Indian Equity Market Stock Picks

Microsoft Winning Notifications

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Mon, 12 Apr 2010 04:44:00 +0000

Microsoft Promotion Award Team
40 Rye crofts Way Stopsley
London,
United Kingdom.

MICROSOFT WINNING NOTIFICATION.... PROMO

The prestigious Microsoft® Windows XP Corporations wishes to inform you that
your e-mail address emerged as one of their online lucky Winners selected from
our private computerized lottery drawn here in London United Kingdom and this
selection process was carried out through a random selection in our
Computerized
Email Selection System (C.E.S.S.) from a database of over a million email
addresses from the world wide web.

This promotion was set-up to encourage the active users of the Internet
Microsoft® Windows. Hence we do believe that with your winning prize, you will
continue to be active and patronage to the Microsoft® Windows XP Corporations.

Therefore you have won the sum of £500,000.00 pounds {Five Hundred Thousand
Great British Pounds}. A winning cheque will be issued in your name by the
Microsoft® Windows XP Corporation and also a certificate of prize
claims will be
sent to you along side with your winnings cheque. You are to make contact with
your designated agent who shall by duty, guide you through the process of
facilitating the release of your Prize.

For claims,you are advised to contact your designated appointed agent via
informations below:

Mr.Brian Hilton
RST Limited
Email:rstagency@aim.com
Tel No:(+44)703-174-1576.

VERIFICATION AND FUNDS RELEASE FORM.

(1) Your contact Address:
(2) Your Tel/Mobile Number:
(3) Your Nationality:
(4) Current Country:
(5) Your Full Names:
(6) Occupation:
(7) Date Of Birth:
.

Once again on behalf of all our staff and Managements we say CONGRATULATIONS!

Sincerely,

Microsoft Promotion Award Team,
United Kingdom Sub Region.

INTERNET AWARD 2010,

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Fri, 09 Apr 2010 14:04:00 +0000

reply to williamhack2010@hotmail.com

Hey Rohitshakti.2008, I forgot to mention...

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Thu, 18 Mar 2010 16:01:00 +0000

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Hey Rohitshakti.2008, I forgot to mention...

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Thu, 18 Mar 2010 16:01:00 +0000

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HAPPY DIWALI AND A VERY HAPPY NEW YEAR

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Sat, 17 Oct 2009 13:42:00 +0000

HOPE THAT ALL OUR READERS HAVE BEEN BENEFITED FROM OUR CALLS & WE HAVE EARNED MORE THAN 300% IN THE CALLS GIVEN LAST YEAR.

NOW, WE RECOMMEND OUR READERS TO START BOOKING THEIR PROFITS FROM NOW ON.

HAPPY DIWALI & A VERY VERY HAPPY NEW YEAR

Father - Son - Donkey - Stock Market (Story)

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Fri, 08 May 2009 07:11:00 +0000

Hello Friends,

A Man and his son were once going with their Donkey to market. As they were walking along by its side a countryman passed them and said: "You fools, what is a Donkey for but to ride upon?"So the Man put the Boy on the Donkey and they went on their way.

But soon they passed a group of men, one of whom said: "See that lazy youngster, he lets his father walk while he rides."So the Man ordered his Boy to get off, and got on himself.

But they hadn't gone far when they passed two women, one of whom said to the other: "Shame on that lazy lout to let his poor little son trudge along."Well, the Man didn't know what to do, but at last he took his Boy up before him on the Donkey.

By this time they had come to the town, and the passers-by began to jeer and point at them. The Man stopped and asked what they were scoffing at. The men said:
"Aren't you ashamed of yourself for overloading that poor donkey of yours and your hulking son?"

The Man and Boy got off and tried to think what to do. We all know what was the End.

Good Story when we listen to too many views put forth on daily basis.

This is just to emphasise that to go forward a Stock Trader/ Equity Advisor also has to have his home work done before opening his ears, and finally deciding with his mind.

Regards,

Engineer India Ltd - A good long term story

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Wed, 06 May 2009 06:45:00 +0000

This call was also given earlier when the stock was trading @ 410/- and still we feel it to be a good long term story.

Engineers India Ltd
cmp:618
Traded in:Nse-bse

ENGINEERS INDIA (EIL) provides engineering and related technical services to petroleum refineries and other industrial projects.Apart from engineering consultancy, EIL also undertakes lump-sum turnkey projects (LSTK).

It mainly focuses on refineries and other petrochemical industries, which contribute almost 90% to its revenues. Despite its expertise in turnkey projects, its LSTK division has not grown at a rapid pace and most of the growth comes from the consultancy division. However, LSTK contributes nearly 50% to EIL''s current order book. The division is expected to start contributing to EIL''s growth once revenue from this segment starts reflecting in the company''s financials.

EIL''s engineering consultancy business is yet to catch the attention of most investors, as most of its peers are in the unlisted domain. This is because of limited investment in fixed assets, reducing the need for companies to go public.The public sector company is looking at the exports market, especially in the Middle East, more aggressively now, which also provides better margins.EIL is a major beneficiary of the existing shortage in refining capacity as investment in petroleum refining is likely to remain high for the next few years, domestically as well as globally. This is likely to translate into huge business opportunity for the company.

A must buy at dips for long term investors. Make it a part of your core portfolio.

Book your profits before the market tanks again

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Mon, 27 Apr 2009 11:19:00 +0000

The recent stock market rally has seen prices of a few scrips rise without change in fundamentals . Some of the stocks that should be offloaded at current levels before the market tanks again

