Tag: wealth management

Wealth Building and Retirement – the Four Bucket Approach

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Summary:

The transition from your Working Life and Career to Retirement can be quite demanding. The challenges in this phase extend from psychological to financial and social. In this note, we focus on the financial challenges. The Equity Investor can use the Four Bucket Approach detailed here to think though the changes and plan for Retirement.

Introduction

Retirement is an important goal of work life, for the equity investor. The image of a relaxed day schedule, no monetary pressures and more time for your favorite hobbies, seems so attractive. In early career, it seems so far away, time wise, that planning for Retirement seems like a waste of time. However as we hurtle through our ever busier careers, it comes closer, and planning for it becomes more important. The suggestion I make is that Retirement should be incorporated in your financial plan from an early stage in your career. To do this, we present the Four Buckets Approach to Retirement as it offers a simple yet powerful framework to plan your financials. Do take advantage of this in your planning.

Wealth Management for Mid-Career: The 3-Buckets Strategy

In the age bracket of 30-55, mid-career working professionals and businesspersons need to convert savings into wealth. They need to plan for the rainy day, as well as fight inflation, to meet financial goals.

For them, the bridge between today’s pay check and tomorrow’s financial freedom is built on two pillars: growth and safeguards. The most effective way to manage this is through a “Buckets Strategy,” which classifies your money according to when and what you need it for. By splitting your investment portfolio into three separate buckets, you can allocate funds and leverage the power of compounding as well as plan for shorter term needs, under various market scenarios. See – Fig 1 – Three Essential Buckets.

Bucket 1: The Emergency Fund (EF)

Time Horizon: Present to 6 months. Purpose: To cover 6 months of normal living expenses, which acts as a financial safety cushion, so that any emergencies like job loss, sudden expenses or medical issues are planned for, so we get time to react and recover from these.

Where to Invest:

  • Savings Accounts: The ultimate tool for instant access. It keeps your money safe and ready for withdrawal at any ATM, branch or online banking.
  • Liquid Mutual Funds: low-risk option that offers better returns than savings accounts with easy access to funds.
  • Short-Term FDs: Ideal for guaranteed, predictable growth. They give fixed returns with a locked interest rate over a fixed time. Tax impact is more compared to liquid MFs.

Allocation Ratios: Here the household and personal expenses for 6 months will be the EF budget.

Bucket 3: Retirement Focused Investments

Time Horizon: Period till Retirement. Purpose: To build an asset that matures by retirement, beats inflation (high-growth investments plus compounding), and includes retirement tax-saving features.

Where to Invest:

  • EPF / PPF: These are government-backed schemes with guaranteed, tax-free returns.
  • National Pension System (NPS) and other Pension schemes: Pension policies and NPS provide a low-cost retirement plan with asset growth. These may have equity and debt options. There are tax benefits on investment as well as on maturity.
  • Safe Direct Equity and Equity Mutual Funds: Generally targeting Blue Chip firms, these provide safety and growth. Assets must be spread in a number of companies. These help capture long-term market growth. Nifty and Sensex ETFs is also a good option.
  • Life Insurance (Endowment) Policies: They offer life insurance along with disciplined, regular long-term savings for future needs.

Allocation Ratios:

  • A common, actionable rule of thumb for retirement is a target corpus of 15 times your annual gross income by the time you retire. This can be reviewed every 5 years, so that the retirement target stays aligned with career growth.

Bucket 2: Intermediate Wealth Assets  

Time Horizon: 6 months – 20 years /period till retirement. Purpose: To fund medium to long term goals as well as general wealth building. Goals can include buying a home, car, or planning for major family events, etc. This balances growth with capital protection through a mix of assets.

Where to Invest:

  • Debt Mutual Funds: These focus on fixed-income securities to provide stable and predictable growth with better post-tax returns than FDs. These provide steady returns with relative stability.
  • Long-Term Equity: Direct Investing in listed companies help you benefit from business growth. Investments can be aligned with risk profile. Aggressive equity investments are possible here. Also investment can be in Equity Mutual Funds, where professional managers handle your assets.
  • Top of Form
  • Bottom of Form
  • Gold & Silver: Act as a safety asset to protect from geopolitics, inflation or currency weakness.

