billion business. its unbelieable that the commodity market is such huze. Now sir i have some simple question ( may be stupid). Is This $100 billoin the value of total commodity business in India, or ahything else? How much MCX, IBX charges for each trade( i believe they get a hepty sum for membership fees). where this sharge can go up in future? Is there any change that RBI doesn't allow foreign parther in this business. waiting for your reply. Thanks sir. ------------- Make your Life as simple as possible. |
Posted By: catchsudipto
Date Posted: 12/Oct/2006 at 10:31am
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Dear Sir, Regarding FT u told that its a market leader with a market cap of less than 2 billions. You also told that whole market place is a $100 billion business. its unbelieable that the commodity trading market is such huze. How much MCX, IBX charges for each trade( i believe they get a hepty sum for membership fees). where this charge can go up in future? Is there any change that RBI doesn't allow foreign parther in this business. whether its has the capasity to become one of the 10 largest comodity, forex market in the world in the near future. What can pull it down. i have seen one more interesting this that Mr sivanand Mankekar ( Prof. of Jamunalal bajaj school of management) has more than 7 lac share of FT. Interesting is that he holds more than 4 lac share of Pantaloon retail. How there guys have soo much money and guts to hold such huze quantity od shares. Thanks. waiting for your reply. ------------- Make your Life as simple as possible. |
Posted By: basant
Date Posted: 12/Oct/2006 at 11:00am
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The total value of ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: catchsudipto
Date Posted: 12/Oct/2006 at 11:12am
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Dear Sir, Thanks for the information. I can sence that the oppertunity is huze and we have to take that risk of loosing 50% if FT doesn't pan out as per our expectation. Sir u told that " The total value of Sir i have read an article About Prof Mankekar in BT. If i recall correctly he doesn;t like to come to the media. He is a Prof in Jamunalal Bajaj school of managemant. He most probably teaches economics ( if i recall correctly). His son is also a Faculty in the same college, Now prof Mankekar and his SON manages all their investments. The same article also printed some news on Mr R J and Mr Nirmal kochar. Thanks Sir. ------------- Make your Life as simple as possible. |
Posted By: catchsudipto
Date Posted: 13/Oct/2006 at 5:39pm
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Dear Sir, This is a nice article about Mr Jignesh shah. http://www.ftindia.com/Business%20Today.pdf ------------- Make your Life as simple as possible. |
Posted By: omshivaya
Date Posted: 19/Oct/2006 at 12:24pm
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Little out of context here. I applied for an invitation on indiaearnings.com and got it some days back. I think someone had earlier asked for an entry, so this is one way. I dont remember which post it was asked in, so am posting here. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: BubbleVision
Date Posted: 23/Oct/2006 at 5:32pm
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The CBOT has agreed to buy out CME..... http://www.nytimes.com/2006/10/20/business/20insider.html?ex=1318996800&en=dc186f8a7f018012&ei=5090&partner=rssuserland&emc=rss - Link ....
BasantJi, can you look at it for the valuations of CME and how does it impacts MCX IPO..... ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: basant
Date Posted: 23/Oct/2006 at 5:59pm
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Very difficult since those markets are matured while we are yet to see a full blown commodity market.But these asets are invaluable and it would be futile to evaluate them before say 2010. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: deepinsight
Date Posted: 24/Nov/2006 at 4:00pm
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http://www.siliconindia.com/magazine/fullstory.php/YWQ142294145 - http://www.siliconindia.com The Serial 2.0 Entrepreneur Date: Thursday , November 02, 2006 Exchange is to Financial Technologies, what Search is to Google�Platform for Mass Disruptive Innovation,� says Jignesh Shah, Chairman of the $2.5 billion Financial Technologies Group in a press conference in Mumbai, his company�s headquarters. He is talking about how his company will leverage its leadership position in global technology markets to re-define �Brand India� from a cost arbitrage value proposition to an Intellectual Property centric business model. He continues, �India 1.0 IT companies were about creating IP for others, India 2.0 companies are children of liberalization and are about creating and owning global IP themselves. Financial Technologies is first of the many to come out of India that will choose to become a Nike rather than a Nike sweat shop and Coke, than a Coke bottling plant in their respective industries. China did it in last decade; India will do it in this one.� Meet the face of Brand India 2.0 Sounds too bold? You would not think that if you knew the man saying it. Meet Jignesh Shah, the youngest, first generation Indian billionaire who wears various epithets like the Exchange King, Transaction Czar and the Socialist Capitalist with ease and operates on 1000 day cycles to create wealth and billion dollar enterprises. The company he built a decade back has placed him on India�s billionaire pedestal in almost less than half the time his peers in the same industry took. Standing tall with $1 billion, Shah has risen to the likes of Narayana Murthys, Azim Premjis and Shiv Nadars in monies, but only that his is the first company to offer branded productized services targeted for financial markets and transactions. A list of his employees who joined the millionaires� club recently made it seem as if it had no significance. Over hundreds of them today own houses in plush colonies of Mumbai�the most expensive real estate city in world. In other words Shah at 39 is already wealth creator for the masses; a vision he�s had since his college days. Shah�s management mantra chips off from Bill Gates� �read every mail and respond� philosophy. Since FT�s early days Shah has made sure that he responds to every mail addressed to him on mailto:[email protected] - [email protected] Recently, Dr. Manmohan Singh, the Indian Prime Minister, said: �No force in world can stop an idea whose time has come.� True indeed, India�s tryst with destiny and opportunity to take its rightful global place is here and now. And companies such as Financial Technologies and MCX are surely the ones leading India 2.0 by unlocking value at the middle and bottom of pyramid and bridging the urban-rural divide. This has in fact sowed the seeds of change in India�s brand perception from cost and labor arbitrage to Intellectual Property centric business model. FT Labs - The engine for Innovation and Growth �Financial Technologies has created IP centric business enterprises around digital transactions through our core technology platform and industry domain knowledge for financial markets across all asset class. Given that most of the digital transactions flow through financial markets, we are putting a tap on these market flows. We have positioned ourselves for perpetual growth with a model that is linked to the equity and the transaction value,� he avers. Over the years, he has waylaid competition from IBM, TIBCO Software, TCS and others to establish his grip on the market. FT�s domination in the online trading software sphere is such that in due process, in little over four years, share prices have risen from a measly $.45 cents to $35. Financial Technology Group has garnered 80 percent of online trading in the Indian market with many exchanges. It is Shah�s unwavering faith in his beliefs that has contributed to his meteoric rise. His Financial Technologies today stands at a net worth of $1.7 billion. He is the youngest first generation billionaire Indian entrepreneur