Thursday, December 31, 2009
Wednesday, December 23, 2009
WOMEN RESERVATION BILL: TIME IS RIPE
H D Deve Gowda-led United Front government, in1996, first introduced the legislation to reserve 33.3 percent seats in Parliament and state legislatures for women. Though it has been introduced in Parliament several times since then, the Bill could not be passed because of lack of political consensus. The idea of making a legal provision for reserving seats for women in Parliament and the State Assemblies first came up during Rajiv Gandhi's tenure as Prime Minister.
The time is now very ripe to get it passed in both the houses. One could not have asked for a better time. The president of the largest democracy in the world is a woman. The president of the national political party with a history of 125 plus years and which is the major ruling partner of UPA -2 is a woman. The leader of opposition in the LS and the speaker of LS are women. The chief minister of the most populous state is a woman. Woman heads the Trinamool Congress, major partner of UPA 2. The all-powerful general secretary who is in charge in AIDMK is a woman. There is woman Politburo member of CPM, who is also a member of Rajya Sabha. We have a woman chief minister in New Delhi. The opposition to the bill came from Yadav trio and Paswan. The strength and bargaining power of this group has come down substantially after the 2009 LS election. There is no threat to UPA government from this group. The UPA -2 should get the bill passed immediately in both the houses and send it the president for doing the needful.
The time is now very ripe to get it passed in both the houses. One could not have asked for a better time. The president of the largest democracy in the world is a woman. The president of the national political party with a history of 125 plus years and which is the major ruling partner of UPA -2 is a woman. The leader of opposition in the LS and the speaker of LS are women. The chief minister of the most populous state is a woman. Woman heads the Trinamool Congress, major partner of UPA 2. The all-powerful general secretary who is in charge in AIDMK is a woman. There is woman Politburo member of CPM, who is also a member of Rajya Sabha. We have a woman chief minister in New Delhi. The opposition to the bill came from Yadav trio and Paswan. The strength and bargaining power of this group has come down substantially after the 2009 LS election. There is no threat to UPA government from this group. The UPA -2 should get the bill passed immediately in both the houses and send it the president for doing the needful.
Tuesday, December 22, 2009
POLITICS OF PERSONAL AGENDA
ACT-I. Lead players – Reddy brothers.
The powerful Reddy brothers hijacked 40 odd MLAs and kept them in resorts in Hyderabad, Goa and other places. They threatened to pull down the only BJP government in the South, if their demands are not met. Among others, they insisted that in the larger interest of the state, BSY should step down. This was during the period, when the parts of north Karnataka was facing severe humanity problems caused by unprecedented floods. The elected representatives instead of overseeing the relief work were enjoying their paid holidays in resorts. Sensing the seriousness of the problem the party high command deputed Arun Jaitely to bengaluru to work out a peace deal. Jaitely held series of discussion with top rung leaders and as well as with other office bearers. Discussions continued for three days. The Reddy brothers did not budge. Jaitely returned to Delhi empty handed. Some BJP leaders also held meeting with RSS functionaries in the city. In the meanwhile, the warring Reddy brothers intensified their stand. They were even not ready to meet BSY for any discussions. The drama shifted to Delhi. Janardhan Reddy who was camping in Delhi, met the then party president Rajnath Singh, their god mother Sushma Swaraj and others. The leaders in turn interacted with Advani. The meeting and interaction went on for three days. BSY was summoned to Delhi. Some understanding was reached with Reddy brothers except the removal of BSY. The high command warned the Reddy brothers to toe in line or face the consequences. Reluctant Reddy brothers accepted the truce. Most of their demands (personal agenda) have been met. The first casualty of this truce was removal of the most efficient and only woman minister from the ministry. The other demands considered with the public knowledge are shifting of efficient, honest and straightforward senior beurocraft. The CM also reversed his own orders of transferring various officials in the Bellary district. The coordinating committee was expanded to include more members from the Reddy group. In the meanwhile, the temperature was cooled down in bengaluru with the on set of winter.
ACT-II. Lead players - Renuka Charya and Bellubbi
BSY, managed to save his chair and confessed that in the dirty game of power politics, the values and principles have been thrown to the wind. He also admitted that God also would not forgive him for his selfish acts. In politics chair is more important than any thing. The group of MLAs who supported Reddy brothers were hoping that some of them would made ministers. BSY categorically stated there would not be any expansion until the budget. The dissidents in the meanwhile started visiting various Mutts to put pressure on the CM. The dissidents re enacted the resort politics. The hapless CM relented to the pressure tactics. After having discussions with his senior colleagues, the CM announced that Renuka Charya would inducted to the ministry on 24-12-09 and one more MLA, probably Bellubbi will be accommodated in the ministry in Jan2010. Personal agendas are achieved. The life, for people of flood affected areas in north Karnataka have not changed for better. Long live our politicians. Long live our democracy.