Allocation Ratio Options:

  1. All savings available after EF and Retirement allocations should be used for Intermediate Wealth Asset building.
  2. A 60:40 ratio: Thetraditional allocation has been 60% equity and 40% debt. This has to be periodically rebalanced.
  3. With the rise of Gold and Silver, we suggest a 10% allocation to them. The ratio can be 60:30:10%.
  4. A dynamic allocation approach: With(100 – Age) allocated to equity, rest to Debt and Gold/silver.
    • Age 30 → 70% equity, 30% to debt + G/S
    • Age 50 → 50% equity, 50% debt + G/S
    • Age 40 → 60% equity, 40% debt + G/S

Wealth Management in Retirement: The 4-Bucket Strategy

Lifespans have increased. Life expectancy in India has shown significant rise, reaching 70–72.5 years in 2022–23, up from 49 years in the 1970s. So we have to plan for a longer retirement period, even as inflation and healthcare costs rise.

After you progress from a working career to Retirement, the focus changes from primarily asset growth to primarily capital protection and encashing your assets for retirement income. The goal is to ensure your retirement funds support you and your family for your lifespans, even as markets go up and down.

Retirement:

The salary or business income disappears and has to be replaced with cash income from available assets.

Your Retirement Focused Investments are encashable on retirement and may also convert into annuity funds. The investor’s other Intermediate Wealth Assets also need to be repurposed post Retirement.

The 4-Bucket Approach helps to protect your assets while still allowing some growth to beat inflation during a long retirement. See Fig 2 – The Four Bucket Retirement Approach.

Bucket 1: The Emergency Fund

Time Horizon: 2 Years. Purpose: The Emergency Fund needs increase as it should provide for around 2 years of expenses. This provides better safety and peace of mind.

Where to Invest:

  • Savings Accounts: For instant access to money when needed.
  • FDs: Stable investments that provide predictable cash flow with low risk.
  • Liquid / Debt Mutual Funds: Low-risk option with slightly better returns and easy withdrawal.

Allocation Ratios: Here the household and personal expenses for 2 years will be the EF budget.

Bucket 2: Cash Generating Assets

Time Horizon: 2–10 Years. Purpose: On retirement, many assets built till now need to be closed, encashed or converted into Cash Generating Assets. These assets helps meet regular monthly expenses and lifestyle costs during early retirement by providing steady income with low risk.

Where to Invest:

  • Pension Annuity: LIC, insurance plans and PF can convert into pension annuities.
  • Dividend – Equity: Blue-chip stocks and MFs that provide regular dividend income; REITs and INVITs.
  • Dividend Debt Funds: Offer steady income with lower risk than equity.
  • Equity assets and debt MFs: A Systematic Withdrawal Plan (SWP) on existing equity assets and debt MFs helps encash these assets. Even as the core portfolio grows, one can generate monthly income.
  • Real Estate Rental Property: Generates regular monthly rental income and adds stability.

Allocation Ratio:

  • The allocation starting point has to be the monthly cash requirements in retirement.
  • Working backwards from this, the Cash Generating Assets need to fulfil this requirement.
  • Pension annuities, dividend paying assets and rental property can be accurately predicted.
  • The SWP can be increased to meet any gaps. In case of surplus, the cash may be reinvested in Dividend-Paying Equity and Debt assets.

Bucket 3: Intermediate Growth Assets

Time Horizon: 2–20 Years. Purpose: Assets need to grow and fund the retirement period, protect from inflation and refill Buckets 1 and 2 over time while keeping risk moderate. Non rental Real Estate may be sold and proceeds reinvested in rental property or equity / MF assets.

Where to Invest:

  • Balanced Advantage Funds: Balance equity and debt MFs based on market conditions.
  • Large-Cap Direct Equity and MFs: Stable companies for steady growth.
  • Real Estate Appreciation Asset: Land or Commercial property can be considered these assets can be considered for liquidation in order to generate capital and cash.

Allocation Ratio: Here the allocation can be similar to Mid-Career Bucket 2: Intermediate Wealth Assets 

Bucket 4: Retirement Home, Will and Assets Planning for the Family

Time Horizon: 2-20 Years Purpose: The career home and location may change to a retirement home in a new location. The Will and Assets Planning are required to bring clarity and certainty to the process.

