Legal
June 26, 2013
Real Estate crash in India Estate prices have kept moving upwards relentlessly even as other asset classes have languished. Corporate mis-governance and corruption has driven investors […]
July 16, 2012
Energy Efficiency Rankings In an unsurprising ranking by International Energy Efficiency Scorecard developed by ACEEE, US and Canada have bottom ranks in Energy Efficiency along with […]
May 10, 2012
India’s fast growing middle and upper classes are consuming electronic gadgets at an astounding rate.The replacement cycle has also decreased dramatically as growing disposable incomes means […]
February 25, 2012
India's Solar PowerIndustry is starting to see some M&A with both domestic and foreign companies buying smaller firms. While the biggest M&A story is that of Tata Power acquiring the stake in Tata BP Solar, other firms without any grounding in the energy industry are too getting in. Now a Coal Equipment and EPC company Tecpro is getting into the solar energy business by acquiring a small solar lighting and heating company Eversun.Tecpro Systemsis primarily focused on the Power Sector Space.It is a leader in the ash handling and material handling systems and is currently diversifying into becoming a turnkey provider in this segment.Like other infrastructure players it has seen amazing growth in the last 3 years at around 70%+.The growth has been fantastic both on the topline and the bottomline.The 2300 crore Order book provides some comfort over the next year’s revenues or so.The Power Sector in India particularly the Thermal Power Plants are expected to see an explosive growth period.Steel and Cement sectors are also growing strongly.With Tecpro Systems focusing on these 3 segments,it should be able to maintain a good growth trajectory in the future years as well
February 1, 2012
India is a country with one of the biggest population of poor people living hand to mouth. But becoming super rich in this country is not rocket science. All you have to do is become a political crony and start counting your millions if not billions. Corruption in India is quite rampant and blatant which has been proved time and again with scam a day. Politicians and Businessmen have been jailed but they have managed to get out on bail using their millionaire lawyers to fake illness and other shenanigans. Some politicians are now involved in both professions with some rumored to be billionaires owning companies through surreptitious means and parking their money in Swiss banks. Business Groups in India see their shares rising and going down depending on which political party wins proving the nexus between politicians and businessmen. There has been no reforms to separate these two and now powerful politico-business dynasties have started ruling large parts of India.
January 31, 2012
India's Real Estate Companies have seen a very tough 3-4 years with interest rates climbing, investors running away from shoddy accounting and the global macro scene being quite bad. One needs only to look at the stock price chart to see times have been very bad. Besides some of these companies have come under court scanner for their practises with Unitech CEO spending some months in jail for a telecom scam. However property prices have not come down as India's real estate bubble seems immune from crises in the West and in India . Prices have more or less remained stable while other assets have seen a major carnage at one point or the other.
January 19, 2012
The company is planning to introduce a big bang plan for broadband coupling a cheap tablet with a cheap monthly plan. This is on the lines of a mobile phone with a monthly connection. Reliance has a good chance of winning the broadband market which remains under penetretad and high cost. It poses a direct existential threat to India's telecom companies which have failed to compete on data effectively.
Reliance in continuation of its strategy in the media industry has bought a small stake in Den Networks one of India's largest cable networks though one its subsidiaries. The company is slowly and methodically capturing the entire media development and delivery network in the country. The stake in the cable companies will give it leverage to deliver its broadband and content.
January 7, 2012
Reliance has a massive balance sheet which is has used strategically to acquire 4G spectrum (Infotel) and content.The company had revolutionized the telecom space through the Monsoon Hungama campaign when it had provided super cheap telecom mobile plan with handsets. It could do the same in the Internet space through providing super cheap Talbelts like Aakash with super cheap broadband plans on 4G. It already has content to provide its subscribers.Note broadband companies in India provide poor service at high rates, so Reliance can takeover the broadband space in India easily if it executes right.
January 4, 2012
Telecom Companies in India are in general an unscrupolous lot with the 2G Scam showing the whole telecom industry of India in a Bad Light.While a number of top executives of telecom companies spent time in jail,it seems that these companies have learned nothing.They continue to find loopholes to take both their customers and government for a ride.Indian Broadband and Telecom companies have made defrauding customers an art by illegally adding value added services and charging for them.They also burn millions of dollars in subsidized diesel to power their telecom towers since there is no restriction on that.Now these comapnies have been caught again in another manipulation trick in 3G services.
