Monday, 19 June 2017

Fireworks for India's Loss - Seriously?

In one word, ASHAMED. My housemaid was asking today morning, why are they celebrating? Who won the match. And when she got to know that the celebrations are for India's loss against Pakistan, she was very sad.
In such a tense situation, first of all, India shouldn’t play the match. But it played. India being trashed, is it a matter of pride for Indians? Or is it that the celebrations are for Pakistan defeating India? Is that the level of patriotism we have got? Or, does this mean people are not happy that India is cutting down Pakistan to size?
Golwalkar quoted
The law-abiding citizens are told to restrict themselves, and those who are out to indulge in violence are given a free hand to do what they like. This is in a way admitting, though indirectly, that within the country there are so many Muslim pockets, i.e., so many 'miniature Pakistans', where the general law of the land is to be enforced only with certain modifications and the whims of the miscreants have to be given the final say. This acceptance, indirect though it may be, implies a very dangerous theory fraught with possibilities of destruction of our national life altogether. Such 'pockets' have verily become centres of a widespread network of pro-Pakistani elements in this land. 
That was a different age and that was a different social scenario. Even after 70 long years, why are those comments still relevant? I am not passing any judgements. My question is simple. Why are we in such a situation? Below tweets are a glimpse of what happened after the match. It's time for us to seriously introspect what is the mistake we are doing.




Wednesday, 24 May 2017

Major Gogoi Case - Why are we taking a back foot?

This debate over Major Gogoi, I am not at all happy. Is this what we patriotic Indians are supposed to indulge in? The most important thing we are missing in this is, those who are questioning the Major are angry that the Major hasn’t opened fire, killing at least 500. Had the 500 been killed, the outrage would have been massive and they will, finally, succeed in diverting the attention of the world towards the funded movement in the state of Jammu and Ladakh. The Chief of Army’s personal intention in this case is an indication how precarious the Major’s position has turned. What exactly did we do wrong here? What are the open issues regarding this?
1. No one is questioning those questioning the acts of the Major why they are interested in the deaths of at least 500 Kashmiris. How exactly are they getting benefitted?
2. Why was a voice given to the yob forced to grace the bonnet? Army should have taken him to Delhi and forced a medal around his neck, in gratitude for the service he provided to Indian Army in saving the lives of many. Punishment will come, say, like a government job in Abujmad or Nagaland.
3. This happened, fine. Why are we giving the mercenaries a voice in mainstream media? Why are we allowing them, first of all, to present their views? All those who are spewing venom on mainstream media should be voluntarily boycotted by everyone.
4. What sort of action is being taken on those people spewing venom online, on mainstream media and elsewhere? These are recorded statements and should be used to charge them.
5. The biggest question is not even that. An FIR is filed against the Major and J&L govt is humming and hawing to take back the case. If he is a soldier and if he is under the jurisdiction of Indian Army, why is the power to file FIR given to a state government? The case should have been filed by the Army police and investigated. As a byproduct, does this also mean J&L govt can order his presence under his jurisdiction till the case is not settled? Is this not against the national interests?
At least now, I think we need to come up with a concerted attempt to sort this issue out. We need the government to be creative like this Army Officer. This is a festering wound which needs to be urgently taken down.

Friday, 19 May 2017

Economic Offenders - What’s the Solution?

