Dec 3, 2009

Hospitals in India – Shame & Sham

“God save you from one who wears a white or a black coat”. My grandmother used to say this often. This was her way of blessing me with sound health and sound social life so that I stay far away from doctors and lawyers.

I often ponder over these words of wisdom and feel how right she was. In this world it is hardly possible now days that we do not visit doctors. A family member of mine was diagnosed with cancer some time back and since then I have made numerous visits to the hospitals.

Indian government runs the biggest healthcare scam in the whole world. Throughout my life I have paid my taxes and till date without fail. The government hospitals built from that money should supposedly treat my patient free of charge. But when I reach the so called best Medical Institution in Asia, I am asked to ‘help’ the admission in-charge so that the patient can be admitted. Cancer is a kind of disease which needs urgent attention and this so called best hospital in Asia gives me the date of biopsy and bone scan test after 35 days. The doctor is trying to convince me that such a delay is not harmful! He can give an earlier date if I can get his younger sister placed in my company.

With a life at stake, I showed middle finger to the hospital (indirectly to Indian Government) and got my patient admitted to one of the most prestigious private hospitals in Northern India. This is also one of the costliest. The hospital kept on asking me if I need a deluxe room as my patient will feel more comfortable there. I confronted them by asking the nurse in-charge a question. I asked her “Are your general wards better than govt. hospitals? If yes then continue treatment in general ward.” “I am in a hospital not hotel. I need a better doctor not deluxe room which I cannot afford” The doctors were punctual but have very high fees. I have no problem with a doctor charging his fee, I feel helpless when these hospitals start behaving like an Insurance agent who wants to sell me ULIP policy.

In the afternoon I decided to have lunch and went to the hospital canteens. Now they have a very well furnished coffee house along with a swank canteen. As I saw the menu I was shocked. They were selling Burgers, Pizza, Fried Rice, Fried Poori, Oily cholles. All junk food! And just 20 minutes back the medical superintendent was selling me executive junk free diet program. This hospital is Selling & Promoting Junk food and that too at exorbitant prices. Only food item available was 2 idlies plate without sambher for, hold your breath. 64 Rs plus taxes. I decided to try food outside the hospital. I had to walk 3 kms to get a roadside shop where I could eat my complete lunch for 25 rupees. I asked the food vendor why no food seller near the hospital. His reply was equally shocking. He said that the hospital bribed the local police and they dragged away the food sellers and shut down chemist shops. They said like anywhere else a few local chemists started their shops and a few food sellers started the shops. It was mainly the chemists that were giving this hospital a competition by selling medicines at a discount. So police dragged them all. And when I observed I realized that in fact there is no chemist shop within 5 km distance of this hospital. Now this is Indian Police for you with you always!

Later this hospital told me that all chemotherapy drugs will be charges at MRP. This hospital has a chain of pharmacy stores and they offered me a 10% discount on all drugs. I asked them to procure the drugs from their own pharmacy chain but they blatantly refused. This is a 600 bed hospital and the land was given to it for Rupee 1 with a condition that it treats 1/3 rd of poor patients free. The land alone is worth more than 3500 crore rupees at present. This hospital was fined recently by health ministry for not allocating 200 beds to treat poor patients. And guess the fine Rs 2 lakhs only! There is 3500 crore of grant given and just Rs 2 lakh fine for flouting the promise? Shame on you Indian Health Ministry Shame on you. It’s because of you that millions of Indians die unattended for need of medical care. You are the fraudsters of the century.

Meanwhile, I have moved the patient to a nursing home where chemotherapy drug is administered to her. The cost of chemotherapy has come down by 40%. Though I do not know if I will be able to continue the 12 cycles of chemotherapy treatment, but I will keep on writing against this corrupt Indian set up on this blog where the protector is the tormentor.

Jun 14, 2009

Stop Racism – Look Who is Talking

Recent attacks on Indians in Australia have caused quite a buzz in media. It is really disturbing that these things have happened. I have lived in Sydney for quite some time. I used to love my walk to work from Milson Point to Kent Street over Harbour bridge. The Sunday Luch at Lighthouse on Watson Bay was a usual affair. The surprise element is that these lunches were never with Indians but with Australians. When I moved into the neighborhood it was an Australian Kid next door who helped me unpack the stuff in my new home. I still refuse to believe the monstrous image of Australians which has been created by Indian media.

I somehow do not understand that why Indian media is making such a big issue of attacks by some crazy people. These attacks are not the reflection of Australian culture. It is the act of some sick people and trust me most Australians feel the same. Australian culture as I know is very friendly.

However Indian Media and politicians have made this issue of national pride. They say Australia is racist while forgetting that India remains one of the biggest rascist country of the world. Indians discriminate against their own countrymen.

India discriminates the most on the basis of skin colour. Indians look their own country men with contempt if they have dark colour. Skin fair creams for both men and women sell like hot cakes in India, everyone wants to be fair . More than 99% of their movie stars are fair in colour. And Indians call Australians rascist.

Indians discriminate each other on religion, castes and even sub-castes. Hardly you will find any inter-caste or inter religion marriages in India. Sindhi matrimony, Punjabi matrimony etc. are some of the online matrimonial portals. Inter- religion marriages are big taboo. In fact killing couples for inter- religion marriage in India is quite common. They call it ‘Honour Killing’. Ever heard of this in Australia, UK or US? And Indians call Australians rascist.

Indians discriminate based on language. There is constant fight over national language and some of the states have refused to accept Hindi as a national language. North Indians vs. South Indians is a constant war. People from North and South simply hate each other.

Indians discriminate their East Indians folks. They call them Chinese and ‘Chinky’. How rude. East Indian girls are often mistreated in public buses and even denied entries in Five Star hotels and discotheques.

Kashmiri Pandits were massacred and forced to evacuate Jammu and Kashmir throughout the 80s and 90s while the Indian government remained a mute spectator. Numerous instances happen in India where Hindus, Muslims, Christians, Sikhs kill each other.