with a 47.43 percent stake in his group, and has created three different billion-dollar companies in a span of just 10 years. His group has other investors who have pooled in $1.5 billion in the business, and has in the process created several millionaires in past 10 years and has attracted top talent from across the world! Sahasa Laxmi Varam (Fortune Favors the Brave) Shah was an Electronic Engineer hailing from a traditional Gujarati family, trading in iron, steel and chemical. Having specialized in digital designs of logic, he was looking to go to the U.S. for higher studies in 1990. At that time, the Bombay Stock Exchange (BSE) was looking for talented, young engineers for its $25 million pan-India trade automation project BOLT. Shah jumped the gun, quit plans of going to the US, applied for the job, and was among the 14 selected. Early on in the precincts of BSE, Shah was hit by the tidal wave of hyperactivity in the stock market. Transactions intoxicated him, and he plunged into the library in the BSE, at times losing track of day and night, reading about the history of the Indian commodity trading and exchanges. His inquisitive mind began understanding macro and micro mechanics and fine threading of markets. In 1993, BSE sent him abroad to learn about the global markets. Over in the London, Hong Kong, New York, Tokyo, Singapore and other Exchanges, Shah studied every bit of the sophisticated execution of the knowledge that he had internalized during his learning curve in BSE. Online trading in these exchanges convinced Shah that stock trading in India would come of age once BSE�s automation project was implemented. Shah returned to India to a shocker: BSE had decided to award the automation project to CMC, and as such, the engineers working in the project would be moved elsewhere. The maverick in him sprang up. Defying logic, Shah quit BSE, coughing up $22000 as a penalty for having violated the three-year employment contract. Jobless, he did not flinch. He instead devised his motto in life: �Courage of Conviction and Power of Perseverance�, which he often uses in his speech. And incredibly so, he went ahead and bet whatever wealth his family had including mortgaging the house�to raise $11000 capital for institutionalizing what many called his �madness�. He spent a part of the money paying the penalty for his four other colleagues, who followed his vision. On New Year�s Day, 1995 Shah�s Financial Technologies India Limited (FT) was born in a humble 250 sq. ft. mezzanine floor office in Mumbai�s Fort area in the hands of Shah and Dewang Neralla. Interestingly Fort area in Mumbai happens to be the hub of financial markets of India, very unlikely place for a technology company to have its office. But Shah strongly believed that he and his team should breathe the same air that his customers were breathing for the first 1000 days of the company! No great results were visible initially. The team plunged into research for the next three years. Patience is an important virtue for any entrepreneur and Shah has that in plenty. It was a time span long enough for Shah and his associates, with no immediate prospect of earning profit, to get disillusioned and move on. For somebody as qualified and experienced as Shah, there would have been no dearth of job opportunities either. He was holding offer to work in Merill Lynch NY office in currency trading. But patience combined with self-confidence and gut feeling, made him hold on to his dream; the rationale being that once a technology is created, it would allow them to charge in a different way. Between 1995 and 1998, Shah and Neralla built the base technology DNA from scratch that powers most of FT�s technology centric markets and ecosystem innovations. While Shah would develop the business algorithms, the latter would write the codes. ODIN, FT�s first product was born in 1998, but it was hardly the end of tribulations. Against All Odds Shah tried to achieve this in an age, when services companies were taking off and posting profits unheard of. But he refused to be sucked in by the vicious cycle and adopted the previous generation software services business model of skilled labor arbitrage. He was determined to build a global productized service around financial markets out of India, he pledged, and a tad more dauntingly, enter into an IP centric business model with all his customers. Shah decided to take a novel high-risk, high-gain approach. He drew up the unique model of linking the potential income from a product with the transaction of the exchanges it was designed to process. Behind this was his belief that he could garner more revenue by following this model. This effectively meant, the greater the volume, more would be the revenue generation. Like Revi Seth, Board Member of GE Shipping, puts it: �Jignesh�s ability to execute with unmatched speed and focus, coupled with his innovative IP (Intellectual Property) centric business model gives the FT Group, an unfair advantage to deliver exceptional shareholder returns in today�s knowledge economy.� In conjunction, Shah also decided to take a parallel route�to pick up to 50 percent of equity from exchanges using his technology. Shah wanted his company to benefit from both the short term gains produced by the regular transactions as well as to capture the value unlocked by the implementation of his technology in order to generate liquidity in the long term. He reasons in retrospect: �Financial Technologies has consistently realized the highest value for its technology with its intellectual property centric business model that has scaled beyond conventional dollar per hour, quarter on quarter and sum of parts models adopted by traditional IT software and service companies.� Shah refused to provide other companies with skilled labor, to make them more successful and competitive. He wanted to develop indigenous technology, which is compatible with the trading platforms of new generation markets across the globe. The past ten years has proven beyond doubt that his unconventional model has helped him capture the highest value for the company for its technology IP as reflected by the shareholders� returns in the past three years to its investors. For which, Business World magazine in India ranked his company as the No.1 in their 2006 annual ranking. Nasscom (National Association of Software and Service Companies), India�s premier IT body, awarded FT as the 8th most valuable software company in India among 1000 software companies of 2006. The company was also awarded �ISV Partner of the Year� by Microsoft India in the innovation category at the Microsoft Partner Summit. Unlocking value at the middle of the pyramid Be successful by making your customers successful FT was in the online trading software market that was dominated by IBM, TCS and TIBCO Software. Shah figured out that he needed a compelling proposition to overcome the high-end competitors, and in that he segmented the market, micro targeting the middle and bottom of the client pyramid. FT�s products� unique selling proposition was that they were compatible and affordable for the largest chunk of the users in the particular vertical domain. While companies like TIBCO were selling their software for $1 million, FT offered it�s own branded product as service to a Gujarat based company Growth Avenues at one-tenth the price in the pay per use model, helping the company to set up a retail chain in Surat. FT revenues soon soared as its customer volume grew and helped in creating several Charles Schwab and E-trade in India way back in 1998 /99. Next, Shah cashed in on the competition between ICICI bank and Investmart to be the first to launch an Internet Trading facility. He took on IBM and beat the company to obtain the order for ICICI Direct, India�s first online share and mutual funds trading facility. Soon companies like Sharekhan, the online share-trading portal in India followed as clients. In the next three years, FT became the numero uno player in the institution market, virtually becoming the primary supplier to all the big names with 90 percent of the market