Activities:

  • Invest in, buy or rent a Retirement Home: Post retirement or in old age, there may be a plan to shift home to near the children, to the native place or to a retirement home
  • Sale of Real estate – some assets may need to be liquidated as per the plan
  • Update your wills, discuss with family – about assets and businesses: it’s time to prepare or update your will so that your assets will be inherited by your family as per your plan. Both husband and wife need to have their own wills. Businesses too need to have a succession plan
  • Endowments for social causes: If possible, you may decide on a few endowments for social causes like education, NGOs or religious trusts

Allocation: All your assets must be accounted for in your will. Beneficiaries should be broadly aligned with the laws, to avoid disputes later. Further discussing this with family at the time of making a will helps to handle friction and disagreements at this stage.   

Conclusion

Disclaimers and Disclosures

This document has been prepared by JMI, and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. This report should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JMI has not independently verified the accuracy or completeness of the same. Neither JMI nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Investment in the securities market are subject to market risks. Read all the related documents carefully before investing. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from a RIA Registered Investment Advisor or lawyer. Registration granted by SEBI to JMI, and certification from NISM in no way guarantee the performance of the Research Analyst or provide any assurance of returns to investors.

JMI has been an equity investment adviser commercially since Nov 2012, and a SEBI certified and registered since 2016, under SEBI (Research Analysts) Regulations. Any questions should be directed to punit.jain@jainmatrix.com. Name of the RA as registered with SEBI – Punit Jain, SEBI Registration No. INH200002747. Logo/brand names –

JainMatrix Investments, Hyundai i10

Buying a Car? Here’s the Real Cost

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Last week I sold my car. It was a beautiful machine. I bought this Hyundai i10 in 2013. It became the default safe ride for work commutes, local errands and weekend joyrides. Occasionally we travelled intercity in it. Then my son grew old enough, and he learnt to drive in it. He added college commutes and meetings with friends, to the list of activities.

Now 12 years after the purchase, it was time to ring out the old. Selling your used car has also changed over the years. So a call to Spinny and another to Cars24 helped evaluate my options. I got a better offer from Cars24, so I sold it to them.

I felt a little sad to see it go. But I thought I can take my case and put some numbers to my car purchase, usage and sale decisions. And see if something useful comes out of it.

Should one really evaluate a car purchase in numbers? I’m not sure, but lets give it a shot.

Purchase, Sale and Line Items

  1. Purchase – Rs 5,73,000 in 2013 in Bangalore
  2. Annual maintenance – first year 0, from 2014 Rs 6,000, rising to Rs 12,000 recently. Lets assume no major accidents and no major parts replacements, just more repair and wear & tear recently.
  3. Petrol costs – My usage over 12 years was less, just 28,000 km. This can vary widely from person to person. But lets calculate for this. This usage becomes 2,333 km/ year. Petrol prices rose from Rs 72 /lit in 2014 to Rs 100/lit now. Assuming an efficiency of 12 km/lit., one can calculate annual costs.
  4. Sale – Rs 2,90,000 in 2025 in Bangalore
  5. Totaling these in excel and using the IRR function, I got a -12.3% annual return for my car purchase.
  6. However petrol usage is widely different for different folks, so lets remove this and recalculate.
  7. Without petrol, I got a -7.66% annual return on my car purchase.
  8. One missing factor is inflation. Obviously Rs 1 lakh was worth much more in 2014 than today. Lets factor in a 5% annual inflation to all transactions.
  9. The Without Petrol calculation with a 5% inflation now is -12.1% annual return on the car purchase.

Excel Snapshot

Here’s a snapshot of the excel calculations. Click image below to see bigger.

