Prajna Capital - An Investment Guide

Companies are rushing to buy back Foreign Currency Convertible Bonds (FCCBs) as the RBI’s deadline of March 31 draws closer. Firms such as Mahindra & Mahindra ($11 million), Uflex ($45 mn), Moser Baer ($4 mn) have announced FCCB buybacks in the past few days while others such as GV Films, Nahar Industrial, Everest Kanto have said they are considering bond repurchases. An FCCB is a convertible bond that is a mix between a debt and equity instrument. It acts like a bond by making regular coupon and principal payments, but these bonds also give the bondholder the option to convert the bond into stock. Around 156 companies have issued FCCBs between 2006 and 2008 raising close to $15 billion, according to Reliance Money. According to an investment banker, "now many of these bonds are trading at steep 50% discounts. So, if a seller is available then you can buy FCCB bonds worth $10 million for only $5 million”. After buying back FCCBs worth $4 million in late January, auto ...

Often under-rated and out of radar, deep value stocks can do wonders to your equity portfolio. THEY are believed to carry hidden treasure on Dalal Street. While investors call them the low-lying unpolished gems of the stock market, brokers say there are big bucks to be made if you can identify these stocks early. No prizes for guessing this, we are talking about deep value stocks which can do wonders to one’s portfolio when market re-assesses them. According to analysts, a deep value stock can be defined as something which is low priced in relation to the margin of safety the stock provides, to limit losses when a mistake is made. Lets get some insight into how to identify these stocks, what should be your ideal portfolio allocation and reasons behind their low valuations in the market. SLEEPING GIANTS They are like any other stock traded on the exchange, but there is no hypothetical understanding of them. A section of traders on the Bombay Stock Exchange even call these stocks as ‘ s...