e-Nagar

November 30, 2007

closer look

Filed under: Humor — Ankur Aggarwal @ 1:13 pm

A husband and wife were waiting in the consultation room when the doctor entered. “And what seems to be the problem, Mrs. Smith?”
“My husband worries constantly about money.”
The doctor absentmindedly replied, “Ah, I think we can relieve him of that!”
====

At a cocktail party, the curvaceous blonde was the center of attention. Standing in the middle of the room, she was surrounded by almost every man there. Finally, one woman turned to her husband and said, “I just don’t see what they see in her.”
“I don’t either,” replied her husband as he started across the room.
“I’ll take a closer look!”

November 29, 2007

Delimitation Bill

Filed under: News — Ankur Aggarwal @ 10:44 am

Finally the much awaited delimitation bill has been presented in the Parliament.

Since I thought most people are unaware of what it means for the country esp. its urban population, I thought I will explain it. Although India is a democracy where everybody is claimed to be equal. But reality it is not exactly true.

1) The Lok Sabha seat cannot span across state boundaries. Hence smaller states/union territories like:
Mizoram
Nagaland
Sikkim
Andaman and Nicobar Islands
Chandigarh
Dadra and Nagar Haveli
Daman and Diu
Lakshadweep
Pondicherry

Have an advantage of higher representation per citizen. However this bill cannot solve this problem.

2) The real problem we are targeting is that:
The present constituency map for Lok Sabha Seat or a seat in the State legislative assembly was drawn in accordance to the 1971 Census. Over the past 37 years the demography of the country has changed considerably. Several new cities/urban centers have spawned up over the last 3 decades and population of the existing cities (like Bangalore) has boomed to many folds. Hence what was once a open field with little or no habitation is now a crowded apartment complex with over a thousand households. In contrast, thanks to movement of labor to the cities, the village population has been more or less stagnant increasing slightly in areas where new irrigation methods or crops were introduced, and reducing in rain fed areas.

Unfortunately Election Commission could not keep pace with this changing population density and this has yielded some disastrous consequences for the urban citizens. Although cities account for over 70% of the GDP, 80% of all taxes collected and 40% of the country’s population, politicians which continued to ignore the cities continue to get reelected and there is nothing we could have done about it.
With this delimitation, we could hope for a more equitable representation and hence would compel the politicians to respect our urban population.

However one important aspect of the demilitation which  involves giving equitable representation  to the states whose population density has increased over the past 3 decades, has been  left to be outside the scope of the bill.

November 27, 2007

Burnpur Cement

Filed under: IPO — Ankur Aggarwal @ 6:41 pm

No of shares: 20.8 million
Issue Date: 28th Nov – 3rd Dec
Price Band 12/-

This is a classic issue which tells us exactly what are the tell tale signs of a bad IPO.
1) The factory has been operational since 1991, and still its growth and performance has been below average. No wonder a share of face value 10/- is going for ipo at 12/- Last year was the first time the company made a profit >1cr.
2) The objective of the IPO is to raise about Rs 26.2 crore to part finance the proposed Rs 500 crore greenfield one million tonne integrated cement plant in Jharkhand. Can someone tell me from where is the rest 474 crore coming?
3) Promoters are offloading 49% stake in the company. They might as well sell it the entire company off, after all Cement industry is on boom and Ambuja Cement (sensex stock) and L & T cement (another blue chip) actually did that recently.

4) The company boasts that it has made a profit of 1.14 Crore (on a proposed market capitalization of 53cr resulting in an EPS of < Rs 1.) but you have to read its balance sheet to realize that this profit was partly because of a trading profit of over 4 crore. (Now this confuses me, should i categorize this company as a trading firm or as a manufacturing firm?)

5) One should not forget that the profitability of the company is partly due to the scarcity of cement and high prices.. so consistency is not guaranteed, infact that company has a track record of making losses and has a meager revenue of 26 Crore.

6) The company has over 90 crore in debt (a sum equal to almost 4 years of revenue)…. i wonder if even the banks can give them one extra penny.

7) The company says the IPO is to enable its backward integration into clinker… but tell me why would you make 100s of cr of fresh investment in a raw material plant to save 1-2 pennies on your annual revenue of 20cr. This defies all logic and commercial prudence!

In short this issue is the fastest way to penury. BTW the reason for this post is that MoneyControl and several other yellow journalists have assigned 3 star rating to this issue and even ICICI has recommended people to apply.

some nice videos

Filed under: Humor, Links — Ankur Aggarwal @ 3:42 pm

Here is a nice CSI Spoof video
Even a monkey can dance better than you

—-
The other day I tripped on the escalator and fell downstairs with a big thud. Soon afterwards, when I was picking up stuff, the saleswoman said, “Hi–if you need anything, I’m Jill.”

I thought, “Wow! I’ve never met anyone with a conditional identity before!”

November 26, 2007

origin of rains

Filed under: Humor — Ankur Aggarwal @ 11:21 pm

When a child asks, ‘Where does the rain come from?’
Its a cute thing to tell him, ‘God is crying,’ and if he asks,
‘Why is god crying?’
its also a cute thing to say, ‘Probably because of something you did.’

November 24, 2007

mutual fund fleecing

Filed under: Investing — Ankur Aggarwal @ 4:34 am

Recently ICICI announced the launch of ICICI Prudential Real Estate Securities Fund. Its advertisement came with the picture of how the landscape of bangalore has transformed over the years, so naturally I became interested. However, the moment I started reading its offer documents, I realized that this fund has no intentions in owning and developing a property. All it will do is take your money and invest in a debt scheme/bonds.

Similarly, a couple of months ago a lot of global funds were launched which claimed to invest in international securities. I was keenly interested in them, because it would help me in hedging my risks, and reduce my portfolio’s dependence on the performance of BSE Sensex. However, yesterday, when I visited their website to check their portfolio, all I found that they were either sitting with huge stockpiles of cash or 90% of their portfolio consisted of either Indian stocks or ADRs of Indian stocks…. which totally contradicts their advertisements, or investment rationale.

Today there was an article in moneycontrol how all the index funds (irrespective of the fund house) have underperformed the index… Surprised!!!! well this is what happens when index funds does not invest in stocks which forms the index.

The point is that that please do not fall for the jazzy advertisements and facade…. go check the history of the fund and its current portfolio before giving them their money.

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