Indian economy has left the recession concerns behind and showed resilience. The equity market indexes reflect this positive environment. FII’s are pumping money into markets and Indian economy. So why should our Indian companies remain behind? Shouldn’t they also try to get capital from different sources either by IPOs, QIPS, or equity, or bonds? And that’s what we are seeing these days. Every Indian company is trying to grab capital from financial markets. Some are raising capital by means of issuing corporate bonds!
As per an data published by AK Capital Services Ltd, in FY2009/10, public and private sectors combined raised close to Rs 172,000 crore of capital from Indian and foreign markets. In FY2010/11, this figure is expected to be Rs 350,000 crore i.e. almost double. Majority of this comes from foreign markets. I do not have exact numbers, my guesstimate is 80%+ comes from foreign markets.
Examples are: SBI, IDFC, Union Bank, L&T
One reader asked, why a company like SBI (i.e. a bank) issues bonds to raise capital? It is already in the business of collecting deposits from people?
Simple answer to this question is: Banks like SBI, need more money than they can collect from deposits. Continue reading rest of this article…
The 1H2010 can be summarized as return of optimism, in economy, in stock markets, stabilization of global economy, and fears about euro zone. As an individual investor, should I care about macro economics, or should I even worry about what happens to Greece or to euro currency? Ambani brothers patch up and there are stories its good for markets and business! To me, being stalwarts in India Business world, instead of setting an example, it was idiotic for them to even fight and drag each other into courts. These are good academic discussion, but I doubt it is going to help in your own portfolio. I am taking stock of my portfolio.
Two readers of this blog left couple of intelligent questions in comment section on some of the articles. Both of these questions relate to what I term as rebalancing the portfolio (or profit booking). I wanted to wait until I posted articles on TIPBlog portfolio update and risk analysis. I wanted to discuss these two questions in the context of TIPBlog portfolio. It will help better understand the re-balancing and profit booking processes.
One common question that I continue to receive is about the efficacy of long term investing. The notable factor is almost all of them use two specific examples to explain that long term investing is not a viable solution. These examples are (1) Stock market tanking in 2008; and (2) Satyam going kaput.
Overvaluation in Heated Market – In What Context?
To me, the essence of holding company is like a parent company. A parent who are trying to raise their kids, i.e. new businesses or future companies, in a hope that all of them will be able to sustainable themselves in future. Parents work hard take risk, and kids… you know what I am trying to say, right? Continue reading rest of this article…