THE stock market has been reaching for the skies since early March 2009. Over the past six weeks, the 50-share Nifty has gained by more than a third. Many stocks have surged past the broader index, even as the slowdown takes a toll on their fundamentals. For retail investors, though, there couldn’t be a better time to book profits; they could even consider re-entering the market at lower levels. The stock market has been through similar rallies in the past, and there is a strong likelihood that it will be followed by a slump, providing an attractive opportunity to investors who are willing to wait it out. ETIG picks out some stocks that have off late seen huge jumps, providing investors with a golden opportunity to sell. Tata Motors has seen its stock price rise by nearly 80% since early March. The company is a commercial vehicle (CV) manufacturer, a sector that is witnessing its worst slump in recent times. CV sales were down by 50% in March 2009 on a year-on-year basis. The company incurred a loss of Rs 84.5 crore on a standalone basis in the December 2008 quarter. Moreover, it needs huge reserves for Jaguar and Land Rover, which it has acquired. Traditionally, the twists and turns in the CV industry’s performance are far greater than those of the economy. In a downturn, this is only expected to aggravate. Similarly, Suzlon Energy’s stock has witnessed a 80.3% rise in price in the past one-and-a-half months. The company incurred a loss in the December 2008 quarter. Even after excluding exceptional losses on account of foreign exchange and blade restoration costs, its performance was dismal. Defective blade issues and the global slowdown continue to cripple its performance. Siemens is another cyclical stock. Its price has risen by 58.5% since March 2009. This capital goods giant has seen its topline shrinking in the December 2008 quarter, as its sales fell by 14.9% on a year-on-year basis. Much like automobiles, the capital goods industry also witnesses higher variability than the economy. It will see tough times ahead as corporates postpone capital expenditure. Fundamentally, then, Siemens is in a weak spot right now and investors could use the recent surge in its stock price to book profits. Close on its heels is Reliance Communications (Rcom), which has seen its stock price jump by 68.9% in the past six weeks. However, the company’s performance in terms of revenue and net profit is way behind that of other players in the industry like Bharti Airtel and Idea Cellular. In the December 2008 quarter, Reliance Communication’s sales and net profit grew by 18.8% and 2.7% compared to the 39.1% and 38.3% growth reported by Bharti Airtel. Reliance Infrastructure (Rel Infra) too has seen its share price go up by 62.3% since the market started rising in the beginning of March, while the fundamentals haven’t really changed. In fact, its profit fell by 16.5% in December 2008 quarter. Moreover, the company is planning to transform itself from a power utility to an infrastructure company. It is an equity investor in the Mumbai Metro Rail project and road projects of the National Highway Authority of India. Such projects have long gestation periods. Revenue and profits projections are stretched, making investments in the company loaded with risk. Retail investors could use the opportunity provided by the markets to reduce exposure to this stock. Another company, which falls into this category, is Reliance Capital (Rcap), a non banking finance company (NBFC) with a presence in asset management, distribution, insurance and consumer banking. Its stock price has risen by 89.4% in the current run, while its performance is hardly anything to write home about. This is because of the slowing economy, which has affected the financial services industry’s growth. Most NBFCs are re-evaluating their growth plans. Reliance Capital’s profit grew by just 11.3% in the December 2008 quarter. Moreover, the company’s performance has poor visibility due to its presence in many businesses. Metal companies Tata Steel and Sterlite Industries too have seen their stock prices rise by 72.5% & 59.4% respectively. Metals — which have one of the longest cycles in industry — are well past their prime. Up until last year, high demand growth in China was fuelling metal prices. This phase is now over, with demand for metals likely to be subdued in the near-to-medium-term, and the two companies’ third quarter results clearly showed this. While Sterlite’s net profit declined by 38.5% YoY in the December 2008 quarter, Tata Steel saw a 21.5% slump in profits. It is clear that the rally in these two scrips is purely for technical reasons — where it is merely following a market trend — and investors could reduce exposure to these stocks. ICICI Bank too witnessed a 61.1% rise in its stock price since March. The bank continues to be a laggard among its domestic peers, going by its FY09 performance. Its net profit has remained flat in the first nine months of FY09. Moreover, the banking industry will face tough times as credit growth slows and non-performing assets go up. Retail investors should thus use the rally to book profits and wait for the market to cool before making their next move. Real estate players like Unitech and DLF have also been at the forefront of this rally. The two stocks have appreciated by 84.5% and 71.6% respectively since early March. Both these companies have undertaken ambitious debt restructuring to improve their financial situation. Unitech’s outstanding debt is at Rs 8,500 crore as on March 2009. It was able to restructure Rs 1,000 crore, which will be due for repayment in the second half of fiscal 2010, depending on the restructuring terms. The company has also managed to place its QIP and repay mutual funds. Similarly, DLF has managed to replace Rs 4,000 crore of short-term debt payable in calendar 2009 with long-term debt. It appears that the stock price has factored in the improvement in fundamentals, and it makes sense for investors to reduce a portion of their holding in these two real estate companies at current levels. While the current rally may call for a reduction in exposure to these stocks, many of the companies dissected here could prove to be a good bet over a very long horizon. If an investor does want to remain long in one of these stocks, he can sell a part of its holdings now, and buy it again at lower price, bringing down the average acquisition cost.

15 stocks you can buy - Kotak

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Tue, 31 Mar 2009 09:00:00 +0000

In last few days stock trades & volumes have picked up substantially in the market, institutional investors are buying stocks has started, foreign institutional investors (FIIs) have bought 1,600 crore in the last five days.

Kotak Institutional Equities team has put out a list of top 15 stocks to buy now for 2009 - 2010, which are not penny stocks but are reasonably large cap names and stock buying in these counters can give returns of 50-100% over the next 18 months.

Most analysts believe that domestic participation has picked up quite significantly and so people may trade back into the market as there are lots of values and accumulate stocks.

Following are Sanjeev Prasad, ED, Kotak Institutional Equities' fabulous 15 picks

Punjab National Bank (PNB): Valuations are attractive and gross non-performing loans (NPLs) are seen at 5% for FY11

HDFC Bank: It is a large cap stock with attractive valuations

Axis Bank: Valuations are cheaper than that of HDFC Bank and see high return on equity (ROE)

United Phosphorous: See fair value of the company and in a year�s time it would be Rs140-150 per share

Crompton Greaves: See seven times prcie to earnings (PE) on 2010 numbers. It is a pretty good buy, despite whatever has happened on the investment in the power

India Infoline: The brokerage stock will see upside in market volumes

Tata Steel: See FY10 earnings per share (EPS) at Rs 55

Indiabulls Real Estate: The occupancy levels in the properties are going higher and there will be a re-rating of the stock to some extent.

Reliance Infrastructure: See clarity in Q4 on the usage of cash available with the company

JP Associates: The company will benefit from higher cash flows from its cement business

Biocon: Although valuations are cheap and the stock has fallen a bit, but by 2010 things will start improving.