Last year I was in Mumbai, a city in Maharashtra state of India, Some people were on the streets campaigning against people from other state. They wanted that all the Indians who had migrated to their state should leave immediately. They alleged that the immigrants took away native’s jobs, subsidies etc. A dozen of migrants were killed and Scores injured. And if Australians are doing the same why are Indians making such hue and cry.





Above, The Maharashtrians political people beat up North Indians in Maharashtra,forcing them to go back to their own cities.
Having looked at some of the images above, I can only praise Australians that at least they do not torture their own countrymen.

And do Indian students behave responsibly in Australia? Let us look at the profile of an average Indian student in Australia. While some of them are really brilliant and study hard, most of them are just there because they could not make it to Indian universities, but since their fathers are rich and can spend 4-5 million Indian rupees, they travel to Australia. In Australia they spend half of their time in Pubs and what not places. They drink at beaches and other public banned places, ogle and make passes at women. No wonder they offend most of the people abroad.

Any form of Racism is bad and there is no justification whatsoever for it. But as they say clean your own house first!

Apr 28, 2009

Indian Media Scam - Private Treaties

By now you must have read about the Pyramid Saimira Scam. For the starters the story goes something like this. The promoters of the company, PS Saminathan and Nirmal Kotecha wanted to offload their stake in this company. So they conspired with the Assistant Editor of ‘Economic Times’ Rajesh Unnikrishnan to jack up the prices and demand of the stock so that they could offload it.

Together with this senior journalist promoters published reports on December 21 and 22, 2008 that SEBI had ordered Promoters to make an open offer for an additional 20 per cent stake in Pyramid at a price not less than Rs 250 per share within 14 days, for allegedly violating creeping acquisition norms. At that time the stock was trading at Rs 60. Following more recommendations from the journalist the stock shot up since promoters were to buy a Rs 60 stock at Rs 250 everybody started buying. The promoters and Economic Times Asst Editor were laughing all the way to the bank as they offloaded huge stake in the company.

But SEBI was surprised. Following investigations, SEBI found that the forgery was done to manipulate the stock price of PSTL and Nirmal Kotecha was one of the major beneficiaries and Economic Times Editor connived in this. All have been debarred from trading.

I never trusted promoters and offloading their stake always bothers me. But I am more surprised by the role that Assistant Editor of Economic Times played in this whole scam. Come-on we read this business daily. Should we no more trust on what it says? If as an investor you look forward to it for unbiased comments on the companies then sorry, Times Group papers is the wrong place.

You should know about the Times Group ‘Private Treaties’ service. Private Treaties is a pact between the Times of India group and approximately 100-odd companies, under which Times Group buys shares of some small companies. The list is expanding rapidly. The share purchase money is immediately taken back against the promise of guaranteed advertising in Group publications—to build the investee company’s brand(s). So for Times Group to gain from appreciation in stock value the brands have to be built, so there has to be the positive coverage on the companies always.

Unfortunately Pyramid Saimira Ltd.was also a Private Treaties client of Times Group. The name still appears on the clientlete list on their website. Check at www.timesprivatetreaties.com/portfolio/list-as-per-industry.html

MoneyLIFE, a website has in its possession a document to prove that Time group journalists are being designated as “champions” for Private Treaties clients to tailor editorial coverage to enhance the value of these companies and Times group investment.


An e-mail by The Economic Times editor Rahul Joshi (dated 29-Nov-2007) says:

“At ET, we are carving out a separate team to look into the needs of Private Treaty clients. Every large centre will have a senior editorial person to interface with Treaty clients. In turn, the senior edit person will be responsible, along with the existing team, for edit delivery. This team will have regional champions along with one or two reporters for help—but more importantly, they will liaise with REs (Resident Editors) and help in integrating the content into the different sections of the paper. In this way, we will be able to incorporate PT into the editorial mainstream, rather than it looking like a series of press releases appearing in vanilla form in the paper.”

In the past two years, Times Group has invested over Rs. 2,000 crore in 114-odd companies in diverse businesses. (Check website www.timesprivatetreaties.com)

Typically, the group buys a 5%-10% stake in mid-sized companies which plan an IPO. The company agrees to invest an equal amount in advertising in Times publications over a three-to-five-year period at a steep discount to the normal advertising rates.
Most companies that sign Private treaties are planning public issues, selling expensive realty projects or looking for private equity. All of them are looking for publicity and an assurance of POSITIVE Editorial Coverage. For the Times Group, it is a double bubble. First it gives Significant Capital Appreciation and tax-free income (since there is no long-term capital gains tax)—on the other hand, advertising revenue is fully taxed.

Here are some of the Clients of Times Group Private Treaties on which you will never hear a bad news.

  1. Deccan Aviation
  2. HDIL Ltd.
  3. Rajesh Exports Ltd
    Sobha Builders
    India Infoline
    Emaar MGF
    Amity Education
    Vishal Retail Pvt Ltd
    Zicom
    Ezeegol.com
    Bartronics Ltd
    Paramount Airways
    Almondz
    Future Group

Do you think that you will ever read negative articles about these companies in Economic Times? Economic Times is the most read business daily in India. A lot of people including Fund Managers make investment decisions based on Economic Times. It is one of the biggest conflicts of interest and a major sham which Times Group has been running. And so yesterday I changed my newspaper.

Post Script: Well Bartronics Ltd is also in the list about which I had expressed concerns in my blog in Feb Read Story here. A lot of people had commented that falling promoters stake is not a concern. Well to update you all on demand by SEBI promoters have released the number of shares they have pledged. Go to BSE website check out it seems that in Mar-09 quarter they have pledged each and every share they owned !!

Apr 9, 2009

Poverty Line or Starvation Line?

I had always known that poverty is widespread across India. But never felt that poverty was so extreme. Since last 12 days I was hopping trains travelling in buses and visited some rural areas of UP, Bihar, Madhya Pradesh, Rajasthan and Andhra Pradesh.

