Best Investment Opportunities

Best Investment Opportunities For Near Term :


1. ONGC FPO : Our Recommendation : Strong Buy for Investment purpose for  longer Term.

About ONGC :
Incorporated in 1956, Oil and Natural Gas Corporation Limited (ONGC) is India based company involved in exploration and production of oil (hydrocarbons). ONGC's main business is around 2 energy segments: exploration and production, refining. During the fiscal year ended March 31, 2010 (fiscal 2010), ONGC had a crude oil production of 32.95 million metric tons and natural gas production of 27.98 million metric tons.

It is a Fortune Global 500 company ranked 413,and contributes 77% of India's crude oil production and 81% of India's natural gas production. It is the highest profit making corporation in India, according to filings with the BSE of latest quarter results External Link. It was set up as acommission on 14 August 1956. Indian government holds 74.14% equity stake in this company.

ONGC is Asia's largest and most active company involved in exploration and production of oil. It is involved in exploring for and exploiting hydrocarbons in 26 sedimentary basins of India. It produces about 30% of India's crude oil requirement. It owns and operates more than 11,000 kilometres of pipelines in India. It is one of the highest profit making companies in India. In 2010, it stood at 18th position in the Platts Top 250 Global Energy Company Rankings.

A turning point in the history of India’s oil sector was in 1994. While the oil sector was on the backburner of India's political realm for some time, is was brought to the forefront by the privatization of India's leading oil E&P organization, the ONGC. Simultaneously, there were steps taken for the enhancement of production on the Bombay High oil fields as the result of a INR 150 billion development investment.

One of Asia's largest oil E&P companies, ONGC became a publicly held company as of February 1994, following the Indian government's decision to privatize. This privatization was conceived and achieved (sweat equity) to a great extent by ONGC’s influential Association of Scientific and Technical Officers (ASTO) – spearheaded by the then Bombay top executives Ganesh P. Shahi and Amarjit S. Jowandha (DGM and Head - Management Services Group too) who worked closely with the then ONGC CMDs S. K. Manglik and S.L. Khosla, IAS and with Dr. Vijay Kelkar, Secretary, Ministry of Petroleum & Natural Gas, Government of India, among others. Amarjit S. Jowandha was able to usher in change from his imbibed learnings, inter alia, from his alma mater University of Bombay [Jamnalal Bajaj Institute of Management Studies (also referred to as JBIMS or just Bajaj]. Eighty percent of ONGC assets were subsequently owned by the government, the other 20% were sold to the public. At this time, ONGC employed 48,000 people and had reserves and surpluses worth INR 104.34 billion, in addition to its intangible assets. The corporation's net worth of INR 107.77 billion was the largest of any Indian company.

After its initial privatization, ONGC had authorized capital of INR 150 billion: it also met its need to raise INR 35 billion to invest in viable oil and gas projects. The Asian Development Bank (ADB) had also set a deadline for privatizing and restructuring at 30 June 1994, if loans were to be granted for development of two ONGC projects. As a consequence of the successful privatization, the loans were granted - US$267 million for development of Gandhar Field, and US$300 million for the gas flaring reduction project in the Bombay Basin. The successfully formulated and implemented privatization strategy put ONGC at par with other large multinational and domestic oil companies.

ONGC operates more than 22,000 km's of pipelines in India. Its subsidiaries include ONGC Videsh Limited (OVL), ONGC Nile Ganga BV (ONGBV), ONGC Nile Ganga (Cyprus) Ltd., Jarpeno Limited, Imperial Energy Tomsk Limited, San Agio Investments Limited and Imperial Energy (Cyprus) Limited.


2.100% CAPITAL PROTECTION FUND WITH COUPAN RATE OF 11%

SPECIFICATION

 v  Underlying                        : S&P CNX NIFTY Index

 v  Tenor                               : 14M/15M

 v  Capital Guarantee             : 100% Principal protected

 v  Initial Level                       : Close on allotment date

 v  Final Level                        : Close on 14M

 v  Redemption                      : 15M

 v  Underlying Performance     : (Final Level-Initial Level)/Initial Level

 v  Observation Frequency      : Daily

 v  Coupon                            : 11%

 v  Participation Rate(PR)        : 100%

 v  Upper Barrier Level           : 120%

 v  Contingent Level               : 77.5% Initial Level

Payoff scenarios*
Initial Level	5500	5500	5500	5500	5500	5500	5500
Contingent Condition Met	Yes	Yes	No	No	No	No	No
Barrier Hit	-	-	No	No	No	Yes	Yes
Final Level	3850	4262.5	4950	6050	6599.45	6600	7150
Nifty Performance	-33.00%	-22.50%	-10.00%	10.0%	19.99%	20.00%	30.00%
Product Performance	0.00%	0.00%	11.00%	21.00%	30.99%	11.00%	11.00%

Introduction - Structured Products

What are Structured Products?

 v  Investment instruments that can be customized to suit an investor’s risk return profile

 v  Returns are based on an underlying – Equity or Commodities

Key Features

v    Debt – like payoffs to Leveraged returns

 v  Principle Protection – Available as an option in various Structured Products

Benefits

 v  Ideal for investors with moderate risk appetite to generate equity like returns

 v  Customized to express very specific market views

 v  In case of capital protection, preserves capital in market downturns

Illustration to explain principal protection in a plain Structures Product

Instrument	Principal Protection	Liquidity	Risk		Potential of Maximizing Return	Customization	Fees
			Market Risk	Credit Risk
Structured Products	Available	Low/None	Low	Low/Medium	High	High	Upfront
Bank Fixed Deposits	Yes	Medium/High	None	Low	Low	Low	Upfront
Mutual Funds	No	High	Medium/High	None	High	Low	Management
Direct Equity	No	High	High	None	High	Low	Brokerage
Derivatives	No	High	Very High	None	High	Low	Brokerage

Comparison with other Investment Options

Capitalizes on range bound views by accumulating returns when underlying lies within a range

Looking back at maturity, captures the highest level during the product tenor

Protect the capital while still allowing one to participate on the upside of the underlying

Superior yields as compared to debt market instruments

Beat the underlying returns by offering a multiplier on underlying performance