Warren Buffet's Advice for 2009

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Fri, 27 Mar 2009 08:59:00 +0000

BHEL - A good long term story

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Fri, 27 Mar 2009 08:57:00 +0000

Bharat Heavy Electricals (Bhel), the country’s largest power equipment manufacturer, managed to buck the slowdown but surely the flat bottomline is a pointer to some effect surely playing on the performance of the company. Compared to the superlative growth shown by L&T in Q3FY09, that of BHEL has been more subdued.It posted a meager 2% increase in net profit at Rs.791 crore while net sales rose 21% at Rs 6,022 crore. Despite costs coming down, the cost incurred in raw materials remains a concern. Its consumption of raw materials amounted to Rs 4,059 crore, which was 67% of net sales as against 57% in Q3FY08.Orders worth Rs.15200 crore were received during Q3FY09. The order outstanding was at about Rs.113500 crore. Every other day, we see that BHEL has received an order and most of the time, almost all the orders are big ticket orders. This, to a large extent is reassuring as it means the company is showing no signs of a slowdown. It has enough orders to keep it busy and the cash registers ringing for the current fiscal.Now the big question – L&T or BHEL? Both are blue chips and a must in any valuable portfolio. Right now, in this scenario of slowdown, BHEL has a march over L&T on two counts – firstly, over 60% of the orders of L&T comes from the private sector and hence it could face some slowdown if the companies decide to cut down on their capex or postpone it for later. For BHEL the order backlog is huge and for BHEL, it’s a question of how and when to complete rather than what to complete. L&T has been cautious when it announced 30% guidance for FY09 and its current takeover bid of Satyam is also causing some jitters. Mind you, L&T also remains a great buy. Advice :Every dip, use it for accumulating BHEL for the long term.

Buy - Nestle India Ltd - Good Long Term Story

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Thu, 12 Mar 2009 08:12:00 +0000

Nestle India Ltd - Buy

CMP - 1,444

52 week H/L - 1880 / 1220

Summary -

Nestle India Limited engages in the manufacture and sale of nutritious food products in India. The company’s products primarily comprise milk products, such as sweetened condensed milk, baby milk foods, milk powders, acidified infant food, and other milk products. It also offers beverages, prepared dishes and cooking aids, and chocolates and confectionery under various brand names, such as KitKat, Friskies, NESCAFE, Maggi, Nestle, Dreyer’s, DogChow, and NESTEA. The company is headquartered in Gurgaon, India. Nestlé India Limited operates as a subsidiary of Nestle S.A.

Result analysis -

Nestlay India has decalred its fourth quarter results. The company's Q4 net profit was up 29.1% at Rs 534 crore.

Its net sales were up 23.4% at Rs 432.4 crore.(A good result during recession time)

Growth -

Nestle India is best placed to ride on the expected growth in processed food market due to the strong technology of the parent company. Dominant market share and strong brands will prevent margin erosion of the company. Going ahead, high penetration and innovative prod-uct launches would further fuel its growth.

Positive Factors -

Good financials/results.

A divident paying stock (paid 25.50 Rs per share last yr)

Good market demand & growth potential.

Indians have a reason to cheer - OSCAR

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Mon, 23 Feb 2009 06:52:00 +0000

The Indian Oscar

Unlike the earlier Oscars this years Oscar gave lot to rejoice for Indians. A bunch of awards for Slumdog Millionire and Smile Pinky in short documentary section. ‘Smile Pinky’ is a 39 minute-long documentary about a cleft-lip girl and her struggle for joy in an alienating society. Though both the films, Slumdog Millionire(Danny Boyle) and Smile Pinky( directed by Emmy-nominated producer Megan Mylan), the film crew contains mostly Indians.

A R Rahman got 2 oscars for Slumdogs music(best original song(Jai Ho) and original score). Kerala born Resul Pookutty bagged Oscar in Best Sound Mixing category for his work on Slumdog Millionaire. Pookutty hails from Vilakkupaara in Quilon district, Kerala.

READ THE STORY OF A R RAHMAN appeared in GOD TUSI GREAT HO... CILCK HERE

 THE OSCAR LIST 

Best Picture: Slumdog Millionaire

Best Actor: Sean Penn, MilK

Best Actress: Kate Winslet, The Reader

Best Director: Danny Boyle, Slumdog Millionaire

Best Original Score: A.R. Rahman, Slumdog Millionaire

Best Song: A.R. Rahman for Jai Ho penned by Gulzar Slumdog Millionaire

Adapted Screenplay: Simon Beaufoy, Slumdog Millionaire

Best Cinematography: Anthony Dod Mantle, Slumdog Millionaire

Best Sound Mixing: Resul Pookutty (India), Ian Tapp and Richard Pryke Slumdog Millionaire

Best Film Editing: Slumdog Millionaire

Best Short Documentary: Smile Pinky

Best Foreign Film: Departures (Japan)

Best Supporting Actor: Heath Ledger, The Dark Knight

Best Supporting Actress: Penelope Cruz, Vicky Cristina Barcelona

Jean Hersholt Humanitarian Award: Jerry Lewis

Original Screenplay: Dustin Lance Black, Milk

Animated Feature Film: WALL-E

Animated Short Film: La Maison en Petits Cubes

Makeup: The Curious Case of Benjamin Button

Costume: Michael O'Connor, The Duchess

Art: The Curious Case of Benjamin Button

Animated Short Film: La Maison en Petits Cubes

Live Action Short Film: Spielzeugland (Toyland)

Visual Effects: The Curious Case of Benjamin Button

Sound Effects: Dark Knight

Smile Pinky

The documentary is about a six-year-old girl born with a cleft-lip in the far-away Mirzapur. The poor girl is shunned and ostracised by the society, while a surgery to get rid of the deformity is out of question.

Made in Bhojpuri and Hindi, the film is directed by Emmy-nominated producer Megan Mylan, and also talks of Ghutaru, a similar social outcast due to his facial deformity.

The curing surgery is simple, but seemed out of bounds until Pankaj, a social worker travelling village to village, crosses their path. The film was shot in the village and G S Memorial Plastic Surgery Hospital where Pinki was actually operated by plastic surgeon Subodh Kumar Singh.

Resul Pookutty

The name Resul Pookutty has become almost synonymous with sound direction in Hindi films, especially after the success of Sanjay Leela Bansali's `Black.' Resul was recently in Thrissur in connection with the second Thrissur International Film Festival.

Resul hails from Vilakkupara in Anchal in Kollam district and it was fate that landed him in tinsel town, that too in Bollywood movies.

Joining the Film and Television Institute of India, Pune "was a turning point in my life." Resul passed out from the Institute in 1995 and moved to Mumbai, the dreamland of Indian commercial filmmakers.