The powerful Reddy brothers hijacked 40 odd MLAs and kept them in resorts in Hyderabad, Goa and other places. They threatened to pull down the only BJP government in the South, if their demands are not met. Among others, they insisted that in the larger interest of the state, BSY should step down. This was during the period, when the parts of north Karnataka was facing severe humanity problems caused by unprecedented floods. The elected representatives instead of overseeing the relief work were enjoying their paid holidays in resorts. Sensing the seriousness of the problem the party high command deputed Arun Jaitely to bengaluru to work out a peace deal. Jaitely held series of discussion with top rung leaders and as well as with other office bearers. Discussions continued for three days. The Reddy brothers did not budge. Jaitely returned to Delhi empty handed. Some BJP leaders also held meeting with RSS functionaries in the city. In the meanwhile, the warring Reddy brothers intensified their stand. They were even not ready to meet BSY for any discussions. The drama shifted to Delhi. Janardhan Reddy who was camping in Delhi, met the then party president Rajnath Singh, their god mother Sushma Swaraj and others. The leaders in turn interacted with Advani. The meeting and interaction went on for three days. BSY was summoned to Delhi. Some understanding was reached with Reddy brothers except the removal of BSY. The high command warned the Reddy brothers to toe in line or face the consequences. Reluctant Reddy brothers accepted the truce. Most of their demands (personal agenda) have been met. The first casualty of this truce was removal of the most efficient and only woman minister from the ministry. The other demands considered with the public knowledge are shifting of efficient, honest and straightforward senior beurocraft. The CM also reversed his own orders of transferring various officials in the Bellary district. The coordinating committee was expanded to include more members from the Reddy group. In the meanwhile, the temperature was cooled down in bengaluru with the on set of winter.
ACT-II. Lead players - Renuka Charya and Bellubbi
BSY, managed to save his chair and confessed that in the dirty game of power politics, the values and principles have been thrown to the wind. He also admitted that God also would not forgive him for his selfish acts. In politics chair is more important than any thing. The group of MLAs who supported Reddy brothers were hoping that some of them would made ministers. BSY categorically stated there would not be any expansion until the budget. The dissidents in the meanwhile started visiting various Mutts to put pressure on the CM. The dissidents re enacted the resort politics. The hapless CM relented to the pressure tactics. After having discussions with his senior colleagues, the CM announced that Renuka Charya would inducted to the ministry on 24-12-09 and one more MLA, probably Bellubbi will be accommodated in the ministry in Jan2010. Personal agendas are achieved. The life, for people of flood affected areas in north Karnataka have not changed for better. Long live our politicians. Long live our democracy.
NON PARTICIPANT WINS THE RACE
Nitin Gadkari did not participate in the race. However, the umpire using his discretion declared Gadkari as the winner,much to the dissatisfaction of the participents. The RSS finally got its man as the president of the saffron party. Gadkari is new to national politics. He has not won a direct election. He is not a member of either Loksabha or Rajya Saba. This makes his task difficult.He has a very challenging task in rebuilding the party from the grass root level. This depends on the cooperation he gets from various factions within the party. The once disciplined party, is now has enough indisciplined and dissident MLAs and MPs and office bearers, in various states, Rajasthan and Karnataka being in the prominet ones. The success of his tenure as president will heavily depends on the cooperation being extended by senior leaders like Arun Jatley, Sushma Swaraj, Ananth Kumar, Venkaiah Naidu, Rajnath Singh, Narendra Modi and others, including leaders from his own home state. Gadkari is known for his straightforward attitude. However, his recent assertion that RSS had no role in his elevation to the top post is far from the truth. The whole world knows what went on behind the scene. Best wishes to him.
Wednesday, December 16, 2009
BANK MERGERS: EMPLOYEES SHOULD SEE REASON: SIZE MATTERS
The strike by employees of state owned banks against mergers is unwarranted and uncalled for. Mergers actually results in overall benefits to all stakeholders when the consolidated post-merger entity is more valuable than the simple sum of the two separate pre-merger units. The primary cause of this gain in value is in the performance improvement following the merger. The post-merger focuses on improvements in all types of efficiency, led by the increased cost efficiency. The mergers have been motivated by a belief that a significant quantity of redundant operating costs could be eliminated through the consolidation of activities. Substantial geographic overlap reduces the number of branches in markets. A related effect of mergers is increase in market share in the very very competitive market. More over public sector banks are not being merged with private sector banks. The government has assured to the employees that there will be no change in the service conditions, emoluments, terminal benefits etc. The ownership still remains with the government. The move is to create banks of international size, to play a significant role in the world economy in the changed economic scenario.
Monday, December 14, 2009
BJP’S WRONG PRIORITIES
The assertion of Sushma Swaraj, senior BJP leader in the LS that if their party forms a government at the Center next time, Ram temple will be on top of the priority list, indicates that the BJP has not learnt any lessons from its past mistake. It is again trying to play the religion ‘card’ to come to power at the Center. It has no other issues to fight. BJP has no programme and policies for the country’s burning problems. There is poverty, hunger, unemployment, power shortage and lack of infrastructure both in urban and rural region. The country needs major reforms in education, health and housing sectors to enable the poorest of the poor, the underprivileged and the deprived sections of the society to avail the benefits from such reforms and improve their standard of livings. Instead of debating on such issues, the party is trying to disturb the secular fabric of the country again. If building temple is going to be the main poll agenda of the BJP, the chances of BJP forming government at the Center are very very bleak.