And on my way back, I asked myself a question, if there is so much poverty in India then how come only 26% of our population is below poverty line. I could immediately smell a fraud and misinterpretation of facts by Indian Government.

Let’s check what the definition of poverty in India is. It says that anyone earning below Rs 368 per month in rural areas and Rs. 559 per month in urban areas is considered below poverty line. This is approximately USD 7-10 a month!! Now the billion dollar question is .. Is this amount sufficient to lift you above poverty line?

The government feels a person earning merely 19 Rs a day is urban area is not poor. What all can you do in Rs 19. You can’t even buy a kilogram of vegetable for your family in this amount. How will you buy medicines? Where will you live? Even Kerosene will cost you 18 Rs / Litre. But our politicians feel 19 rupees is a good amount for you not to be called poor.

In 19 Rupees you can’t even get 2400 calories a day below which you UNICEF says a person is starving. It is not poverty line. India has defined ‘Starvation Line’. And so the fact is that 26% of the Indians are starving to death slowly. Surviving on less than a meal a day. But according to our politicians only 26% people are poor.

I tried to calculate the minimum amount that a person needs to survive in India.

If I take the current prevailing rates of food items in urban India

Rice = 20 Rs/Kg
Wheat = 17 Rs /Kg
Staple Vegetable = 12 Rs / Kg

For 1 person the Food expense alone come at around 700 Rs per month.

Cooking and fuel expenses comes at 50 Rs / month

Minimum clothing / sleeping requirement = 50 Rs / Month (Assuming that person sleeps on streets / roads and at least needs 1 blanket and mat)

A poor person labours hard and lives in unhygienic conditions which also mean that he will also fall ill. Going by current medicine rates at least 20 Rs a month should be kept aside for medicine & doctor fee

So Just to survive a person needs 820 Rs / Month.

So by this estimate approximately 68% people are below Poverty Line in India

And what do our politicians do? Give away subsidies to build a car when the same amount of money can be used to feed Indian poor.

37.7% of Indian households do not have access to a nearby water source. But we have world class mineral water companies.

49% do not have a proper shelter. But we have our ministers living in 5000 sq yard bungalows in Lutyen’s Delhi

69.5% do not have access to proper toilets. But we have the malls with Gucci and Reebok brands.

85.2% of Indian villages do not have a secondary school. But higher education of is subsidised.

43% of Indian villages do not have a pucca road connecting them. But Delhi government buys flats from builders for common wealth games.

Satyam was nothing. Ever seen bigger frauds than this.

Mar 26, 2009

Do Indian Newspapers Report False Real Estate Prices??

Almost all the Indian newspapers that I read on a daily basis have started an exclusive section called 'Real Estate'. This particluar section is a major revenue generator for them because I see a lots of advertisement on the pages.

On the right hand side of the main page there was a column that talked about the rates that are 'prevalent' in the Delhi/NCR region. I was absolutely shocked to read the prices, they were higher than what even the brokers were quoting. The Source of the property rates in various locations of Delhi/NCR was a property website.

So I picked that newspaper and website and started some analysis. (I will not take newspaper or names of the property website for obvious reasons.)

The 'prevelant price of any product be it cement, steel , stocks, food, property is determined by the 'Transaction' price. For the benefit of the starters when a trade happens it has two prices. One is the 'Seller' Price , which is the price at which seller quotes a product. Other is the 'Bid' Price, which is the price which buyer is willing to pay for the product. And when the seller and buyer price matches the product is sold at a price which is called 'transaction' price. The same principle applies across all markets and stock exchanges of the world.

So if a seller wants to sell a house at $200,000 but the buyer is willing to pay only $150,000 the transaction does not happen. Now if somebody asks what is the 'Prevalent' rate of the house. What do you say? Do you quote Seller's price $200,000 or the $150,000 which buyer is willing to pay. We know that no transaction happened. Here the newspapers fool peole by doing a small fraud.

I logged in to the property website whose source the newspaper had quoted and started looking for rates in Delhi/NCR region. I noticed that the 'prevalent' property prices quoted were the "Seller' Price. It was not the price at which the 'transactions' were happening. The property websites in UK always report the 'Transaction' price in an area. It doesn't matter what stupid price the 'Seller' wanted to sell his house for.

If some persons log into a website and wants to sell 1 BHK for 1 million dollars, does it become the so called 'prevalent' prices in that area. who is validating it? No one. And all these newspapers report these ambiguous rates.

Interestingly on the same property website there was Find buyer section where I tried to find what is the price a buyer is willing to pay for the 'property' in Delhi/NCR area. There were more than 45K buyer's and they also had mentioned the price they were willing to pay for the house.
Below is the chart. You can see the number of buyers who have the budget between a price range.


(Click on image to enlarge)

So you have seen that these are the kind of prices a buyer is willing to pay for the house. This is the 'prevalent' rates of property. This is the price at which the supply should come in.
You can see that hardly there is any demand for houses priced at above 60 lakhs INR. But 90% of the prices are above 60 lacs. Even after my IIT degree I am not able to undertand the maths of the property websites, newspapers and the builders. Clearly some nexus exists between them.

Let us create the awareness movement and let us tell to everyone so that these guys are not able to fool us.

Mar 17, 2009

India Misleads on Inflation Figures

A very big fraud has been happening right under our nose in India and we were all taking False Claims of Indian authorities all this while.  

Almost every Friday Since last 7 months we are cheering up that Indian inflation is coming down. Is it really true? Prices are going up like anything.

India calculates its official inflation based on Wholesale Price Index (WPI) rather than Consumer Price Index (CPI) based inflation. WPI is never an indication of the inflation simply because the consumers do not buy from wholesale markets. They buy at retail level. Most economies like US, UK, Japan, France, Singapore, and China etc. have selected CPI as its official barometer to weigh its inflation. And hold your breath even Pakistan follows CPI. (And all that while you laughed at high inflation in that country).