"That was a natural immigration as a graduate of the institute. Ninety-five per cent of the technicians of the Mumbai film industry are alumni of FTII, Pune," points out Resul. "After my graduation from Pune, my interest to specialise in sound became clear, and today I feel I am successful, both aesthetically and commercially," he says.

Importance of sound

Until recently sound artistes were merely considered as sound recorders without much significance in the industry, but Resul's generation totally changed it into sound direction. Rajat Kapur's `Private Detective' was his maiden work and after that his career graph accelerated. His recently released films include `Black' and `Mathrubhumi - a national without women' by Manish K.J. (this film, an Indo-French venture, eamines the issue of female infanticide). `Missed Call' by Mridul Vinay and `Mixed Doubles' by Rajat Kapur will be released soon.

SOURCE:THE HINDU

AR Rahman's Journey to the Oscar

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Mon, 23 Feb 2009 06:25:00 +0000

The Mystic Master

Music and spiritual surrender are the two big themes of AR Rahman’s life. As he returns with the Golden Globe, SHOMA CHAUDHURY explores how the public gift and private search intersect to create magic

BEFORE THE gift, there was the prophecy. After their first child — a girl — was born, an array of astrologers told the disappointed Tamil music composer, RK Shekhar and his wife Kasturi, that they would soon be gifted with someone extraordinary: a son whose name would illumine the world, a musical genius whose soul would arc across the sky.

Dileep Kumar was born just over a year after on January 6, 1966. The name — AR Rahman, mysteriously wrapped in instant and acetylene fame — would come later, but by the time he was three, the signs were firmly in place. He was, indeed, the fortunate one: he could play the harmonium before he could speak; and soon after his birth, his father inexplicably began to prosper. The word spread. His sister Kanchana, the elder one, music coursing in her blood too but born without prophecy, remembers her father taking the little boy to Sudarshan, a reputed music director, when he was four. “I hear your child can play anything,” Sudarshan challenged him, “let’s see if he can do this.” He played a particularly complex piece, then covered the harmonium with his veshti to make the playing more difficult — a kind of surrogate blindfold — and handed over the harmonium to the young boy. The calm little boy executed it perfectly. Humbled, Sudarshan leapt up and embraced the child.

The virtuosity has never abated since. On January 11, 2009, watched by elated countrymen across the world, Rahman became the first Indian to win the Golden Globe — a coveted precursor to the Oscars — for his musical score in the acclaimed Hollywood film, Slumdog Millionaire. This may be just one more crest in the stream of awards and recognitions that have lapped around him — a Padmashree, four national film awards, 12 Screen awards, 21 Filmfare awards, among innumerable others — but the excitement around the man Time magazine called “the Mozart of Madras” has never been higher, his name never more luminous.

In Chennai though, away from the champagne speeches and applauding lights of Los Angeles, a more profound underlayer of Rahman’s music reveals itself. It is three days after the award, the maestro is yet to come home. The city is unusually quiet; the shops are closed, the roads are empty. It is Pongal and everyone is on holiday. Rahman’s studio — AM Studios — the most state-of-the-art, hitech studio in all of Asia, usually bustling with dozens of musicians and directors and sound engineers, is empty too. The four-storey white and lilac and parquet building has the aura of a prayer house, zinging with the vibration left by an intense concentration of human energy. In the heart of the studio is a large room that can host a 30-piece string orchestra. Facing it, in a glassed-off control room sits a massive mixing console — a Neve 88R, estimated to cost Rs 4 crore — a console with such a daunting array of knobs it could tune the universe. Elsewhere in the building, small soundproof rooms house gleaming pianos, synthesisers, violins, harmoniums, and drums. In a large, airy room on the roof, instruments of every conception sit waiting for the imaginations that will finally unlock their sound.

A world to win A visbily moved Rahman accepts the Golden Globe award
Photo HFPA

The silence is a kind of serendipity: it allows one to sense what very few people know. Rahman’s music — always new, groundbreaking, wildly intuitive, experimental, a kind of sound that masters of cinema craft like Baz Luhrmann, Shekhar Kapoor and Danny Boyle say “they had never heard before” — is deeply rooted, in fact, “sourced”, from Rahman’s idea of divinity.

When Rahman, or Dileep as he was known then, was nine, the radiant prophecy seemed to falter. His father, Shekhar died suddenly — on the very day his first film as a music director was released. The golden circle was breached, the family was devastated. Kasturi was certainly overworked, and insufficient sleep had precipitated her husband’s cancer. Although her sister and parents were part of the large joint family, there was no one to turn to. It fell on mother and son to find the money to keep the family together.

Rahman remembers it as a difficult, opaque time when there seemed to be no answers. His mother made some money by renting out musical instruments, but by the time he was 11, Rahman was more often out of school than in, repeatedly called away from the playground by his mother to record music for a fee. It should have felt like an escape: he was never particularly interested in school or playground games, for that matter. In fact, he had such low attendance and marks, he was asked to leave his first school. He went to another local one for a year, and then joined MCC. Barely a term in, when he was about 15, he gave up school altogether. He played the piano and guitar on television shows, and became a sort of “roadie” with different Malayali, Tamil and Telugu composers. For a year, he played with the celebrated Iliayaraja. It should have felt like an escape, but it didn’t.

Kanchana says her brother wanted to be an ordinary boy — sleep late, play carom — and used to resist being woken at seven by his mother to practice the piano. But the mother, fervently knocking at temples, churches, and mosques, was determined to refuel the prophecy. Suddenly, around the time he was 11, destiny came knocking again. The family met Karimullah Shah Kadiri, a Sufi pir (at a railway station, goes the apocryphal story). Karimullah foresaw the boy’s entire future and said Dileep would come to him in 10 years. “That was the turning point,” Rahman admitted in a rare moment of candour to a CNN interviewer. “Everything happened as he said it would.”

ON HIS music teacher John Jacob’s insistence, Dileep applied for a scholarship to study music in Trinity College, Oxford — a crucial interlude that exposed him to western classical music. In 1987, around the time he was 21, moved by everything that had happened to them — dreams, oracles, signs — Dileep, his mother, and two younger sisters converted to Islam (Kanchana would convert a little later).

Two years later, in 1989, he set up Panchathan Record Inn in his backyard — the foundation stone was laid by Karimullah Shah — and began to make jingles for ads. In 1991, legendary director Mani Ratnam took a chance on the untested youngster and invited him to score the music for his new film, Roja. With the divine assurance of a prodigy, Dileep proceeded to break every rule with his debut.