Sunday, December 13, 2009
SUFFICIENTLY INTELLIGENT AND COMPETENT
Anil Dharker views that our intelligence agencies are inefficient and unprofessional and comparing them to the agencies in UK and US is unfair. (DNA 23-11-09 - How intelligent our sleuths are) They must be having sufficient information about Vilas Pandurang Warak and Rahul Mahesh Bhatt. That need not be made public, since investigation is still in progress. The law is same for every one and the National Investing Agency (NIA) is following the established procedure in questioning them. Just because they are from film land, rules need not be deviated. It is the media that is harassing them with un wanted publicity. The investigating agencies are just doing their job. We all know how FBI officials treated our Sharukh Khan in August this year, at New York airport. If the US intelligent agencies are so efficient why they had know clue about the 9/11 attack, which killed thousands of people. Why they are not able to catch the most dreaded terrorist Osama Bin Laden, in spite of Pakistan government giving them free hand to use their territory for that purpose? By appearance most Indians, Bangladeshis and Pakistanis (the epicenter of international terrorism) look alike which is a major hindrance in surveillance and information gathering, unlike in the West, where they can easily identify an Asian by look. This is the advantage the Western intelligent agencies have over our agencies. Otherwise, our intelligent agencies are also sufficiently intelligent and competent.
BURY THE REPORT, BUILD PLACE OF WORSHIP FOR ALL RELIGION
A lot of debate, discussions, views and counter views have been on the air since the Liberhan report was leaked/placed in Lok Sabha. Justice Liberhan has taken seventeen years to tell what the country already knew. The delay is an indication of how successive governments at the Center were serious about the reports, its findings and taking action against the culprits. The report is a stillborn child, which will be quietly buried. The present government at the center has neither the numbers nor political will to take strong action against those who were responsible for the demolition. The political parties are in no mood to find a lasting, permanent solution to the problem. The debate, discussions should focus on this, instead of looking into the omissions and drawbacks of the commission. The purpose of all religion is to know and love God and to show ethical and proper directions to life and living. The preaching in all religion does not differ in any way and all teach love as against hatredness. India being a country, which harbors a multitude of religious belief, the feeling of solidarity in diversity can be best showcased by building a centre of worship for all religions.This would no doubt become a memorable monument for the whole world to appreciate and emulate. Its time the political differences are buried and India demonstrates to the world that we are a truly a secular nation in letter and spirit. The government should initiate talks in this regard involving all political parties.
ANDHRA SPLIT: HIDDEN AGENDA
PUBLISHED IN HT ON 15-12-09 UNDER THE CAPTION - TELANGANA DECISION HASTY.
The haste decision of UPA -2 government to initiate the process of splitting the Andhra, has put the otherwise strong Congress government in the state in a spot. The Telangana movement is not an overnight creation. The demand was there for the past forty years. KCR who was part of NDA government in 1999 did nothing for creation of separate state. TDP(KCR was in TDP at that time) had more numbers in LS at that time and Chandra babu Naidu was the chief minister of Andhra. He could have got the Telangana state without any problems, normally associated when smaller states are carved out of bigger state. In 2009 assembly as well as in the LS election TRS lost very badly. Under YSR, Congress rode back to power. There was no agitation when YSR was at the helm of affairs. The bickering and weak leadership in state Congress gave him the much needed plat form to re-launch his sagging political career. It is a myth that the smaller the state, the better the administration and the development. It is not about the size or numbers when it comes better governance and performance. The quality of political leadership, commitment, political will and genuine concern for the development of the state and welfare of the people that matters. Does KCR have the magic wand to solve all the problems faced by the Telangana region? Why he did not go on fast unto death, for the same cause, when he was part of NDA?
The majority of MLAs and MPs of Congress, TDP and Praja rajyam parties are against the split. Unless a favorable resolution is passed in assembly, the Center will not be able to proceed further. And we will be back to square one.
The haste decision of UPA -2 government to initiate the process of splitting the Andhra, has put the otherwise strong Congress government in the state in a spot. The Telangana movement is not an overnight creation. The demand was there for the past forty years. KCR who was part of NDA government in 1999 did nothing for creation of separate state. TDP(KCR was in TDP at that time) had more numbers in LS at that time and Chandra babu Naidu was the chief minister of Andhra. He could have got the Telangana state without any problems, normally associated when smaller states are carved out of bigger state. In 2009 assembly as well as in the LS election TRS lost very badly. Under YSR, Congress rode back to power. There was no agitation when YSR was at the helm of affairs. The bickering and weak leadership in state Congress gave him the much needed plat form to re-launch his sagging political career. It is a myth that the smaller the state, the better the administration and the development. It is not about the size or numbers when it comes better governance and performance. The quality of political leadership, commitment, political will and genuine concern for the development of the state and welfare of the people that matters. Does KCR have the magic wand to solve all the problems faced by the Telangana region? Why he did not go on fast unto death, for the same cause, when he was part of NDA?
