panch-tattva talk

Friends,

 LN Mittal will bid for NELP (New Exploration & Licencing Policy) VII blocks. This would be for the family and not for Arcelor Mittal. His Singapore based investment arm has already bought stakes of 49% in a refinery in Punjab partering HPCL.

MCX stake sold to 3 FIs by Financial Technologies for Rs 400 crs equaling 9.5% stake.

Gulf Finance HOuse , an Islamic Bank will invest $10b in Mharashtra and develop SEZ along Mmbai-Pune expressway.

MUL would face pressure  on margins while revenue will rise. Small car segment will see launches from Bajaj Renault, Vilkeswagon,Honda and Ford while GM has already entered the segment so far dominated by MUL, Hyundai and TM. Industry capacity would rise to 3.5 million units by 2010.

Bislery would double the capacity and distribution network. The present market size of water biz is Rs 1350 crs and Bisleri of Chauhan’s is the leading brand.

Ramdev Agrawal of Motilal Oswal Fin. Ser. says that the margin of safety is low now and returns for next five years will be lower that what it was for last five years  ie 20% p.a. against 29% p.a.. This staement , if taken seriously , says that the returns from the interest earning will not be far too less if the risk premium is deducted out of expected 20% for next five years. Further who would be managing the portfolio for the next five years will also want cut from the investor. There is a further point that there never has been a period extending whole ten years continuously which has been rewarding year after year. The risk involved generally requires double earnings. The saying is ‘one in hand is better than two in bush’ and carries weight.

JB Grp of Hong Kong is planning to enter steel making business in India with Rs 1500 cr investment and is looking for ore/coal mines in southern states.

IRDA announced free-pricing for the Rs25000cr General Insurance Industry. Corporates account for 50-60% premium income for the industry. Since many big corporate houses are in general insurance business , the free pricing would make matters difficult from the angle of fair play.

Some interesting ratios are there to be looked at to understand where the market is perched at the moment. PE ratio for listed securities stands at 27.30 times now against 22.22 times an year earlier. Of 35 industries studied the PE for 26 industries increased during december 07. Market cap of NBFC is higher by 16 % at Rs2.70 lac crs. Retail PE of five firms is 115 times now against last year’s 68 times. This was reported by Pradip KUmar Dey in F.E. dtd 16th Dec.