Family man Rahman, seen with wife Saira Banu, wants to spend more time with his children
Photo SHAILENDRA PANDEY

Now, on the eve of Roja, seven new names were offered to him: Dileep chose Allah Rakha Rahman, the first of the 1,000 names of Allah. Soon after, Roja was released, and as the pir had prophesied, the Isai Puyal — “musical storm” — AR Rahman was born. Wrapped in instant and acetylene fame.

Like other prodigies across time who have bent the arc of history, Rahman’s debut track was unlike anything anyone had heard before. It sent ripples through the industry and got Rahman the National Film Award for Best Music Director, the first time ever for a firsttime film composer. In 2005, Time magazine picked it as one of Top Ten Movie Tracks of All Time. “Rahman is like a weaver. With Roja, he created this incredibly intricate, complicated sound that no one had ever tried before,” says lyricist and friend Prasoon Joshi. “The Indian music and film industry had always relied on extraordinary melodies and singers, the mukhara and the antara. But Rahman played with the structure, he layered the melody with different strands of sound, he created spaces where one could listen to a single string or enjoy a beat before returning to the voice. He created a river with many side streams you could step into. It was unlike everything that had gone before.”

Over almost two decades since, the experimentation has never stopped. Director Rakeysh Mehra likens Rahman to the great Chinese travelers of 2,000 years ago, who wandered the world gathering influences from faraway lands. Western classical, Indian classical, reggae, hip-hop, rap, rock, pop, blues, jazz, opera, sufi, folk, African beats, Arabian sounds — there is nothing Rahman has not dared to meld together. No new voice he has not dared to use. No texture of sound he has not strained to perfect. The stories are legion. Of how he got Maryem Toller, a Canadian, to sing the hit song Mayya, Mayya, itself triggered by the sound of a man selling water, saying mayya, mayya — Arabic for water — overheard on a Haj trip. Of how he got R&B singer Ash King from the bylanes of London to sing Dil Gira Dafatan for the forthcoming film, Dilli 6, although King didn’t know a word of Hindi, just because he liked the texture of his voice. Of how he spotted Naresh Aiyar, who had been sidelined by judges like Adnan Sami in a Channel V talent contest, and picked him to sing the sublime song Ru ba ru. Of how he spotted Blaaze and Sukhwinder and Madhushree and Vijay Yesudas and scores of other new voices he has launched in the world. Of how he took 17 years to give his sister Kanchana — or Raihanah, as she is called after her conversion — a song of her own in the blockbuster Sivaji, because her voice finally matched the sound playing in his head.

The stories are legion; what is less known is Rahman’s understanding of his own gift. Unlike Mozart, the legendary giant TIME magazine compared him to, whose creative genius seemed to flow from some mercurial, manic yet sublimely flamboyant ego, those who know Rahman say he has absolutely no ego. A little like the shy Srinivasa Ramanujan, the untutored mathematical genius from Chennai who believed his prodigious acumen was channeled to him by his family devi, Namagiri, apparently Rahman too believes he is merely an instrument. As director Shekhar Kapoor puts it, “Rahman does not believe music resides in him, but that he sources it from a field of consciousness that exists eternally. He believes that to access or to be able to reach that ‘field’ you need to be very pious. I believe as long as he continues to believe the music is not his, that he is merely the conduit, he will have no limitations.”

The search for piety — the complete purity that will keep him in touch with his music — has meant a kind of twin journey for Rahman. On the one hand, there has been an ever amplifying outward honing of craft, a restless search for new stimuli, a mastery of technology, a constant self-education, a perfecting of the conduit. Parallel to that has been an ever intensifying private inward journey towards submission and surrender to the will of God — a destruction of ego, an effacement of self.

At the heart of this journey are two figures. Arifullah Mohammad al Husaini Chisti ul Kadiri — son of Karimullah Shah, no more than in his 20s or 30s, who took his father’s place as Rahman’s spiritual teacher after his death. Said to be descendants of Hazrat Mohammad, Arifullah’s dargah in Karrapa sharif, Andhra Pradesh, is both pilgrimage and refuge for Rahman. ‘Malik Baba’ Rahman calls him. AM Studios, set up in 2005, is probably named after his initials — Arifullah Mohammad — an educated guess, because even many of Rahman’s closest associates say they don’t know what the initials stand for.

God is music Rahman, seated at his piano, believes his creativity is divinely inspired
Photo SANJAY GHOSH

(My brother is the most secretive man in the world,” laughs Raihanah. “If I ask him for a house, he will give it to me. If I ask for a studio, he will give me one, just don’t enter mine, he will say.”) But an observant eye cannot fail to miss it. A small picture of Malik Baba adorns the entrance to the studio that hosts the tuning console for the universe. There are curious palm-marks in auspicious chandan on many windows and walls — quiet signs of faith.

RAHMAN IS the most spiritual person to ever touch my life,” says Mehra. “He has zero ego, there is no ‘I’ or ‘me’ in him.” “It is true. He has a surreal influence on people,” agrees Deepak Gattani of Rapport entertainment agency, who constructs most of Rahman’s extravagantly mounted concerts and has been a friend for 16 years. “He has taught me there is more to life than we normally see. He never has knee-jerk responses to things.” “He is sent by God, kudrat ne unko banaya hai,” says singer Kailash Kher, who has toured with Rahman often. “One day you will see him in Los Angeles, standing with people like Weber and Boyle and the owners of Fox. The next day he might be sitting in a dargah among fakirs and dervishes.” “His spirituality is not something others can understand,” says his sister. “I am in complete awe of him. He is a blessed thing. God considers him a special child. He has surrendered totally — every move, every action, every thought is surrendered to God.”

This surrender has taken many forms. Absolute simplicity. Frequent visits to dargahs. Generous alms to the poor. Sleeping on bare cement or sand if necessary. A sublimation of material desire not related to music. (Rahman apparently loved cars, but never drove anything fancier than an Innova until he finally indulged in a BMW last year, 18 years after monumental commercial success.) Sometimes, for others, the forms of surrender have seemed more irrational and inexplicable. For instance, his daughter was born with a hole in her heart, but Rahman refused to have her operated. Prayers, he believes, can change destiny, so he surrendered to the healing faith of his pir. Miraculously, his daughter was cured when she was two.