The majority of MLAs and MPs of Congress, TDP and Praja rajyam parties are against the split. Unless a favorable resolution is passed in assembly, the Center will not be able to proceed further. And we will be back to square one.
VIR SANGHVI IS RIGHT – PAK IS CUNNING
Thought provoking and excellent article by Vir Sanghvi – There is a method to their madness (Reflections HT- 13-12-09). For the reasons best known to their leaders (MAD), the PAK neither is interested in having peaceful relationship with India nor is their successive leaders are making any sincerer efforts in finding a lasting solution to the vexed problems. The government of India had provided more than required proof against the perpetrators of Mumbai attack. Shah Mehmood Quershi, PAK external affairs minister had the audacity to say that the proof provided is half- baked, recently in New York. PAK is simply not interested in taking action against the offenders. On one pretext or the other, the PAK is delaying taking actions on the terrorists who attacked Mumbai.
Any right thinking and responsive government would have taken action barely on the request made without going into the details of so-called proof. However, our good neighbor does not do that. This gives reasons suspect whether such heinous acts were carried out with the tacit understanding and the support of the establishment there. Only time will reveal the ‘true’ intentions of PAK in its role in curbing the terrorists activities on its soil or otherwise.
Earlier, the former Pakistan president Pervez Mushraff has admitted that the aids provided by the United States to Pakistan for the fight against terrorism during his tenure was misused to strengthen the defenses against India. Mr.Zardari, the present PM, has accepted the fact that the terrorists in their land are created, nurtured and supported by the Establishment. Terrorists, by tacit understanding and the support of PAK military and ISI carried out the 26/11 attack on Mumbai. The government of India has provided enough proof, that the attack was carried out by out-fits, that are sheltered and protected by the Government of PAK. The PAK government is not serious in this matter. The dreaded international gangsters, drug peddlers and terrorists are living like Moghul emperors of yester years with active support of the government. India has given a list of most wanted international criminals who are sheltered in PAK. However, no response from them. What kind of a peace deal, one can have, with leaders of that kind of mindset. It is high time that we stop acting like statesmen, show our strength, and put the peace talk in the back burner.
For IPO analysis from the same blogger log on to firstchoiceipoanalysis.blogspot.com
Any right thinking and responsive government would have taken action barely on the request made without going into the details of so-called proof. However, our good neighbor does not do that. This gives reasons suspect whether such heinous acts were carried out with the tacit understanding and the support of the establishment there. Only time will reveal the ‘true’ intentions of PAK in its role in curbing the terrorists activities on its soil or otherwise.
Earlier, the former Pakistan president Pervez Mushraff has admitted that the aids provided by the United States to Pakistan for the fight against terrorism during his tenure was misused to strengthen the defenses against India. Mr.Zardari, the present PM, has accepted the fact that the terrorists in their land are created, nurtured and supported by the Establishment. Terrorists, by tacit understanding and the support of PAK military and ISI carried out the 26/11 attack on Mumbai. The government of India has provided enough proof, that the attack was carried out by out-fits, that are sheltered and protected by the Government of PAK. The PAK government is not serious in this matter. The dreaded international gangsters, drug peddlers and terrorists are living like Moghul emperors of yester years with active support of the government. India has given a list of most wanted international criminals who are sheltered in PAK. However, no response from them. What kind of a peace deal, one can have, with leaders of that kind of mindset. It is high time that we stop acting like statesmen, show our strength, and put the peace talk in the back burner.
For IPO analysis from the same blogger log on to firstchoiceipoanalysis.blogspot.com
Wednesday, December 9, 2009
IPO ANALYSIS – DB CORP LIMITED - SKIP, JUMP AND PASS OVER
D B Corp, one of the leading print media house in the country, publishing 48 newspaper editions, in three languages, in eleven states and which also operates 17 FM radio stations, is entering the capital markets. The public issue consist of 1, 81, 75,000 shares of Rs 10/ each, including the offer for sale of 1, 27, 25000 shares in the price band of Rs 185 -212.
The issue will open on 11-12-09 and closes on 15-12-09. Enam Securities private limited, Citi Corp Markets India private limited and Kotak Mahindra Capital Company limited are the Book Running Lead Managers.
The flagship newspapers of DB Corp are, Dainik Bhaskar, Divya Bhaskar and Saurashtra Samachar, have a combined average daily readership of 15.5 million readers, making them one of the most widely read newspaper groups in the country. The other newspapers are Business Bhaskar, DB Gold and DB Star and, on a franchisee basis, DNA (in Gujarat and Rajasthan). In addition to newspapers, they also publish 5 periodicals, namely, Aha Zindagi, a monthly magazine published in Hindi and Gujarati, Bal Bhaskar, a Hindi magazine for children, Young Bhaskar, a children’s magazine in English and Lakshya, a career magazine in Hindi.
