Video: Full Interview at CNBC-TV18 on 22nd June

Here is the full video of my interview at CNBC-TV18 in which I discuss select stocks including Reliance Industries, Sriram Transport and more. I also share my thoughts on the real estate, railway and defense sectors. Click the image below to see the video on the CNBC/Moneycontrol page:

Video 

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By |June 23rd, 2015|Categories: CNBCTV18, Stocks, Video|Tags: , , |0 Comments

Why is FIPB Rejecting the Request for the Strides-Shasun Merger?

So Strides Arcolab was going to merge with Shasun. This merger was cleared by shareholders. Then it was cleared by the Competition Commission. And there’s some court meetings that have been done.

It needed an approval from the Foreign Investment Promotion Board (FIPB) which has, apparently, rejected the proposal. They needed this approval in order to issue shares of Strides to Shasun shareholders that were non-resident. Shasun has about 21% ownership by Foreign investors, which will, post the merger translate to just 5% of shares in Strides.

Strides has about 38% holding with non residents, and with the Shasun merger will probably see that come DOWN as a percentage.

It makes very little sense for an FIPB to even have a say in such a transaction; and this is strange, coming from a government that seems to want to encourage investment!

We’ve complained about the high-handed nature of the FIPB earlier. ([…]

By |June 17th, 2015|Categories: Government, Stocks|Tags: |2 Comments

Vedanta to Merge With Cairn, Gets Hands on Cash, Takes Retro-Tax Risk

Cairn and Vedanta will merge soon, says a Vedanta Board Meeting note, where Cairn shareholders will get:

  • One share of Vedanta for a share of Cairn
  • A preference share of Vedanta worth Rs. 10 for every share owned, which pays 7.5% dividend per year and pays it out at the end of each financial year.

And that’s pretty much it.

When?

Sit back and relax. Sometime in the March 2016 quarter. That is approximately the time of the next Greece drama, so I would not suggest immediate outrage. Though honestly I am a terrible person to be in the media business because there is no such thing as premature outrage in the media business.

But we couldn’t resist. So although the timelines are way out, the contours of the deal’s currently proposed structure is known.

Not So Great for Cairn Shareholders

There’s two reasons why Cairn shareholders will not be rejoicing.

One, that Cairn has a […]

By |June 15th, 2015|Categories: Cairn, Stocks, Vedanta|0 Comments

JustDial Will Buy Back at 1550 per Share, But Just 2-3% of Shares Will Be Bought

JustDial recently decided to buy back shares. They have a reasonable amount of cash on the books, and they will be using about Rs. 170 cr. of that money to buy back shares through a tender offer. See the conference call transcript.

(Also read: Demystifying Share Buybacks)

Just Dial will pay Rs. 1550 per share. At that price it can buy back just 11 lakh shares.

Their stock price is much lower – at 1096 as we write.

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Should you tender your shares?

The company has 7.05 crore shares. That means the buy back will only reduce the company’s share capital by 1.5% or so. Promoters own 2.31 cr. shares, and everyone else owns 4.74 cr. shares.

That means, if everyone else submits their shares in the tender offer […]

By |June 10th, 2015|Categories: JustDial|4 Comments

Interviewed at ET Now: On Splitting Airtel, The Upgrade of Persistent Systems and The Bank EPS Push

I was interviewed on ET Now Today, and here are the snippets. Plus, clarifications

Splitting Airtel’s business a good idea, but may hurt Indian shareholders

I believe that splitting Airtel’s business into the Indian and African units is a good idea, but it’s unlikely to happen because of the debt overhang.

Therefore, it would be seen that will the lenders agree on creating a new entity and pass on most of the debt to it. That would be difficult to push. Even if the telecom operator engineers a split, it might have to end up taking a lot more debt on the Indian entity and reduce the debt on the African entity. That would not be good for Indian shareholders as the debt was essentially taken to buy the African business.

In that context, I do not see a possibility of this coming in soon. If such a scenario comes, it will have a one-time hit […]

By |May 20th, 2015|Categories: Banks, Bharti, BHARTIARTL, ETNow, PERSISTENT, Video|6 Comments

Infy: The Impact of Results on the Stock In The Past

As we approach Infy Results, we see that markets have been relatively benign about the company in recent times. While the stock shot up over 5% in Jan (after Dec qtr results) it is comparatively little compared to earlier times, where a 5% move was a bit on the lower end of the spectrum.

 

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Today, for the first time in a long time:

  • Infy isn’t the first Big IT company to announce results: we have seen TCS results (30% Year on Year down on profits), HCL Tech (YoY profits up 3.6%), Wipro (YoY profits up 2%)
  • Infy is releasing results mid-day instead of at 9 AM. So markets will not really move so much the previous day.

The stock is on a medium term downtrend, at a support level of the […]

By |April 24th, 2015|Categories: Infosys, Results|Tags: |1 Comment

Who Bought Those SunPharma Shares?

After that insane 20,000 cr. volume in Sun Pharma yesterday as Daiichi sold a whopping Rs. 20,000 cr.  worth shares, who really bought them?

