Indian bloggers mania: sridhar kondoji

Icon

Indian blogs

Indian economic report card for the year 2007-2008

A significan quote from Economic Survey 2007-2008 tabled in Indian Parliament is
” Any reduction in excess capital flows from the high levels in 2007 may affect the equity markets in the short-term, but will make the task of monetary management easier,”

Finance Minister P Chidambaram has many loose ends to fight to maintain the Indian growth story. The rate of economic growth for the year 2007 – 2008 is 8.7% and is less compared to the 9.4% and 9.6% achieved in previous years. I like the fact that they projected less economic growth this year and are asking the Parliament for more reforms to be introduced to achieve or exceed previous growth rates. The reforms that Finance Ministry or economists are asking is not difficult to intriduce and implement though. The Left parties on whom UPA government depends has not opened its eyes to the globalization and is pulling or restraining the government. This policy is both good and bad. Good, because our economists will get more time to prepare themselves and the country in rapidly evolving global economic situation and bad because our growth story will take much longer to realize.

It will be extremely important for us to see how our finance minister will handle the evolving global economic situtation and especially mounting recession fears in United States.
In India, both short term and long term interest rates are high compared to West. Despite high interest rates our growth is commendably high and is in perfect shape. People are spending and almost all cylinders of our economy are fired up.
Under such circumstances, what we need to take care of is maintain healthy employement rate, maintain high FDIs and encourage corporate spending.
However, one negative side of maintaining high interest rates is that foreign money flows (short term investors) into Indian markets will flood due to high rate of returns. This will unnecessarily boom our stock markets without actually leading to underlying growth of the companies. This will also strengthen Rupee and create chaos in export oriented sectors. Finance minister is advising to fight this scenario by improving productivity and become competitive. In other words he wants them (export oriented sectors) to fight this on their own and giving lectures of globalization. Finance miniter is not entirely correct on this account.
He needs to cut short term interest rates and still indirectly influence long term rates in such a way to distract short term flows of foreign money and continue to encourage healthy spending by indian consumers without causing un-sustainable booms such as US housing boom. There is a short term bubble in Rupee strength due to short term money flows and that needs to be pierced.
I don’t mind short term equity market losses for robust long term growth story.

Cut subsidy spending, tame the Inflation and maintain healthy short term and long term interest rates.
Encourage investments from Indians in India and this can happen, when people realize that savings give less rate of returns than investing in other sectors. This will also encourage entrepreneurship by individuals and corporate spending in R&D.

Advertisements

Filed under: Finance India, India blogs, Indian Bloggers, , , , ,

Anil Ambani is now furious about dwindling stock price

Anil ambani is worried about Reliance Power stock price and also erosion of stock prices of other companies under his group. He now blames some hidden hands behind this fiasco. He is probably blaming Mukesh ambani for decreasing stock prices of all companies under ADAG.

Instead of utilizing the money he got via IPO in kick starting the projects, he is watching the stock prices on a daily basis just like a normal investor. This is pathetic. Let market forces decide the right price and instead he should be more worried about project execution now.

In order to put life into stock, promoters are coming up with unprecedented move of alloting free bonus shares. This again will be decided at Feb 24th board meeting. I am sure there will be few strings attached to it, if not, then they are admitting to the fact that their shares are over priced and are now correcting the same.
By doing this, they are safe guarding their 90% share (80%-90% after bonus shares).
If they don’t, then they have to painfully see the erosion of stock value and in future, when they need more money, they will have to place shares at much lower value bringing down the total enterprise value of Reliance Power as well as Reliance Energy.

This great Relance Power fiasco will also have bearings on proposed future IPOs from Amabani family.
No matter what percentage of free bonus shares they allot, iam waiting few more years to buy into Reliance Power story. As of now, the company is worth nothing, even though on paper, it is wrongly valued at thousands of crores.

Just stay away from all Reliance companies. They are utterly over valued.

Filed under: Finance India, India blogs, Indian Bloggers, , , , , , , ,

WWIL a former SitiCable and part of Zee group

When it comes to entertainment services and the delivery of the same, there is lot of confusion in the minds of consumers as well as investors.
Lets get to the consumers confusion first and then investors next.
Consumers have plethora of service providers when it comes to cable, broadband and VOIP (data) services.
Also there are many value added services like Video on Demand and interactive services like gaming etc provided by these service providers.
THe consumers have seen Cable providers like SitiCable, Incablenet etc and now they started to seeing DTH providers. Telcos are now nervous lot to protect their revenues from their voice services like land lines etc. They are now coming up with IPTV technology. Reliance, bharathi etc are among the leading entrants in IPTV services.
Consumers:
Only cable providers have proven to provide reliable service in comparison to other type of services until now in the West and i believe this is true everywhere.
DTH is still on its way to take off and have many technology hurdles to pass. DTH in India is not feasible due to the construction types of old multi storey buildings.
Also, there is shortage of KU band thus restricting thier growth and also their profitability by many new entrants in this space.
IPTV still has long way to go. They have to invest a lot in the infrastructure and i believe this technology cannot be usefull to people with old TV sets. IPTV needs lots of bandwidth and that is difficult in India atleast for now.
Stay with Cable for now until other technology evolves.