share. MCX: Opportunity to change life of a billion people But Shah�s thirst was not quenched. All the while building FT, he had his sights set on an online transaction exchange. He was clear in his mind about the eventual goal: He always wanted to build a globally branded productized services company out of India. Thus he made his next big stride in 2002, when the commodities trading market in India was taking shape. He applied for a license to set up an online trading exchange with Forwards Markets Commission. This pitted him against heavyweights like BSE and NCDEX, who were also vying for the same. The media quickly wrote him off since he was neither a trader nor a banker. Besides what did a technology company have to offer, they questioned. The doubting thomases were again left rubbing their eyes in disbelief when Shah won the license. Multi Commodity Exchange (MCX) was born and it was up running in a record nine months. Like FT, MCX�s success too was achieved on the basis of segmenting the market and micro targeting the maximum extent of the market. Shah is an astute player and to strengthen MCX, he strategically tied up with nine International Strategic Alliances across the world�the Tokyo Commodity Exchange (TOCOM), The Baltic Exchange, the Chicago Climate Exchange (CCX), the London Metal Exchange (LME), the Dubai Multi Commodities Center (DMCC), the New York Mercantile Exchange (NYMEX), the New York Board of Trade (NYBOT) and the Bursa Malaysia Derivatives, Berhad (BMD) Euronext-Life and Zengzhou Exchange (China). It also had tie ups with 14 public sector institutions and institutions like State Bank of India group including all subsidiaries and SBI Life, National Stock Exchange of India (NSE), National Bank for Agriculture & Rural Development (NABARD), HDFC Bank, Bank of India, Union Bank of India, Bank of Baroda, Canara Bank and Corporation Bank as its shareholders in a very unique and successful Public-Private Partnership (PPP). P.G.Kakodkar, former Chairman of SBI, considers Shah�s success with the FT group as a role model for the next generation budding Indian entrepreneurs. �It has shown the way to create the next Google, Microsoft and GE in our own backyard,� he says. Shah�s farsightedness assured that MCX beat the behemoth National Commodities Exchange (NCDEX) in no time to become the No. 1 exchange in the Indian market. With 55 percent of the commodities market share in the country�while the balance 45 percent comes from 22 other exchanges in the country, including 2 national exchanges, NCDEX and NMCE�MCX is among the top 10-commodity future exchange in the world. Globally, MCX is No. 2 in Silver and natural gas and No. 3 in terms of Gold exchanges and is at the fourth position in Energy volumes. It has more than 1500 brokers operating in 1000 cities in India with 30,000 commodity-trading terminals. With the highest peak daily turnover of around $4 billion and 500,000 daily traded contracts, the establishment has given Shah the required boost to go in for an IPO to raise around $100 million for infrastructure development. The MCX leadership and growth has attracted Fidelity International to pick up a nine percent stake in MCX at a valuation of $540 million. Shah also has a broader vision for the exchange: �MCX�s vision is to truly enable India�s 70 percent of agri based population (700 million people) to participate in its economic growth through an exchange platform that injects new level of efficiencies by eliminating intermediaries, benefiting both consumers and producers by providing them a level playing field and an industry ecosystem that rewards value creation.� The goal at MCX is to create globally competitive market infrastructure and ecosystem that will bridge economic divide by integrating rural India with global markets. DGCX�Making India Proud Shah�s first Global expedition started off from Dubai markets in August of 2004. Dubai Gold and Commodity Exchange (DGCX) a 50:50 Joint Venture of Financial Technologies, MCX and Dubai Multi Commodity Center (DMCC), a venture of Dubai Government, gave him great confidence in taking his technologies overseas and deploying it. It is the only International Exchange in a Free Trade Zone with 50-year tax holiday and currently trades in Gold, Silver, and Currency derivatives. The Exchange was set up in a record time of one year, twelve days and forty five minutes by FT and His Highness General Sheikh Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai personally came to inaugurate the exchange in November 2005. MOG-ModelTM (Market Oriented Growth - Model) for Social Entrepreneurship After setting up MCX, India�s No.1 commodity future exchange, in order to bridge this economic divide, Shah decided to set up the National Spot Exchange Limited (NSEL), which he says will create a parallel market for spot trading in agricultural commodities, thus enabling the doubling of farmers� income in five years. He always had his eyes set on improving the lot of the poor farmers, who toil away in the fields under the uncompromising sun, only to be denied the deserved price on his produce. It is an effort to bridge this gap and provide the farmers with a level playing field. Apart from making the process of peasants selling their produce more transparent and efficient, it will offer them the opportunity to trade at par with international prices. On the growth radar are warehouses in several districts across the country to facilitate the reception of goods from the cultivators. While MCX is geared at price realization, NSEL will be focused on price discovery in a spot market, attracting many players to the exchange. Agencies like Food Corporation of India (FCI) and National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) will be able to buy and sell agri-products here. It will create a bridge between physical market traders and MCX by providing a sound system for physical deliveries, enhancing the depths of the futures market and create a better balance between speculative, hedged and spot traders. The farmers will be able to quote their asking price, thus giving them some leverage in getting the deserving price. It will reduce pressure on the farmer to sell directly after harvest by facilitating institutionalized credits against warehouse receipts. Shah has also set up National Bulk Handling Corporation Limited (NBHC), an end-to-end provider in warehousing and bulk handling of agri-commodities. It will support the agri-spot and futures marketplaces with requisite infrastructure for settlement and delivery. Apart from improving the supply chain efficiency, the company will also provide single-window access to information, finance, trade and logistics facilities. As a reflection of Shah�s success, NBHC was recently appointed by the Food Corporation of India (FCI) as a consultant in the matters of procurement, hedging and disposal of agro commodities. Some of the leading national level banks have also officially recognized NBHC as their collateral manager. And we can�t forget about Safal National exchange (SNX), which is a joint initiative with National Dairy Development Board (NDDB), providing a nation-wide platform for trading in horticulture, floriculture, dairy and allied products. All these exchanges together are changing the dynamics of the Indian market. Asserts Shah: �Financial Technologies, through MCX, DGCX, NSEL and SNX among others has established how the next generation Exchanges are becoming �eBay� platform for all �non-eBay things� and unlocking value at the bottom of the social and economic pyramid.