OBJECTS OF THE ISSUE
The objects of this Issue are to raise funds for - setting up new publishing units, upgrading existing plant and machinery, enhancing brand image through sales and marketing, reducing existing working capital loans and for prepaying existing term loans.
However, the projects for which the Net Proceeds are intended to be utilized have not been appraised by any bank or financial institution and the costs of the projects are based on the internal estimates of the Company.
FINANCIALS
07 08 09 (Rs in crores)
Total Income 674.37 862.69 960.98
Net Profit 35.90 69.77 54.81
EPS (In rupees) 3.06 6.01 4.06
The weighted average RoNW was in excess of 30% for the last three years.
VALUATION AND MATTERS OF CONCERN
Established brands in Indian print media with wide geographical reach. Average fundamentals. Based on FY 2009 EPS, in the price band of Rs 185 -212 the stock is valued around 50 times its earnings, as against the industry average of 28 times. The valuation is very much stretched. The company has no definitive business plans. The promoter group companies have history of de-listing from the Stock Exchanges. Some of the trademarks, logos and copyrights are not registered. The company is unable to disclose information in relation to certain promoter group companies. Promoters and promoter group have equity interests or investments in other entities that offer services that are related to the business of DB Corp.
BUSINESS CHALLENGES
D B Corp business is dependent on advertising revenue and a reduction in advertising expenditure,loss of advertising customers or inability to attract new customers could have a material adverse affect on the business. The company relies substantially on advertisements revenue. During the financial year ended March 31, 2009, the company derived 75.50% of consolidated income from advertisement income.
According to PWC report, the media growth rate to increase in 2010 to 10.4%, from of about 9% now, as economic conditions are expected to gradually improve. The industry will continue to grow at increasing rate and there will be an overall compounded annual growth rate for the period 2009-13 of 10.5 percent. The report also predicts a healthy growth in all eight segments of entertainment and media industry in next four years (2010 to 2013). These are television, filmed entertainment, print media comprising newspaper and magazine publishing, radio, emerging segments like music, animation, gaming, internet advertising.
The Indian newspaper industry is intensely competitive. In each of the markets, DB Corp faces competition from other newspapers for circulation, readership and advertising. In addition, they may face competition from other forms of media including, television broadcasters, magazines, radio broadcasters and websites. These other forms of media compete with newspapers for advertisement and for the time and attention of readers. The group may also face competition from international media companies as the Government of India has recently liberalized its foreign investment regulations and restrictions applicable to the media sector. Competition for circulation and readership has often resulted in competitors reducing the cover-prices of their newspapers. Furthermore, competition for advertising from newspapers has often resulted in competitors reducing advertising rates or offering price incentives to advertising customers. Such reduction in prices or rates or the introduction of new price incentives could have a material adverse effect on financials.
Circulation and readership of newspapers among readers is an important source of revenue as they significantly influence ad-spend by advertisers and advertising rates. Circulation and readership are dependent on, among other factors, the quality of editorial content and the preferences of readers, the reach of newspapers, and the loyalty of readers to newspapers and ability to successfully establish new locally focused newspapers in new regions. Any failure to meet readers’ preferences, quality content may affect circulation and in turn revenues.
The issue is very unattractively priced. There is nothing left for investors. AVOID SUBSCRIPTION.
The issue will open on 11-12-09 and closes on 15-12-09. Enam Securities private limited, Citi Corp Markets India private limited and Kotak Mahindra Capital Company limited are the Book Running Lead Managers.
The flagship newspapers of DB Corp are, Dainik Bhaskar, Divya Bhaskar and Saurashtra Samachar, have a combined average daily readership of 15.5 million readers, making them one of the most widely read newspaper groups in the country. The other newspapers are Business Bhaskar, DB Gold and DB Star and, on a franchisee basis, DNA (in Gujarat and Rajasthan). In addition to newspapers, they also publish 5 periodicals, namely, Aha Zindagi, a monthly magazine published in Hindi and Gujarati, Bal Bhaskar, a Hindi magazine for children, Young Bhaskar, a children’s magazine in English and Lakshya, a career magazine in Hindi.
OBJECTS OF THE ISSUE
The objects of this Issue are to raise funds for - setting up new publishing units, upgrading existing plant and machinery, enhancing brand image through sales and marketing, reducing existing working capital loans and for prepaying existing term loans.
However, the projects for which the Net Proceeds are intended to be utilized have not been appraised by any bank or financial institution and the costs of the projects are based on the internal estimates of the Company.
FINANCIALS
07 08 09 (Rs in crores)
Total Income 674.37 862.69 960.98
Net Profit 35.90 69.77 54.81
EPS (In rupees) 3.06 6.01 4.06
The weighted average RoNW was in excess of 30% for the last three years.
VALUATION AND MATTERS OF CONCERN
Established brands in Indian print media with wide geographical reach. Average fundamentals. Based on FY 2009 EPS, in the price band of Rs 185 -212 the stock is valued around 50 times its earnings, as against the industry average of 28 times. The valuation is very much stretched. The company has no definitive business plans. The promoter group companies have history of de-listing from the Stock Exchanges. Some of the trademarks, logos and copyrights are not registered. The company is unable to disclose information in relation to certain promoter group companies. Promoters and promoter group have equity interests or investments in other entities that offer services that are related to the business of DB Corp.