SBI was supposed to file detention orders on Monday. Vijay Mallya escaped the country on Saturday and rejected all summons. ED & CBI raids are going on against Karthi Chidambaram. He scooted away out of the country while the raids were going on. These are but names. There are many such - some relative of Adani, the one who bought Peerless(he was caught fleeing, relieveingly), Lalit Modi and many such.
There are a few serious issues regarding this.
1. How did they get the opportunity to run away from the country?
2. Why are the charges that strong enough for them to have a second thought before committing the escape act?
Let’s forget why they turned as economic offenders - whoever may be responsible for the situation to turn such, the bottomline is that they are guilty by absconding.
There are two aspects for this - prevention and containment.
Economic offences are a consequence of auditing - in the case of Ramalinga Raju, someone didn’t notice the transfer of money to Maytas. In the case of Vijay Mallya, someone didn’t bother to look at the loan repayment potential of the business.
The first act is to set up something like CAG which audits the books of every entity having a total value of, say, more than 1000 crores. The auditor should also be responsible if the books are cooked up and things go kaput.
Next is to set up a ten point scale, the outcome of which tells whether a loan should be given or not. Let it have a 1000 parameters and let it take a month to fill all the parameters, but the outcome should be binding. It should cover everything from loan amount to the health of business to domestic/global health of the field to number of employees to annual turnover to everything. If the number is above 7, loan should be given. If it is between 5 and 7, loan will be given against a collateral, unrelated to the business in question. If it is between 3 and 5, government intervenes and if it is less than 3, no loan should be given. There should be an annual review of the formula involved to keep it updated. By attempting to standardize the loan issue potential, we can, to a maximum extent, nullify the effect of issuing loans to caustic entities.
Coming to absconders. What exactly can we do? First thing is, if you are planning to initiate proceedings, the first act is to block the passport and put it on a watch list.
If he has already escaped the country, issue him, say, three summons to turn back. He doesn’t heed. First block his passport. Then seize all the property in India, both movable and immovable. And that includes all his shares in a joint venture. If need be, give a permission to all foreign governments to seize his assets in their territories. This will deincentivize them from granting the person asylum. Give him one year to stand trial in lieu of getting the title for his Indian properties back. And if he is capable enough, let him fight his case with foreign governments - India won’t involve. Else, there will no turning back - the assets will become the property of government of India with no scope for judicial recourse.
Is this extreme? Is this a good deterrent? Well, I won’t hazard a guess. But, I will tell one thing. The bill we are going to get is going to be insipid because the father of one such offender who has escaped is going to lobby with opposition to dilute it as much as possible.

Saturday, 13 May 2017

OBOR & CPEC - What Should India do?

It looks like the OBOR story is getting interesting by the day. It has already been proven that Shanghai to Dubai by sea is manifold cheaper than CPEC. And it also knows it’s day dreaming to expect Pakistan to pay back $5 billion dollars per year. So, what has China got in that? Why is China pouring in billions? The road goes through Xinxiang and Baltistan, the hotbed of Chinese separatism. In a flagging economy, CPEC creates jobs. By bringing in as many neighbours as possible on board, China is trying to reassert it’s position in the Chinese Mandala System.
And coming to the Pakistani angle. There is a joke in Indian government circles over Pakistan - China finds India till the last Pakistani. China wants to ensure that India can’t replace India as an economic power. Pakistan is always ready when someone says anti-India. And, Pakistan wants someone to tackle the unrest in Balochistan and Illegal Kashmir. This road will help do it. By bringing in as many countries as possible into it, China is trying to see India will not create problems to the road in Balochistan and Baltistan - many countries will lose their investments and the pressure one can put on India will increase manifold.
India can’t join CPEC because CPEC goes through Indian territory. Joining it is a tacit agreement that Baltistan is a part of Pakistan. And India is not going to accept Chinese mediation because the mediation package doesn’t involve Aksai Chin. China’s game is India’s isolation and put massive pressure on India. The question is what will India do.
The game boils down to interests and nothing more - small countries want money, China wants it’s preeminence, Pakistan, a point over India.
Is it fine for India to join CPEC? To assert it’s position, what can India do to accept CPEC? Demand China to have representatives of Tibet and Balochistan in their independent capacity? Ask China to eject Pakistan from Illegal Kashmir and accept Indian sovereignty? Yes, those are in Indian interests. But, can India force it’s way through? India should take a hard stand. And for that you need absolute self-reliance in case matters come to blows. Jingoism apart, are we sure India is ready?

