Linkfest:May 22, 2013

Some stuff I am reading today morning:

SEBI has changed the way trading takes place (ET)

India to probe Ranbaxy (BS)

Affordable homes turn into investment options (Mint)

Loans to adult children and friends (Subramoney)

SEBI hits algo trading with penalties and lockouts (CapitalMind)

Venky Harinarayan’s tips for budding entrepreneurs (BT)

The American who bought Mongolia (BusinessWeek)

New life for the new trade of the decade (BillBonner)

SAC investors fleeing as Cohen faces prosecutors (NYPost)

Adaptation – Survival of the fittest (TRB)

Apple avoids paying taxes through a genius tax avoidance scheme (BI)

Forecasting Folly:MHRIL

This post is in continuation of my forecasting folly series (see here)

As the Just Dial IPO creates a buzz, I am reminded of another IPO-Mahindra Holidays & Resorts India Ltd (who run the popular Club Mahindra chain of resorts)  which listed on June 2009 with an offer price of Rs.300 per share.

Four Years Later, the stock is hovering around Rs.255 per share-around 15% below its offer price.Not only that, the promoters have also sold a part of their stake last month to institutional investors at Rs.255 per share

Now, it is interesting to remember what Arun Nanda,Chairman of MHRIL said at the time of the IPO

Between Anand Mahindra and I, we decided to leave a lot on the table and we feel that this should deal us very attractively priced. We have left a lot on the table.If you look at three previous years, our CAGR grew at more than 100% and we get 35% sales from existing customers referring new customers. So honestly speaking, I am quite bullish about the business and in fact I tell my friends that this is a wealth stock, this is one stock which will create tremendous wealth for its customers.


Forecasting Folly, anyone?