� Currency Markets � Putting India on Global Map It is impossible to map Shah�s ambitions. At about the same time when Shah was making his foray into the commodities exchange market, Shah also spread his tentacles into the currency markets. The outcome of this shrewd move was IBS-Forex, a digital currency-trading platform, providing currency-trading solution sphere. Success kissed Shah once again. With a market share of 30 percent, a daily volume of about $100 million is transacted on this platform, on average. It has achieved a cumulative turnover of about $40 billion until July 2006. The strategy to micro segment the market and enable the Davids to compete with the Goliaths with monthly fee at $500 for IBS Forex, Shah has opened up a brand new market for the product across a wide spectrum and has taken Reuters by surprise, forcing them to downgrade their own fee from a staggering $2,400 to $600. Over 30 banks have subscribed to �FXDirect�, which is a digital currency-trading platform that caters primarily to USD:INR inter-bank transactions. The market now being even, this contest should also be worth watching. Leadership � Winning the global war for talent But is it possible to achieve this unprecedented success without the support of an excellent team? Understandably, Shah is very proud of his management team. He names them in rapid succession, rattling off their credentials; he seems to know them like the back of his hand. The volume of business on his exchanges seems to be ever growing, but he dismisses benchmarking success against it as hyperbole; his focus is innovation. �Every step we have taken has been copied by a competitor within a few months. There should be a regulated cooling period, which protects someone investing in innovation. Otherwise there is no incentive to be innovative because the second player always has the advantage,� he says with a touch of bitterness. Unlike most other business tycoons, Shah does not list a more �lavish living� as his aspiration. Instead, he says, �I always had dream to hire the best and offer them a opportunity to share the value they contribute to create at FT�Today I feel proud that we have built a world class leadership team that is unmatched in execution and we are able to attract the best and brightest by providing them global platform to create value, grow and succeed.� A benevolent visionary, Shah not only takes care of his employees, but also acts on his dream of transforming the rural economy of India with his enterprises. He is driven by a desire to create wealth for others. Jignesh Shah Foundation has also sponsored two fellowships in the name of two of his Gurus�Dr. Madhu Pavaskar for cotton and Madhusudan Dagga for gold, from whom he learned the respective domains. And to meet the demand of about 1 million trained professionals over the next three years, Financial Technologies has sponsored �Research Chairs� at the four IIM�s�IIM C (Currency), IIM B (Debt), IIM A (Commodities) and IIM I (Equities). It has also tied up with Welingkar Institute of Management and Mumbai University to offer a variety of courses ranging from a 3 month Diploma to a 2-year full time degree courses along with short-term executive management programs. He has not lost his zeal to project India�s tech talent pool and has now set his sight on wireless telephony technology sector with Atom Technologies, specializing on providing transaction automation for wireless telephony services in the field of mobile-commerce. But he has not removed his focus from the equity, commodity and forex markets. His Ticker Plant Infovending has ambitions to become a global content provider for financial data offering customized real-time data feed solutions on equity, commodity and forex markets. �When media turns completely digital, we will be there too,� he says. A voracious reader, he has a library with 5000 books on various complex market opportunities that FT can get into when the time is right. If his reading in the BSE library could spring such miracles in 10 years, then imagine the possibilities that his library conceals now. Surely, the Exchange King still has many tricks up his sleeve, which he would unleash at the right moment to better his own achievements till date. And the most important of all achievement is clear: �India�s financial markets are proxy to India 2.0 growth and Financial Technologies is proxy to the growth of India�s financial markets, as we have 90 percent of market share in India. Hence Financial Technologies is proxy of India 2.0 growth story.��He signs off as we enter the hallway of his hotel, he looks at the elevator and reflects: A true entrepreneur is the one who sends the elevator down for others, once he is successful. ------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: deepinsight
Date Posted: 30/Nov/2006 at 1:48am
------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: deepinsight
Date Posted: 30/Nov/2006 at 1:51am
|
Mr Jignesh Shah is running his magic internationally. After Dubai ---Mauritius! No mention on the details of the economics of the transaction. But should be quite attractive for FTIL. My view is that each of these exchanges at some point can have value of 100's of millions USD.
------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: deepinsight
Date Posted: 30/Nov/2006 at 1:57am
Posted By: catchsudipto
Date Posted: 20/Dec/2006 at 9:29am
|
Dear Sir, I saw a report apearing in Telegraph that Indian government is going to ban future trading in food grains, grams, cereals, sugar. They had set up a commitee some 5 months back to check whether forward trading is really helping the farmers. The commitee headed by Mr Devendra yadav of RJD noted that its not really helping the farmers. So the commitee have recomemded to stop forward trading in all agricultural products. But commitee has suggested to allow forward trading in all non-agricultural products. Mr Priya ranjan dasmunsi told that the bill will be passed in the nest session of the Parliament. In 2003 NDA had allowed the forward trading, and now UPA wants to reverse it. SIR I have FT in my portfolio. What to do? Sell or Hold. I am a bit tensed now. as i am not able to judge the effect of this ban, moreover the sentiment on FT after this BAN. Pl help. thanks sudipto ------------- Make your Life as simple as possible. |
Posted By: basant
Date Posted: 20/Dec/2006 at 9:41am
|
These are gimmicks. We cannot ban trading for ever also MCX is more into bullion and NCDEX is into commodities.WOuld not advise you into selling based on this news. On the other hand if price of FT drops it could become atrractive. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: catchsudipto
Date Posted: 20/Dec/2006 at 9:58am
|
Dear Sir, Thanks for the reply and suggestion. As i am fully invested even if FT falls i willnot be in a position to buy it a t the lower end. Now my portfolio is nearly evenly distributed 20% to 25% in four stocks. Pantaloon, FT, Tv-18 and Educom and some HDFC and HDFC bank. Can u suggest from which one of the three i will shift if FT drops. Thanks again for the encouraging words. sudipto ------------- Make your Life as simple as possible. |
Posted By: RAKESH
Date Posted: 20/Dec/2006 at 10:12am
|
basantji
at wat rate one should enter this stock
|
Posted By: basant
Date Posted: 20/Dec/2006 at 10:14am
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You may shift out of Educomp. I am getting uncomfortable with the way this stock goes up. Now if the EPS does not increase then Educomp could be in trouble. I am told one particular fund wants to buy it at any cost. FOr the time being it is a hold though. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: RAKESH
Date Posted: 20/Dec/2006 at 10:19am
| sir should i buy financial technolgy at this rate |
Posted By: PrashantS
Date Posted: 20/Dec/2006 at 10:22am
| which fund is that.......Educomp is going at crazy levels........ |
Posted By: catchsudipto
Date Posted: 20/Dec/2006 at 10:29am
|
Dear Sir, are u suggesting a total shift, means to sell 20% in Educom and reinvest in FT ( if prices fall) or a partly shift ? Thnaks sudipto ------------- Make your Life as simple as possible. |
Posted By: basant
Date Posted: 20/Dec/2006 at 10:57am
|
Would take it when it comes... ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: catchsudipto
Date Posted: 20/Dec/2006 at 11:00am
|
Dear Sir, You are right. No point discussion it right now. Thanks again. sudipto ------------- Make your Life as simple as possible. |
Posted By: chic_1978
Date Posted: 21/Dec/2006 at 1:05pm
|
Basantjee
Fin Tech has come down from 2225 to 1775 levels
Any specific reasons & would recomment to buy at current levels ?