Conclusions and Closing Thoughts

  • Added this point on 17/08 – Some of my blog’s brilliant followers have pointed out – Insurance and auto loan costs should be added here too. Insurance of course is mandatory, and more has to be added on if you want good coverage. I peg this at about 2% additional costs per year. A car loan is optional, so it depends on the buyer if he needs one. Here a loan costs about 9-11%, so this will add substantially to costs. Thanks Bala and Nandu !!
  • So there we go. The cost of a car like Hyundai i10 for me over this period was 14.1% annualized on the invested capital, adding insurance, not including petrol and car loan.
  • To some extent, a car purchase could be both a functional and a status purchase. The latter is difficult to quantify. And widely varies from person to person. Lets leave it at that.
  • This was a good hatchback, but not a luxury car. Numbers could be quite different for this.
  • Conversely, don’t forget how useful a car can be. It is quite safe. Its convenient and always available. Good in rainy weather. Its more useful for groups of 2-5 to travel together. Once you do own a car, you may as well use it extensively, for your work and travel.
  • I haven’t factored in depreciation. Not everyone can get this benefit. The dep. rate for vehicles in India is around 15-20% every year for the first 3-5 years. The highest car dep. rate occurs in year 1 of ownership and can go up to 30%. This can certainly lower the cost of ownership.
  • This is of course a 2013-25 story. For a car purchase now, all the numbers will change, but I suspect the annualized costs may be similar for a similar car.
  • The option we have is to take a cab / auto / bus / train / Metro, or personal 2 wheeler for travel. In fact as public transport improves and becomes convenient, the need for personal transport reduces.
  • For wealth building, buy appreciating assets. For utility and fun, go shopping, including for your car. But don’t forget that a car is definitely a depreciating asset.

Hope this was interesting. Do comment and critique below.

Regards, Punit Jain, JainMatrix Investments.

Disclaimer

  • Punit Jain discloses that he has no shareholding in any of the firms mentioned in this article. This is written from the consumer PoV. He has no other financial interest or transactions, with any firms mentioned here or any group company. In addition, other than that mentioned above, JMI and its promoters/ employees have no direct or financial interest in these companies, and no known material conflict of interest as on date of publication of this report, to the best of his knowledge.
  • This document has been prepared by JainMatrix Investments Bangalore (JMI), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JMI. This report should not be considered or taken as an offer to sell or a solicitation to buy or sell any security or asset. The information contained in this report has been obtained from sources that are considered to be reliable. However, JMI has not independently verified the accuracy or completeness of the same. Neither JMI nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Investment in the securities market are subject to market risks. Read all the related documents carefully before investing. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from a SEBI RIA Registered Investment Advisor. JMI has been an equity investment adviser commercially since Nov 2012, and a SEBI certified and registered since 2016, under SEBI (Research Analysts) Regulations. Registration granted by SEBI, and certification from NISM in no way guarantee the performance of the Research Analyst or provide any assurance of returns to investors.
  • Any questions should be directed to punit.jain@jainmatrix.com. Name of the RA as registered with SEBI – Punit Jain, SEBI Registration No. INH200002747. Logo/brand name –

IPOs of Subsidiaries of Listed firms – are Safer and Create Value

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20th July 2025

Summary

This article investigates a trend in Indian markets — listing of subsidiaries by Corporates that are large conglomerates and sector leaders. Who really benefits from these listings? Are they a source of genuine value creation? To understand this, we map the data on subsidiary IPOs by reputed Indian Corporates between Jul’23 and Jul’25. Building on our earlier analysis, which focused on a few prominent examples, we now expand the scope to 10 IPOs across diverse industries. This deeper dive presents more robust insights into the value creation effects of these IPOs for the Corporates, their shareholders, and IPO investors.

Subsidiary Listings over 2023-25

We identified 10 IPOs over the last 2 years, of subsidiaries of well known, listed, Corporates. We share the Market Capitalization data over this period (Jul’23 – Jul’25) at three key timelines – See Table 1:

  • Market Cap of the firm prior to listing of Subsidiary (5 days before IPO listing)
  • Post-listing of Subsidiary (30 calendar days after the listing day)
  • Current levels as on (15th July 2025) to uncover whether value is truly created so far.
Table 1 – Market Cap Data (click image to enlarge)

Some Findings:

Table 2 – Average Parameter Performance
  • The combined firms Market Cap one month Post Listing rose by 16%. In 9 of 10 cases, the combined firms market cap rose within 30 calendar days of the subsidiary IPO. See Table 2.
    • The highest post-listing rise was in Tata Motors + Tata Tech, with a combined gain of 33%.
    • Other notable increases include TVS Motor + TVS SCS: 26%
      • Federal Bank + Fed bank Financial: 20%
      • Bajaj Finance + Bajaj Housing Finance: 20%
    • This confirms a pattern: listing a subsidiary can unlock immediate shareholder value, especially when the market perceives the spinoff as a high-potential, distinct scalable business.
  • The average of gains & losses in the IPO subsidiary firms in the period from listing to today was 9%.
    • Only 4 out of 10 firms that IPO’d had positive gains as of today; remaining 6 had losses. Thus there are uncertain returns from IPOs, the firms appear to lose market cap after listing.
    • This is tough to generalize. It could be due to aggressive valuations. Or excess IPO demand.
  • The combined market caps of all the 10 firms (including subsidiaries) gained by an average of 34% in the period from Pre IPO to today. This is a very high number. Even benchmarked against the average Sensex gain of 16% in this period, the combined market caps gain is excellent.

Observations and Patterns

  • Value creation is visible in most Subsidiary listings, for the combined firms.
  • The Corporates often benefit despite initial volatility in market cap.
  • Combined value generally grows faster than Nifty or Sensex.

So, Who Really Gains from a Subsidiary Listing?

  • Corporates: The Parent company benefits from improved market visibility and simplification of the business. Valuation of the subsidiary is easier, and due to value unlocking, the Post-listing combined valuation has risen. Only in 2 of 10 cases, the combined valuation was flat Post listing of subsidiary.
  • Existing Shareholders of Corporates: Shareholders of Corporates don’t automatically benefit from the subsidiary IPO. To get gains, they have to invest additional capital in the subsidiary IPO. There is an IPO quota that helps parent company shareholders to get good allotment.
  • For Subsidiary IPO Investors: The reputation of the parent, coupled with listing of a firm with simpler business, sometimes from high potential sectors, has seen some of these IPOs do well. But with just 9% average gains as of today since listing, and with only 40% of the IPO firms positive today, investing in IPOs must be done carefully.

Conclusion: Value Unlocking, Risks and final thoughts

  • Subsidiary listings unlock value — the data supports this. For Corporates, it’s a clean move that sharpens focus and delivers a mkt. cap. growth. For investors, gains may depend on taking some action. Passive investors in the Corporate may experience short-term stagnation or dips. Active investors in the Corporate, and IPO participants, however may see faster capital appreciation.
  • The best strategy for Corporate shareholders is to actively invest in subsidiary IPOs in good offerings.
    • IPO investing in general is High Risk, but investing in the IPO of a listed company’s subsidiary is a much safer bet, due to past listed history, transparency and better available information.
    • The subsidiary being listed often has a simpler structure & business model, so is easier to value. 
  • As India’s capital markets mature, we observe that legacy structures of complex conglomerates morph and simplify by way of subsidiary IPOs. These may evolve into a strategic norm — not just for restructuring, but as a deliberate value creation mechanism. The IPO of a subsidiary may also be a regulatory requirement (eg. Bajaj Housing Finance, perhaps a few more) so its a compliance activity, not driven by market cap objectives.
  • Excess demand has returned to the IPO market, and so IPO investors need to expect over-subscription and high IPO valuations while evaluating IPO opportunities.
  • These are 10 recent IPOs, from widely different industries, offered at different valuations, we cannot generalize results with high confidence, every new IPO case could be a different situation.
  • Several cases have emerged of firms preferring to raise funds by QIP rather than debt – an aggressive move. This also may result in several equity dilutions in a short time period. Conservative and well run firms prefer to not dilute their Equity Share Capital for years, giving better ROE.

