Author: Raoji

Categories
Promoters

The devil you know

Retail investors have fled India’s stock markets and it seems that they are not likely to come back in a hurry.

One big reason is the common perception on Main Street “Sab Promoter Chor Hai” i.e. all promoters are crooks.

The newsflow has also been supporting this viewpoint.

Today Veritas came out with a report indicating that the promoters of Indiabulls Group have swindled large amounts from their companies.

Earlier, the newsreport was how the Deccan Chronicle promoters moved money away from their print media business into aviation.

Next was Arvind Rao of Onmobile passing fake bills from his company.

The less said about the shenanigans of Anil Ambani, Gautam Adani the better.

What is distressing is also the behavior of companies like HDFC. HDFC Life Insurance paid group entities like HDFC Bank and HDFC Securities, excess money in the name of “marketing expenses”. They were paid Rs. 428 cr. and 133 cr. respectively, which was more than 2.5 times the money actually spent.

No wonder the Indian public is turning away from the devils in the stock market to the devils they know best-their local jeweller and the local real estate agent .

That’s assuming they still have money left after paying the bills in an era of low growth and double digit inflation.

Categories
Video

Goldman’s new emerging markets

Categories
Quotes

What was that again?

Organized crime learned their lessons from John D. Rockefeller.It’s much more efficient to control a market and boost the price 10 percent than it is to run a loan-sharking business on the street, where you actually have to use a baseball bat and collect every week.-said Eliot Spitzer

Categories
Links

Linkfest:August 07,2012

Some stuff I am reading today morning:

PC reboots finance ministry (Mint)

A newspaper that wanted to fly (BS)

Standard Chartered examined over Iran dealings (WSJ)

Ignore the noise, focus on price (AllStarCharts)

An actionable idea (ChrisMayer)

Climate change is here and its worse than we thought (Washingtonpost)

The case for vacation (TheAtlantic)

 

Categories
Stock

The old order changeth.Cognizant overtakes Infy

Cognizant is now the second largest IT player after TCS displacing Infosys.

For Infosys, which at one time, stood poised to overtake TCS, this is a bitter pill to swallow.

But for longtime Infy watchers, this was not a surprise.

Many watched in aghast as Promoters played “Pass the Parcel” with the CEO position.It seemed that they had decided in advance the sequence in which each promoter would become the CEO.Top class insiders such as Phaneesh Murthy and Mohandas Pai were jettisoned so that the promoters could continue at the helm of affairs.

While Kamath’s elevation as the Chairman of the Infy board was a welcome move, having Kris as Co-chair defeated the purpose of having an aggressive wise Chairman.It was almost like the Infy promoters were afraid of what Kamath would do and wanted Kris to keep a check on him.

For years, analysts, shareholders and well-wishers had wanted Infy to do something with its cash pile.of now 3.8 Billion $. But the company has remained mum.Insiders mention that every month, there are targets put up for acquisition but the management finds one excuse or the other to postpone the purchase.

Compare this policy with that of Kumarmangalam Birla who has acquired  22 companies in the last 15 years resulting in increasing the revenues by 15x.

Its clear that Infy is now run by tired old men with tired old ideas.Its time Kamath took charge and gave the management team something he is famous for-a good old fashioned kick in the ass.