RBL Bank:From Pre-IPO to IPO

RBL Bank (formerly Ratnakar Bank) was the first scrip I started market making in.

The journey started a few years back and it turned out to be extra-ordinarily rewarding both personally for me and my fellow investors.

Hopefully,the Bank will continue to scale new heights of success and glory.

Salutations to the man who made it all possible…yes Sir,you deserve that Million Dollar Smile !

1471526182-7051

Wrong Number

Today Idea Cellular soared by 8% on the basis of a news report by CNBC TV-18 that it is in merger talks with Vodafone.

Idea Cellular angrily denied the reports and I got the following message on Whats App:

IDEA DENIES MERGER/DEAL with VODAFONE

Regrettably, CNBC-TV18 have put out a wrongheaded baseless story stating that Idea is in talks with Vodafone on stake sale.  This is absolutely untrue and preposterous.  There is no such intent.  We request you not to be swayed by such motivated feed.  Do not lend any credence to it.

Thank you for your understanding and support.

Best regards,
Dr. (Mrs.) Pragnya Ram
Group Executive President – Corporate Communications & CSR

What is interesting is the use of the word “motivated”.

Since CNBC TV-18 is owned by the Reliance Group whose Reliance Jio launch is imminent,did the TV channel deliberately run a false story?

Or is it just a normal day’s job for the fine folks at CNBC ?

RBL Bank Employees hit the Jackpot

The public issue of RBL Bank  opens between 19 August,2016-23 August, 2016 with a price band between 224-225 Rs/share.

RBL Bank has a very generous ESOP program which can issue Stock Options upto 12 % of the Bank’s Equity.

As such,employees are keenly awaiting the listing as it will convert many of them into multimillionaires

Some key employees who will be laughing all the way to the Bank (literally !) are:

Name of Employee # Of Options Granted # Of Options Exercised # Of Options Outstanding Value (In Crores)
Vishwavir Ahuja 5,252,900 3,021,670 2,231,230 118.19
Rajeev Ahuja 3,502,900 1,927,670 1,575,230 78.82
Shanta Vallury 1,271,900 753,130 518,770 28.62
Naresh Karia 1,028,400 553,730 474,670 23.14
R Gurumurthy 1,852,250 1,071,065 781,185 41.68
Joginder Singh Rana 970,650 790,895 179,755 21.84
Andrew Gracias 1,851,650 820,495 1,031,155 41.66
Manoj Rawat 802,150 297,425 504,725 18.05
Satish Dhawan 646,650 389,195 257,455 14.55
Sandeep Thapliyal 796,100 586,700 209,400 17.91
Surinder Chawla 886,100 484,200 401,900 19.94
Sanjay Sharma 426,100 189,200 236,900 9.59
Harjeet Toor 951,100 352,700 598,400 21.40
Rana Vikram Anand 750,000 381,300 368,700 16.88
Sunny Uberai 460,500 186,500 274,000 10.36
Rajeev Dewal 225,500 20,000 205,500 5.07
Amareesh Gulati 700,500 150,000 550,500 15.76
Neeta Mukerji 650,000 0 650,000 14.63
Brijesh Mehra 1,000,000 0 1,000,000 22.50
Vinay Tripathi 54,000 20,260 33,740 1.22

What were you doing when RBL Bank was recruiting?

Is Indian Equity doomed?

The following excerpt from Warren Buffett’s latest letter to investors makes for fascinating reading:

“There is, however, one clear, present and enduring danger to Berkshire against which Charlie and I are powerless. That threat to Berkshire is also the major threat our citizenry faces: a “successful” (as defined by the aggressor) cyber, biological, nuclear or chemical attack on the United States. That is a risk Berkshire shares with all of American business.

The probability of such mass destruction in any given year is likely very small. It’s been more than 70 years since I delivered a Washington Post newspaper headlining the fact that the United States had dropped the first atomic bomb. Subsequently, we’ve had a few close calls but avoided catastrophic destruction. We can thank our government – and luck! – for this result.

Nevertheless, what’s a small probability in a short period approaches certainty in the longer run. (If there is only one chance in thirty of an event occurring in a given year, the likelihood of it occurring at least once in a century is 96.6%.) The added bad news is that there will forever be people and organizations and perhaps even nations that would like to inflict maximum damage on our country. Their means of doing so have increased exponentially during my lifetime. “Innovation” has its dark side.

There is no way for American corporations or their investors to shed this risk. If an event occurs in the U.S. that leads to mass devastation, the value of all equity investments will almost certainly be decimated.”

We are neighbors to a fanatical nuclear armed failed state Pakistan with whom we have fought 4 wars and continue to have unceasing hostilities on the LOC.

Are Indian equities eventually doomed due to this geo-political risk?

Fed Rate hikes and the Indian Markets

The table below shows the size and length of the FED Tightening Cycle

Source: Samir Arora

In recent memory,the FED started tightening on 30 June 2004,hiked rates 17 times till the rate was 5.25% and the cycle lasted 25 months i.e. till July end 2006

How did the Indian markets fare in this period?

The Nifty went from 1505.6 on 30 June 2004 to 3143.2 on 31 July 2006 i.e. it doubled.