BUSINESS CHALLENGES
D B Corp business is dependent on advertising revenue and a reduction in advertising expenditure,loss of advertising customers or inability to attract new customers could have a material adverse affect on the business. The company relies substantially on advertisements revenue. During the financial year ended March 31, 2009, the company derived 75.50% of consolidated income from advertisement income.
According to PWC report, the media growth rate to increase in 2010 to 10.4%, from of about 9% now, as economic conditions are expected to gradually improve. The industry will continue to grow at increasing rate and there will be an overall compounded annual growth rate for the period 2009-13 of 10.5 percent. The report also predicts a healthy growth in all eight segments of entertainment and media industry in next four years (2010 to 2013). These are television, filmed entertainment, print media comprising newspaper and magazine publishing, radio, emerging segments like music, animation, gaming, internet advertising.
The Indian newspaper industry is intensely competitive. In each of the markets, DB Corp faces competition from other newspapers for circulation, readership and advertising. In addition, they may face competition from other forms of media including, television broadcasters, magazines, radio broadcasters and websites. These other forms of media compete with newspapers for advertisement and for the time and attention of readers. The group may also face competition from international media companies as the Government of India has recently liberalized its foreign investment regulations and restrictions applicable to the media sector. Competition for circulation and readership has often resulted in competitors reducing the cover-prices of their newspapers. Furthermore, competition for advertising from newspapers has often resulted in competitors reducing advertising rates or offering price incentives to advertising customers. Such reduction in prices or rates or the introduction of new price incentives could have a material adverse effect on financials.
Circulation and readership of newspapers among readers is an important source of revenue as they significantly influence ad-spend by advertisers and advertising rates. Circulation and readership are dependent on, among other factors, the quality of editorial content and the preferences of readers, the reach of newspapers, and the loyalty of readers to newspapers and ability to successfully establish new locally focused newspapers in new regions. Any failure to meet readers’ preferences, quality content may affect circulation and in turn revenues.
The issue is very unattractively priced. There is nothing left for investors. AVOID SUBSCRIPTION.
Monday, December 7, 2009
ANALYSIS OF FORTH COMING IPOS
Await for analysis of ;
a. DB corp
b. Vasocn engg
c. Hathway cables
d. Kumar urban developers
e. Nitesh estates
f. Lodha developers
a. DB corp
b. Vasocn engg
c. Hathway cables
d. Kumar urban developers
e. Nitesh estates
f. Lodha developers
IPO ANALYSIS: GODREJ PROPERTIES LIMITED – SURE WINNER - APPLY
Mumbai based, leading real estate development company, who are one of the top ten builders in the country, is entering the capital markets, to raise around Rs 500 crore, with public issue of 94,29,750 equity shares of Rs 10/- each in the price band of Rs 490 -530. The issue will open on 09-12-09 and close on 12-12-09. ICICI Securities limited, Kotak Mahindra Capital Company. IDFC- SSKI LIMITED and Nomura Financial Advisory Securities Pvt limited are the Book Running Lead Managers to the issue.
The company is promoted by Godrej Industries Limited, which holds around 80% of equity share capital. Godrej Industries Limited is the listed flagship company of the Godrej group of companies, which is one of the leading business conglomerates in the country.
Godrej Group is engaged in diverse business segments, spanning Home appliances, FMCG, Consumer products, Industrial products , Oleo chemicals, Animal feed, Real estate development and Oil palm plantations.
Godrej properties limited (GPL) has real estate development projects in 10 cities in India, which are at various stages of development. Currently, the business focus is on residential, commercial and township developments. GPL is a fully integrated real estate development company involved in all activities associated with the development of residential and commercial real estate.
GPL, as of October 15, 2009, has Land Reserves of 391.04 acres aggregating approximately 82.74 million sq. ft. of Developable Area and 50.21 million sq. ft. of Saleable Area, located in or around prominent and growing cities across India, such as Mumbai, Pune, Bengaluru and Ahmedabad. As on the same date the company has completed a total of 23 projects comprising 16 residential and 7 commercial projects, aggregating approximately 5.13 million sq. ft. of area for development.
OBJECT OF THE ISSUE
The company plans to raise around Rs 500 cr, intends to use Rs 203 cr for acquisition of land development rights for forthcoming projects, Rs 75 cr for construction purposes, Rs 172 cr repayment of loans and the rest for general corporate purposes.
FINANCIALS
(Rs in crores)
09 08 07
Operating income 247.38 227.50 137.26
Profit after tax 76.62 74.85 28.72
RoNW 25% 41% 48%
EPS (In rupees) 12.53 12.78 4.97
VALUATION
GPL is promoted by reputed Godrej group, which has very strong brand equity. Excellent financial track record. Leaders in corporate governance. In the price band of Rs 490-530 the stock is valued at about 40 times of its earning for FY-09. ICRA has awarded grade 4 for the IPO indicating above average fundamentals. The high valuation is justified considering the strong financials, brand equity and future business prospects.
