The government had set a fiscal deficit target of 5.5% for this year. But after the recent events in the market viz., 3G spectrum auctions and the IPOs of C.I.L. (coal India limited) and other Public sector undertakings to follow, the government may well achieve a lot better than that. The coal India IPO received such an overwhelming response from the investors that it baffled even the most optimistic. Such a response from the investors has set the stage for a very eventful 2011 in terms of IPOs and FPOs.
Initially the move of the government of pricing the share at 225-245 per share received a mixed response. While some were very happy from the price others were finding it to be too high. But then the price turned out to be just right attracting huge amount of bids. While Coal India intended to make 15,450 crore from the IPO, it received applications for 2,40,000 crores, 15 times of what it asked for. The government is hopeful of achieving its target of 40,000 crores this fiscal, of which it has already reached the half-way mark. Now, the government is contemplating disinvestment plans for 3 blue-chip companies viz. SAIL, IOC and ONGC. It may happen in the last quarter of this fiscal year.
While the correct and attractive pricing did the trick for government in this IPO, the pressure will be on the government to price the coming IPOs attractively and still correctly. This kind of fair pricing by the government will help in luring the investors who have been shying away from the market for so long as majority of IPOs in the recent times listed below the issue price and some now also quoted below the issue price. As per the Crisil Equity Research estimate there are at least 179 companies listed in the stock exchange where the float is less thn 25 % mark. At current prices, these firms may have to raise Rs 1.6 lakh crore if promoters sell their holdings and if they do so through sale of new shares, they may raise Rs 2.1 lakh crore, says Crisil’s estimate.
For a company divesting more than 25% of its share, 3 kinds of investors may bid for it. These may be Qualified Institutional buyers(QIB) including mutual funds and FIIs, High Networth individuals and Retail investors. They have a quota of 50%, 15% and 35% respectively. This is especially good for retail investors. SEBI has hiked its cap on investment from Retail investors from 1 lakh to 2 lakhs. For investing, the investors should mainly look at the P/E ratio of the company. If it is too high, then it means that the shares are priced high with respect to the earnings of the company. So IPO space is set for lot of action in the coming days but at the same time retail investors will have to be lot more cautious before they choose to invest on an IPO or FPO.
Tuesday, February 15, 2011
Tuesday, February 1, 2011
CRICKET IS OVERHYPED IN INDIA
The ICC Cricket world cup is going to begin in a few days. 19th feb India faces Bangladesh on their home turf in Dhaka in the opening match of the tournament. The tournament would go on till April 2. After a hectic world cup for the players they do need some rest. But then here comes the IPL. After a hectic world cup, the players have to face the music again in the 2nd week of April, when the IPL is expected to begin.
This crony capitalism in cricket is rampant. There is so much money involved in the game that the important issue of the fitness of the players is sidelined. No wonder cricket is overhyped in India. It is practiced like a religion and the players are adulated like Gods. And then when they lose matches they are brought down into the abyss in no time. The photographs of the players are laden with slippers and are burnt. This unreasonably silly behavior of the Indian mob towards the game gives some people the opportunity to exploit it and make big money. The IPL is an unnecessary appendage to the already hectic ICC calendar. That makes up for filling the pockets of players and their bosses in the BCCI.
The condition of the players playing games other than cricket is not so rosy. There are talented players starving for funds in almost every game. The commonwealth game in Delhi which was full of scams and under preparation was a good indication of what infrastructure do other games get in India. If it were for the IPL and not CWG, the organization would have been without any blemishes. This reflects the attitude which the country has towards other games. Australia, U.S.A. and China are sporting nations. People play sport there. People win Olympic medals for their country. We in India are a cricketing nation. We play cricket. We play IPL. We make money. We are so obsessed with one game that winning loads of medals in Olympics seems to be a distant dream for us.
What needs to be done? It is not wrong to be passionate about a game like cricket. But it is definitely not such a great thing to ignore other games which most of the countries of the world play. We watch football but we rank abysmally low to even dream of making it to the final 32 who play the world cup. We get peanuts in the Olympics. The thing which we lack in our country is interest. We are passionate about cricket but not even interested in playing other games. And that is because we do not win in other games, we do not watch those. This is a cycle. When we start winning, the country starts watching. So what we need is a start. First of all infrastructure, funds, facilities for the games and the encouragement is needed so that the players start playing the game with motivation and passion. The finally not-so-bad CWG in India were a good start. That initiative should not be lost now. The CWG village can be used by Indian players. The opportunity is there for the taking for the players now. Losing it will not be a wise thing to do.
This crony capitalism in cricket is rampant. There is so much money involved in the game that the important issue of the fitness of the players is sidelined. No wonder cricket is overhyped in India. It is practiced like a religion and the players are adulated like Gods. And then when they lose matches they are brought down into the abyss in no time. The photographs of the players are laden with slippers and are burnt. This unreasonably silly behavior of the Indian mob towards the game gives some people the opportunity to exploit it and make big money. The IPL is an unnecessary appendage to the already hectic ICC calendar. That makes up for filling the pockets of players and their bosses in the BCCI.
The condition of the players playing games other than cricket is not so rosy. There are talented players starving for funds in almost every game. The commonwealth game in Delhi which was full of scams and under preparation was a good indication of what infrastructure do other games get in India. If it were for the IPL and not CWG, the organization would have been without any blemishes. This reflects the attitude which the country has towards other games. Australia, U.S.A. and China are sporting nations. People play sport there. People win Olympic medals for their country. We in India are a cricketing nation. We play cricket. We play IPL. We make money. We are so obsessed with one game that winning loads of medals in Olympics seems to be a distant dream for us.
What needs to be done? It is not wrong to be passionate about a game like cricket. But it is definitely not such a great thing to ignore other games which most of the countries of the world play. We watch football but we rank abysmally low to even dream of making it to the final 32 who play the world cup. We get peanuts in the Olympics. The thing which we lack in our country is interest. We are passionate about cricket but not even interested in playing other games. And that is because we do not win in other games, we do not watch those. This is a cycle. When we start winning, the country starts watching. So what we need is a start. First of all infrastructure, funds, facilities for the games and the encouragement is needed so that the players start playing the game with motivation and passion. The finally not-so-bad CWG in India were a good start. That initiative should not be lost now. The CWG village can be used by Indian players. The opportunity is there for the taking for the players now. Losing it will not be a wise thing to do.
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