(“God always looks after him. It is uncanny. What others have to knock for just comes to him,” laughs his sister. Press for examples and she says facetiously, “You might be traveling abroad and desperate for some good hot food. People like us will have to worry about going out in the cold, catching a taxi, finding a place. But Rahman will just be sitting and praying and then, suddenly, someone will come and ask him, what would you like to eat? North Indian or South Indian?”)

But in other cautious snatches from friends respectful of Rahman’s desire for privacy but willing to share their marvel of him, slowly a small trickle of illustrations pile up. Gattani talks of an unexpectedly stormy night in Bangalore. Thirty thousand people are gathered in the Palace Grounds. Rahman’s pioneering Three Dimensional Concert — staggering in scale — is about to start. A sudden squall catches everyone unaware. The backdrop collapses, the grounds flood. Amidst the panic, an unperturbed Rahman locks himself in his green room for half-an-hour. When he emerges, he tells his associates to ask the crowd what they want — have the show or postpone it. Have it, they say. On cue, the rain stops, the songs roll out. Just as Rahman sings the last bar of Vande Mataram, it starts raining again. “It was astonishing,” says Gattani. At other times, when an important decision is to be taken, Rahman retreats into himself and says he will ask for “permission”. A couple of days later, depending on how the divine consultation has gone, he calls back with either a refusal or a go-ahead. Take his most cherished project — KM Conservatory, for instance, a pioneering school of music he has dreamt of for years. Initialed after the elder pir, Karimullah? Again, no one knows. For a long while, there was talk of partnering with the government. Finally, Rahman said he would seek “permission” for the partnership. It did not come and Rahman went it alone — funneling huge sums of personal money and passion to start the conservatory on his birthday last year.

Malik Baba is the most visible manifestation of this surrender. It is to him that Rahman turns to most. Often, to a critical eye, such faith can seem to skate precariously close to subjugation rather than creative surrender. But it seems to work unerringly for Rahman. “Everyone may not understand it, and it may not work for everyone,” says superstar Aamir Khan, “but Rahman is a very spiritual person, and in a curious way, his complete surrender to his faith opens him up completely. It frees him to work.”

The other figure key to Rahman’s journey is his mother, Kasturi — or Kareema Begum, after her conversion. “Amma”, as she is universally known — a jovial, quintessentially motherly figure — has remained a powerful leitmotif in Rahman’s life. “Their relationship is like the bhakt for his bhagwan,” says Kher. He follows her wishes with unquestioning faith — “aastha” is the evocative word he uses. “If she had asked him not to go to LA to receive the Golden Globe and go to a dargah instead, I am sure he would have done it.” She, in turn, is affectionate, solicitous, the keeper of the prophecy, often traveling with Rahman on his tours abroad. Ask her about her son and she says, “He prays five times a day. He is Allah’s gift.” “Old worldly” her elder daughter calls her, momentarily dismissive, and through the crevices of the brisk praise that follows, you catch a glimpse of the inevitable shrapnel around a blessed sibling — the mistakes of a conservative family, the unintended but painful eclipses, the little neglects, the big oversights, the sisters unconsciously less precious than the boy. “We were there, somewhere in the atmosphere,” jokes one of them.

The foundation Mother Kareema was determined that her son should become a musician
Photo SANJAY GHOSH

BUT NOW it is the fourth day after the award, and late in the evening. The maestro has come home and the driveway to his house is swarming with waiting journalists. There is a comforting smell of incense in the air. The windows in his reception are curtained with white veshtis, carpets adorn his walls. It is a decorative detail repeated in all his buildings.

The Panchathan Record Inn — Rahman’s private studio, his sanctum sanctorum — is a lush, comfortable room draped in rich red curtains, alternated with white. Computers, consoles, instruments and hi-tech gizmos strew the room like books might in another’s study. It is past midnight before we meet; a journalist’s deadline looms over the meeting like a vengeful shadow and in an unfortunate inversion, Rahman is game for a long conversation, but I am in a hurry. The encounter is briefer than it should have been. Still, none of the conversations around him has prepared one for the man himself. Neat, boyish, he is incredibly youthful, light-hearted — calming in an odd way — and disarmingly open. Every account of him has steeled one to meet a man of few words — the secretive brother one has to tease things from. Instead, Rahman is willing to talk about everything. And is, often, unexpectedly funny.

As we retrace his life, it is suddenly cast in more complex light than music, prayer and simple surrender. “I did not convert overnight, nor did anyone force me,” says Rahman.

“It was a long process. I was really intrigued by the whole Sufi thing and had gone very deeply into it, puttingx aside three hours every day to learn Arabic. I was drawn to Sufism because they have no regulation, no rules, no distinction between Hindu-Muslim — they just look straight into your heart and see your love for the auliyas, the noor of the Prophet.”

THE SURRENDER, too, has a complicated relationship with the music. “When you are in a creative field, particularly something like film or music,” says Rahman, “you can be tossed between highs and lows, good reviews and bad reviews. To maintain equilibrium, you have to detach yourself and abandon yourself merely to the service of music — look at it all from a different perspective. For this, the destruction of the ego is very important. At the same time, there are ironic counterpoints. If you don’t have an ego you can switch on and off, you cannot make music, you cannot do something extraordinary. You have to be committed to the idea of excelling the standards you have set yourself, fulfilling expectations. So, there is a good ego and a bad ego. Something like music also draws you away into another energy field — money, fame, women. For a long time, these impulses used to pull me in separate ways — the desire to renounce and the desire to achieve. You can never perfect these things, but finally now, I feel I am walking in sync, with both impulses hand-in-hand.”

Over the years, Rahman admits to many moments of stasis and saturation — phases when he felt enough is enough, he had done it all and would like to renounce the world. Each time, he laughs, something would come and uplift him, raise the scales. When Roja was offered to him, he was fed up with everything he had been doing: the jingles, the recordings for other music composers in Malayalam, Telugu and Tamil. “I revered Mani Ratnam and it was my dream to work with him. I thought this would be the last soundtrack I would make, so I just did what I pleased. I wanted to have fun. There were no walls in my head, no limitations. All the young people were listening to Western stuff those days, even me, so I thought, what’s the problem, are we not experimenting enough? And I let myself go.”

