Finance
Growth with debt-Keep your fingers crossed
I was surprised to note that Tatas have also borrowed heavily by pledging its shares. Growth with too much borrowed money is very risky. Public invests in Tata companies thinking they are financially sound without realizing that they have borrowed heavily. When I saw Tatas going in for huge acquisitions like Jaguar/Rover and Corus, I was concerned that even if one of them landed in trouble, Tatas could get into serious trouble. With the recession and financial crisis, trouble has landed in multiples. The interest of the common shareholders in the Tata companies could suffer.
Is Delhi airport renovation heading for trouble
I think its time that GMGR led DIAL is told to quit if it doesn’t have funds or can’t raise funds to complete the upgradation of Delhi Airport. Every now and then they keep coming up with some scheme (I think they are scams) to raise money. I think last year, they wanted to take deposits for hotel development even though at that time there was no financial crisis. Thankfully, the government did not allow them to do that as even the government felt that GMGR might pocket the entire amount. Now again, GMGR-DIAL wants to levy a fee on all outbound travellers a sum of Rs. 350, an increase of Rs. 50 on the earlier proposed levy of Rs. 300. Just because GMGR-DIAL has a fund shortage, why should we as customers pay to fill the shortfall? There is no logic to this. I feel that if they cannot perform their obligations, the government should ask them to quit and get another company to handle it. I think Anil Ambani would be happy to take over.
SEBI asks promoters to reveal pledged shares information
It seems that after the Satyam fiasco, SEBI is asking promoters to reveal information about pledged shares. I do not think that this step will do any good. Promoters will reveal the information and after some time people will forget about it.
A simple solution to the financial crisis
I agree with the majority of the American people that there should no more bailouts. Why? Because that is not a solution. We have already seen that noone knows where the $350 billion went. The problem is the economy as a whole and not any individual industry. You cannot bail out one industry because the American economy is not dependent on any one industry.
Finance Christmas Carol for 2008
Here is a Christmas carol written by a student in Australia that has an important message for all
Never forget, there is no FREE LUNCH
Let me take this opportunity to comment on the current financial crisis. The major reason behind what has happened is our quest for high growth combined with our reluctance to logically question the reason for the high growth. This is also true for the financial crisis that gripped India after the Harshad Mehta scam.
Ranbaxy stake sale – Let’s call a spade a spade
The Singh family, promoters of Ranbaxy Laboratories, in a surprise move sold their controlling stake to Daiichi. Now this act of the Singh family is just what it is – a stake sale. However, Malvinder Singh, CEO of Ranbaxy has explained this move as a pioneering move and as such I am forced to comment.
What goes up fast, also comes down fast
My interest in the stock market arose at the time of Reliance Power IPO. That was the first time that I commented on the stock market. At that time, I started reading Udayan Mukherjee’s column in HT. I liked his writing style.
Reliance – IPO
Even though, I had finance as one of my specialization in MBA, I have been a little confused with the how heavily the Realinace Power IPO has been oversubscribed. I do nor remember exact numbers but I remember the IPO was at around Rs. 450 and the market was expecting it to be listed at Rs. 900-1000. Hence the frenzy to take part in the IPO by everybody. This suggests that either the company is stupid to sell its shares at Rs. 500 or the market is stupid to buy it at Rs. 1000 on listing. One can think of a 5-10% variation but almost 100% variation is beyond my understanding.
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