CHALLENGES AND STRATEGIES
The company’s ability to successfully compete in new segments across different geographies is yet to be demonstrated. Due to general recession, proportion of un-booked space in the on-going commercial projects exposes it to market risks. Further slowdown in real estate segment may affect the demand and resultant decline in property prices. This coupled with oversupply situation in many pockets can affect the prices further, which will have cascading impact on financials.
As per CRISIL estimate, the annual additions in units are expected to grow from 70 million units in 2008 to reach 81 million units in 2014. Estimated annual additions in units in rural areas are to grow from 174 million units in 2008 from 198 million units in 2014. GPL with selective acquisition of land parcels in strategic locations, also enter into development agreements with land owners to acquire development rights to their land in exchange for a pre-determined portion of revenues, profits or developable area generated from the projects. The Godrej brand name and the reputation associated with it contribute in attracting potential joint development partners . This business model enables undertaking more projects without having to invest large amounts of money towards purchasing land. Hence, GPL is able to limit risk through project diversification while maintaining significant management control over our projects. A SURE WINNER FROM THE GODREJ STABLE. APPLY.
The company is promoted by Godrej Industries Limited, which holds around 80% of equity share capital. Godrej Industries Limited is the listed flagship company of the Godrej group of companies, which is one of the leading business conglomerates in the country.
Godrej Group is engaged in diverse business segments, spanning Home appliances, FMCG, Consumer products, Industrial products , Oleo chemicals, Animal feed, Real estate development and Oil palm plantations.
Godrej properties limited (GPL) has real estate development projects in 10 cities in India, which are at various stages of development. Currently, the business focus is on residential, commercial and township developments. GPL is a fully integrated real estate development company involved in all activities associated with the development of residential and commercial real estate.
GPL, as of October 15, 2009, has Land Reserves of 391.04 acres aggregating approximately 82.74 million sq. ft. of Developable Area and 50.21 million sq. ft. of Saleable Area, located in or around prominent and growing cities across India, such as Mumbai, Pune, Bengaluru and Ahmedabad. As on the same date the company has completed a total of 23 projects comprising 16 residential and 7 commercial projects, aggregating approximately 5.13 million sq. ft. of area for development.
OBJECT OF THE ISSUE
The company plans to raise around Rs 500 cr, intends to use Rs 203 cr for acquisition of land development rights for forthcoming projects, Rs 75 cr for construction purposes, Rs 172 cr repayment of loans and the rest for general corporate purposes.
FINANCIALS
(Rs in crores)
09 08 07
Operating income 247.38 227.50 137.26
Profit after tax 76.62 74.85 28.72
RoNW 25% 41% 48%
EPS (In rupees) 12.53 12.78 4.97
VALUATION
GPL is promoted by reputed Godrej group, which has very strong brand equity. Excellent financial track record. Leaders in corporate governance. In the price band of Rs 490-530 the stock is valued at about 40 times of its earning for FY-09. ICRA has awarded grade 4 for the IPO indicating above average fundamentals. The high valuation is justified considering the strong financials, brand equity and future business prospects.
CHALLENGES AND STRATEGIES
The company’s ability to successfully compete in new segments across different geographies is yet to be demonstrated. Due to general recession, proportion of un-booked space in the on-going commercial projects exposes it to market risks. Further slowdown in real estate segment may affect the demand and resultant decline in property prices. This coupled with oversupply situation in many pockets can affect the prices further, which will have cascading impact on financials.
As per CRISIL estimate, the annual additions in units are expected to grow from 70 million units in 2008 to reach 81 million units in 2014. Estimated annual additions in units in rural areas are to grow from 174 million units in 2008 from 198 million units in 2014. GPL with selective acquisition of land parcels in strategic locations, also enter into development agreements with land owners to acquire development rights to their land in exchange for a pre-determined portion of revenues, profits or developable area generated from the projects. The Godrej brand name and the reputation associated with it contribute in attracting potential joint development partners . This business model enables undertaking more projects without having to invest large amounts of money towards purchasing land. Hence, GPL is able to limit risk through project diversification while maintaining significant management control over our projects. A SURE WINNER FROM THE GODREJ STABLE. APPLY.
Wednesday, December 2, 2009
IPO ANALYSIS: JSW ENERGY LIMITED – POWER PACKED - APPLY
Jindal group needs no introduction in capital markets. The group has business interest in the steel, power, cement, aluminum, software, power trading and infrastructure sectors.
The power company from the JSW group is planning to raise Rs 2700 cr through IPO,in the price band of Rs100-115 per share, having face value of Rs.10 per share. The issue will open on 07-12-09 and closes on 09-12-09.
JM Financial Consultants Pvt Ltd, Kotak Mahindra Capital Ltd., ICICI Securities Ltd., IDFC-SSKI Ltd., JP Morgan India Ltd., SBI Capital Markets Ltd., Morgan Stanley India Ltd. and IDBI Capital market Services ltd are the book running lead managers to the issue.
