Coal India’s Offer For Sale: Lack of Profit Growth Even With Monopoly Scares Us Off

Coal India has an offer for sale out today.

  • 31 cr. shares for sale on the exchanges
  • This should raise Rs. 10,000 cr.
  • If there is more demand, they will sell another 10,000 cr. worth
  • Retail investors get about 5% discount (for upto Rs. 200,000 invested)

You can buy through your broker.

So Should I Sell My House and Buy?

The Short Answer: No.

So What’s the Long Answer?

Noooooooooo.

Oh Come on.

Ok, I’ll stop messing around.

Coal India is a quasi monopoly for coal mining in India. We use a lot of coal. Not just to blacken someone’s face when they made cartoons we didn’t like, which has substantial demand and major growth potential considering just the mad people on twitter. But that is not where we use coal.

We use coal in Thermal power plants. Of which we have a lot. I don’t have time to actually count them but we have a […]

By |January 30th, 2015|Categories: COALINDIA|Tags: |3 Comments

Now, International Woes at an Austrian Bank, But Not To Worry, Draghi Will Be Here

Sorry for all those news coming from international sources. There’s one more. This time it’s an Austrian Bank, called Reiffeisen. These is how the bonds of this bank were, yesterday, from Zero Hedge.

 

The bonds fell to as low as 48 yesterday. The bank, says Bloomberg, has a large exposure to Russia, with a potential loss of 500 million Euros. It also has 4.3 billion euros worth of Swiss Franc based loans given mostly in Poland. That repayment cost just went up 20%! (So, expect defaults)

Banks don’t go down nowadays. They just get rescued after causing turmoil in the market. So yeah, let’s await the statement of superman Draghi that says Everything Must Be Rescued If It Is A Bank.

By |January 29th, 2015|Categories: Macro|Tags: |1 Comment

Premium: What’s Feb Going To Bring Us? Look at the MA20 and MA5

We look at what to expect in the month of February. This is a post for Capital Mind Premium subscribers only.

By |January 29th, 2015|Categories: Premium|Tags: |0 Comments

Greece: 11 Lost Years, and Counting

As we see Greece rejoicing the win of a party that says they should renegotiate Euro debt, let’s see how their economy has done.

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(Data from ECB)

They’ve seen their GDP go down to levels last seen in Dec 2003, which is about 11 years ago now. The GDP may have finally seen a quarterly uptick in Sep 2014, but that’s little consolation after all the dramatic falling it has done.

It’s really no wonder that Greece seeks any way out, even if they defaulted on European Debt or moved away from the Euro. The consequences may be dire, but if they are required to continue with their austerity measures, it’s unlikely they get out of this mess anytime soon. It’s a little incongruent for the ECB to say it will use whatever it […]

By |January 28th, 2015|Categories: Greece|Tags: |6 Comments

Portfolio: Two Stocks Out, Two Stocks In

We are tweaking our CAPM Portfolio. This is a post for Capital Mind Premium subscribers only.

By |January 27th, 2015|Categories: Premium|Tags: |0 Comments

Premium: Syriza Wins Greece, Talks Tough. What Happens Next?

With Syriza winning the Greek general elections, Capital Mind gives our take on what this could mean for the Eurozone area. This is a post for Capital Mind Premium subscribers only.

By |January 26th, 2015|Categories: Premium|Tags: |0 Comments

Forex Reserves at the Highest Ever, but RBI Controls Balance Sheet to Restrict Inflation

The RBI’s back to buying dollars by the truckload. Forex reserves have been going up substantially.

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The RBI has over $322 bn of cash reserves, and then another $13 billion from forwards (it may even be higher since the forward exposure number is from November).

This is the highest ever forex reserve we have ever held.

The RBI has not just bought in the spot market this (financial) year, it’s bought a truckload in the forward market as well, totally over $66 billion:

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Offset by Sales in Govt Bonds, Inflation Stays on Hold

And the difference this time is that the RBI has managed to do this without stoking inflation. With […]

By |January 25th, 2015|Categories: RBI|Tags: |4 Comments

The Nifty Adjusted for Inflation Hits a New High! Are we in a Bubble?

The Nifty has hit a phenomenal new high, even including dividends and (Wholesale price) inflation! We were requested recently (thanks!) to update our inflation-adjusted Nifty chart – Capital Mind is the only site in India that provides this information.

And that brings us to this chart:

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How do we make this chart? We take monthly WPI inflation back-casted to 2000 and adjust each month’s data as it it were in “purchasing power of the 1999 rupee”.

Adjusting for Inflation effectively means this:

  • If the Nifty was 100 in 1999
  • and went to 110 in 2000
  • but inflation was 8% (that is, Rs. 100 in 1999 had same purchasing power as Rs. 108 in 2000)
  • Your actual index number must provide the return = 110 * 100 / 108 = 1.85%.
  • Which means the inflation adjusted index is 101.85

For this calculation we don’t just include the Nifty, we assume any dividends […]

By |January 23rd, 2015|Categories: Nifty|Tags: |8 Comments

Macronomics: That Massive QE in Europe, What Does It Bring for India?

We analyze the ramifications of the newly-announced Eurozone QE program. This post is for Capital Mind Premium subscribers only.

By |January 23rd, 2015|Categories: Premium|Tags: |1 Comment

Suzlon Rids Itself of REPower, But Its Still Overburdened

Suzlon has decided to sell that big thing it bought in the past: REPower. Now named Senvion, the German acquisition was the bane of Suzlon’s existence. After it bought REPower in 2008, it couldn’t get access to the underlying technology until it had bought out all minority shareholders, which happened only in 2012. And even then, it couldn’t use the Balance Sheet strength of the much larger German company because of German laws forbidding it.

This chapter may have finally seen an end.

Suzlon finally has sold Senvion to Centerbridge Partners, LP for a sum of 1 billion Euros or about Rs. 7500 cr.. This is way lower than the amount they spent to acquire it, which was 1.5 billion Euros. (Which, at the time, was Rs. 10,000 cr.

Centerbridge is a PE fund that buys distressed assets, it seems. While Senvion was doing well, the problem was that Suzlon wasn’t – it couldn’t service the debt […]

By |January 22nd, 2015|Categories: Suzlon|Tags: |4 Comments

Nifty Hits a New High But Watch The (Lack of) Earnings Growth

The Nifty hit an all time high today. The highest it’s ever been and by all indicators, very very bullish.

But what’s not good is the fact that this “euphoria” is probably short lived.

[…]

By |January 20th, 2015|Categories: Nifty|Tags: |7 Comments

Portfolio: Two More Stocks Showing Strong Tech Strength

We're adding [Stocks] on a momentum move. This post is for Capital Mind Premium subscribers only.

By |January 20th, 2015|Categories: Premium|Tags: |0 Comments

Premium: Understanding Leverage and How Markets Can Reward and Kill

We explain the concept of leverage and its impact on a portfolio. This post is for Capital Mind Premium subscribers only.

By |January 19th, 2015|Categories: General, Premium|Tags: |0 Comments

Portfolio: Charts show [Stock] Breaking Out

We're adding [Stock] on a momentum move. This post is for Capital Mind Premium subscribers only.

By |January 19th, 2015|Categories: Premium|Tags: |0 Comments