But our country, India, is amongst rare countries of the world, which uses WPI as its official scale to measure the inflation in the economy. Simply because WPI is always lower than CPI, thereby painting a false picture to the electorate that prices have fallen. So figures of 2.63% as claimed by Indian authorities are untrue. As per CPI our inflation figures stand at 10.5% in January up from 9.7% in December. Now you can make out the huge difference between WPI and CPI, 6.5%!

If that is the reason why CPI is being used by Indian authorities? I see two main reasons.

  1. Since WPI figures are always lower than CPI, the innocent public of India is fooled into believing that prices are coming down and hide the actual price rise on the pocket of consumer.
  2. WPI index tells us about commodity producers, manufacturers, bulk sellers and market owners. A low WPI is an indication to them that their selling prices rate is decreasing and gives them all good reasons to raise the wholesale prices. After all money for elections come from these rich people.

If we see Academically also the WPI calculation in India is flawed.

1st Flaw - At least 1,918 quotations should be received for assessing changes in WPI but Indian authorities invite not more than 1200 quotations. So price information is not even.

2nd Flaw – From 435 commodities in WPI , more than 100 are no more important from consumer point of view so the price fall in these 100 commodities does not really affect the Indian consumers.

3rd Flaw - There is a huge difference between the provisional and final index figure!! Once in April 12, 2008, the provisional figure of inflation was 7.33, which were revised as final inflation figure of 7.95 what a healthy error!!

4th Flaw - WPI measures the general level of price changes at the level of either the wholesaler or at the producer and does not take into account retail margins. WPI does not reflect the actual price hike, which the consumer is paying.

5th Flaw - Service sectors are not duly accounted in WPI. Service sector like health and education are important as consumers are increasingly spending more money on these items. So if education fee goes up or Doctor fees goes up, it doesn’t matter to Indian government.

6th Flaw - WPI measures the price changes from the production side and never from the consumption side It is surely a lop sided viewpoint of consumers.

Besides all these Frauds Indian Authorities will thump their chests at bringing down the Inflation. That’s what I call 'Shamelessness'

Mar 12, 2009

Realty sector to be under scanner

Real Estate sector in India is undoubtedly the most corrupt sector in India. Even though Satyam Scandal happened in IT sector, one must not forget that its root lied in Real Estate ( Maytas Infrastructure.). Read on this report from Hindu

Striking a note of caution for real estate developers, Mr D. Subrahmanyam, Executive Director of the Housing and Urban Development Corporation Ltd (HUDCO), said, after Information Technology, the real estate sector could next fall under the scanner of regulators in transparency matters.

HUDCO is a fully-owned enterprise of the Government of India engaged in financing housing projects and other urban developments. Addressing a seminar at the Realty Expo 2009, organised by the Confederation of Real Estate Developers Association of India (CREDAI), he said, “The next target of the national regulator after the Satyam scam may be the realty sector as it is known to contain elements indulging in unethical practices.” Speculation on real estate transactions by both buyers and sellers often result in pricing out of genuine buyers from the market, he observed.

The banks and financial institutions refrain from financing real estate projects as company balance sheets and other corporate papers often lack transparency, he said. “The asset agreement is considered a weak ownership document as a mortgage for financing documents,” he said, adding that some developers also deliberately avoid taking completion certificates.

On the strategies to be adopted in a period of slump, he said, “The developers should make a realistic study of demand and supply situation and affordability issues before investing in projects.” The sector also needed a grater degree of regulation, he pointed out.

Mr Harshvardhan Neotia, Chairman of the Ambuja Realty Group, said the current correction in real estate prices and costs is healthy for the industry as it gives leeway for the developers to become more vigilant and quality conscious. Mr Pradip Kumar Chopra, Chairman, PS group, said on the sidelines of the seminar that prices of housing units in Kolkata were down by nearly 25 per cent on an average.

Mr Jayanta Kumar Sinha, Chief General Manager of the State Bank of India, said there is good demand for houses from “genuine buyers” and that the situation would stabilise during the next financial year as cost of loans were being rationalised. ( Note that
SBI is hands in glove with the present government to prop up prices and hence comes this statement)

The Realty Expo 2009 is being held here at the Science City grounds from March 4-8.

Mar 9, 2009

Votes Bought in India

India is a democratic country, however as I had mentioned earlier that even the institution of democracy has been corrupted by Indian politicians.

Center of Media Studies conducted a survey just now and the results showed that votes are purchased by political parties by paying cash! Imagine that happening in a country that claims itself to be the world's largest democracy!!

The study started with a sample size of 18,000 voters in 19 states and 23,000 households belonging to the below poverty line (BPL) category in 2007. Please not that it did not cover other inducements like liquor or freebies and focussed only on the assembly and Lok Sabha elections. Had they clubbed it, the results would have been worse.

According to the Survey National average of people who took cash to cast their votes was found to be 22 percent in the general category and 37 percent in BPL families. Poor felows fail to understand that the same cash is taken by the elected leaders as 'bribes' once they come back to power.

The Topmost Indian States in Cash for Vote Corruption
1. Andhra Pradesh, 94 percent of BPL category voters had accepted money to vote ( No doubt Satyam Computers was found and is registered in this state.)
2. Tamil Nadu with 78 percent (No Comments!)
3. Karnataka and Chhattisgarh with 73 percent (Karnataka is the IT face of India !)
4. Assam with 56 percent
5. Orissa with 50 percent.
Note that Prosperous states like Gujarat and Maharashtra reported 24 percent and 13 percent general category voters respectively taking money, while among the BPL households the figure is 32 percent for both states.


The lowest figure - of 13 percent - was in states ruled by Left parties like Kerala, West Bengal and Tripura and similarly for the Bahujan Samaj Party. It is quite believable since these party use muscle power (henchmen, dons) to terrorise and gather votes rather than money power. Don't think these parties are good, these parties are far worse.

Even in Delhi, 25 percent of the voters received money for their vote which is shocking.

This is the face of Democracy in India. The Largest populated democracy. This is India Shining.