Saturday, 29 April 2017

Justice Karnan’s Contempt Proceedings - The discussion in Supreme Court

The question is, if Supreme Court asks for impeachment, will the Parliament heed.
AG Mukul Rohatgi: (Pointing to Karnan) The Contemnor is here
Justice Karnan: (Lists a number of cases and complaints against several other judges he made) says “Instead action is being taken against me
CJI Khehar: So it means that ..we take it that you stand by what you said in your complaint. See you should be very careful in your response. If you want to say that you want to think about it then we can give you time
Karnan: Please restore my judicial work
CJI: We will allow you to think. We want you to be completely relaxed
Karnan: After restoring my work, I can relax. Only then I can relax
Justice Chelameswar: Our question now is do you wish to be defended by a lawyer? A counsel? If you want we can appoint somebody.
Justice Misra: The letter you gave dated March 25 suggests you want to unconditionally apologize
Karnan: Yes my unconditional apology may be accepted
Justice Misra : So are you ready to unconditionally apologize or affirm your earlier allegations. In that case we shall proceed with the contempt and allow you to appoint a lawyer
Karnan: No I am not a contemnor. My whole work was taken away without hearing me. Every body asking me why your work was taken away. I live in a colony. So many people know me. I have no answer
CJI: The letter of March 25 you say complaint withdrawn against all 20 judge. Then you say allow me to work and then you will supply us with material to prove the complaint against the judges. We are not able to understand. You still stand by your allegations?
CJI to Rohatgi and K K Venugopal: Seriously one feels he may not be in a condition to respond. Seriously we do not know if he is in a position to comprehend or understand what we are asking
AG: The point is that I personally feel that from the point he made the allegations, coupled with scandalous press conferences, stayed his transfer, the gentleman knows what he is doing.
CJI: To my view these all the more shows why he is not in a position to comprehend
AG: No I don’t think so..He goes on naming judges he knows press will say that the particular judge is corrupt
Karnan: Everybody knows
AG: If he does not accept a lawyer, then nothing remains. Is is open and shut
Adv R Dwivedi (For W Bengal DGP) When police was sent, he made bad comments about the seven judges who passed the warrant order. Said they had no locus standi, said it was illegal, malafide. He made several abominable comments
Karnan: Why was police sent? What did I do ? I am not a terrorist or an anti-social element. Your lordship should protect my dignity. It has been spoiled in public. I am also holding a constitutional office
CJI: When we issued a notice to you you did not enter presence..Why? that is why bailable warrant was issued..It is not as if you are a terrorist. Despite being a judge you were not complying with a court’s directions.
CJI: So we are giving you time to reply
Karnan: First you restore my work. If contempt proceedings proved against me any punishment is fine
CJI: We will proceed only after we get a written response from Justice Karnan. A response by way of an affidavit
Karnan: If my work is not restored I cannot file a reply. I am very mentally disturbed
CJI: (WHILE RISING AFTER PASSING THE ORDER) If you feel that you are mentally not in a position to reply give a medical certificate. Then we will consider
Karnan: I want punishment. Send me to jail. Please record this. I will not appear before you next hearing. Arrest me. Put me in jail”