------------- happy & wise investing |
Posted By: RAKESH
Date Posted: 21/Dec/2006 at 2:30pm
| basantji want to ask same thing should i buy at current levels or wait for more downside |
Posted By: basant
Date Posted: 21/Dec/2006 at 3:18pm
|
Too tough to answer at this time. If you do not have a position buy some but be ready to add on declines. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: PrashantS
Date Posted: 21/Dec/2006 at 4:03pm
|
I dont know chota moon badi baat........" but really it is the rate we are comfortable at buying is what matters....... |
Posted By: ankit18
Date Posted: 21/Dec/2006 at 5:21pm
|
Okay, The following quote valids for the same stock where nothing has changed for the company but price is volatile :-
When the stock goes up, you dont have valuation on your side (skimmed milk)
When the stock goes down, you dont have conviction on your side.
I feel its better to buy Financial Tech now, MCX will continue running as always. It may go down more but who knows? And, it may not available it these prices again, but who knows? Its always in the hindsight we will know what was correct or wrong. ------------- Markets are never wrong. Opinions are!!! |
Posted By: ethennet
Date Posted: 21/Dec/2006 at 11:32pm
|
Dear all members, this is good time to buy the Financial Technologies and hold for 6 month that will cross 2500 Rs. buy in small quantity and increase the quantity whenever u got the time to buy below 1700, u will get the better idea after visiting the the bseindia site the company annoucement. Happy trading........ |
Posted By: RAKESH
Date Posted: 21/Dec/2006 at 11:48am
|
basantji
wat abt asian cerc its in the same space is this worth buy......
|
Posted By: basant
Date Posted: 22/Dec/2006 at 12:07pm
|
Udayan babu ki bhasha mein "No Rakesh... it is like comparing chalk with cheese". FT is FT because of the MCX exchange. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: India_Bull
Date Posted: 26/Dec/2006 at 6:49pm
|
RBI okays 49% FDI in stock exchanges Under the new rules, FDI would be limited at 26%, while foreign portfolio investments would be capped at 23% in all these entities, the RBI said. The RBI, however, said that portfolio investments would be allowed only through the secondary market. ------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: basant
Date Posted: 26/Dec/2006 at 10:21pm
|
Fiun Tech runs commodity exchange. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: India_Bull
Date Posted: 26/Dec/2006 at 10:28pm
|
Very True, but sooner or later it wd be applicable for commodity exchanges ?Are the current rules allow FDI in commodity exchanges? ------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: basant
Date Posted: 27/Dec/2006 at 12:00pm
|
Yes they would be of coourse.I get that. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: ethennet
Date Posted: 27/Dec/2006 at 12:29pm
|
Its good time to invest in Fintech as it touch to value of 2250 Rs. in recent days, now available between 1700 to 1800...... i think that will cross the value of 2500 Rs. in 1 month
Financial Technologies wins Deloitte technology India & Asia-Pacific awards
Financial Technologies raises USD 100 million by way of FCCBs |
Posted By: prosperity
Date Posted: 28/Dec/2006 at 3:08pm
|
Bought small qty and hence started exposure to Fin Tech.
Bought at 1782 excluding brokerage !
If it reaches 1725-1735: Would buy more !!
Since both TV18 and Educomp are above my buy targets, this made more sense to deploy my cash .. ------------- |
Posted By: basant
Date Posted: 28/Dec/2006 at 3:20pm
|
Remember you were debating whether to buy Tv18 at Rs 605 or Rs 585 now at a consolidated price of rs 1300 it makes no difference whether you bought at Rs 605 or Rs 585.
I trade through Kotak and while filling in a buy/sel lorder 90% of the time I never put in the price but press "0" that indicates the market price.WHen the vision is long then it always makes sense to buy at market price or leave the stock altogether but just waiting for that 2%-3% fall can prove very costly sometimes (mostly). ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: India_Bull
Date Posted: 28/Dec/2006 at 3:26pm
|
Very True Basantji..
Fin Tech looks attractive at current market price .I think most of the costs have been accounted in previous quarters and this quarter onwards shd show good numbers ..
What is your opinion ? By the way any idea? Educomp got 5% up today?
Another star in the cricket team Aditya birla is standing like Sunil Gavaskar and scoring runs consistently looks 1500 by Feb... ------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: kulman
Date Posted: 28/Dec/2006 at 3:33pm
|
while filling in a buy/sel lorder 90% of the time I never put in the price but press "0" that indicates the market price.WHen the vision is long then it always makes sense to buy at market price or leave the stock altogether but just waiting for that 2%-3% fall can prove very costly sometimes (mostly).
------------------------------------------
How true it is!
I remember http://www.theequitydesk.com/forum/forum_posts.asp?TID=654&PID=9632#9632 - RJ's words :
MARKETS CAN'T BE TAUGHT, THEY HAVE TO BE LEARNT !
Caveat: Tution fees are quite high here, aren't they? ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: reetesh
Date Posted: 28/Dec/2006 at 3:44pm
|
Sir & Kulman jee: Great people dont only think a like but they also do things alike, like I and sir do.... hahaha.. I wonder how people can keep cash if that cash is to be deployed into market eventually I cant keep that it even for a minute, no matter if price is higher by 3% to 4%, I hope people dont buy only for 3% to 4% gain in this market we are in middle of right now unless you are a trader.... ------------- When going gets tough, that’s when tough (people) gets going. |
Posted By: basant
Date Posted: 28/Dec/2006 at 3:46pm
|
Yes, Nuvo is also doing well, educomp no idea why it is up since I did not have any idea why it went down also!!! For a long term investor Fin Tech looks very attractive but if you go by PE you may get nervous. These stocks hold very valuable assets and that is what the foucs should be on.------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: nikhil090
Date Posted: 28/Dec/2006 at 5:20pm
| Just started to read about Fin Tech. From the look and feel of it, it is going to be a bigger story than TV18 and Pantaloon. It is going to be the story of integration of Indian economy globally. |
Posted By: ethennet
Date Posted: 28/Dec/2006 at 7:20pm
|
Basant ji what i feel about fintech is that after MCX listed that will be More big company in term of value and as they are covering the CAPITAL MARKET with technologies it seems very good. They also got offer to open commodity exchange in Marituius.......... in Next 6 month.
|
Posted By: basant
Date Posted: 28/Dec/2006 at 8:11pm
|
MCX listing will unlock some solid value.ALso it would be interesting to see whether the Govt. allows FDI in commodity exchanges in case it does then we know what valuations such assets could generate. But meanwhile its PE at over 100 does sound confusing but as I mentioned earlier these stocks are to be bought for playing a structural change in oyr economy rather then a short term punt. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: nikhil090
Date Posted: 28/Dec/2006 at 7:42am
| Any idea how many trading members do NSE have? What is the money that they charge as admission fees? What is the transaction charges that they take? I am asking so as to corelate with Fintec and growth which may be expected. if the same information is available for Fintech, can anyone pls share. |
Posted By: basant
Date Posted: 28/Dec/2006 at 9:09am
|
Do not go that micro just think that from global trends the total, commodity market is 10 times the stock market and the total FX market is 10 times the commodity market. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: nikhil090
Date Posted: 28/Dec/2006 at 10:40am
|
I understand your point. When the macro scene is so compelling, then just hold on to sector leader. But for me conviction comes from understanding the business really well. Though this is a difficult company to understand and obviously they are doing lot of things which I may not understand, I will still give it a try. Even after your excellent write up on TV18 and so much discussion, I was still not able to understand the depth and potential of the business till I started reading on my own. I already have certain information about MCX and DCGX - MCX admission fees is Rs 10 lakh but I dont know how much do they charge per lakh of trade from their members. I know that DCGX charges $100000/member for admission which has been increased recently to $150000/member. These numbers give me the perspective for the whole story.