Mar 3, 2009

Retail Investor Fooled Again

I wonder why 'Retail Investors' are called 'Small' Investors. It is because there brain is small, their intelligence is small.
This class of investor has time and again been fooled by Promoters, Analysts and Brokers. They are fooled into beleiving the great Indian Stock Market Story and always get the hurt the most.
I remember the times during 1992 crash of Indian Stock Market. The retail investor lost more money after the crash rather than before it.

It works on a simple philosophy.
During Bull Runs the Big Sharks hoard stocks before the retail investor, this simply means that cost of buying of Big players is always lower than that of retail investor. Now when stock markets start crashing these Big Guys just can't go out and sell their stocks. There has to be someone to buy them.. Right??


At these times the Analysts start coming out with stories that these are the right times to buy the stock get the blue chips. Its a dip use this opportunity, Invest Invest. We have seen last year when Sensex was at 15,000 a lot of so called Market Experts ( I do not want to take the names here, a little googling will tell you ) were telling retail investors to enter for profits on 1-2 year time frame. The Retail Investor buys , Big players get an exit route and they sell.
Thus Retail Investor thus buy something which Smart people want to sell.
And as always Indian Retail Investor invests more in a Bear Market rather than in a Bull Market. Analysts do their Job of writing articles for bribe.

If you see the table below you will find that FIIs sold 13.5 billion equities last year. Mutual Funds bought 2 billion. Domestic Institutions / LIC bought not more than 4 Bn till date. The promoter buy back was just a sham to prop up their stocks. (DLF fooled everyone by their buy-back news). Now interesting question? Who bought rest 7.5 Bn dollars worth of Equities in India? You get it right. Retail Investor. Who has been fooled again.


Table 1: Net Equity Purchased / Sold by FIIs (Foreign Institutional Investors) and Mutual Funds

FIIs

Mutual Funds

Feb-09

-2,690.50

-1,497.10

Jan-09

-4,250.20

-864.2

Dec-08

1,330.90

340.7

Nov-08

-2,820.30

-975.4

Oct-08

-14,248.60

1,429.50

Sep-08

-7,937.00

2,292.10

Aug-08

-2,065.80

-368.9

Jul-08

-1,012.90

1,412.50

Jun-08

-10,577.70

3,186.90

May-08

-4,917.30

64

Apr-08

979

128.6

Mar-08

124.4

-1,847.60

Feb-08

5,419.90

514

Jan-08

-17,326.30

5,551.60

TOTAL

-59,992.4

9,366.7

TOTAL (USD)

13.4 bn

2 bn


As I finish writing this article in Month of March-09 FIIs have additionally sold USD 500 Mn and Mutual Funds sold USD 200 Mn.

Mar 1, 2009

55 million Indians pushed below the poverty line

Now this is one development that is likely to give the ruling UPA government sleepless nights especially when general elections are a sniffing distance away. Kolkata based Indian Statistical Institute has just come out with a results of a survey from about 124,000 households across the country. And the results of the survey have punched a big hole in the present government’s claim that it has been able to alleviate poverty in the country during its regime. Infact, if the results are to be believed, about a staggering 55 m people have been further pushed below the poverty line. This, at a time when the country recorded its best economic growth ever. A sorry state of affairs indeed as what the country needs is not lopsided economic growth where the rich get richer but a more equitable growth whereby the benefits of higher growth percolate down to the poorest sections of the society.

Is this India Shining? Best Investment Place? Read a related article below

Dancing with a bear is risky

M.J. Akbar Arab News

Instead of banning opinion polls during election time, the government should ban subversive academic organizations like Kolkata’s Indian Statistical Institute (ISI). Opinion polls and exit polls are way off the mark, so why bother? A ban only betrays the nervousness of a government anxious to come back to power, but uncertain about how this will happen.

It is true that the slightest shift in the electoral demographic could send a government from the heaven of office to the hell of irrelevance. But does the Cabinet of Dr. Manmohan Singh and the party of Sonia and Rahul Gandhi actually believe that the Indian voter sits biting his nails before a television set in order to make up his mind about how he will vote? The really accurate psephologist is not a pseudo-scientist available on hire, but the social scientist whose name you do not know.

The facts that are molding the mood of the voter have been gathered by the ISI, based on data collated by the National Sample Survey Organization from about 124,000 households across the country. Get ready for a sharp crack in your first illusion. The United Progressive Alliance (UPA) government, through its economic spokesman Montek Singh Ahluwalia, has sold us the bait that poverty has gone down under its watch. Fact: The number of people living below the poverty line has actually increased by a horrifying 20 percent. India had some 270 million people below the poverty line in 2004-5, when the present government took office. That number has gone up by 55 million, or 20 percent, after five years of policies named after the “aam aadmi” (common man) but shaped for the “khaas aadmi” (vested interests).

The economic map of India has shifted the axis of tension. The old notional north-south line that divided the country into broad politico-cultural halves is passe. There is a new poverty diagonal that separates the nation on a north-west to south-east arc. The India to the east is sinking toward Bangladesh and Burma; India to the west is rising, and becoming the stuff of popular aspiration and fantasy.

If you want to know why Mamata Banerjee could undermine the ramparts of the red fortress in Bengal, pore over the ISI report. A stunning 14 out of Bengal’s 18 districts are among the 100 poorest in India, after three decades of Marxist rule. The most indigent district in the country is not in Bihar, Orissa or Jharkhand, but in Bengal, Murshidabad, capital of a principality that once included the whole of Bengal, Orissa and a significant part of Bihar. When Robert Clive stepped into Murshidabad in 1757 after victory in the Battle of Plassey, he looked around in wonder and exclaimed that it was richer than London. Today he would look around and find women slaving away, making bidis at the rate of 41 rupees for a thousand, out of which the middleman keeps six rupees. In percentage terms, the rich pay far less to their middlemen.