Saturday, 22 April 2017

Indian Share Market for a Long Term Investor - An Analysis

I was doing a level of analysis over consistent market performers from 2008. Below are the criteria which I considered.
1. 300% returns over the whole time period
2. 12% returns in the last one year
The returns expected are very modest, but will beat the FD rates in India.
I got a total of 32 companies in total(the only gap in analysis is share split) and below are the major inferences.
1. Only 3 are the largest companies in their segment and only 7 companies exist with more than 10% of the total market cap of the sector.
2. 12 companies exist with market cap share less than .1%
3. 6 companies exist with market cap less than 250 crore and of them, 2 are less than 100. It is surprising to see that companies that small, categorized as X are that consistent performers.
4. 25 out of 33 of these companies have P/E less than market P/E for that segment
5. 11 companies are literally debtless. They have a D/E ratio less than or equal to .01. The number shoots up to 25 companies if D/E ratio is less than .5. Only two companies have D/E ratio greater than one and one of the both - Can Fin Homes is a housing finance company.
6. 15 of the companies are chemicals related(Chemicals, Dyes, Pesticides etc) and 4 are Textile related.
7. 15 of the companies have daily share sales less than 15 lakhs - 1 less than 1 lakh, 4 less than 5 lakhs and 10 less than 10 lakhs. Again, it needs to be seen how these companies tick.

So, what do we infer, if we want a long term investment?
1. D/E ratio should be as less as possible.
2. P/E less than segment P/E
3. To be more safe, have a market cap limit of, say 500 or 1000 crore.
4. Look into segments like Finance, Auto, Chemicals and Textiles - they are ever growing

The data below.


