ABSURD AND MEANINGLESS

The views expressed in the article 'How the UPA robbed us of Rs 2,80,795cr'
(DNA 29-08-10) by R. Jagannathan is meaning less and absurd.

The amount refers to the loss made good to oil marketing companies by the government. The profitable ONGC, GAIL and OIL were asked to part with Rs 1,12, 592cr and the rest came from Oil Bonds. Calling these exercise as loot/robbery has no reasoning and without understanding of our complex economy. Consider this -India's 58.4% population is dependent on agriculture, as means of livelihood.However, this segment contributes 17% only to the GDP. It is an indication of resourcefulness of the population depending on it. Of the total 110crpopulation, 37% consists of BPL families. The middle class constitutes another42% (however, this is below the BPL as per international standard). Hence, the subsidies provided to loss making oil marketing companies can not be termed as loot, fraud, since these subsidies benefits nearly 80% of the country's poor and middle class population. What is the alternative? Allowing the petroleum products to be priced at the prevailing oil rates/market determined rates. The country is not yet ready. That will make life miserable for nearly 90%of the country's population. The author's views holds no water, as of today.

Secondly, regarding the DTC bill. There is no end to human wants/wishes.
Government needs money, particularly for rural development, health care,
infrastructure and education. Where do they get it, if the people who have
capacity to pay is let off. Those 'who have' should take care of the 'have not',
that is the true meaning of inclusive growth. I think the government is on the
right track in this regard.

TEN REASONS WHY ONE SHOULD NOT INVEST IN SKS MICRO FINANCE IPO

1. Unethical business: The Company is charging interest around 40% p.a. on money lent to the poor and down trodden.


2. Unsustainable business model: The business model will not sustain in the long -run.


3. No commitment from the promoters: SKS’s founder and chairman sold his shares to Tree Line Asia Master Fund (Singapore) Pte for $12.9 million in Feb. this year.


4. Look at the salary of top executives :

Suresh Gurumani - Managing Director of the Company. The total monthly salary is Rs. 12, 50,000. In addition to the above, Mr. Suresh Gurumani was paid onetime bonus of Rs. 10,000,000, in April 2009.

Dr. Vikram Akula - chairman Rs 70.00 lacs p.a. In addition, ESOP amounting to Rs10.97lacs, totaling Rs 1.79cr p.a.


5. Mohd. Yunus says - “I get very worried when investment funds come to microfinance,” said the founder of Bangladesh’s Grameen Bank, which pioneered the industry by giving small loans to rural women to start their own businesses. “I don’t want to excite businessmen that there is profit to be made here,”


6. The IPO will make the promoters, and other venture capitalists including some P/E funds that have stakes in these companies’ millionaires. The hapless borrowers continue to live in abject poverty.

7. Government /RBI will not be mute spectators to the exploitation.
They are bound to regulate the segment. This will make the business un- attractive.


8. Financial inclusion initiatives taken by the public sector banks will marginalize the micro finance business. Do not buy the theories put forth by the BRLMs to sell the issue.




9. The average cost of acquisition of shares by promoters is less than Rs50/-The Company has limited period of history and no dividend payment record.


10. The Andhra Pradesh government has constituted district level ‘Task Force Committees’ (TFCs) to investigate the unethical practices of micro finance institutions in the state. The committees were constituted after the government received many complaints against the loan shark practices adopted by some leading MFI’s of the state.

FOR DETAILED ANALYSIS OF THE IPO LOG ON TO FIRSTCHOICEIPOANALYSIS.COM

BHARAT BANDH: WHY CANNOT OPPOSITION RULED STATES REDUCE VAT.

The BJP and some other political parties have called for Bharat Bandh on 05-07-10 against price rise and for increase in prices of petroleum products. Assuming for the sake of argument, that Center's policies are flawed and the present UPA government is anti-poor. Among others, VAT constitute any where between 24 -33% of the petroleum product prices. VAT is a state subject and the respective state governments have the power and authority to slash the rate to zero level if they are so concerned about the common man,for whose sake the strike being called.
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HEGDE SUCCUMBED TO INTIMIDATION TACTICS

Most people are happy, that the lokayukta has withdrawn the resignation. However, his reputation and integrity has taken a beating. Was he not aware of his fatherly respect to Advani when he resigned? The whole world knows that the Reddy brothers are into illegal mining. He should have put removal of publicly known corrupt ministers as a pre condition for withdrawal. Why Advani simultaneously did not instruct the CM to drop Reddy brothers or expel from the party. I also have great respect for Mr. Advani, but when its come to fighting corruption he and his party is no better than the Congress. I do not think BJP government/any other government in the country is serious against fighting corruption. Generally, people enter politics to make money through corrupt practices, hence do not expect the politicians to fight against corruption. BJP government will make some cosmetic changes in the lokayukta set up and dilly-dolly the important issues on one reason or the other and after some time Hegde will resign again

SANTOSH HEGDE WITHDRAWS RESIGNATION

The lokayukta of Karnataka Justice Santosh Hegde has withdrawn his resignation after being persuaded by Sri L K Advani of the BJP. Hegde briefed the press in the presence of the CM BSY and BJP national president Mr. Nitin Gadkari among others, about his withdrawal.