December 7, 2011
Investing Money in India right now is a very confusing matter given the large number of choices and the lack of attractiveness of different assets due to different reasons.There are hundreds of voices seemingly intelligent but who are selling their own books.If you turn on the finance new channels they will keep saying buy stocks for the long term as if a normal investor can make money by buying stocks for the short term.Gold proponents will say that it has been a great investment over the last several years and with the US,European systemic shocks it will remain so.However the rapid uptrend in gold prices has made it a somewhat risky investment.Investing in Gold is also not easy given the wide array of choices like Gold ETFs,physical or futures.So lets see each asset class with its pros and cons
July 5, 2011
India's Supreme Court took over the investigation of vast amoutnof black money stashed in foreign money accounts from the compromised government.The ruling Congress party has proven to be remarkably reluctant to take action against corruption and black money despite huge pressure from the civil society and the judiciary.The government itself has ministers who are highly corrupt with a telecom minister in jail and the textile minister who may be on the way as well.Other ministers like the Agricultural Minister Pawar has repeatedly surfaced in numerous scams rocking the country.The Supreme Court has also taken the government to task for granting a retail banking license to the Swiss giant bank UBS.Note UBS had not been given a license as it was under suspicion for facilitating the movement of ill gotten money into Swiss bank accounts
July 5, 2011
The Indian telecom industry is the world’s fastest growing industry with 792 million mobile phone subscribers as of February 2011. It is also the second largest telecommunication network in the world in terms of number of wireless connections after China. The industry will reach around $80 billion in revenues by next year showing an astounding CAGR of over 25% and will employ a stupendous 1 crore employees making it one of the biggest value creators in India in recent times. The introduction of mobile phones brought a major revolution in the industry. Mobile phones have become a modern day necessity. Be it a professional, a trader, a housewife or a student, everyone has one. The availability of cheap mobiles in the Indian market, is also a major factor in making it available & affordable to the common masses. Today's mobile phone is not just a phone, it has a built in camera, music system, games & internet enabled networking. These facilities entertain you as well as make you available to work as & when required.
July 4, 2011
India has become the third country in the world to start a National Green Tribunal (NGT) which is a judicial body exclusively meant to judge environmental cases.Note Environment has become the one of the most important issues in the country affecting the broader society.Alongwith Land Acquisition,environment has become the most frequent conflict flashpoint.There have been numerous case where large industries have been confronted by local people fighting for the environement.Recent cases like the Vedanta Bauxite smelter in Orissa,Thermal Power Plants in Andhra Pradesh,the Jaitapur Nuclear Power Plant in Maharashtra have seen huge controversy and protests.Note Vedanta Resources has found itself in the centre of controversy over mining bauxite in Niyamgiri Hills which are held sacred by the Dongria Kondh tribal group.With powerful political and bureaucratic patrons,Vedanta has managed to ride roughshod over Tribal Rights.
Having a National Green Tribunal (NGT) has become essential for the country so that development can proceed with peace between various stakeholders .Note normal judges and courts don't have the expertise to understand the massive complexities and intricacies involved in billion dollar industrial projects and their impact on the environment.The NGT will have each judge having an environmental expert to guide him/her on the ecological issues so that they can come to an informed judgment.
July 4, 2011
India's Supreme Court took the matter of hundreds of billions of dollars of Black Money stashed into foreign bank accounts into its own hands as the government has repeatedly failed to take any action stalling the case.The Indian government led by the Congress Party has been repeatedly blasted by the Supreme Court for not acting against corruption matters.Recently the Court in an unprecedented move took over the supervision of the CBI in 2G Telecom Scandal Case Investigation.Note CBI is under the Home Ministry and like other investigations was being tardy to take action government ministers.The 2G Telecom case has resulted in top ministers and corporate CEOs being jailed with prospects of more being convicted.
July 4, 2011
Not only that but with the loss of political power,Sun TV executives can no longer manage to intimidate the industry.The Sun TV COO Saxena was hauled off to jail in a cheating case filed by a film producer.Note this would have never happened in the earlier DMK regime as the police would have refused to even lodge a case let alone put Saxena in jail.Crony Capitalism is not without its dangers and betting on these stocks is not a great idea.The reason is that once the political party loses power which happens quite frequently in India then the businesses close to that party come under serious fire.Note Dayanidhi Maran is also facing the heat in the 2G Scam where he has been accused of amassing huge amounts of money by favoring close promoters.When he was the Telecom Minister the whole Sun TV group of companies used state telecom infrastructure for free.The whole lesson from this is that betting on stocks/companies close to the ruling party might not be a good idea.In fact opening an event driven hedge fund might be a good idea using power changes in crony capitalist democracies.Thanksin stocks are rallying Thailand today as his sister has won the elections.
