Tuesday, July 8, 2008

The biggest blot in Politics and still NO MAYHEM?

Friends,
The biggest upset in politics , that is , Left deciding to withdraw support to Congress and still market was down just 176 points.
How many thought of market plunging only this much?It went down by 300 points but recovered half in last session.
Hence it becomes now clear that market already discounted the withdrawal of left support as, if this was not discounted, then market could have tanked by over 1000 points as destabilization of government in center is looked upon as a big negative for market.
I think Left made a tactical error while withdrawing support to UPA at thsi time as they already were able to garner support from SP and there is no way congress led UPA government can have any problem to go through the much needed Nulcear Deal with USA which will put us in an enviable postion with other countries especially the neighbouring countries.
The SP support is a master stroke of the younger sibling of the Ambani family.While making arrangement of support for UPA led congress government, Anil Ambani has showed his political acumen as well besides been showing how much astute he is when he was given just Khokha of companies when the two brothers departed.
While the elder get the cream of the co , like IPCL and Ril Ind,where all the oil and gas story was there in it , Anil Ambani got Rcom and Ril Energy(Old Bombay Suburb) Ril Capital.While only Rcom was having some good subscriber , Ril Energy which was Bombay Suburb Electric Supply(BSES), this co was taken over by late shree Dhirubhai Ambani which was mere a power distribution co in some suburbs in Mumbai as Tata Power also was the main player in Mumbai and that too in most of the part.
While BSES was just a power distribution co even when Anil Ambani took over , it has come a long way after the two brothers deprated.According to my view , if it would have been other person and not Anil Ambani then the devision between two brothers would never have happened because while the equal devision work was done by the wellkown figure, Mr K V Kamath the head of ICICI,the ratio that came was 70:30 in favour of Mukesh as it was impossible to divide the co on valuation which Ril Ind possesses which consist of big oil and gas reserves.
And at that time it was decided that Mukesh Ambani would make up that loss of 20% by giving Cauvery Basin Gas at reduced rate but Mukesh is not ready to give anything to Anil more after seeing that AA can over cross him in wealth even without that gas he has to give to AA as a part of this pie for equal devision.Instead he is trying to create all obstacles not to let Anil do whatever he wants to.MA knows that if the MTM deal is done AA will surely be bigger then him.
Even if we take Ril Cap which AA get in his part, Rcap was nothing but a small financal entity and nothing more and was seeing the price of just Rs 150 or so when the two departed but it was AA’s acumen that he made Rcap a financial power house and I think Rcap is going to go places in future as well.Though in financial world , According to my view AA has showed much much more business guile then MA as the later was already sitting on a big business while AA created everything on his own from whatever Khokha which were empty which he got when two departed as can be seen as Rcom use to have some business while Rcap and Ril Energy were just companies and nothing more….which AA got but still AA was confident of himself that he will succeed with this as well.
Well,the SP party support for nuclear deal to congress will act as a great backing for AA’s project as it is a wellknown fact that Amarsingh is very near to AA and so is Amitabh Bachhan’s family.
Well, coming back to market, the small fall of 176 points is the testimony that market is not giving much weightage on this development as this is already discounted.
Only if crude goes up from here we can see more down side otherwise on any good news market will react positively or to say atleast will not succumb to negative news………..anymore....

2 comments:

  1. Rajeev,
    Your appreciation of Anil Ambani and a soft corner for him (Poor Anil got only 30% !!!)is misplaced. I also had a similar attitude towards him until Reliance Power IPO. Anil screwed all investors in Reliance Power IPO (basically Anil pocketed nearly 90% of investors money since he got that much share with virtually no investment from him). His modus operandi is no different from his brother or his father. It may be worse - read the IPO propectus - "screw you" message is everywhere and yet thousands of investors rushed into it.

    Investors in Reliance Power will have to wait several years or even decades to break even. Out of 100 rupees they invested, only 10 rupees will be invested on their behalf (the rest belongs to Anil).
    Anil's political contact with SP may rescue him to some extent, but don't you think it is a bad trend - political parties coming openly in favor of certain industrialists?

    If value investors like Warren Buffett observes activities of people like Anil Ambani, it is a major turn off to invest in India. Ambanis know it, so they don't have any ADRs and don't expect any time soon.

    In the long term, Ambanis are a drag on India's progress. They thrive in a corrupt atmosphere, thus encouraging more corruption.

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  2. kbs,
    It is easy said then done.
    Just imagine with such a big wealth at stake if one gets less what happens?
    It is always easy to critisize others....just imagine what you have done if you were AA?
    Put yourself in AA's place.Easy to speak from the other side,man....
    I still say that it was because of AA the devision was possible , if it would be someone else(we are seeing in Bajaj's) then ?or what you have done , if it were you?Will you have left those 20% for Mukesh Ambani?
    People are not able to read the fine lines of my post....am sorry to say that....
    Think what I am up to.....over 1lac cr turnover co and a forieng revenue of over 45,000 cr...and still people think Dhirubhai Ambani was a fraud.....What a recognition!
    All these turnover and wealth created for co and shareholders is just nothing?
    As DA was never recognized by people so is happening for AA but he will go up and up...mark my words....

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