Blogging: A Rising Indian Industry

Advertising and marketing are two primary aspects which define the success of any business in this ambitious world. It is essential for a company to get noticed to strengthen itself as a brand. With the internet evolving at its zenith, blogging is rising as an excellent alternative for many brands to promote and sell their products.

Advertising industry usually focused on the dominant mainstream media such as Print, Radio, and TV to help brands. However, as the internet media underwent a massive growth in the past few decades, these conventional advertising media have got some robust competition from the social media on the web with blogging playing an enormous part in it.

Blogging was acquainted on the web in the late 90s and was merely a stage or website where the blog writer posted about their day-to-day experiences. During its primary days, a blog was viewed as a personal diary as the modern blog emerged from the concept of an online journal in the 90s.

Blogging achieved its popularity as its usage spread through 1999, following the arrival of first hosted blog media like Open Diary (pioneers), LiveJournal, Pitas.com succeeded by DairyLand and Blogger.com (which was next obtained by Google). Although the blogs throughout its growth showed some considerable influence over the political line, Blogging earned its mainstream reputation when many governmental authorities, news services, and candidates began adopting the stage for outreach and opinion forming.

Gradually and steadily, the blogging industry picked up the pace into the mainstream media and became an excellent tool for politicians and political competitors to create judgments on different affairs of the state or the world.

The influence of blogging was not confined to the political arena only. Blogging being an internet media was the final choice for all the internet businesses and eCommerce markets on the web. Finally, the blogging stage became a hub for many internet based businesses to market and promote their goods while bloggers made ample money out of it.

With such a huge impression and influence on the community, Blogging has appeared out as a full-fledged profession for many people all across the world.

Blogging gives an open advertising model. With services like Affiliate Marketing, the businesspeople or companies are expected to pay the bloggers only when they record a sale for them.

The Journey So Far…

Recently, in developing countries like India too, blogs are being published by the eCommerce monsters so as FlipKart.com and Amazon India which are recording huge sales every day getting a high amount of referrals from various blogs all over the country. One instance of such gain was experienced by Xiaomi Smartphones which was only sold on FlipKart. The Chinese Smartphone makers recorded huge sellouts without any publication on print media, TV or other tradition media channels but utterly relying on the internet bloggers. Such a tremendous accomplishment has positioned Xiaomi as the third largest smartphone producer in the world.

This is just one breakthrough story. The internet has an enormous list of such success stories where blogging has played a significant role in the company’s success.

What do Indians Blog About?

Indian bloggers have diverse views for blogs. While the estimates of newbie mommy blogs from India are on the growth, many others take to expert blogging as well. See Amit Agarwal of Labnol.org, one of the many esteemed Indian bloggers. Here is a brief record of most popular blogging niches in India:

  1. Technology – It is not without cause that India is known as the ‘tech hub’. There is a growing number of tech bloggers in the age group of 19-25-year segment.

Digital Inspiration (Labnol)

An IIT graduate, Amit Agarwal had quit his corporate job to become a professional blogger. By being a professional full-time blogger since 2004, he is also known for being the first professional blogger from India. Mainly focusing on Social Media based technology, this blog also has up-to-date updates on various latest technologies from Google. WordPress, Apple, etc.

  1. Sports – Sport is defined as, an activity involving physical exertion and skill in which an individual or team competes against another or others for entertainment. Well, that’s just the technical definition. Sport is beyond words, it is a religion for some and a preferred method of lifestyle for most. India has now become a hub for all sporting activities. Gone are the days where the only sport followed was cricket.

Sportskeeda

From cricket and football, to TT, wrestling and kabbadi, Sportskeeda, an online platform for sports enthusiasts presents news, reviews and a lot more. Sportskeeda is essentially a network or community of sports lovers. On Sportskeeda you will find interviews, reviews, analysis, comics and even satires on a variety of sports featured therein.

  1. Finance – Finance blogging is a familiar niche too. One can discover blogs/columns/stories/expert tips of finance experts on leading finance blogs such as Jago Investor and MoneyControl.com.

Safal Niveshak

Safal Niveshak is the brain child of Vishal Khandelwal. The blog consists of stories of successful investor around the world. It also conducts interviews with investors in India. Safal Niveshak also offers e-books and courses related to investing.

  1. Business – India is developing in the SME sector, and with the high penetration of corporate investment, cross-cultural business connections have expanded significantly in which blogs like WATBlog.com, BuyerBehavior.org, Trak.in, CapitalMind.in are successful.