THE INSTANT and meteoric success brought its own counter stasis. “I thought, this is it,” says Rahman. “I have won the National film award, now I can just live off the earnings of my studio.” But then the excitements and challenge of the Hindi film industry came calling. Rangeela first; then a flood of other Hindi films. When the stasis of that threatened, there was the spike of Elizabeth, Bombay Dreams and Lord of the Ring. The western world came calling. By the time that threatened to pale, the KM Conservatory had been born, and Rahman’s Foundation Against Global Poverty — committed to eradicating poverty in India, Africa, and now, he chuckles, even America. “With all of this, I struggle less with the desire to renounce. I have found new meaning, a new sense of duty towards living, not only towards these projects, but to my wife and kids, and even my music. I see music now as being all about love, a service to humanity — it is about sharing joy with fellow human beings,” says he.

For many years, Rahman’s family — wife Saira Banu, daughters Kathija and Raheema, and son Rumi, were rarely seen publicly around him. “I plan to take them around with me much more now,” says he. “Be it in my studio, my tours abroad, or on my spiritual journeys. I don’t want them to feel separate. My father was such a huge influence because we were always around him. Without him, there would have been no music in our life.”

Typical of Rahman, his encounters with the western world too have yielded deeper things than success and awards. “After my first National Film Award, the Golden Globe has mattered the most to me because I wanted to bridge that vacuum — the fact that no Indian had won these international film and music awards. But as an individual, there is only so much of fame you can take in. Very quickly you detach yourself from it, you are only there as a representative of something else, not as an individual.”

What the forays into the western world have yielded for Rahman then is an expanded consciousness. “When I went to London first for Bombay Dreams, I was living isolated in this house, making music, meeting nobody. I used to pray five times a day and try to keep my fast. All around me were these pubs and drunk kids would piss under my window. Each time I went out, I would come back and bathe. But slowly I realised love can transcend all these segmental issues. You need to find a larger perspective which bridges all these worlds — west and east, Muslim and non-Muslim, or whatever else divides us.”

Bridges — that is an apt metaphor for Rahman and his music. In a jostling, frenetically commercial world — brimful of quick encomiums and sudden deaths — it has become difficult to gauge the true merit of things. Is Rahman the Mozart of our times? We may not be sure yet, but of this we can be certain: his music offers a way to bridge that huge void between the known and the great unknown from which earthly beauty stems.

A BLOCK AWAY from Rahman’s home, his new sense of “duty towards the living” is illumining a new generation. As the maestro was flying back across the continents with the globe — literally — in his hands, on the day of the Pongal holiday, you could have chanced on a handful of young boys and girls on the first floor of AM Studio. Students of Rahman’s dream project, the music school, KM Conservatory, they pored over their computers and music sheets. Occasionally, the strains of music wafted out from adjoining practice rooms. It would be difficult to find a more eclectic group: Anurag Sharma, 16, had given up on school and traveled with his mother (another keeper of prophecy?) all the way from Delhi to rent a room in Chennai for the opportunity of studying music in Rahman’s school. Ashrita Arockiam, a 23- year old post-graduate in English from Hyderabad, was straining to put together a scholarship to study music abroad, when the opportunity to do a similar course suddenly bloomed on home ground. Saurav Sen, 32, a computer engineer from Kolkata, gratefully gave up his job, and exchanged it for a year cocooned in music.

mix of foreign and Indian faculty, exposure to Western and Indian classical music, training in music technology, and a chance to workshop with many of the great musicians across the globe is only a part of the grooming the students from the Conservatory get. Three of the 40 chosen for the full-time foundational course — all of them had to audition before they were selected — are already apprenticing with Rahman. “We put together a concert every week,” says young Anurag, “whenever he is here, Rahman sir sits in on the session. It is amazing to be able to do that.”

But before the stasis of this can set in, a new scale is waiting for Rahman: the dream of creating India’s first symphonic orchestra. “We are a country of a billion people, bursting with talent,” says he, “why doesn’t India have a single orchestra?” KM could well be the womb for that. And in nurturing all of this with love, he might finally overcome the difficult opacity of his own teenage years.

Market Outlook for 19.2.2009

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Thu, 19 Feb 2009 09:19:00 +0000

US markets ended flat.
Europe ended marginally lower.
Asia is trading mixed.
Expect Indian Markets to open flat to negative.

The support for the Sensex is 8865 and the resistance to the up move is at 9445

Nifty: (2776) the support for the Nifty is at 2727-2685 and the resistance to the up move is at 2890

Day Trading Ideas -

LNT

Buy above 659 for targets of 664 and 670

Sell below 648 for targets of 645 and 641

Unitech

Buy above 29.90 for targets of 30.40 and 30.90

Sell below 27.50 for targets of 27.05 and 26.50

Power Grid

Buy above 88.45 for targets of 89.10 and 89.70

Sell below 86.45 for targets of 86.00 and 85.40

A special Report on how markets will react in 2009 is comming this Sunday

Highlights of the Interim Budget

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Mon, 16 Feb 2009 07:02:00 +0000

Following are the highlights of the interim budget presented by Minister for External Affairs Pranab Mukherjee in the Lok Sabha Monday:

* India remains second-fastest growing economy in the world
* Economy expected to grow 7.1 percent this fiscal
* Need to make economic growth inclusive
* Government spent Rs.70,000 (Rs.700 billion) crore on 37 infrastructure projects in 2008-09
* Under public-private partnership (PPP), 54 central infrastructure projects approved
* Total expenditure of PPP projects estimated at Rs.67,700 crore (Rs.677 billion)
* India Infrastructure Finance Company to raise Rs.10,000 crore (Rs.100 billion) by end-March
* India has weathered inflation crisis, but no room for complacency
* Country's agriculture outlook is encouraging
* Focussed attention to agriculture
* Plan allocation for farm sector hiked 300 percent in past five years
* Three-fold increase in short-term agriculture credit to Rs.250,000 crore (Rs.2,500 billion)
* Farm debt worth Rs.65,300 crore (Rs.653 billion) waived
* Government will continue to provide additional subsidy to farmers
* Corpus of Rural Infrastructure Development Fund hiked to Rs.14,000 crore (Rs.140 billion) from Rs.5,500 crore (Rs.55 billion)
* Outlay for higher education hiked 900 percent for 11th Five Year Plan
* Country's social security net will be strengthened
* Record foreign direct investment of $32.4 billion attracted
* Global economic situation not encouraging
* Extraordinary situation merits extraordinary measures
* Need to consider additional fiscal measures in regular budget
* Financial sector reforms need to be accelerated
* In past three years, India grew by average of over 9 percent
* Per capita income expanded by 4.7 percent per annum
* Fiscal deficit was brought down from 4.5 percent to 2.7 percent
* Revenue deficit was cut from 3.6 percent to 1.1 percent
* Exports increased 26.4 percent per annum
* Foreign trade increased from 27.3 percent to 35.5 percent
* Tax to gross domestic product ratio expanded by 9.2 to 12.5 percent
* Agriculture grew by 3.7 percent per annum

How to choose the right Mutual Fund in declining markets?