So again any idea about Nse/MCX transaction charges to its members? 
|
Posted By: omshivaya
Date Posted: 28/Dec/2006 at 10:59am
------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: ankit18
Date Posted: 29/Dec/2006 at 12:27pm
|
MCX is the biggest commodity exchange in India with a daily turnover of 10,000 crores. As, it will keep on adding more commodities to the list, the turnover will increase more and more. In case of TV18, i could see the risks involved in the business, but in case of Financial Tech, i am unable to see the risk (obviously, we wont have more exchanges). The listing of MCX may take away attention from Financial Tech.
------------- Markets are never wrong. Opinions are!!! |
Posted By: omshivaya
Date Posted: 29/Dec/2006 at 1:37am
|
That is one of the reasons why TV18 is diversifying into other areas such as e-brokerage etc., if people will trade in commodities at MCX, why wont they keep trading in stocks and if in stocks, then there is a huge market out there, which TV18 can tap...thru its recent collabortion with CBOP and Ambit. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: basant
Date Posted: 29/Dec/2006 at 7:34am
WHen MCX lists Fin Tech would move up (holding company that can consolidate profits) thereafter investors will have a choice to shift to MCX. Fin Tech has exchanges across Asia (Dubai, CHina, India whereas MCX is only India centric so the cards are not skewed just one way. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: ankit18
Date Posted: 30/Dec/2006 at 9:40pm
|
Has MCX IPO been approved? I heard that Govt has put a hold on that.
------------- Markets are never wrong. Opinions are!!! |
Posted By: basant
Date Posted: 30/Dec/2006 at 10:27pm
|
Not yet approved I am not aware of any deliberate govt. hold on that. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: deepinsight
Date Posted: 03/Jan/2007 at 2:15pm
------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: nikhil090
Date Posted: 03/Jan/2007 at 3:30pm
| I would be negative if they offer MCX stake to public at the same price at which they sold to Fidelity. Fidelity transaction is almost a year old now and the value of the busines would have increased by atleast 50-75%. Also assuming that Fidelity got some discount to intrinsic value as it was MF buyer, the stake to public should value MCX at min 1 billion. Anything less than that would make the public offering quite attractive. |
Posted By: basant
Date Posted: 03/Jan/2007 at 3:44pm
|
MCX at min 1 billion. Anything less than that would make the public offering quite attractive.
____________________________________________________________
MCX at 1 billion would be a bargain not on the PE basis but on the basis of business potential.Fidelity stake sale valuation will see upside on these counts:
1) Non liquidity - so value was calculated on discount.
2) Time lag - As you mentioned one year means 100% growth.
3) If it lists then there would be a premium also from the IPO price as long as they do not suck the public like Deccan.. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: catchsudipto
Date Posted: 03/Jan/2007 at 3:46pm
|
Hi I think the value will be discovered by M Bankers. Now if they offer the share @600 i will surely go and apply in the IPO as i feel promoter will leave someting on the table for the poor small investors. Lets see what happens as the story unfolds. I already have some holding in FT.( discloser) ------------- Make your Life as simple as possible. |
Posted By: basant
Date Posted: 03/Jan/2007 at 3:50pm
|
Now if they offer the share @600 i will surely go and apply in the IPO
________________________________________________________
Rs 600 is misleading. look at mcap or PE. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: BubbleVision
Date Posted: 03/Jan/2007 at 4:00pm
|
What I am Sure is MCX has a great potential to be a very big Exchange to match NYMEX in terms of Price discovery of commodities in 5 years hence. The Newly launched Natural Gas on MCX ... is already clocking volumes that are 25% of NYMEX within 5-6 months of launch. It is already one of the biggest compelete Commodities exchange in Asia...which has Base Metals, Bullion, Energy, and Agro commodities.I am a user of MCX! ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: catchsudipto
Date Posted: 03/Jan/2007 at 4:01pm
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Dear Sir, How will I get the market cap, Or PE of MCX. Will u please throw some light on it. Thanks ------------- Make your Life as simple as possible. |
Posted By: basant
Date Posted: 03/Jan/2007 at 4:03pm
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That will be known only when they come for an IPO ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: nikhil090
Date Posted: 03/Jan/2007 at 4:15pm
|
Basantjee,
I think you are very right. MCX at a billion dollars would be a bargain. On second thought, MCX is one of the most advanced commodity exchange in the world - even ahead of CME and NYMEX as they still have open cry transaction settling system. Also MCX holds stake in Dubai stock exchange - 25% and Safal exchange - 30%. CME which is a global exchange is valued at 17 billion USD and is growing at 35-40%. It trades at PE of 40. However the volume of business handled by them is phenomenal. they handled more than 668 trillion dollar notional value of contract in 2005. MCX would be crossing 1 trillion USD this year. The difference is coming as CME is offering interest rate futures also which account for more than 70% of the turnover. MCX has one of the largest repertoire of contracts (scrips) for trading. Abroad, the exchanges are much more specialized, but with very high volume. NYMEX offers total 8-10 different contracts only. also another point is that Jignesh Shah wants to make this whole thing invward looking with global linkages and price discovery. All this has tremendous potential to bring more efficiency in the whole Indian system of production, procurement, logistics and price discovery. Lets see what Jignesh shah offers to Indian public.. |
Posted By: PrashantS
Date Posted: 03/Jan/2007 at 4:16pm
| Basantji do u think i can add this slowly ..witha long term investment...say 5 years... |
Posted By: nikhil090
Date Posted: 03/Jan/2007 at 4:21pm
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Dear Bubblevision,
Have you traded on NCDEX also? Do you find any difference and can you highlight the reason why you trade on MCX instead of NCDEX? If tommorrow you get the opportunity to trade via any exchange for a commodity, which one would you prefer? Thanks.. |
Posted By: basant
Date Posted: 03/Jan/2007 at 4:22pm
|
Absolutely. WIthout doubt. In 5 years this stock could go anywhere. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: nikhil090
Date Posted: 03/Jan/2007 at 4:27pm
|
Dear Bubblevision,
If you can help me with the transaction fee charged by MCX, it would be very helpful. My sense is that it is Rs 4 per lakh of trade. any idea? However, even with this figure of Rs 4/lakh of trade, with 1 trillion in turnover, the transaction fees itself would work out to Rs 180 crore /pa |
Posted By: BubbleVision
Date Posted: 03/Jan/2007 at 4:29pm
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Nikhil....I have traded on NCDEX, MCX and also on CME!
