2010 | Dalal Street

India Current account deficit widens – BoP Updates

October 1, 20102 min read

Current account deficit continued its widening trend in Q1FY11, reaching USD 13.7 bn against ~USD 13 bn in the previous quarter. It was ~3.7% of GDP, which is on the higher side, historically. Among broad components of the current account, merchandise balance deteriorated, while invisibles improved compared with the previous quarter.

The monthly incoming trade data suggest that trade deficit continues to widen in Q2FY11 and, therefore, until invisibles improve markedly, current account deficit could widen even further in Q2FY11. On the currency side as well, while falling domestic inflation (more…)

India IPO Reviews and Updates

Returns from PSU Equity Offerings

October 1, 20102 min read

Analyzing the Performance of PSU stocks on listing (28 companies) , the returns look reasonably good. 17 Companies have offered >10% returns, 10 companies >20% returns and only 2 companies have seen erosion between 0-8%.

It is worth noticing, that although returns have not been exorbitant, a majority of offering have provided over 10% listing gains (17 out of 26 companies) with 10 companies managing over 20% listing gains which are not mediocre by any means.

It is important to notice that of the 3 companies with negative returns as on today; all of the 3 companies have tapped the market (more…)

Equity Research

Updated Portfolio of Rakesh Jhunjhunwala

October 1, 20101 min read

As on Sept-20-2010, here is the portfolio of Jhunjhunwala Rakesh and Rekha of RARE Enterprises. Investors should know that he holds the Stocks ir-respective of short-term blips – for example – Punj Lloyd. In our study we found that he holds the stock for more than 5 years and that is how he makes a killing. However, apart from directly owning the company’s stock he is a Trader as well making money for members of his syndicate. So if you have to follow him, then Patience is the keyword. Anyway, here is his portfolio, (more…)

Breaking Corporate India Earnings News

Peek into Satyam’s Restated Results – Merger ?

September 30, 2010September 30, 20102 min read

Ramalinga Raju’s erstwhile Satyam Computer Service now Mahindra Satyam after a whopping 500 day accoutning marathon has re-stated results. Here is a take on ~~them~~ it from the investor’s perspective.

Company recorded revenues of Rs54.8 bn for FY2010; (2) EBITDA margin of 8.3%; (3) net loss of Rs1.2 bn after including extraordinary item of Rs4.2 bn. Extraordinary items pertained to severance compensation for employees (Rs0.9 bn), forensic investigation expenses (Rs1.1 bn) and write down in value of assets of subsidiaries (Rs2.2 bn), (4) cash and cash equivalent of Rs22 (more…)

Economy, Markets and Macro Views

Sensex @ 20,000 – What FII Strategy Reports Suggest ?

September 21, 20102 min read

The FII have bought into the Indian Equities as if their is no tomorrow and have made the BSE Sensex breach the historical 20,000 levels. What next ?

BNP Says – The Liquidity Driven Market Rally – typically drives markets and stock prices above fair valuation. During times of high liquidity (March-May’06 and Jan-December ’07 for example), the market tends to trade at large premium compared to fair value. During May 2006 and Feb 2007 Sensex traded at 17-19% premium compared to our fair value, while at the peak liquidity of January 2008, it traded at 65% premium. We believe if the current run rate of FII flows continue (i.e. 0.4-0.5% of free float market cap), (more…)

Breaking Corporate India Earnings News

Impact of New Mining policy on Indian Miners

September 21, 20102 min read

Mines – The Natural Resources Wealth of Indians is in the hands of few Politicians and Mafia Dons. In order to curb il-legal mining, the center has proposed a new bill Mines and Minerals (Development and Regulation) Bill, 2010 headed by Finance Minister Pranab Mukherjee. [ This could be a complete eye wash for innocent Indians as il-legal mining is across all Political Parties across the nation]

Some important provisions in the Bill, especially those relating to sharing of 26% equity/profits, are vaguely drafted. Read verbatim, (more…)

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