July 4, 2011
The Indian Financial Companies were subject to strict regulations till 1991 when interest rates were administered and asset allocation was governed through various formal mechanisms and strict controls limited the entry of financial companies. In 1991, the government of India initiated a reform programme for India, which encompassed the financial sector.There were numerous reforms that were intitiated which has led to the emergence of a robust financial sector which easily managed to sidestep the post Lehman global financial crisis in 2008.The post 1991 reforms allowed the deregulation of interest rates,entry of new private sector banks permitted long-term lending institutions like ICICI,IDBI,HDFC to carry out banking activities.The banking sector in India has become increasingly more competitive in recent years. Public sector banks have lost their market share to the more dynamic private sector banks .It is not possible to list out all the Finance Companies in India in one post as there are almost 13000 non-bank finance companies (NBFCs) besides Banks,Insurance Companies,Foreign Financial Institutions etc.This post lists out the Financial Companies in the Gold Finance,Travel,Housing,Infra sectors as well as the Top 10 Banks.
July 4, 2011
At the time of independence in 1947, India's capital market was relatively under-developed. Although there was significant demand for new capital, there was a dearth of providers. Merchant bankers and underwriting firms were almost non-existent. And commercial banks were not equipped to provide long-term industrial finance in any significant manner. By the early 1990s, it was recognized that there was need for greater flexibility to respond to the changing financial system. There was a need for these financial institutions to directly access the capital markets for their funds needs.So a number of infrastructure finance companies were set up.Some of them have become fully private like ICICI while others have been partly privatized. like REC and PFC.Besides a number of private companies have recently become big players in the infrastructure financing space like SREI,L&T Finance etc.Note with almost $1 trillion expected to be spent on infrastructure in India over the next 5 years,the scope for these companies is immense if they manage their assets-liabilities in a decent manner
July 2, 2011
Indian Businessmen and Politicians have been looting the citizens and the treasury of billions of dollars through numerous corruption scams and scandals.While the focus has been on the big corruption scandals at the centre being perpetrated by ruling party politicians,opposition party has not been far behind.The Nira Radia Tapes revealed the extent to which the Indian politicians have sold the state to big business.Major ministers are appointed by the major industrial conglomerates leading to billions of dollars in embezzlement.There are numerous instances like the Commonwealth Games Scam,Adarsh Scam,the 2G Telecom Scam etc.Many of the politicians are now big businessmen themselves owning companies legally and illegally.According to Nira Radi,India's agricultural minister is the benami owner of one of the largest realty companies DB Realty whose CEO is cooling his heels in jail for the 2G Scam.The concerned minister is also involved in the Lavasa City Scam in which a whole city was built in partnership with HCC flouting all environmental norms and regulations.
June 30, 2011
Note Indian ministries and regulators have been found to be massively corrupt with the 2G Telecom Scandal facing the glare from the Supreme Court .Huge loss has been caused by ministers,corporate CEOs and various politicians a number of which are in jail right now.The CAG report had said that Reliance had doubled its cost in the KG-6 Basin leading to a huge loss for the Indian government.A number of other lapses (intentional) has been found by the DGH and the Ministry each time favoring the private oil and gas companies in India.Now the CBI has filed a case of corruption against the the former chief of the DGH V K Sibal for scuttling a probe by the Central Vigilance Commission (CVC) for showing undue favors to the private companies.Note India has been stuck by a number of scams in the stock market pertaining to mid cap and small caps.This has led to huge losses for investors with some companies like Reliance Telecom,Unitech having over 90% of their share values eroded.Reliance the biggest Indian company by market capitalization might be facing the same fate if the investigative agencies and the courts do their jobs.
June 21, 2011
Now India's Largest Company Reliance too has seen its stock fall to a post Lehman low on concerns that it has colluded with the Oil Regulator and Ministry to gold plate its costs in the KG 6 Gas concession.Reliance is India's biggest oil and gas company with interests throughout the supply chain.Note its nothing new as Reliance has always been known to be the most powerful corporate in India .However with the government's own auditing department CAG raising allegations of collusion and corruption,Reliance too may find itself snared in the corruption scandal.Note the infamous Nira Radia tapes had ample proof of how the powerful Reliance group manages the appointment of its favored persons in key federal ministries.The company must now by hoping that the Supreme Court which is already preoccupied with a ton of corruption cases does not take a keen interest and gets the CBI to investigate the allegations.