Disclaimer

  • Punit Jain discloses that he has no shareholding in any of the firms mentioned in this article except Bajaj Finance (since April 2003, ownership <1%) and Bajaj Housing Finance (since Sept’24 IPO, ownership <1%), and these have been mentioned here only as one of the 10 samples/ examples chosen. He is also a telecom consumer with services from Bharti Airtel and Reliance Jio. Other than these, he has no financial interest or transactions, with any firms mentioned here or any group company. In addition, JMI and its promoters/ employees have no direct or financial interest in these companies, and no known material conflict of interest as on date of publication of this report, to the best of his knowledge.
  • This document has been prepared by JainMatrix Investments Bangalore (JMI), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JMI. This report should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JMI has not independently verified the accuracy or completeness of the same. Neither JMI nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Investment in the securities market are subject to market risks. Read all the related documents carefully before investing. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from a SEBI RIA Registered Investment Advisor. JMI has been an equity investment adviser commercially since Nov 2012, and a SEBI certified and registered since 2016, under SEBI (Research Analysts) Regulations. Registration granted by SEBI, and certification from NISM in no way guarantee the performance of the Research Analyst or provide any assurance of returns to investors.
  • Any questions should be directed to punit.jain@jainmatrix.com. Name of the RA as registered with SEBI – Punit Jain, SEBI Registration No. INH200002747. Logo/brand name –

Belrise Industries IPO – Strong as the Chassis

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  • Date: 21st May 2025
  • IPO is open from 21-23rd May, at ₹ 85-90/share
  • Mid Cap. of mkt cap ₹ 8,000 cr.
  • PE is 27 times.
  • Sector: Auto Components
  • The IPO to raise ₹ 2,150 cr.
  • Opinion: BUY with a 2-3 year perspective
  • See here, an automobile Chassis –

IPO highlights

  • IPO application dates: 21 – 23rd May’25, with Price Band of ₹ 85 – 90 per share, FV: ₹ 5. Lot Size: Investors can bid for a minimum of one lot of 166 shares, and in multiples of this.
  • IPO Size is ₹ 2,150 cr.; it’s entirely a Fresh Issue of shares, no OFS.
  • This IPO will expand the Equity Share Capital of Belrise as it is a Fresh Issue of shares.
  • Objects of Issue: 1) ₹ 1,618 cr. will be used repay or prepay certain borrowings, reducing its debt burden, currently D/E is 1.01 2) A portion will fund capital expenditure to expand and modernize its mfg. facilities, especially for EV and aluminium components. Some funds will support working capital needs, while 3) the rest will go toward general corporate purposes.
  • The IPO share quotas of QIBs: NIIs: Retail is 50:15:35. (Qualified, Non-Institutional Investors)
  • The unofficial/ grey market premium of HMI is ₹ 18/share over the IPO price.
  • IPO allotment is by 26th May, crediting shares/ refunds by 27th, and listing on BSE / NSE on May 28th.

Summary

  • Why Belrise Industries: The Indian auto sector is growing impressively and India is #1 in 2-wheelers and a leader in small cars globally. Belrise is one of India’s largest auto component suppliers, with a diversified portfolio spanning sheet metal, chassis, suspension, plastic/polymer, and EV systems. It has a 24% market share in metal parts of Indian 2W segment, and is #3 here. It caters to leading OEMs such as Bajaj, Hero, TVS, and Tata Motors. With 15 mfg. plants in India, it benefits from proximity to OEMs. Belrise has pivoted towards EV parts like battery packs and electric chassis assemblies, this positions it well for the next phase of auto growth in India and abroad.
  • Why now in IPO: The IPO is a fresh issue, and will help the firm repay debt and fund capex. At current valuations with PE of 27 times, it is reasonably priced among auto component peers, with significant upside potential as volumes scale in India and globally. Belrise is now focusing on CVs and 4W which provide higher volumes and revenue per vehicle.
  • Risks: 1) High dependence on a few OEM customers 2) RM price fluctuations can impact margins 3) Execution risk in scaling up EV and aluminium divisions 4) Supply chain disruptions or cost inflation 5) sector or economic downturn 6) Shift in OEM product design preferences 7) Regulatory risks around import-export policies and tariffs. 8) Location risk – 7/15 of plants are in Mah.
  • Opinion: BUY with a 2-3 year perspective.