I traded currencies on CME for a client.
The Liquidity is huge on MCX particularly on Bullion, Energy and Base Metals. I dont trade Agro. I have no doubt... that I would preffer MCX instead of NCDEX.
Actually...MCX is also luckier for me ... as my trades over there seem to make more money than the ones on NCDEX. Hence I only trade on MCX.
I dont currently know the exact transaction charges which MCX charges its members. I would ask my broker friend I tell you in a day or two. ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: nikhil090
Date Posted: 03/Jan/2007 at 4:50pm
| thanks for the help. |
Posted By: deepinsight
Date Posted: 05/Jan/2007 at 5:54pm
Master-trader for a subcontinentBy Joe Leahy Published: January 4 2007 02:00 | Last updated: January 4 2007 02:00 In the mid-1990s, Jignesh Shah did what at the time was unthinkable for a young professional Indian. He turned down an offer from Merrill Lynch, the US investment bank, to work in Wall Street in favour of striking out on his own in Mumbai. He did it to pursue an idea that was even more outlandish for its time. In a domestic financial world that was still dominated by the Bombay Stock Exchange, then a conservative brokers' club of more than 100 years' standing, he wanted to set up his own Indian commodity futures market. "In '95, I thought that, though people were saying it was not possible, let me become a billionaire at under 40 years of age from India, doing business in India," he says. Today, at 39, he claims he has already accomplished this. Recent transactions have valued his stakes in his two flagship companies; Financial Technologies, which develops capital market technology systems, and Multi Commodity Exchange, India's largest commodity futures market, at a total of more than $1bn. MCX has grown from start-up capital of $10m three years ago to a valuation of $500m when Fidelity International bought a 9 per cent stake early last year. It is growing so fast that market sources claim it could be valued at about $1bn when it holds its initial public offering, expected early this year. Moreover, MCX's monthly turnover was approaching Rs2,000bn ($45bn) by September 2006, up from under Rs1,000bn a year earlier, making it the world's second largest exchange for trading in silver, third largest for gold and second largest for natural gas. Mr Shah grew up in a business-orientated family environment. Hailing from India's mercantile state of Gujarat, the Shahs were involved in iron, steel and chemical trading. He spurned the family business by choosing to take a degree in electrical engineering, with the intention of doing postgraduate studies in the US. But he was instead recruited by the Bombay Stock Exchange to work as an electronic engineer on a project to set up a national automated trading network, India's first. It was his first exposure to markets and the training was invaluable. After three years working in India, he was sent to London, New York and Singapore to study their market systems. He also started visiting the BSE's dusty library, where he learned of Mumbai's former glory days as a regional centre for commodity futures, starting in 1875 with cotton trading. Until the second world war, India had about 300 commodity futures markets with Mumbai as their hub. But the government banned commodity derivatives trading in the 1960s, fearing it could be used to manipulate staple goods prices. Since those days at BSE, says the fast-talking, restless Mr Shah: "I eat breathe and sleep markets; markets are a passion, markets are an obsession, markets are a hobby." In 1995, when the BSE outsourced its automation project, Mr Shah struck out on his own with $10,000 and a handful of information technology experts from the exchange to develop trading software. His first major breakthrough came during the internet boom when he beat IBM to a contract to set up a system for ICICI Direct, the internet broking arm of India's largest private sector bank. Soon after, most of the big names in the market became his clients. The next break came in 2003, when the government awarded Mr Shah's team one of three mandates to set up a national commodity ex-change. For him, it meant the realisation of his preferred business model. Unlike many other Indian technology companies, particularly those doing outsourcing, he did not want simply to sell products to third parties or implement one-off projects for them. "In any knowledge-centric business, you will be able to unlock the highest potential by creating and owning the business enterprise around the knowledge rather than just selling the knowledge in whatever form. If you are gutsy enough to take the risk associated with running a business enterprise - that will unlock the highest potential." Those who know Mr Shah say his timing has been fortuitous. MCX specialises in commodities such as gold bullion and oil, which have had a strong year in 2006. But the company has inherent strengths. Its software is seen as sleek, and is built using existing Microsoft programming, reducing the complexity of development. Mr Shah's entrepreneurial management style means MCX is able to make decisions more rapidly than say, rival NCDex, which is controlled by institutions. "MCX is always going to be more flexible, more aggressive," says Nikhil Vora, a partner in Mumbai-based SSKI Securities. It is particularly fast at deal-making - in just three years MCX has already formed tie-ups with the New York Mercantile Exchange, the London Metal Exchange and others. It has also set up an exchange in Dubai and is planning to establish a commodity spot exchange in India this year. Mr Shah says one lesson he learned running a start-up in India is to bring in strong, established partners. Aside from Fidelity, MCX's shareholders include an array of powerful state banks, HDFC Bank, the second largest private bank, and the National Stock Exchange, the largest stock market. Also crucial is to hire a professional management team. Unlike many Indian entrepreneurs, he has not run the business as a family concern. His brother works for the company but is not number two to Mr Shah. MCX's joint managing director is Lamon Rutten, the former chief of finance, risk management and information in the commodities branch at Unctad, the United Nations trade and development agency. "They were professionals, I was a risk-taker. I think there could not have been a better combination," he says of his original management team. India, however, is not a country that naturally embraces risk-takers. Many Indians regard business with suspicion and believe it should be heavily controlled. In this environment, the entrepreneur has to practise more self-belief than usual and to seek out like-minded government officials and businessmen. "When we started, nobody was ready to believe a commodity exchange could do 10,000 crore [$2bn]," he says. Mr Shah needs to continue innovating in a world in which global commodities market behemoths are being formed through mergers and in an India in which, while the direction is towards further liberalisation, the reform process is patchy. But he remains as confident and impatient as ever. His first billion in hand, his vision now is to put Mumbai back on the global trading map. "Bombay has the best of the entrepreneurs, financial knowledge and colleges and universities. It has a court system, financial markets and Bollywood. With the right policies, we could claim back our rightful place." http://www.ft.com/servicestools/help/copyright - Copyright The Financial Times Limited 2007 ------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: deepinsight
Date Posted: 05/Jan/2007 at 5:57pm
Vision bears fruit after decadeBy Joe Leahy in Mumbai Published: January 4 2007 02:00 | Last updated: January 4 2007 02:00 Some entrepreneurs realise their vision in a day. For Jignesh Shah, it took nearly 10 years. After having the idea of a commodity exchange during his time at the Bombay Stock Exchange in the early 1990s, it was not until 2001, when the government sought applications from parties to set up national commodity exchanges, that he got his chance. Four bidders were shortlisted: Financial Technologies, ICICI, the country's largest private bank, and two regional commodity exchanges. But when the final list came out, ICICI and Financial Technologies had been dropped. Conservative elements in the government opted for the regional exchanges, saying the two corporations, in spite of their rapid success in their existing businesses, had no track record of setting up exchanges. "People thought: 'A technology company, how will they do the commodities business? They are not bankers, they are not commodity traders.' But we were very clear, these new generation exchanges are a totally different game," he says. He represented his case before the government again, appealing to more liberal thinkers, and this time won the day. The episode, he says, illustrates the contrasts prevalent in today's India. "There are two Indias: one that is really legacy and one that is modern." http://www.ft.com/servicestools/help/copyright - Copyright The Financial Times Limited 2007 ------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: deepinsight
Date Posted: 05/Jan/2007 at 6:05pm
|
Jignesh Shah is smart, articulate, has a vision and knows how to execute. The technology platform is great. The market opportunity is great. If one can buy the shares (of FT) at a reasonable price - it would be a keeper for one's kids (forget 2010).