Investors:
All these services have their shortcomings when it comes to technology and implementing the same to provide un-disrupted service to consumers.
Cable providers like Siticable (wwil) have the problem of converting thier analog cable to digital in order to reap more profits and provide value added services like more channels, broadband, voip services. They also want to connect directly to the customers by-passing local cable operators (last mile operators), who are largely under reporting their subscribers thus cutting into the profits of MSOs like WWIL (Wire and Wireless). One of the impediments in increasing their subscriber base is 49% FDI cap which has to go up to 74%. 49% FDI cap is largely restricting these service providers in raising cash to invest. Also, TRAI has to mandate CAS implementation in all major cities which is still pending. Only handfull of cities have CAS for now.
Short term triggers: TRAI raises FDI limit to 74%. TDSAT, TRAI rules in favor of cable providers in sharing FTA channel fee of RS 77.
DTH: Too many players and profitability of any player is too far from now. Stay away for now.
IPTV: This story is still playing and may not be able to provide the value added services like Cable providers due to infrastructure shortcomings. Huge investments are also needed for this play.

I am buying WWIL and a long term investor.

Filed under: Finance India, India blogs, Indian Bloggers, , , , , , , , ,

Blame game starts as Reliance power shares struggle

Every body has to take their share of blame for the dismal performance of Reliance power shares. To start with, i would blame Anil Ambani, investment bankers and all those analysts who pumped up the stock in the hope of bumper listing.
Due to bumper listing of several IPOs, value investors were sidelined for long now and momentum investors took front seat and technical chartists were revered.

THe right way for Anil Ambani was to do private placement and raise money to get the projects started under Reliance Energy fold. However, seeing the boom period Anil ambani lost his senses and wanted to make a quick buck just like a normal trader.
He quickly made Reliance Energy a holding company and shifted power related projects to Reliance Power and floated another publicly traded company by filing IPO.
The original price was around RS 180-RS 200 few months ago and don’t know, how and why they came up with RS 450-RS 480 range for this Company with no revenue to show, no concrete contracts for sourcing GAS, Coal for these projects. Anil adamantly didn’t listen to any suggestions for private placement as he thought the stock market will give him the right price. By offloading 10%, he was dreaming to get more value for his 90% share holdings and quickly wanted to become richest Indian.

There are many risks in completing the power projects and there will be too many negative trends for this company going forward.
By 2013, the cost of power per watt may become cheaper due to Rupee strengthening and there could be lot of competition from wind power, solar power providers.
So, i certainly can buy Anil Ambani’s shares for less than RS 100 going foward.

I suggest that we should all avoid any IPO led by tainted investment bankers of Reliance IPO.
I suggest you do both fundamental and technical analysis before investing money in stocks.

I am afraid, my earlier prediction of Reliance group promoters becoming poorer by their recent highly pumped Reliance Power listings coming true.
Certainly the investors are to be blamed for thier losses in Reliance Power.

Filed under: Finance India, India blogs, Indian Bloggers, Uncategorized, , , , , , ,

Cable service players FDI cap may soon be revised

In order to give level playing field for cable operators on par with telecom players, TRAI is all set to succumb to the longing demand from cable service providers for raising the FDI cap to 74% from current 49% limit.
WWIL formet siticable and a subsidiary of Zee, will be direct beneficiary of this recommendation and subsequent approval from I&B ministry.
WWIL being largest MSO with 6-7 million subscribers may attract private equity investors or foreign investors like Comcast.
WWIL is on its path to increase its subscriber base by offering several value added services.
Please read further on FDI cap related latest news at http://www.thehindubusinessline.com/2008/02/10/stories/2008021051340300.htm

Filed under: Blogroll, Finance India, India blogs, Indian Bloggers, , , , , , , ,

ADAG group will become poorer with the listing of Reliance Power

ADAG which refers to Anil Dhirubai ambani group is all set to crumble under its own feet.
ADAG group has aggressively priced their shares leaving nothing on the table for appreciation to the IPO subscribers for another 10 years. The 5% discount to retailers was only a bait which many people have bitten under the assumption that Reliance shares will rise by 100-200% on the listing day. However a crefull analysis of the company tells us a different story.
The company’s shares are priced at multiples far higher than existing players with proven track record like NTPC and tata power.
Reliance power has promised the generation of electricity in future and has nothing to show at the moment.
It looks like they have over leveraged their own family name and are all set to plunge many IPO subscribers into losses that cannot be recovered in another 5-7 years (again a distant dream).

RPL, RNRL are best examples to cite where irrational exuberance is at play. These companies are not even generating any revenues and are commanding market cap in thousands of crores. This represents the mad faith in Ambani groups and may take a beating following Feb 11th when Reliance power shares start trading.

What ADAG and MDAG are good at doing is, break up money making entities into holding companies. They have successfully done this before only to inflate their businesses and are rapidly increasing their paper wealth.
Look at RPL, where checvron took a small stake around RS 60 per share. The business didn’t even start and the price of the stock jumped more than 300%. Chevron was supposed to take additional stake and the investors were bidding the shares even higher in the hope that chevron will buy at the higher price. Smart Chevron backed of saying that it is too expensive. I wouldn’t be surprised if chevron booked profits and sold their existing stake instead of buying new stake. Adding to the agony of common investor, Mukesh group has sold their 5% stake in their own company RPL in open market and booked profits at the expense of common unwary and gullible investors.

Reliance power listing in all my honest opinion will turn the tide against Anil Dhirubhai ambani and wil be one of the heavily shorted shares on dalal street. I wouldn’t be surprised to buy Reliance power shares for less than RS 100 in few months to come.

The mood is SELL SELL SELL a typical Cramer style.

Filed under: India blogs, Indian Bloggers, , , , , ,

Blog Stats

  • 38,176 hits

Top Clicks

  • None

At a glance

February 2008
M T W T F S S
« Jan   Mar »
 123
45678910
11121314151617
18192021222324
2526272829