Turns out the buyers weren’t named Dilip Shanghvi (the promoter of Sun Pharma). While we don’t know the identity of all other buyers, we do know from NSE’s Bulk Deals reporting that three big investors bought into Daiichi’s selling. Here they are:

[…]

By |April 22nd, 2015|Categories: Stocks, SunPharma|10 Comments

Is The TCS Bonus a Way To Show Their Severance Payouts? Slowest Headcount Growth in a While, Stock Falls 4% on Falling Revenue Growth

We first thought the TCS results were okay. They made a profit of 5773 cr., they said, which looked okay over the previous year’s number of 5358 cr. (same quarter last year). But here’s the detail:

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The little * there is: * Figures are excluding One-time Special Employee Reward of Rs. 2,628 crore in Q4.

TCS has paid out Rs. 2628 cr. as a special bonus for the 10th anniversary of its listing. This means a week’s salary for each year served. Which will obviously help the longer term employees (and senior folks) a lot more than others.

Why should a company pay employees a bonus for the 10th anniversary of a listing? If it was symbolic, they should have declared a special dividend, one thinks. And ooh, there is no “special” […]

By |April 17th, 2015|Categories: TCS|8 Comments

J&K Bank: A Combination of Bad Luck and NPAs, Talks Big on MetLife. Back to Public Sector Valuations?

This is a very interesting story on J&K Bank. The bank’s been in the news for the wrong reasons recently: for one, it saw a big fraud that hurt its Dec quarter results. Now it’s been hurt because of the floods in J&K, which will definitely hurt its NPA situation after the major floods last year too.

J&K Bank’s NPAs have gone up tremendously in the Dec quarter, adding over 460 cr. to Gross NPAs, taking them to 2658 cr. on total advances of Rs. 46,000 cr. This is up tremendously from 725 cr. in the same quarter last year.

Much of these NPAs are as a result of floods, the situation in REI Agro and earlier, in HDIL (both of which turned NPA through HDIL has turned back into a standard account), and added to the NPAs were the losses due to the fraud.

This time we have fresh floods in Kashmir, which hopefully will not get serious. The J&K […]

By |April 3rd, 2015|Categories: Banks, JKBank, Stocks|6 Comments

March Shows Returns of -4.6%, 10-year Returns Will Fall Unless Sensex Goes Up 67%

The Nifty returns for March were lousy, giving us a -4.6% month at the end of the financial year:

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This takes the year’s return to just +2.5%, but at least we’re positive. March’s median returns have been horrible at -1.3%, and April and May too have seen lousy returns in the recent past.

[…]

By |April 2nd, 2015|Categories: Charts, Nifty, Sensex, Stocks|Tags: |1 Comment

On CNBC TV18: Of Jindal Steel, Bank Headwinds and That Markets Haven’t Corrected Enough

I was on CNBC TV-18 today and spoke about Jindal Steel, Banks and the overall situation in the market.

 

 

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By |March 23rd, 2015|Categories: Banks, CNBCTV18, JINDALSTEL, Stocks, Video|6 Comments

Government Cancels JSPL and Balco Coal Mine Allocations, These Stocks Look Lousy on the Charts

The coal mine situation has become intense again. The Coal Secretary, Anil Swarup tweeted on Friday night:

This changes  a lot of things. Gare Palma 4 (/2 and /3) and Tara were won by Jindal Steel and Power, and Gare Palma 4/1 was by Balco: (Livemint)

Balco had submitted a closing bid of Rs.1,585 per tonne for the Gare Palma 4/1 block while Jindal Power had submitted a closing bid of Rs.108 per tonne for the Gare Palma 4/2 and 4/3 blocks and Rs.126 per tonne for the Tara coal block.

The speculation is that these blocks were won through cartelization.

And this is how these stocks are, technically – weak, and likely to hit near term lows. Here’s Jindal Steel for you:

image[…]

By |March 22nd, 2015|Categories: Coal Block, JINDALSTEL, SSLT, Stocks|4 Comments

Suckered: NTPC’s Awesome Bonus Debenture and How The Government Gets 9,700 crores Without Selling a Single Share

NTPC has decided to graciously give “Bonus Debentures” to all its shareholders. If you own a share, you get a debenture free. (It’s not “free” really, because nothing ever is, but we’ll get to that).

The concept is that you get a debenture for no further payment. Why? Because you see, the government has a bloody deficit.

What? What’s the connection between the government’s deficit and NTPC’s bonus debentures? Deepak, are you getting senile, old man?

I object to being called senile in my old age. I was senile when I was much younger. But we digress.

NTPC’s Doing What?

From the press release,

  • NTPC has truckloads of cash and “free reserves”. 72,418 cr. worth of free reserves – basically, accumulated profits over many years.
  • They have 824 cr. shares out there.
  • For each share, they will issue one debenture (for no payment required) to the shareholder.
  • Each debenture has a face value of Rs. 12.50.
  • That means debentures worth Rs. 10,307 cr. will be issued.
  • NTPC will redeem – […]
By |March 13th, 2015|Categories: NTPC, Stocks, Suckered|19 Comments

On CNBC-TV18: Discussing Suzlon and Bharat Forge with Anuj Singhal and Ekta Batra

I was on CNBC TV18 two days ago, talking about Suzlon and Bharat Forge and so on:

Some of the things I’ll add more on:

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By |February 20th, 2015|Categories: Bharat Forge, CNBCTV18, Stocks, Suzlon, Video|Comments Off on On CNBC-TV18: Discussing Suzlon and Bharat Forge with Anuj Singhal and Ekta Batra