June 20, 2011
The Indian Stock Market saw a flash crash on the morning of 20th June at 10 am.The market which started weak at 9 am fell by almost 3% in 10 minutes.The main index Nifty which was trading at around 5350 crashed to around 5200 in around 10 minutes.The market recovery by 1% but is again starting to go down to the low levels fo 5200 .Note the Indian stock market has been hammered due to worries on inflation,massive endemic corruption which is facing protests from the civil society.The FIIs which are the main buyers of Indian equities in the last year or so seem to have abandoned the Indian stocks as QE2 starts ending and global risks like Greece,US slowdown,inflation and interest rates worries in emerging markets come to the fore.Note Indian stock markets are not the easiest to invest in with scams and scandals happening regularly and it at best remains a market in which you have to choose between the bad and the ugly.
May 14, 2011
Electronic Waste is a massive problem in the Developed and Developing world with Thousands of Tons of Hazardous Electronic Waste being generated each year.With Electronics getting more ubiquitous and costs falling rapidly,Electronic Waste Problem is only going to increase.E-Waste is responsible not only for releasing dangerous substances into the environment it also causes deaths and injuries to poor in countries like India,China and Africa who are forced to work in extremely bad conditions.Electronic Waste Recycling is the need of the hour but the governments around the world have not pushed hard enough.Europe has been at the forefront with the WEEE directive passed in 2002 while USA has been a laggard as usual failing to prevent toxic waste from being dumped in landfills and shipped to poor countries with lax environmental regulations.Electronic Waste Recycling Act of 2003 has been passed in California which again as usual has been leading the federal government on clean technology legislation.
May 13, 2011
WEEE refers to the Waste Electrical and Electronic Equipment Directive issued by the European Community on Electronic and Electrical Waste alongwith the ROHS Directive in 2003 which regulates the collection,recycling and disposal of electronic and electrical equipment.The Directive are 2002/96/EC and 2002/95/EC.WEEE makes it mandatory for the producers of to dispose of the Electronic Waste.Unlike the USA which does not have such a strict policy,the companies must do so in an environment friendly way and can't just export all the electronic junk ot Africa,India and China which has been the way of the industry till then.
The legislation provides for the creation of collection schemes where consumers return their used e-waste free of charge. The objective of these schemes is to increase the recycling and/or re-use of such products. It also requires heavy metals such as lead, mercury, cadmium, and hexavalent chromium and flame retardants such as polybrominated biphenyls (PBB) or polybrominated diphenyl ethers (PBDE) to be substituted by safer alternatives.The EU’s WEEE and RoHS laws simply serve as a template for national laws. They are transposed into national law at national level.Member States are required to draw up a register of producers and collect information on an annual basis on the quantities and categories of electrical and electronic equipment placed on their market, collected, re-used, recycled and recovered within that Member State and on collected waste exported.
May 13, 2011
Electronic waste is defined as loosely discarded, surplus, obsolete, or broken electrical and electronic devices.It consists of secondary computers, electronics,LCDs,computers,mobile phones etc which have been discarded or thrown by the owners.The rapid decline in the cost of semiconductors due to Moore's law has led to a rapid increase in the size of the electronics industry which is more than $1 trillion dollar globally.Millions of electronics items are thrown out each year leading to mountains of Electronic Waste.If not treated and Recycled,E-Waste can be hazardous to the environment and lead to wastage of precious materials which can be reused.Lost electronic devices contain a variety of materials, including metals that can be recovered for future uses. By dismantling and providing reuse possibilities, intact natural resources are conserved and air and water pollution caused by hazardous disposal is avoided.Electronic Waste Recycling companies are quite disorganized without major global e-recycling companies.The E-Waste Manageress industry still consists mainly of thousands of workers in developing countries like India where they continue to work in dangerous conditions.1,200 small companies generated revenue of around $5 billion last year.This is expected to treble by 2015 as more countries make electronic waste management compulsory and the sheer volume of electronics grows (think iPads)
May 12, 2011
BJP,the chief opposition party in India is finding it hard to fight the ruling party's widespread corruption as its leader are too compromised in land scams of their own.The Karnataka ministers of the BJP are known to be amongst the most corrupt in the country with the CM himself indulging in land scams along with his sons.The Bellary trio of Reddy brothers have amassed billions of dollars through plundering iron ore illegally and having literally bought the government in Karnataka for the BJP with their ill-gotten wealth.Karnataka’s Chief Minister has justified corruption as tradition and despite huge pressure to resign managed to survive due to unique caste politics of India .The Supreme Court has called the corruption in India “mind boggling” while the Chief Vigilance Officer had earlier called 30% of India’s population utterly corrupt.Now the BJP's ministers in the Punjab government have been accused of land scams in the state.Two of the BJP ministers Manoranjan Kalia and Swarna Ram have been implicated in a Land deal on the outskirts of Chandigarh.Kalia holds the industries and local bodies portfolio, Ram is social welfare and justice minister.