Abhishek Rungta

An entrepreneur is always on a lookout for unexplored business strategies. Abhishek Rungta’s Blog focusses on Internet marketing, work productivity, business development strategies as well as online ventures of successful bloggers. In fact, it’s not all packaged in a drabby tone but mostly infused with Abhishek’s good humour.

These are the four foremost categories of blogging. Of course, there are private blogs too, but when we talk about niches, these are the main ones.

Do Indian Bloggers Earn?

I recently read about a 14-year old who makes around 1000 USD per month from his blog! Quite an accomplishment for this young lad but what I am stating is that earning money through blogging is a primary motive for the young Indian bloggers, notably when it comes to advertisement incomes.

Admittedly, AdSense income earning is the principal source, supported by InfoLinks.com, Chitika.com and others. Indian blog monetization is in a stage where US blogs, particularly, were in 2004-2006. Hence, there is a lot to be discovered because what we are performing now is going with ‘tried and tested’ ways rather than focusing on innovation.

Anyways, after advertisement earning come to the blogs which are solution-oriented like Blog Consultancy, Writing Services, Tech Training, SEO Services and others.

Nevertheless, to wrap up this discussion, Indian blogging is a billion dollar business when blended with eCommerce. Blogging is a lucrative field, provided one follows specific rules and regulations. However, there are some, including me, who think that the power of blogging should be practised aesthetically. From India’s viewpoint, blogging has potential, more when Internet access spreads to more people and users are sensitized about the concept and potential of ‘blogging’

Successful Funding Stories in Blogging

  1. Sportskeeda.in

Sportskeeda, one of Indias leading sports media companies is backed by Seedfund. The early stage venture capital fund had invested $600,000 in Sportskeeda in 2011.

  1. YourStory

YourStory is Indias largest media tech company for startups, entrepreneurs, investors and innovators. It has published over 20,000 stories of entrepreneurs. YourStory and sister platforms, HerStory, SocialStory, YS TV, YS Research and YS Pages have reached 60 million engaged readers. The company has raised a sum of $13 million in 3 funding rounds from investors like Ratan Tata and funds like Kaalari Capital, Qualcomm Ventures, UC-RNT Fund and 3one4 Capital.

  1. Capital Mind

Capital Mind has raised an undisclosed amount of seed funding from early stage investors in India and the US. The platform will use the funds to build and market financial analytics platforms and products. The seed fund was led by Raghu Vohra of Blackstone Valley Group. Capital Mind works on a freemium model and provides charts and analysis for free. For premium member the platform provides in-depth analysis of stocks and fixed income about India. This includes macronomics, portfolios, optionalysis and ‘premium’ analytics.

When trying to pinpoint which industry deserves your money, it can help to pay attention to trends. Moneybee is always looking for sunshine industries. Blogging, being one such industry will help power the growth of small businesses as it provides a platform to connect with the masses and establish the companies position in the their respective industries.

This artcile is authored by Uttkarsh Sogani, Investment Adviser, Moneybee Investment Advisors Private Limited. You can call on +91 22 4030 2050 or email on uttkarsh@moneybeeadvisors.com for more details.

 

Bibliography

http://therodinhoods.com/post/plz-help-me-to-find-all-the-latest-statistics-related-to-blogging-in-india/

https://blog.indiblogger.in/2009/06/15/statistics-from-the-indian-blogosphere/

http://lighthouseinsights.in/indiablogtrends2016.html/

http://www.openvine.com/small-business-internet-blog/5-benefits-of-blogging-for-your-small-business

 

 

 

Value Investing- the real wealth creator in long run

Value investing is an investment paradigm which generally involves buying securities that appear underpriced by some form of fundamental analysis. It is time proven to be the most wealth creating investment strategy.  Few known proponents of value investing include Warren Buffet, Prem Vatsa, Rakesh Jhunjhunwala, Rakesh Damani amongst others. Pics 1

Value investment in a nutshell is a bet on the quantity of margin of safety. Margin of Safety as described by Benjamin Graham is the discount of the market price to the intrinsic value.

Buffett’s investing philosophy evolved from Benjamin Graham and a focus on finding situations in which a company’s value exceeded its market price. He is considered to be one of the most successful investors in the world, and as of January 2018 is the second wealthiest person in the world, with a total net worth of $84.5 billion.

For him, buying stock at lesser than intrinsic value, enjoys high safety of margin during economy turmoil. When economy or global environment is under pressure, all stocks laggard and correct to good level. Even value stocks correct to some extent but built confidence to buy once again in portfolio when everyone is selling.

Few of his success stories include:

Coco Cola – What made Buffet buy Cola Cola?