Can we discuss valuation and entry prices? ------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: India_Bull
Date Posted: 05/Jan/2007 at 6:13pm
|
Hi Deepinsight,
If you look at current valuation, Warren would not buy it but Peter Lynch would have jumped on it irrespective of the price...
Its a gr8 business and the company has a very aggressive and competant leader, however lot depends on Govt policies etc... inspite of that its going to be a huge sucess..But its a kind of volatile stock and you might see 2500 in March who knows (or might 1000 in case of big correction) . I am holding this for more than a year now and buying on dips.
Basantji, could you pls share your thoughts on the entry points.. ------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: PrashantS
Date Posted: 05/Jan/2007 at 6:40pm
|
You know we could trade...and buy slowly....ofcourse this will make your broket richer but again...u can sleep better.... Hear is waht i did for one of my stocks.... Example stock...India Cement....Now i knew that its numbers are goign to be good...and it was quoting at 220...i think when i decided to buy...it .... now this was really moving to 218 or something. ...and i used to woner ...damn i could have saved some money on that...so i decided to trade in this with lot of risk..... so everyday i traded such that i would earn 1000 bucks in it...so in the end i would bring down my cost price by lets say 1Re that is considering 1000 Stocks.....(Rough figure.) so i did get opportunities where the stock moved 10 bucks...so this went on for quite a while.......and i had brought the price to 175.........so then came the bloddy fall....and the stock....price fell to 187 ...the two day fall in december....i decided to take a little riskon this i bought a little in bulk and in 2 or three days it went on to 220 levels....and i did sell of the quantity i had bought ..... sowhatevr i held...the average price came out to be 120 bucks...and there is no way i can get that price unless...there is a heavy sell off... even today i trade whenevr i find the time...and i buy 2 or three stocks which i will hold for the next 10years... May be a HDFC or some hot favourites....which i think will survive fr a very long time........ Note : I am able to do this may be coz the wind is behind me ... but it is tough and it makes u a little tensed... ..............DONT TRY THIS ...VERY RISKY Ultimately it is all about profits!!!!!!!!!!!!!!!! Again i am tyring my best...to get rid of unwanted stocks...but i need some profits....to buy some good stocks..........so i keep 10% of cash on hold most of the time.... |
Posted By: basant
Date Posted: 05/Jan/2007 at 7:13pm
|
If you look at current valuation, Warren would not buy it but Peter Lynch would have jumped on it irrespective of the price...
Its a gr8 business and the company has a very aggressive and competant leader, however lot depends on Govt policies etc... inspite of that its going to be a huge sucess..But its a kind of volatile stock and you might see 2500 in March who knows (or might 1000 in case of big correction) . I am holding this for more than a year now and buying on dips.
________________________________________________________
You are bang on. I just cannot think differently. As soon as the stock falls (underperforms the market) we start to question the very basis of the company and as soon as it starts to rise we get more confident about the stock. Now as it falls it provides some real great entry points for a 3 year view investor.I can share a thought on for the past 38 months. FOr the first 18 months it languished between Rs 145 to Rs 245 for the next 4 months it cayght a range of Rs 320 - Rs 400 odd. for the next 6 months it was between Rs 700 odd and Rs 325. Finally today it is at around Rs 1300 plus (consolidated).
I think that if the underlying business is good and the temporary news flow (rumours of Govt. banning agri futures) bad it makes a case for some real good investing option.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: PrashantS
Date Posted: 05/Jan/2007 at 7:53pm
|
But how can we buy at these falls..unless we have bought at low rates......it is just a very difficult call..........we wont panic and sell...but to add more we need to generate money constantly..... I thinkk after my experience....u must be thinking i am typical case of Mungeri Basantji...  |
Posted By: nikhil090
Date Posted: 05/Jan/2007 at 8:38pm
| That is where the question of priortization will come in. at fall, when one opportunity becomes more attractive, then either sell off other stock which is not intended to be part of your portfolio or if you are comfortable take some personal loan (again personal preference) and remain committed. But overall one must not become too skewed towards one stock. |
Posted By: PrashantS
Date Posted: 05/Jan/2007 at 8:48pm
| yes ...i do thatall the time......i have these momentum stocks...whcih would give me profits...so that i seel them when the main stock for long term looks attractive................this way i dont have to worry to much with price fluctuations of the stocks...which i am accumalating ........for long term.........I have never taken loan so not very comfortable with it.......so this is the way i do play it for short term and dont sell stocks whcih i have kept for long term.....Now Financial tech...and someother stocks...i m accuamalating slowly...Not a great idea...but again...want to save my capital too .....so these short term trade profits shield me a little... |
Posted By: nikhil090
Date Posted: 05/Jan/2007 at 8:54pm
|
Basantjee,
I have seen this phenomenon of buying when it moves up and questioning when stock moves down more pronounced in stocks which have not been researched by oneself - either due to lack of data or inclination. At least when I do research which broadly makes sense, then I can hold on. BUt in case I do not know indepth about the company then I have lack of conviction.
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Posted By: nikhil090
Date Posted: 05/Jan/2007 at 9:08pm
| As long as you pull this strategy off, it is great. However, you may miss out some opportunity sometimes due to this. |