Row Labels BSE Code Name Scrip Class Market Cap Sector P/E Industry P/E BOOK VALUE (RS) % of Segment Daily Sale Volume(lakhs) Debt Equity Ratio Price Margn
2008 2017 21/02/2008 21/02/2013 21/02/2014 20/02/2015 22/02/2016 21/02/2017 21/03/2017 9 Year 4 Year 3 Year 2 Year 1 Year 1 Month
EICHER MOTOR 505200 Eicher Motors Limited B1 69,467.77 AUTO - LCVS & HCVS 44.32 103.97 1273.17 26.72% 400.923005 0.01 287.05 2783.65 4872.15 16373 18927.1 25234.45 24902.05 8575.16% 794.58% 411.11% 52.09% 31.57% -1.32%
GODREJ CONS  532424 Godrej Consumer Products Limited 57,338.44 PERSONAL CARE  46.84 54.04 149.67 12.35% 192.241896 0.58 117.25 757.5 802.35 1104 1212.9 1701.85 1698.4 1348.53% 124.21% 111.68% 53.84% 40.03% -0.20%
TUBE INV.    504973 Tube Investments of India B1 12,962.02 MISCELLANEOUS 12.48 17.64 177.34   23.3449425 0.19 64.8 167.05 189.85 359.85 365.75 605.45 615.15 849.31% 268.24% 224.02% 70.95% 68.19% 1.60%
SRF LIMITED  503806 SRF Limited B1 9,813.16 TEXTILES - MANMADE  20.58 27.2 457.26 59.37% 241.322794 0.49 118.1 198 216 924 1091.85 1603.4 1603.9 1258.09% 710.05% 642.55% 73.58% 46.90% 0.03%
VARDH TEXT   502986 Vardhman Textiles B1 7,478.62 TEXTILES - SPINNING - COTTON BLENDED  7.61 16.62 669.33 29.35% 15.23766 0.28 114.55 284.45 341.1 496.1 758.2 1371.4 1330.8 1061.76% 367.85% 290.15% 168.25% 75.52% -2.96%
ATUL LTD.    500027 Atul Ltd. B1 7,341.28 DYES & PIGMENTS  25.19 26.51 429.75 41.89% 624.140785 0.2 71.55 334.05 436.55 1293.9 1400.95 2254.45 2243.9 3036.13% 571.73% 414.01% 73.42% 60.17% -0.47%
PVR LTD      532689 PVR Ltd 7,300.33 MEDIA & ENTERTAINMENT 85.31 45.78 186.04 4.37% 144.622375 0.67 273.2 276.6 531.55 694.75 720.7 1269.1 1410.95 416.45% 410.10% 165.44% 103.09% 95.77% 11.18%
FINOLEX IND. 500940 Finolex Industries 6,907.15 PETROCHEMICALS  23.01 35.6 80.12 37.60% 38.78805 0.23 74.75 88.05 182.9 278.95 306.85 522.3 543.25 626.76% 516.98% 197.02% 94.75% 77.04% 4.01%
CANFIN HOMES 511196 Can Fin Homes Limited 6,776.46 FINANCE - HOUSING 31.99 31.91 329.71 1.79% 269.111439 7.93 75.95 154.65 174.9 619.25 965.95 1989.85 2100.3 2665.37% 1258.10% 1100.86% 239.17% 117.43% 5.55%
AARTI INDUST 524208 Aarti Industries B1 6,577.02 CHEMICALS 21.84 39.03 135.63 3.86% 28.263771 0.49 37.15 86.5 90.8 283.15 429 786.95 789.05 2023.96% 812.20% 769.00% 178.67% 83.93% 0.27%
ICRA         532835 ICRA Limited - Credit Ratings 4,116.52 MISCELLANEOUS  57.54 56.28 480.03   0.5426135 0 790.5 1268.75 1594.2 3647.75 3704.15 4170.9 4173.95 428.01% 228.98% 161.82% 14.43% 12.68% 0.07%
TVS SRICHAKR 509243 TVS Srichakra 2,909.68 TYRES 16.73 13.71 538.25 4.33% 83.895236 0.07 140 222.1 265.75 1670.25 2281.35 3080.7 3323.9 2274.21% 1396.58% 1150.76% 99.01% 45.70% 7.89%
J.B.CHEMICAL 506943 J. B. Chemicals and Pharmaceuticals Ltd 2,844.44 PHARMACEUTICALS  17.53 28.1 128.95 0.37% 20.937675 0.15 56.65 82 131.4 191.25 251.05 331.4 338.25 497.09% 312.50% 157.42% 76.86% 34.73% 2.07%
EXCEL CROP.  532511 Excel Crop Care Limited B1 1,899.57 PESTICIDES & AGRO CHEMICALS  26.18 43.68 353.78 3.66% 8.219528 0 110.9 179.7 479.95 854 936.25 1740.7 1771.45 1497.34% 885.78% 269.09% 107.43% 89.21% 1.77%
DFM FOODS    519588 DFM Foods 1,648.28 MISCELLANEOUS  69.16 52.31 64.83   63.6132825 0.97 19.85 188 313 380 992 1829.15 1734.75 8639.29% 822.74% 454.23% 356.51% 74.87% -5.16%
