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By:

Kaustubh Kale

10 September 2024 at 11:37:15 pm

Modak and the Art of Investing

As the aroma of freshly steamed Modaks fills homes during Ganesh Utsav, the festive spirit comes alive instantly. My mouth is already watering at the thought! The humble Modak, prepared with love to honour Lord Ganesha, may look simple from the outside. But anyone who has tried making one knows that a good Modak depends on several things coming together - the right ingredients, the right recipe, patience with the process, and finally, enjoying the result. Investing is surprisingly similar....

Modak and the Art of Investing

As the aroma of freshly steamed Modaks fills homes during Ganesh Utsav, the festive spirit comes alive instantly. My mouth is already watering at the thought! The humble Modak, prepared with love to honour Lord Ganesha, may look simple from the outside. But anyone who has tried making one knows that a good Modak depends on several things coming together - the right ingredients, the right recipe, patience with the process, and finally, enjoying the result. Investing is surprisingly similar. Choose the Right Ingredients A Modak is only as good as the ingredients that go into it. Fresh coconut, good-quality jaggery, properly prepared rice flour and the right flavours all contribute to the final result. Our investments and financial products are the ingredients of our financial plan. Equities, mutual funds, fixed income, gold and other investments each have a specific role to play. The objective is not to pick whatever appears most exciting at the moment, but to select suitable, good-quality investments that match our financial goals, time horizon and ability to take risks. Health and life insurance are equally important ingredients. Adequate coverage helps protect savings, the family, and their financial goals and dreams. Good ingredients provide the foundation. But ingredients alone are not enough. Get the Recipe Right You may have the finest ingredients in the kitchen, but if the proportions are wrong, the Modak may still not turn out well. The same applies to investing. Asset allocation is the recipe of a financial plan. Too much of one ingredient can spoil a Modak. Similarly, excessive concentration in one asset or too much money in low-return products can spoil a portfolio. Balance is key. A thoughtfully constructed portfolio brings different investments together in the right proportions. To keep asset allocation very simple - short-term goals can be planned through bank fixed deposits, recurring deposits and debt mutual funds. For long-term goals, one can consider hybrid mutual funds, equity mutual funds or direct stocks. Trust the Process Once the Modak is shaped and placed for steaming, constantly checking whether it is ready will not make it cook faster. Investors often make the same mistake. We keep checking markets, reacting to every correction, chasing recent performers or changing strategies because of short-term noise. Good investing requires patience and discipline. Invest regularly, review periodically and allow your financial plan enough time to work. Compounding is powerful precisely because it rewards those who remain invested for long periods. Sometimes, the best thing an investor can do is simply avoid unnecessary interference. Enjoy What You Have Created Finally comes the most important part - eating the Modak! The purpose of investing is not merely to accumulate the largest possible number on a statement. Wealth should eventually help us fulfil our goals, support our families, create financial security and enjoy life with greater peace of mind. A good Modak needs the right ingredients, the right recipe and trust in the process. A good investment journey needs exactly the same. This Ganesh Utsav, may Bappa bless us with the wisdom to make good financial choices, the patience to stay disciplined, and the prosperity to enjoy the fruits of our efforts. Ganpati Bappa Morya! (The author is a Chartered Accountant and CFA (USA). Financial Advisor. Views personal. He could be reached on 9833133605.)

Hyundai Motor IPO - Good for Long Term?

Writer: Mangesh Kulkarni
Mangesh Kulkarni
Oct 15, 2024
2 min read

Updated: Oct 22, 2024

Hyundai

Hyundai Motor IPO has opened for subscription on October 15, 2024 and will close on October 17, 2024. The allotment for the Hyundai Motor IPO is expected to be finalized on Friday, October 18, 2024. It is planned to list on the BSE and NSE with a tentative listing date set for Tuesday, October 22, 2024. Hyundai Motor IPO is a book built issue of Rs 27,870.16 crores. The issue is entirely an offer for sale of 14.22 crore shares, therefore the company will not receive any proceeds from the sale.


The IPO’s price band is set between Rs. 1865 to Rs. 1960 per share. Applicants are required to buy minimum of 7 shares to qualify for the offer. Retail investors are expected to invest a minimum of Rs. 13,720. Additionally, employees of Hyundai Motors will enjoy a discount of Rs. 186 per share.


Established in May 1996, Hyundai Motor India Limited is a subsidiary of the Hyundai Motor Group, ranking as the third-largest original equipment manufacturer (“OEM”) globally in terms of passenger vehicle sales. As of March 31, 2024, the company has successfully sold nearly 12 million passenger vehicles in India, in addition to exports.


The company specializes in the production and distribution of four-wheeler passenger vehicles, including models such as sedans, hatchbacks, SUVs, and electric vehicles (EVs). By December 31, 2023, Hyundai Motor India had established partnerships with 363 dealer companies for distribution and sales across India. Holding a 15% market share in India and boasting leading EBITDA margins of 13.8% in the first quarter of the fiscal year 2025, Hyundai is well-positioned for continued expansion.


Let’s now examine the financial performance of the company. Hyundai Motors India Ltd. has demonstrated a revenue and profit after tax growth rate of 19% CAGR and 48% CAGR over the past three years.


The company maintains a low debt position, with a debt to equity ratio below 0.1, and has an average return on equity of 27% over last 3 years (source - screener). At the upper end of the price band, this IPO is available at a P/E ratio of 26.3, indicating it is fairly valued.

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