Muslim-majority Murshidabad has a population density of 1,102 per square km against a national average of 590. Among its constituencies is Jangipur. Its member of Parliament is Pranab Mukherjee, the current finance minister. Wouldn’t it be ironic if the Marxists were pushed back in Bengal but won Jangipur, as the law of accountability began to extract its price? The job losses that could cross over a hundred million by March are going to have significant impact on voter mood. January saw a fall of 24 percent in exports from last year. Realists consider the Reserve Bank of India’s projection of 7 percent growth optimistic. Rising India might be under a cloud for the last six months, but Stagnant India has been in gloom for years. There is little coverage of this gloom since media are driven by advertising; advertising is interested in consumption, and the hungry do not even consume food.

It is extraordinary how political parties shy away from decisive facts, and chase ephemeral ones. The extended BJP family is sending vigilantes to check on what the young are doing in their leisure time, but displays little interest in what the young really want — someone to worry about their workplace. It is understandable when a ruling party shies away from the economy because it has no answers. Why should an opposition party be averse? All it has to do is ask questions.

The political discourse, on all sides, is consumed not by issues that are relevant to the voter, but by posturing and negotiations for partnerships of convenience. The parties do not even pretend to have any ideology in common, or even a purpose that is vaguely similar.

Everyone knows that the negotiations for office after the results will have little to do with the manifestos that will be printed before the elections. There is only one weight that will be placed on the scales of judgment, the weight of numbers. (The scales of justice have no place in politics.) One is often reminded, while watching the pantomime, that when you dance with a bear you don’t stop. Those who stop get mauled before they can walk off.

A friend reminded me of an even more appropriate aphorism, and was kind enough to add that this had become relevant to the whole of South Asia. The quotation was from Alice in Wonderland. If you don’t know where you are going, any road will take you there.

Feb 27, 2009

Software that Hides Sales - India Rocks!!!

Microsoft may be big boss in making softwares, but when it comes to its application no-one can beat us. Check out this item below.
IT SLEUTHS DETECT SOFTWARE THAT HIDE SALES AT SHOWROOMS
Chennai
In a year that registered a record seizure of Rs 27.34 crore worth of valuables and cash, the Income Tax investigation wing has stumbled upon software used by jewellery showrooms to hide actual sales details.
Director general (investigations) of IT P Ranganathan told reporters that some big jewellery showrooms in the city were using software called Cadmium that allowed them to selectively suppress details of accounts. "This software provides the users with an option to disclose only part of the actual sales made.
It also facilitates deletion of unaccounted sale entries in the stock data and the data thus deleted cannot be retrieved at all.
The jewellers are using this software for both sales and stock accounting," Ranganathan said.
The Income Tax department has shown an improvement in its performance compared to last year's, seizing Rs 27.24 crore worth of valuables and cash. Hard cash accounted for Rs 14.30 crore.
The IT investigation team carried out 22 search operations between April 08 to February 09 in Tamil Nadu and Puducherry and had executed 128 warrants.

Feb 26, 2009

Rating Agencies - The new Devil?

"Sold our soul to the devil for revenue", moaned some employees of Moody’s recently. They were crying foul about how the company issued fake ratings to junk securities just to make money on them. Moody’s 28% associate in India, ICRA, seems to be doing the same things. Not showing penance for giving 4 out of 5 IPO rating to Reliance Power which had no business to show for its creditworthiness, the company is at it again.

It has assigned its highest rating to Reliance Communications (RCL), as the latter prepares to borrow money for expansion purposes. This rating is for a company that has a debt to equity of 0.9 times, which will increase to 1.2 times after the latest round of fund raising! RCL is already being questioned by the Enforcement Directorate for violating the foreign exchange rules. The company had reportedly parked the unutilised money (of around Rs 51 bn) from its foreign currency bond issue interest free with a wholly owned subsidiary! Further, the company has a large portion of forex loans (around 66% of total loans) in its book, which has the potential to severely hurt its profits.

The story of credit rating agencies worldwide and in India is a story of massive failure. And the result is that our entire financial system is now at risk. If the raters are not brought to task, we will always remain in a debt bubble trap.

Feb 22, 2009

Masters of Frauds in India


C R Bhansali’s web of deceit was elaborate. He had floated 133 companies to pull in funds and suck them out. Money came easy; he was inspiring with his grandiose plans, high interest rates and entry into mutual fund and banking. CRB’s meteoric rise in the early 90s coincided with the boom in the Non-Banking Finance Company (NBFC) sector. His fall in 1996 was equally fast.

Forget investors, even credit-rating agencies didn’t see it coming. CARE, a leading agency, gave ‘AAA’ rating at a time when the company was going down.

How to become chairman of top 3 finance companies

Born in Rajasthan, raised in Kolkata, Bhansali became a dada in the financial capital — Mumbai — before he turned 40.

First came the finance company (CRB Capital Markets), after which the mutual fund (CRB Mutual Fund) and CRB Share Custodial Services followed. Then he planned to get into banking, and he almost made it.

He had a dream run from 1992 to 1996 collecting money from the public through fixed deposits, bonds and debentures. He floated around 133 subsidiaries and unlisted companies. Most of the money was transferred to these dummy companies.

The flagship company, CRB Capital Markets, went public in 1992 and raised a record Rs 176 crore in three years. In 1994 CRB Mutual Funds, through its Arihant Mangal Growth Scheme, raised Rs 230 crore. Another Rs 180 crore came through fixed deposits.

CRB Corporation Ltd raised Rs 84 core through three public issues between May 1993 and December 1995. CRB Share Custodial Services raised a further Rs 100 crore in January 1995 to set up operations.

Between 1992 and 1995, when the market was in the post-Harshad Mehta bear phase, Bhansali managed to raise close to Rs 900 crore.

Post-1995, he got a beating on the stock markets. His investments in the property market did not pay off because of the slump.

Caught in a financial trap, Bhansali tried borrowing more money from the market. ‘‘To repay the interest rate on amounts he borrowed later, Bhansali was forced to borrow once again. This went on and on, and he got stuck in a financial quicksand,’’ says a former employee, refusing to be named.