SUTLEJ TEXT  532782 Sutlej Textiles and Industries B1 1,503.95 TEXTILES - GENERAL  8.67 29.19 412.6 17.25% 39.7302165 0.64 106.25 212 213.9 328.4 441.5 846.15 831.35 682.45% 292.15% 288.66% 153.15% 88.30% -1.75%
HONDA SIEL   522064 Honda Siel Power Products B1 1,478.86 ELECTRIC EQUIPMENT 24.91 41.05 361.4 2.96% 10.54155 0 228.5 455.6 456.4 1089.5 1145 1389.6 1360.2 495.27% 198.55% 198.03% 24.85% 18.79% -2.12%
TASTY BITE   519091 Tasty Bite XC 1,308.66 FOOD PROCESSING  63.75 52.31 234.79 0.74% 101.7967885 0.34 54.45 145 265 720.5 1530 4774.8 4794.95 8706.15% 3206.86% 1709.42% 565.50% 213.40% 0.42%
ARCOTECH LTD 532914 Arcotech Ltd 1,013.25 MISCELLANEOUS 28.82 20.95 94.98   65.27478 0.43 6.22 49.65 171.85 344.8 351.6 629.2 542.6 8623.47% 992.85% 215.74% 57.37% 54.32% -13.76%
AMBIKA COTTO 531978 Ambika Cotton Mills 775.74 TEXTILES - SPINNING - COTTON BLENDED  14.85 16.62 584.97 3.04% 9.272367 0.01 122.35 204.05 302.35 530 774.25 1205.05 1320.85 979.57% 547.32% 336.86% 149.22% 70.60% 9.61%
LINCOLN PHAR 531633 Lincoln Pharmaceuticals Ltd 452.3 PHARMACEUTICALS  15.04 28.1 67.95 0.06% 28.639968 0.07 10.8 35.65 40.2 87.9 162.1 191.75 234.6 2072.22% 558.06% 483.58% 166.89% 44.73% 22.35%
IFB AGRO     507438 IFB Agro Industries Limited 423.3 CHEMICALS 12.55 35.11 267.91 0.25% 7.2793035 0.17 74.95 176.4 197.85 280.8 399.9 454.6 451.85 502.87% 156.15% 128.38% 60.92% 12.99% -0.60%
CAMPH.& ALL  500078 Camphor and Allied Products Ltd TS XC 413.26 CHEMICALS  18.27 39.03 303.25 0.24% 6.6967145 1.35 73.25 154.05 165.05 269.9 473.1 687.7 710.15 869.49% 360.99% 330.26% 163.12% 50.11% 3.26%
DAI-ICHI KAR 526821 Dai-Ichi Karkaria XC 393.72 CHEMICALS  18.21 40.38 164.93 0.23% 6.216 0.01 30.05 39.8 50.2 166.3 329.4 502.5 480 1497.34% 1106.03% 856.18% 188.63% 45.72% -4.48%
TRANSPEK     506687 Transpek Industries Ltd TS XC 340.72 CHEMICALS 15.2 40.38 161.95 0.20% 5.26128 0.29 75 75.65 105 256.5 357.9 534.25 582 676.00% 669.33% 454.29% 126.90% 62.62% 8.94%
PRIMA PLASTI 530589 Prima Plastics XC 298.61 PLASTICS  27.72 44.52 58.48 0.63% 14.7476 0.01 9.41 13 13.1 50.3 116.5 227.6 230 2344.21% 1669.23% 1655.73% 357.26% 97.42% 1.05%
NGL FINE CHM 524774 NGL Fine-Chem Ltd XC 242.8 PHARMACEUTICALS  17.01 28.1 71.57 0.03% 10.50284 0.01 13.6 17.71 23.5 75.45 209.2 345.15 377.8 2677.94% 2033.26% 1507.66% 400.73% 80.59% 9.46%
JENBURKT PH. 524731 Jenburkt Pharmaceuticals Ltd XC 223.17 PHARMACEUTICALS  19.88 28.1 86.44 0.03% 22.548426 0.01 32.8 68.5 90.45 327.9 393.4 461.15 455.8 1289.63% 565.40% 403.92% 39.01% 15.86% -1.16%
COMPETENT AU 531041 Competent Automobiles Co Ltd XD 143.39 MISCELLANEOUS 10.51 43.19 167.92   2.852379 0.01 42.25 50.5 61.7 107.7 130 175.15 175.1 314.44% 246.73% 183.79% 62.58% 34.69% -0.03%
BAID LEASING 511724 Baid Leasing & Finance Co XD 69.99 FINANCE - LEASING & HIRE PURCHASE  15.26 36.4 20.52 0.04% 11.080272 0.58 10.99 13.4 17.5 25.35 36.5 91.95 78.4 613.38% 485.07% 348.00% 209.27% 114.79% -14.74%
JAYSN DYEST 506910 Jaysynth Dyestuff 69.52 DYES & PIGMENTS  10.98 26.51 78.97 0.40% 1.450008 0 10.84 23.85 26.9 41.05 46.6 82 82.2 658.30% 244.65% 205.58% 100.24% 76.39% 0.24%
VIRAT INDUS. 530521 Virat Industries XD 67.65 TEXTILES - HOSIERY & KNITWEAR  22.16 23.34 30.08 1.30% 1.2947 0.03 10.15 19 30 58 83.9 95.1 107 954.19% 463.16% 256.67% 84.48% 27.53% 12.51%