Data Patterns IPO Subscription Details:
 
IPO Opening Date: Dec 14, 2021
IPO Closing Date: Dec 16, 2021
Issue Type: Book Built Issue IPO
Face Value: ₹2 per equity share
IPO Price: ₹555 to ₹585 per equity share
Market Lot: 25 Shares
Min Order Quantity: 25 Shares or multiples of 25
Listing At: BSE, NSE
Issue Size: Eq Shares of ₹2 (aggregating up to ₹588.22 Cr)
Fresh Issue: Eq Shares of ₹2 (aggregating up to ₹240.00 Cr)
Offer for Sale: 5,952,550 Eq Shares of ₹2 (aggregating up to ₹348.22 Cr)
Qualified Institutional Placement (QIP) Shares Offered: Not more than 50% of the offer
Retail Shares Offered: Not less than 35% of the offer
Net Interest Income (NII) (HNI – High Net Worth Individual) Shares Offered: Not less than 15% of the offer
 
Net interest income = Interest earned – interest paid by the banks or financial institutions.
 
Update on 14-Dec-21 @ 12.45 pm:
 
GMP (Grey market Price) today is ₹610 which means the grey market is expecting shares of Data Patterns to list around ₹1195 ( ₹585 + ₹610), believe market observers.
 
This means investors may benefit from listing gains.
 
About the Company
 
Data Patterns is one of the few vertically integrated defence and aerospace electronics solutions providers catering to the indigenously developed defence products industry. It has proven in-house design and development capabilities, with experience of over three decades in the defence and aerospace electronics space. Data Patterns offers the entire spectrum of defence and aerospace platforms – space, air, land and sea. The company offers a wide range of products, including COTS modules, avionics displays, and communications ATES and satellites, fire control and other electronic systems for BrahMos and electronic warfare surveillance systems and radars. As of Sept’21, it has 818 employees with more than 500 qualified engineers, including 416 members in the design & engineering department. Its manufacturing facility consists of a 100,000 sqft factory built on 5.75 acres of land in Chennai, which has facilities for design, manufacturing, qualification and life cycle support of high-reliability electronic systems used in defence and aerospace applications. The order book as of Sept’21 stood at Rs5.8bn, with orders from several marquee customers in the Indian defence ecosystem, including the Indian defence ministry, BrahMos, DRDO, the Indian Space Research Organisation, HAL, BEL and a DPSU involved in the missile space. Data Patterns continues to invest in the development of various platform-specific products that have an annuity requirement, thus ensuring continuity of business in the coming years. It has received an annuity order for Rs120mn for the design and supply of cockpit displays for the Light Utility Helicopter (LUH), which has significant potential to generate additional annuity revenues from the new units required for the larger number of LUHs planned by HAL. Data Patterns has started to focus on civilian requirements like nano-satellites, wind profile radar and also plans to expand its export business, which is 10-12% of the core business currently.
 
Financials in Brief
 
During FY19-21, its revenue and PAT clocked 31% and 169% CAGR respectively, while average RoE and RoCE stood at ~15% and ~18%, respectively. During FY18-21, its order book clocked 41% CAGR to Rs4.9bn in FY21, which further expanded to Rs5.8bn in 1HFY22. The company enjoys a higher gross margin and EBITDA margin of 68.6% and 41.1% respectively, which are the highest among the key defence and aerospace companies. The order book as of Sept’21 stood at Rs5.8bn (3x FY22 annualized revenue), of which 67% share comes from production, 22% from development and balance 11% from services.             
 
My View: SUBSCRIBE
 
On FY22 annualized financials, the IPO is attractively valued at 40.7x EV/EBITDA, 16x EV/sales and 65.4x P/E vs. Paras Defence’s 68.9x EV/Sales and 19.7x EV/Sales and 157x P/E. The total addressable market is expected to grow from $1.97bn in CY20 to $6.65bn in FY30E, with a CAGR of 9%. The opportunities in the Indian defence sector is seen strong at $65bn in FY22. The company is looking to expand its product portfolio and focus on repeat large-volume production orders. Furthermore, it expects to augment design and development capabilities and increase its revenues by leveraging core competencies and growing its services and exports business. Data Patterns has a healthy order book of Rs5.8bn (3x FY22 annualized sales), providing revenue visibility over the medium term. Because of the strong financials, the healthy order book of 3x, strong track record of delivery, unmatched competency model & technology and attractive valuation, we recommend SUBSCRIBE to the issue with a long-term perspective.
 
Source: Research done on various financial websites and written here. read more

A lot of investors panic when the markets fall and start selling their stock holdings – this leads to even more drastic fall. This is what happened on Friday, 26-Nov-21. When the markets falls do not worry – not a single company fundamentals changed in the last 24 hours – it takes time. So why take your investments out when only one bad news of a new variant of COVID was found, that too in Africa.