Going down, he even tried to invest in Bollywood

Bhansali made a determined effort to get out of the trap by investing in some high-risk ventures. He is believed to have even made a Hindi commercial film. Again, the gamble failed.

In the end, Bhansali was borrowing funds from banks through questionable means. All was well till December 1996. Then the Reserve Bank of India (RBI) refused banking status to CRB and contemplated action for various irregularities.

Pradip Bhavnani, President of National Association of Small Investors, says: ‘‘There was a lot of confusion about how to act against CRB, considering its NBFC status. When he started defaulting, public sector banks like the State Bank of India were the first to be hit. Had the SEBI and RBI acted fast, investors wouldn’t have lost money.’’

Bhansali spent three months in jail in 1997. He is out now but nobody knows where he lives and if they do, they are not snitching.

Feb 16, 2009

Bartronics Ltd - A mini Satyam?

As Satyam Computers Limited saga unfolded a lot of people started raising questions on companies which were registered in Hyderabad. Because Satyam happened it is wrong to assume that all apples are rotten. Having said that it is better to be safe than sorry.

There is a lot of buzz going around a company by name Bartronics Limted. Talks are around that it will be a great company in future etc. etc.

I will not here argue the future earning potential, all I want to analyze and present some facts on share holding pattern which I obtained from company website.

The table below displays the Shareholding of the company. It should be remembered that 2 years back the Promoter holding was 58% and it has come down to 33% now and the trend shows that it is decreasing further.
In last 9 months the Promoter's share dropped from 39% to 33%.FII reduced their share from 11% to 6.6%and NRIs reduced it from 12% to 2%.

Share holding of Bartronics Limited
Share holding pattern as on:31/12/200830/09/200831/03/2008
No. of Shares%age HoldingNo. of Shares%age HoldingNo. of Shares%age Holding

Promoter's Holdings

Indian Promoters961821833.19962565933.221033384538.94
Sub Total961821833.19962565933.221033384538.94

Non- Promoter's Holdings

Banks Fin. Inst. and Insurance6304722.188204722.8320293147.65
FIIs19185706.6224559388.48291152010.97
Sub Total435620515.03519334217.92494083418.62
Private Corporate Bodies380540313.13397452513.7219933277.51
NRI's/OCB's/Foreign Others5392121.864879341.68323668212.20
Others1445750.502700750.931194660.55
Sub Total448919015.49473253416.33534947520.16
General Public1051384336.28942592132.53591097022.28
Grand Total28977456100.0028977456100.0026535124100.00

Why the promoters and the smart money reducing their stake in the company if its future is so good. Promoters are the first people to know about the state of the company. FIIs and wealthy NRIs too have a great access to the company information because of the research team they employ.

Why the Big guns are reducing the stake? Big Question.

Now another interesting fact. I saw a report that asked Retail Investor or the general public to buy Bartronics. If you see the retail investor holding in last 9 months it has gone up from 22% to 36%, an increase of 63%.

The small investor is buying something which Smart people are selling!! Is Retail Investor more smart that FIIs, Does small investor has more information about the company than promoters, Does small investor has more risk appetite than a wealthy NRI?This is simple case of offloading to the small investor by fooling them and adds to another everyday frauds that happen in India.

If the promoters are so sure of super growth of this company, why are they doing such a generosity on small investor by distributing its stock.Below is the table for your analysis.

Disclaimer* This article is not intended to malign the company and has been written in good faith to evoke thoughts from the small investors. Readers can read the details of pattern on company website at http://www.bartronicsindia.com/investors/fresults.html and arrive at a conclusion.

Instanex FII index : FIIS Sell $1bn Indian Shares

These are troubled times. A lot of articles have been written by the so called 'Analysts' that Retail Investor (read small investor) should buy in the current market while at the same time the smart money or the FIIs are existing the Indian markets. The Indian market was pushed up from 4K to 21K only because FII brought in amount of monies into the Indian bourses which were never heard before. And now that FIIs are leaving the market is bound to go down further. Analysts having fooled the FIIs with India shining campaign are now fooling small investor into the trap. If the small investor feels that they are more markets savvy, has more market news access he can go ahead and burn his hands in Indian stock market.

FIIS SELL $1BN INDIAN SHARES
February 16, 2008
Deccan Chronicle The Asian Age
The FII index had severely under-performed the Nifty from January 1 to February 13 as the FIIs sold shares worth $1 billion in the Indian markets.

An analysis of the newly compiled Instanex FII index shows that on the day the FIIs sell they under-perform the Nifty and when they buy they out-perform the Nifty.

It is also a well-known fact that when they buy the market is up and when they sell the market is down. Very rarely is the market up when they sell, and if it is, it could be because the Indian financial institutions drove
the market on that day.

Gautam Chand of Instanex Capital Consultants Pvt. Ltd that has compiled the index of 15 scrips, says, “For example, year-to-date (February 13) in 2009, FIIs have net sold shares worth over Rs 5,000 crores ($1.04 billion). Over this period, the Instanex FII Index has lost 1.04 percent while the Nifty has fallen just 0.36 percent, confirming the trend that when they sell they under-perform the Nifty.”

He says that investors who wish to profit from their view on FII flows into or out of listed Indian equity shares could replicate the Instanex FII Index using shares or stock futures and expect to track the trend of actual FII
flows more closely. The Instanex study shows that the pattern of FII investments over the past five years indicates that FIIs make concentrated bets with their top 15 stocks consistently accounting for close to 55
percent of the value of their 1,000+ holdings and the top 100 accounting for close to 88 percent. The top holdings do not change drastically over time, further confirming that FIIs like to add to the same stocks when they invest additional amounts.

The Instanex FII index consists of 15 stocks —Reliance, Bharti Airtel, HDFC, Infosys, ICICI Bank, Bhel, HDFC Bank, ITC, HUL, ONGC, SBI, NTPC, L&T, TCS and Sun Pharma.

