Manish Bhandari’s Observation

I must bring an interesting observation I have been having for some time to your notice.

India is likely to witness shortage of quality investable companies in the future.

The seeds were sown few years back with the scrapping of press note, allowance of 100% FDI in most of the sectors, buy back by listed MNCs and regulatory arbitrage available to do buy back rather than paying dividend.

Moreover, in many cases Initial Public Offers are from companies that have been, private equity funded leaving less room for upside for secondary market players.

All these factors are compounding the valuation for high quality companies to stratospheric height, leaving less room for error, if forecasted earnings are not met.

Moreover, my observation is that in many areas, MNC with technological edge, global relationship, brand, superior business processes have an edge, emerging as leaders or have gained dominant markets share in respective field. 

Many such, not represented in the listed equity universe of India.

The classic example is the compressor industry, where the world technological leader is not listed anymore.

This sets us in dilemma of how to invest in an excellent business, which is not listed, or invest in a second rung, average business as proxy play.

Therefore, relative value trade, pitting one company against another without a deep dig, is not going to yield sustainable return.

Such scenario also reinforces, hold on to the good companies you have discovered rather attempting to find new gem.

wrote Manish Bhandari,Vallum Capital

Narayan Murthy should shut up

Narayan Murthy is making a mountain out of mole.

If we compare the hike in salary of Praveen Rao with the industry peers, it is not very high.

So, I do not think he is making any valid point. To say now that we always took very low salaries and all that is all humbug.

Those were the different days and he had huge amount of shares in the company. So it suited them to not to debit profit and loss account with high salaries.

But things have changed, Praveen is not a founder, Praveen is a professional who is being paid based on his professional competencies and what peer compensation packages would be.

This is a very uncalled for debate and mudslinging which Mr Murthy has unnecessarily got himself entangled in.

I am pained actually to see his email.

He has used I, me and myself 23 times.

Is this becoming of a leadership that you keep on talking about? I did this, I did that, it was me, it was my decision, what is it? Where are we on this?

You have done your good job, you are leaving legacy behind. Leave it and go ahead in life and look at many more things than engaging yourself into Praveen’s salary. Why does he go on saying we do not like this kind of salary to be paid?

Leave it to Vishal Sikka, leave it to Seshasayee, leave it to the company. They will decide what has to be done.

You have done your job for almost close to 30 years, you came back, you were there for one year, you again went back, you again engaged.

In February you called truce and said “I will not go into public and talk about it, if there is any differences we will settle within”.

Then what happens?

Just Praveen’s salary has become a big issue for you to write a huge mail to the media and saying that I am not approving it.

This is completely, highly unbecoming of a leader like Mr Narayana Murthy. I hope and pray wisdom will prevail and he will not again engage into these kind of things-said Anil Singhvi