Entire Report in PDF format:

JainMatrix Investments_ Belrise IPO_May_2025Download

Disclaimers and Disclosures

  • Punit Jain discloses that he has no shareholding in Belrise Industries Ltd., or any group company. In addition, JainMatrix Investments Bangalore (JMI) and its promoters/ employees have no direct or financial interest in this company, and no known material conflict of interest as on date of publication of this report. We may apply for the IPO through a stock broker in line with our recommendations.
  • This document has been prepared by JMI, and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JMI. This report should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JMI has not independently verified the accuracy or completeness of the same. Neither JMI nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein.
  • Investment in the securities market are subject to market risks. Read all the related documents carefully before investing. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from a RIA Registered Investment Advisor.
  •  JMI has been an equity investment adviser commercially since Nov 2012, and a SEBI certified and registered since 2016, under SEBI (Research Analysts) Regulations. Registration granted by SEBI, and certification from NISM in no way guarantee the performance of the Research Analyst or provide any assurance of returns to investors.
  • Any questions should be directed to punit.jain@jainmatrix.com. Name of the RA as registered with SEBI – Punit Jain, SEBI Registration No. INH200002747. Logos / brand name –

IRCTC Ltd – Navaratna Back on the Rails – BUY  

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  • Date: 10th Apr 2025
  • Large Cap with mkt cap ₹ 57,000 crores.
  • CMP: ₹ 715, current PE: 47 Times
  • Advice: Buy with a price Target of ₹ 1,179
  • Why IRCTC: This next gen Railways PSU has monopolies in internet rail ticketing, food and catering and Rail Neer. High potential segments include Tourism, travel packages and running luxury trains. Indian Railways is making high investments in train networks for speed, safety, passenger amenities and eco-friendly operations. These will accelerate trains as a preferred travel mode. IRCTC has a key passenger facing role in this.
  • Why Now: IRCTC has recovered post Covid and has excellent FY23-25 results. At a PE of 47 times, it is below historical average PE of 55 times, so undervalued. It has also invested on new capacities, new initiatives and better services. Across India we see a travel and tourism rebound at airports, tourist destinations and train stations. Its internet ticketing business is growing share of overall rail tickets, adding to convenience and access. PSUs are safer investments, in a volatile market.
  • Risks: 1) PSUs are slower to respond to market opportunities 2) Frequent transaction failures and website crashes, especially in Tatkal hours 3) It has vast user data and centralized systems, so is exposed to cyber-attacks, which can be damaging 4) Regulator is GoI and regulatory changes is an issue like loss of monopoly 5) Private online travel firms are raising competition 6) Absolute valuations of PE and EV/EBITDA ratios are high, even after a large recent fall.
  • Opinion: Buy with a price Target of ₹ 1,179 by May’27, a 65% upside.

Description and Profile

  • IRCTC (Indian Railway Catering & Tourism Corporation) is a listed subsidiary of Indian Railways (IR). Incorporated in 1999, IRCTC has its HO in New Delhi. It operates in 4 business segments of Catering, Internet Ticketing, Tourism, and packaged drinking water under the name “Rail Neer”.
  • It reported total revenue of ₹ 4,270 cr. and PAT of ₹ 1,111 cr. for FY24. For the last 8 years the Revenue, EBITDA and PAT grew at 17%, 23% and 27% CAGR. It has 2,726 employees.
  • IRCTC runs operations for Indian Railways (IR) in catering services, online railway tickets and packaged water. It has streamlined the ticket booking process with its Online Ticket Booking system, called the advanced Next Generation E-Ticketing (NGeT) System.
  • IRCTC has established strategic partnerships with leading online travel agencies, including MakeMyTrip, RailYatri, and Goibibo to enhance accessibility and convenience in online tickets. It has 5 zonal offices and 10 regional offices; 1 internet ticketing office, 19 Rail Neer Plants, 11 base kitchens and 1 tourism office across India.
  • Revenue from Catering services is 46%, Internet ticketing-30, Tourism-16; Rail Neer 8%.
  • Management team – Sanjay Kumar Jain (CMD), Neeraj Sharma (Govt. Director), Rabindra Nath Mishra (Dir- Finance) and Dr. Lokiah RaviKumar (Dir – Catering & Services). Shareholding of IRCTC is Promoter (President of India) 62.4%, FIIs 7.45%, DIIs 13.72%, Public 15.33, Others 1.1%.

The rest and entire equity research report is available as a PDF, please feel free to download. More such quality reports are available with the JainMatrix Investments paid subscription.