Pic 2

  • Iconic name and global reach created a moat around the product, so Buffett did not have to worry a competitor would come and take away market share.
  • dominant company in the beverage industry and has large food holdings as well.
  • Attractive valuation with good management.

Buffett bought more than $1 billion of Coca-Cola stock in 1988, following crash in stock market, a stake of 6.2%.

Coco Cola stock price folded 18.7x after Buffet invested in 1988. The stock has produced annualized gains of more than 11% since Buffet first invested. The stock was available at $2.45 in 1988 as against $43.3 (In Feb 2018).

According to the Coca-Cola company, your investment of $1000 alongside Buffett would have bought you approximately 408 shares in 1988. It would now be worth more than $18,725, for a percentage change of just over 1,773%

Investment in Bank of America

In 2011 Warren Buffet invested $5 billion in preferred shares of Bank of America at the time when the company was struggling with large legal bills in the aftermath of the subprime lending crisis.

The key features of the deal were:

  1. 6% dividend annually, or about $ 300million on preference shares.
  2. Convertible preference shares into 700 million common shares at exercise price of $7.14 any time before 2021.

In August 2017, Berkshire Hathaway made good on its plan to convert warrants into Bank of America common stock.

Why Warren buffet converted warrants into common stock?

  1. Bank of America raised its dividend to 48 cents a share annually after the Federal Reserve gave it the go-ahead in June2017.
  2. At 48 cents, the dividend on the common shares pays about $336 million annually.
  3. The share price on the day of conversion was at $23.58, meaning Berkshire’s paper profit on the stake is about $12 billion. The stock is currently trading at $30.33 as on 11.02.2018.

In these current highs is there a possibility to find stocks which are Value Investments?

Here are some studies which we think have the potential to become multibagger while being fundamentally strong:

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Market Capitalisation of KG Denim is Rs 156.0 crore (as on 11.02.2018) with Equity share capital of Rs 25.7 crore and Net worth of 104.7crore as on 30.09.2017. Stock is currently trading at Rs 60.9 (FV10). One can look for “trigger brand” -garmenting business as a stock story along with other business dimensions and fundamentals.

The company holds 102acres of land in Coimbatore and 2,155sq. mt in Gujarat. The company recorded decent revenue of Rs 309 crores in H1FY18, but bottom line got impacted because of GST and increase in raw material cost. However, considering FY17 EPS of Rs 9.4, the stock is available at much attractive valuation.

The company manufactures Denim, Apparel Fabric and Home textile.

Pic 7

Have debt of 127.67 cr and cash in-hand of 7.79cr as on 30.09.2017.

Highlights of FY16-17

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In Banking, one can study South Indian Bank. CMP Rs 27.5 Market Cap Rs 4,975crores

South Indian Bank is one of the oldest banks in south India, based out of Thrissur, Kerala. It is leading private bank with one of the lowest recorded Gross NPA and Net NPA. It has total advances of Rs~49,717 cr as on 30.09.2017. It’s loan book exposure is -Kerala 42%, South (Ex-Kerala) 34% and rest of the India 24%.

Break Up for Advances:

Pic 9

As on 30.09.2017 -NIM margin stands at 2.95%, C/I cost to income ratio of 42.6%, CASA ratio of 24.5%, Gross NPA of 3.6% and Net NPA of 2.6% . These key parameters are improving quarter on quarter basis. The company also sold part of NPA to ARC during FY 16-17. 73% of Corporate Loan Book is Investment Grade.

At CMP of Rs 27.5, stock is available at P/BV of 1.08.

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In Mining, one can look at NMDC. CMP Rs 136 Market cap of Rs 42,918crores

As steel industry is on shine and Iron ore is feeder for the industry, the lowest cost producer of Iron ore will be key beneficiary. NMDC, a navratna Public sector enterprise under Ministry of steel, is one of the lowest cost producers of Iron ore in the world.  It is India’s largest producer of Iron ore. NMDC has iron ore mining capacity of 46mtpa with utilization rate of ~80% and is expected to improve gradually over the next 2-3 years, as its key customers (JSW steel, Essar Steel and RINL) are all ramping up production. NMDC is well placed to serve them due to its high quality of ore and access to rail infrastructure. NMDC has operating margins above 50% and PAT margins above 30%. Iron ore prices are on rise. It augers well for NMDC.

The above article has been contributed by Hardik Solanki, Investment Adviser, Moneybee Investment Advisors Private Limited.

The artcile is not a equity buy recommendations. The views are of the write alone. For further discussion, you can connect with Hardik on +91 22 4030 2053