Feb 15, 2009

Government Bailsout Builders in India

The real estate market is dead.
People who need homes are not buying property because the buyers feel that the
prices are too high.

The developers are not selling any property because the sellers still want the
prices they had predicted in their Excel sheets - vetted by the specialist
property consultants (the equivalent of the rating agencies who approved junk
mortgage bonds as "AAA").

So there is a standstill.

The buyer and the seller are like the two cowboys in a western film each with a
gun in a holster. Poised to pull the trigger.

All things equal, the buyer should be the winner. The sellers - the real estate developers - have debt on their balance sheets. They need to pay an interest on that debt. They are not selling any properties anymore. So
how do they service that large debt? The obvious answer is that the developer
must slash the prices of the property that he wishes to sell. To a price point
where it will actually sell. Then the developer will get the cash to pay the
interest on the loan and repay the loan.

But there is nothing obvious about real estate.And there is nothing obvious about the real estate business in India.
Particularly when this is election season. And real estate has a natural tendency and a perception to be linked to politics and political funding.

Protecting profits
There are probably tens of millions of square feet of property in various stages of readiness lying unsold and available across India.
This is ironic because there are probably buyers for all that unsold property.
Unlike the USA where most people already have a home, India is in a situation
where people do not have homes - and there are homes lying unsold across the
country.

So there are buyers for property. But at a price that makes sense for the buyer. A price at which the buyer can afford the home. That price may be Rs 1,500 per square foot in "middle class areas" of cities like Nagpur or
Rs. 2,000 per square foot in Pune, and Rs. 3,000 per square foot in northern Bombay.

But those "willing-to-buy" prices may be pretty far away from the "wishing-to-sell" prices in the Excel sheets of the real estate developers.
Left to the market, the prices would collapse - or the banks would take over the property as the real estate developers default on loans.
Instead, we have a government that is keen on cutting rates of interest for home loans (a good idea for sure) but not forcing the developers to cut their prices! In fact, the actions of the government seem to suggest that
they are willing to rescue the developers.

So State Bank of India, a bank controlled by the government of India, announces that they wish to disburse Rs 1,500 crores of home loans at 8% every month for the next 3 months. (Note that, in a convenient coincidence, the elections will be over by then.) In a loan mela, you give away loans to people knowing you will never get the money back. In a loan chela, you follow a government directive even if economic sense tells you that you have the power the turn the terms of trade in favour of the buyer.

With no price cuts and simulating an average price of Rs 3,000 per square foot for a 1,000 square foot apartment on which SBI gives a loan of 70% of the property value, we see that SBI can help the developers clear about 21 million square feet of stock. The buyer, borrowing an average Rs 21 lakhs for a 10 year period at 8%, has an EMI of Rs. 25,478.

But, what if the developer was to blink and drop prices by, say, 30%? SBIs Rs 1,500 crore per month will then help clear 32 million square feet of property (50% more) and the EMI of the individual will collapse by -33% to Rs 16,985 because the buyer now needs a smaller loan of Rs. 14 lakhs to buy that same 1,000 square foot home.

Table 1: State Bank's loan Scheme with Reduced Property Rates

No price cutWith price cut
area (sq feet) 1,000 1,000
total value (Rs)3,000,000 2,000,000
loan facility 70% 70%
loan given (Rs) 2,100,000 1,400,000
money to spend (Rs) 15,000,000,000 15,000,000,000
number of flats 7,143 10,714
total area sold (sq ft)7,142,857 10,714,286
over 3 months (sq ft)21,428,571 32,142,857 50.00%
loan taken 2,100,000 1,400,000
interest rate 8% 8%
Tenure 10 years 10 years
EMIRs. 25,478 Rs16,986-33.00%


SBI wants to act as a catalyst. They want to help kick start the economy. That is great news. But what are they - or the governments in power - acting as a catalyst for? The protection of the wealth of the developers or the increase in the wealth of the individuals? A decline in property prices would be the way to kick-start the economy. The "saving" in EMI of Rs. 8,500 per
month can be used to consume many other products. A decline in interest rates
kicks the buyer and protects the developers.

I like SBI. But it would have been a better reflection of the times if there was a headline that screamed: SBI takes over projects from defaulted developers and sells them at 30% discount to recover its loans. Now that would be a more honest reflection of the state of the real estate market.

Feb 13, 2009

TATAs - BIGGEST PLEDGERS!!!!

So the writing is clear on the wall. The most admired group in India has pledged as many shares worth more than 10,000 Crores. The acquistions of JLR and Corus were projected as coming of a new age India. Seems like all the Cheering and Gung-Ho mongering of India shining has evaporated.
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List of Promoters Pledged Indian Stocks – 3rd List


Oh God !! The list is growing. It seems every 4th company on Sensex has pledged its share.
MOST OF THE COMPANIES HAVE NOT DECLARED WHO LENDED THEM MONEY AND THE INTENTION OF USING THE MONEY SO BEWARE AND BE CAREFUL BEFORE INVESTING IN THESE COMPANIES

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Feb 12, 2009

List of Promoters Pledged Indian Stocks - 2nd List


Here is another list of companies whose promoters have pledged their stocks. The surprises were names like Kitply with more than 35% of its stock pledged and UTV with 22.7% . The lender's name have not been declared.

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List of Promoters Pledged Indian Stocks - 1st List

After it was revealed that Satyam promoter Mr. Raju had pledged most of his shares before admitting the fraud and made a cool 400 million US$, the SEBI (SEC equivalent of India) asked all the promoters of listed companies to declare the pledged shares. After much resistance the following declarations have been made till date. (Source: Bombay Stock exchange).

Surprisingly, most of the companies have not declared the name of the Lender with whom they have pledged the shares. God save if the lender is a mafia or a don or may be an Indian politician!

I hope none of the stocks in Your portfolio appears in this list!!!

I will keep updating the list as disclosure of pledges come each day. Keep tuned in.
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