May 10, 2011
E-waste generally consists of obsolete devices such as DVDs, CDs, floppies, tapes and electronic components including chips, processors, mother boards, printed circuit boards and industrial electronics. E-waste contains many hazardous substances like heavy metals, PVC plastics, brominated flame retardants.When disposed off in a landfill, it becomes a conglomeration of plastic and steel casings, circuit boards, glass tubes, wires, resistors, capacitors, fluorescent tubes, and other assorted parts and materials. It is both valuable as a source of secondary raw material, and toxic if treated and discarded improperly. he USA discards 30 million computers each year and 100 million phones are disposed of in Europe each year. The Environmental Protection Agency estimates that only 15-20% of e-waste is recycled, the rest of these electronics go directly into landfills and incinerators.India's rapidly growing economy generates more than 500,000 tons of electronic waste every year, a number expected to reach 1 million tons by 2012. The obsolete computer and cellphone parts are dismantled, refurbished and recycled manually by hundreds of thousands of unorganized villagers across the country.
May 7, 2011
India's environment minister Jairam Ramesh has pleaded helplessness as he is too being forced to go along with these environmental destructive projects.This is a characteristic which is peculiar to India and has allowed the culture of corruption to flourish.If you build a large enough project with enough billions in investment you can get away with the murder of the environment as the government could destroy such a large investment.These ad hoc measures which lead to construction of illegal projects has been leading to the destruction of ecology in a large scale manner.Only a blanket demolition of all structures built illegally irrespective of the cost will lead to the lessening of the corruption in the business sector.
May 6, 2011
CBI which is India's leading investigate agency controlled by the government at the centre has been known to be a pawn in the ruling party hands.It selectively investigates cases against the opposition and the ruling alliance repeatedly messing up intentionally cases of graft against government ministers at the state and federal level.The Ruling Party has often used CBI as a powerful tool against both alliance parties as well as the opposition parties.This blantant manner of corruption had made the Supreme Court directly take the supervision of CBI in the 2G Telecom Scandal investigation which has thrown top corporate and politicians in jail.Now CBI has started acting tardily in the Adarsh Housing Scandal in which top Congress ministers in Maharashtra,bureaucrats,retired generals and admirals had conspired to usurp real estate land worth crores of ruppees.
May 5, 2011
The Tata Group which is known in India for high standards of corporate governance and doing business ethically in a country steeped in corruption too seems to have fallen.Ratan Tata appeared blemished as tapes of his conversations with the now disreputed corporate lobbyist Nira Radia were published in the media.He was caught at least listening and agreeing the the open manipulation of the Indian ministries in government formation if not the architect.Tata Teleservices which was a major beneficiary of the second round of 2G Telecom Auction during Raja's tenure has now again appeared in the news for the wrong reasons.Despite denials by the Tata Group honchos,the Tata companies seem to be complicit in the billion dollar scam that has shaken the political and business roots of India.
May 2, 2011
Lavasa is a story of corruption,looting of the poor and raping of the surrounding environment by the Indian politician-bureaucrat-businessmen nexus in a beautiful cover of a township built for the rich and well heeled.There is little concern for the law as these powerful developers know that they can get away with murder quite literally.The long term sustainability of the township is in doubt which defeats the entire purpose anyway.Any buyer of property in Lavasa should be aware of these problems and should not buy it as their investment will be eroded in the future anyway besides having the taint of being looted from the poor.However the media too has lost interest as a new scandal emerges everyday.
Lavasa Township being constructed near Pune,Maharashtra has been in the media off and on for creating a environmental disaster in the shape of a beautiful township constructed on the hills.The town which has been constructed for 300,000 residents has violated all building and environmental norms of the state and centre.With powerful politicians and businessmen backing the project,its not as surprise that the state government of Maharashtra actively helped the township in bypassing all the laws and regulations.There is no provision for permanent water supply and it would lead to a clash between the water wants of Lavasa and Pune.Note builders in India are notorious for leaving out water and waste sustainability in their plans.The residents of the buildings,apartments and other shelters have to bear the brunt later on when there is no water and problems like waterlogging.Gurgaon the millenium township suffers from both of these problems quite acutely.Note these problems are common to both million dollar homes as well as slums in India.