See the NSE fall in 26-Nov-21:

NSE on 26-Nov-21

Very soon the clever investors will start investing and markets will rebound. They look a fall as an opportunity to buy not sell. But these kinds of investors are less. Panic investors never make money – it’s the clever investors who wait for an opportunity and get in and make money. read more

Before reading you should know that in India Government is planning to move a bill to ban all private cryptocurrencies. So be careful before investing in any cryptocurrency, if banned you may not be able to sell the cryptocurrencies that you bought..

For the last few years, BITCOIN And CryptoCurrency Trading is making a lot of news. Investors especially in the western countries, and now in India too have shown a lot of Interest in BITCOIN And CryptoCurrency Trading. read more

This post was written on: Thursday, November 4, 2021

Diwali Muhurat Trading is a 50-year-old tradition for Equities, Equity F&O, Currency F&O, and Commodities market. Today – Thursday, November 4, 2021, is Diwali 2021. Today the Diwali Muhurat Trading is set to be held between 6:15 PM to 7:15 PM.

From 5:45 PM to 6 PM there will be a Block Deal Session. A Block Deal Session is a single transaction, of a minimum quantity of five lakh shares or a minimum value of Rs 5 crore, between two parties which are mostly institutional players. The transaction happens through a separate trading window. read more

October 21 saw Index touch a record high to 18,604.45. This happened because of these reasons:

1. Decreasing COVID cases in India and no increase in cases even after a lot of festivals in the month.
2. The International Monetary Fund, as well as India’s central bank, this month estimated the nation’s gross domestic product will grow 9.5% in the year ending March 2022. This data is the quickest among major economies. Compare to last year same time the GDP of India contracted 7.3%.
3. Manufacturing sector saw the fastest growth giving signals that the economy is moving in the right direction. read more

NSE EOD as on Thursday, 07-Oct-2021

In the last one year, Nifty rallied from 11669 to 17790 as of 07-Oct-21 closing. That’s a growth of almost 52%.

Now ask yourself this question – has your trading account gained 52% in the last one year? Or even 25% (half of it)?

Or has it lost money?

If you lost money then what mistakes you did?

Do you repeat this mistake?

Maybe yes.

But do you want to repeat this mistake again and again? If yes the results will be the same.

Therefore you must learn how to trade correctly with a proper plan. A losing trade loses because there is no proper planning. After doing my courses you will become a disciplined trader. read more

First what is India VIX Index?

Volatility Index is a measure of market’s expectation of volatility over the near term. Volatility is often described as the “rate and magnitude of changes in prices” and in finance often referred to as risk. Volatility Index is a measure, of the amount by which an underlying Index is expected to fluctuate, in the near term, (calculated as annualised volatility, denoted in percentage e.g. 20%) based on the order book of the underlying index options.

India VIX is a volatility index based on the NIFTY Index Option prices. From the best bid-ask prices of NIFTY Options contracts, a volatility figure (%) is calculated which indicates the expected market volatility over the next 30 calendar days. India VIX uses the computation methodology of CBOE, with suitable amendments to adapt to the NIFTY options order book using cubic splines, etc. read more

Owner earnings is different from the company’s earnings. In this post, I will explain what is Owner earnings of a company and teach how to calculate the owner’s earnings. It’s a long post please get a cup of coffee and read full.
 
Owner earnings is a valuation method detailed by Warren Buffet in Berkshire Hathaway’s annual report in 1986. He stated that the value of a company is simply the total of the net cash flows (owner earnings) expected to occur over the life of the business, minus any reinvestment of earnings. read more

I have written earlier in my blog on managing the personal financial portfolio and asset allocation which I follow personally, you can read it here. But I am no genius, so writing this post to help you understand a very popular stock investment, asset allocation and money management strategy known as “The Kelly Criterion”.

First a word on who is Kelly?

John Kelly was a physicist working with AT&T’s Bell Laboratory. He developed the Kelly Criterion to assist long-distance telephone signal noise issues in AT&T. In 1956, John Kelly published a paper titled A New Interpretation of Information Rate, now available as a book – Bet Smart: The Kelly System for Gambling and Investing. In the paper, he draws an analogy between the outcomes of a gambling game and the transmission of symbols over a communications channel. This is basically an allocation technique also called the Kelly strategy, Kelly formula, or Kelly bet, that we can follow in our investments that you will read in this article. Kelly’s original paper can be found here ( not easy to understand, lots of mathematics there). In the paper, Kelly described a simple and elegant way for investors to strategically allocate capital in the face of uncertainty. This is what is now known as the Kelly Criterion. read more