LOKAYUKTHA RESIGNS

Justice Santosh Hegde, the Lokayuktha of Karnataka has resigned. Among others, Mr. Hegde has quoted non co-operation from the state government, including inaction against corrupt officials trapped by Lokayuktha and is protecting mining lobby.

IPO FROM AN INTANGIBLE ASSET COMPANY: FAT PIPE NETWORKS INDIA LIMITED.

The company earned a net profit after tax of Rs 399.37 lacs for the year 08-09, which was transferred to General Reserve. The balance at the end of the previous year in General Reserve was Rs 49.97 lacs. If you add, the profit transferred this year, to the figure it should be Rs 449.34 lacs. Simple arithmetic. However, as per the statement of accounts as furnished in the DRHP filed with SEBI, the figure is Rs 2103.04 lacs. For the difference, the corresponding entry shown in the balance sheet is Intangible assets.

Some of the comments made by the readers of First Choice IPO analysis are hereby reproduced.


DO NOT BUY!! Failure to report multiple litigation as well as challenges to its patents. Currently under federal investigation of its labor practices. Financials would not stand up to a US SEC audit, hence the reason to change from a U.S. company to an India company and run the IPO there. Numbers are misleading and inaccurate.
Dr.Raghula Bhaskar and Ms Sanchaita Datta are the promoters of the company. They take in excess of $400,000USD of income on a VC supported venture. They claim profit, but no listing of dividends to its investors. If you scrutinize some of the other ventures such as their India based programmers company BOX, you will find the company is listed as being based out of their home. Makes one wonder whether the VC's are even aware, they may have financed these other entities. This begs to question: Is this IPO merely a sham to pay back the VC is who by now must be impatient for a return.


Bottom Line: Fat Pipe years ago was at the right place at the right time. However, it has failed miserably to stay up with the ever-changing technology and marketplace. Other companies, new technologies, have sprung up bringing with them new technologies and innovation. Sorry Fat Pipe, you are OBSOLETE!!! Do you remember Iomega with the zip drive...? IOmmm who? A bet in Las Vegas would be a better risk.

FOR DETAILED ANALYSIS LOG ON TO FIRSTCHOICEIPOANALYSIS.COM

AIR CRASH AT MANGALORE

Mangalore-bound Air India Express plane from Dubai overshot the runway at Bajpe Airport in Mangalore this morning, killing at least 160 passengers. The injured were taken to hospitals.
The Boeing-737, manned by an expat pilot reportedly landed 2000 feet from touchdown point. Nearly 25 ambulances and firefighters reached the spot to help rescue operations. Rescue operations at the site are almost over and chances of survivors are remote.

PAK TAKES NO ACTION

The epicenter of international terrorism is Pakistan. India has been repeatedly educating the whole world about the terrorists activities carried out by banned international organizations with the tacit support of the Establishment. The recent statement by Hillary Clinton, US Secretary of state, that some people in the government are aware of the whereabouts of elusive Osama Bin Laden, confirms that the successive political leadership in Pak is misleading the world. In spite of knowing the activities of banned out-fits, Pak takes no action against them. The Pak is also accused of diverting the funds provided by the ‘big brother’ to fight terrorism, to fund terrorists. The failed Times Square bombing is a wake up call for the U S to take stern steps against Pak.

IPO INVESTING- KNOW YOUR MERCHANT BANKER

The IPOs which are quoting below the issue price and

the BRLMs associated with the issues that are listed

from 01-01-10 and until date, are furnished below.

NAME OF ISSUER	ISSUE PRICE	CURRENT PRICE - AS ON 03-05-10.	MERCHANT BANKERS/BRLM
SYNCOM	RS 75	RS64	Chartered Capital
VASCON	RS 165	RS 153	Kotak Mahindra, Enam Securities
EMMBI	RS 45	RS18	Keynote
DB REALTY	RS 468	RS 436	Enam Securities, Kotak Mahindra
HATHWAY	RS 240	RS 209	Morgan Stanley, UBS Securities, Kotak Mahindra
TEXMO PIPES	RS 90	RS 62	Almondz Global
PRADIP OVERSEAS	RS 110	RS 87	ANAND RATHI
SHREE GANESH JEWELLER	RS 260	135	Axis Bank Ltd. ICICI Securities Ltd. Avendus Capital
GOENKA DIAMONDS	RS 135	101	SBI CAPS
INTRASOFT	RS 145	130	Collins Stewart, Anand Rathi