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Disclaimers and Disclosures

  • Punit Jain discloses that he has no shareholding in IRCTC as on date of report. In addition, he has no financial interest or transactions with IRCTC, except occasional train travel bookings. In addition, JainMatrix Investments Bangalore (JMI) and its promoters/ employees have no direct or financial interest in IRCTC, and no known material conflict of interest as on date of publication of this report.
  • This document has been prepared by JMI, and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. This report should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JMI has not independently verified the accuracy or completeness of the same. Neither JMI nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Investment in the securities market are subject to market risks. Read all the related documents carefully before investing. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from a RIA Registered Investment Advisor. Registration granted by SEBI to JMI, and certification from NISM in no way guarantee the performance of the Research Analyst or provide any assurance of returns to investors.
  • JMI has been an equity investment adviser commercially since Nov 2012, and a SEBI certified and registered since 2016, under SEBI (Research Analysts) Regulations. Any questions should be directed to punit.jain@jainmatrix.com. Name of the RA as registered with SEBI – Punit Jain, SEBI Registration No. INH200002747. Logo/brand names –

Business Standard – Revealing the 100X strategy: ultimate wealth creation

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I came across an excellent article on Business Standard.

This is very useful for investors new to Equity. Several important concepts are covered here.

Do Read –

https://www.business-standard.com/economy/analysis/revealing-the-100x-strategy-the-ultimate-instrument-of-wealth-creation-124121701224_1.html

Warm regards

Punit Jain

Mid and Small Cap Stock Trends Nov 2024

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27th Nov 2024

JainMatrix Investments, a Research Analyst firm, is pleased to present a note on Mid and Small Cap Market Trends. We have done some research and here are the key findings:

  • The Sensex peaked recently at 85,900 (26Sep) and then fell to 77,100 (21Nov), a fall of 10.2%. For the NIFTY Midcap 100 the fall has been sharper at 11.7%, over the same period.
  • The fall can be described as a recovery to better valuations, and investors can look at starting (or continuing) with equity investments and SIPs at these levels.
  • Our rating and ranking of attractive sectors is:
    • Financials (Bank / NBFC)
    • Power sector
    • Auto and Auto Ancillary (manufacturing)
    • Infotech
    • Consumer QSR,
    • Also travel, tourism and hospitality, pharma and healthcare.
  • Investing Trends: The trends we notice are:
    • Valuations have corrected sharply, but are not cheap yet.
    • However, valuations can remain expensive for extended periods, as we saw in 2004-07, and if they do not get excessive, it should not inhibit investors.
    • Mfg. and IT services can have an export component, the rest are more domestic-focused
    • From 2021 till recently, we have not had big broad corrections, but several waves of sectoral rises and micro-corrections, such as Infotech, Speciality Chemicals, Defense, PSUs, Shipyards and Rail stocks.
    • These cycles have in aggregate kept valuations in check.
    • IPOs too may now become more sober in terms of pricing and valuations, but this route continues to work, and throw up exciting companies, and encourage risk-taking promoters and Private Equity/startup investors.
  • We do not want to choose or trade-off between Large-cap, Mid-cap and small-cap stocks.
  • Large caps have had a big correction as the FIIs pulling out have been more invested in these.
  • Mid-caps present the potential ideas, and if they scale, they are the large caps of tomorrow (and good investments too).
  • Small caps are a higher risk and potentially higher return play and investors with such a risk appetite can look for success here. However, these need deeper primary research as firms are not very good at communicating their story and progress, and may even be secretive.

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  • This note has been prepared by JMI, and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JMI. This report should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JMI has not independently verified the accuracy or completeness of the same. Neither JMI nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein.
  • Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from a RIA Registered Investment Advisor.
  • JMI has been an equity investment adviser commercially since Nov 2012, and a SEBI certified and registered since 2016, under SEBI (Research Analysts) Regulations. Registration granted by SEBI, and certification from NISM in no way guarantee the performance of the Research Analyst or provide any assurance of returns to investors.
  • Any questions should be directed to punit.jain@jainmatrix.com. Name of the RA as registered with SEBI – Punit Jain, SEBI Registration No. INH200002747. Logos / brand name –