JSW Energy limited, is a part of the JSW Group, headed by Mr. Sajjan Jindal.The company currently owns and operates thermal power plants in Karnataka with an aggregate capacity of 995 MW. It also provides operation & maintenance services for power plants of group companies and project management services for the power plants being set up by the group. JSWEL is currently in the process of enhancing its power generation capacity by 2,790 MW. It is also setting up a transmission line network and developing lignite mines through joint ventures.
OBJECTS OF THE ISSUE
The funds raised are intended to be used for setting up power plants. Repayment of high cost corporate debts and for general corporate purposes.
The cost of the projects is estimated at Rs.14,048 crore and is being funded in a debt to equity ratio of 2.45:1 i.e. long-term debt of Rs.9,979.50 crore and equity of Rs.4,068.50 crore. The company has already tied up the total debt component while, funds aggregating Rs.5, 982 crore were deployed in the various projects as on June 30, 2009. State Bank of India and ICICI Banks have appraised and funded the projects.
VALUATION
The company had a CAGR in excess of 30%, in revenue generation, in the last three years. Consistently profit making company. Professional and experienced management. Known for good corporate governance. Strong financials. Power plant are located at diverge geographical locations. The issue has been graded by rating agency CARE as Grade 4, indicating above-average fundamentals. The company’s RoNW is at 18% as on 31-03-09. At Rs 100 -115, the issue is very attractively priced considering its pedigree. Retail investors are offered a discount of Rs 5/- per share.
OPPORTUNITIES
On the successful commissioning of the projects, JSWEL would have benefit of the prevailing high merchant tariff for short term. Given the significant power supply deficit in the country and government recognizing the power sector as a key infrastructure sector to be developed to sustain Indian economic growth, prospects for
growth is favorable for companies in the power sector.
One of the established energy company. One of the early entrants in the power trading business. Currently most of the revenue is derived from power generation. The company has the potential to become an integrated power company in the Indian power sector with presence across the value chain.
The low per capita consumption of electric power in India compared to the world average presents a significant potential for sustainable growth in the demand for electric power in India. There is a very big gap between demand and supply, demand being higher. The company is in the right business at the right time. Investors are advised to apply for the issue for both short term and long term appreciation.
ATTRACTIVELY PRICED. APPLY.
The power company from the JSW group is planning to raise Rs 2700 cr through IPO,in the price band of Rs100-115 per share, having face value of Rs.10 per share. The issue will open on 07-12-09 and closes on 09-12-09.
JM Financial Consultants Pvt Ltd, Kotak Mahindra Capital Ltd., ICICI Securities Ltd., IDFC-SSKI Ltd., JP Morgan India Ltd., SBI Capital Markets Ltd., Morgan Stanley India Ltd. and IDBI Capital market Services ltd are the book running lead managers to the issue.
JSW Energy limited, is a part of the JSW Group, headed by Mr. Sajjan Jindal.The company currently owns and operates thermal power plants in Karnataka with an aggregate capacity of 995 MW. It also provides operation & maintenance services for power plants of group companies and project management services for the power plants being set up by the group. JSWEL is currently in the process of enhancing its power generation capacity by 2,790 MW. It is also setting up a transmission line network and developing lignite mines through joint ventures.
OBJECTS OF THE ISSUE
The funds raised are intended to be used for setting up power plants. Repayment of high cost corporate debts and for general corporate purposes.
The cost of the projects is estimated at Rs.14,048 crore and is being funded in a debt to equity ratio of 2.45:1 i.e. long-term debt of Rs.9,979.50 crore and equity of Rs.4,068.50 crore. The company has already tied up the total debt component while, funds aggregating Rs.5, 982 crore were deployed in the various projects as on June 30, 2009. State Bank of India and ICICI Banks have appraised and funded the projects.
VALUATION
The company had a CAGR in excess of 30%, in revenue generation, in the last three years. Consistently profit making company. Professional and experienced management. Known for good corporate governance. Strong financials. Power plant are located at diverge geographical locations. The issue has been graded by rating agency CARE as Grade 4, indicating above-average fundamentals. The company’s RoNW is at 18% as on 31-03-09. At Rs 100 -115, the issue is very attractively priced considering its pedigree. Retail investors are offered a discount of Rs 5/- per share.
OPPORTUNITIES
On the successful commissioning of the projects, JSWEL would have benefit of the prevailing high merchant tariff for short term. Given the significant power supply deficit in the country and government recognizing the power sector as a key infrastructure sector to be developed to sustain Indian economic growth, prospects for
growth is favorable for companies in the power sector.
One of the established energy company. One of the early entrants in the power trading business. Currently most of the revenue is derived from power generation. The company has the potential to become an integrated power company in the Indian power sector with presence across the value chain.
The low per capita consumption of electric power in India compared to the world average presents a significant potential for sustainable growth in the demand for electric power in India. There is a very big gap between demand and supply, demand being higher. The company is in the right business at the right time. Investors are advised to apply for the issue for both short term and long term appreciation.
ATTRACTIVELY PRICED. APPLY.
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