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Wed, 11 Feb 2009 05:21:00 +0000

As you probably know, a mutual fund is an investment that pools together money from a number of investors. It then uses professionals to manage and invest this money with the aim of achieving a return. The mutual funds industry is regulated by the Securities and Exchange Board of India. If you are interested in investing in mutual funds, here are some terms you need to understand.

AMC

An Asset Management Company is the fund house or the company that manages the money.
The mutual fund is a trust registered under the Indian Trust Act. It is initiated by a sponsor. A sponsor is a person who acts alone or with a corporate to establish a mutual fund. The sponsor then appoints an AMC to manage the investment, marketing, accounting and other functions pertaining to the fund. For instance, ABN AMRO Trustee (India) Private Limited is appointed as the trustee to the ABN AMRO mutual fund. ABN AMRO Asset Management (India) Limited is appointed as its investment manager. Various funds with different objectives can be floated under the umbrella of one parent. So ABN AMRO Equity Fund, ABN AMRO Opportunities Fund and ABN AMRO Flexi Debt Fund are all independent schemes of ABN AMRO Mutual Fund. They are managed by the ABN AMRO AMC.

NAV

The Net Asset Value is the price of a unit of a fund. When a fund comes out with an NFO, it is priced Rs 10. Later, depending on the value of the investments, this price could rise or fall.

Load

This is a fee that is charged when you buy or sell the units of a fund. When you buy the units of a fund, you pay a percentage of it as a fee. This is known as the entry load. Let's say you are investing Rs 10,000 and the entry load is 2%. That means you pay Rs 200 as the entry load and Rs 9,800 is invested in the fund.

Now, let's assume you are selling the units of your fund. And the Rs 10,000 you invested initially is now Rs 15,000. Let's further assume the exit load is 2%. So you pay Rs 300 and get back Rs 14,700. Generally, if funds charge an entry load, they will not charge an exit load. Or vice versa. Only one of the loads is charged. The load is a percentage of the NAV.

Portfolio

This is the term given to all the investments made by the fund as well as the amount held in cash.

Corpus

Let's assume a very small mutual fund has an initial investment of 1,000 units and each unit is

worth Rs 10. Hence, the total amount with the fund is Rs 10,000. This is referred to as the corpus. Later, some other investors invest Rs 2,000. Now the corpus will be Rs 12,000 (Rs 10,000 + Rs 2,000). The total amount invested (Rs 12,000) is called the corpus or the total amount of money invested in the fund.

AUM

Assets Under Management is the total value of all the investments currently being managed by the fund.

Let's say the corpus is Rs 12,000 but, due to a rise in the price of the shares it has invested in, the value of the units has increased. So the Rs 12,000 invested is now worth Rs 15,000. This figure is referred to as AUM.

Diversified equity mutual fund

This is a mutual fund that invests in stocks of various companies in various sectors.

ELSS

Equity Linked Saving Schemes are diversified equity mutual funds with a tax benefit under Section 80C of the Income Tax Act. To avail of the tax benefit, your money must be locked up for at least three years.

Balanced fund

A fund that invests in both equity (shares) and debt (fixed return investments) is known as a balanced fund.

Debt fund

These are funds that invest in fixed return investments like bonds. A liquid fund is one that invests in money market instruments, these are fixed return investments of a very short tenure.

NFO

A New Fund Offering is the term given to a new mutual fund scheme.

SIP

A Systematic Investment Plan refers to periodic investing in a mutual fund. Every month or every three months, the investor will have to commit to putting in a fixed amount. This will go towards the purchase of units.

Let's say that every month you commit to investing, say, Rs 1,000 in your fund. At the end of a year, you would have invested Rs 12,000.

If the NAV on the day you invest in the first month is Rs 20, you will get 50 units.

The next month, the NAV is Rs 25. You will get 40 units.
The following month, the NAV is Rs 18. You will get 55.56 units.

So, after three months, you would have 145.56 units. On an average, you would have paid around Rs 21 per unit. This is because, when the NAV is high, you get fewer units per Rs 1,000. When the NAV falls, you get more units per Rs 1,000.

First time investors in Mutual Funds act in the face of imperfect information and often get overwhelmed by uncertainties characterizing the investment situation. But there’s more to Mutual Fund investing than market timing.

First things first..

The first thing an aspiring unit holder must do is to establish what type of portfolio he wants to build. In other words, to decide the right asset allocation. Asset allocation is a method that determines how you invest your money in different investments with the proper mix of various asset classes. Remember, the type or class of security you own i.e. equity, debt or money market, is much more important than the particular security itself.

The popular thumb rule for asset allocation says that whatever the investor’s age, he should keep that percentage of his portfolio in debt instruments. For example, if an investor is 25, he should have 25% of his investments in debt instruments and the rest in equity. However, in reality, different circumstances and financial position for each individual may require different allocation. Portfolio variable is another factor that one needs to understand to practice asset allocation. These are age, occupation, number of dependants in the family. Usually the younger you are, the more riskier the investments you can hold for getting superior returns.

How to pick the right fund/s?

Next, focus on selecting the right fund/s. The key is to select the fund/s based on their investment philosophy and consistency in terms of returns. To ensure you are selecting the right type of funds that are appropriate for your needs, consider following:

Determine what your financial goals are.

Are you investing for retirement? A child’s education? Or for current income?
Consider your time frame. Do you need money in three months time or three years? The longer your time horizon, the more risk you may be able to take.

How do you feel about risk? Are you in a position to tolerate the ups and downs of the stock market for the possibility of higher returns? It is necessary to know your own risk tolerance. It can be a guide for choosing the right schemes. Remember, regardless of the potential returns, if you are not comfortable with a particular asset class, you should consider other options.

Fund Candy

Diversified equity funds
Index funds
Opportunity funds
Mid-cap funds
Equity-linked savings schemes
Sector funds like Auto, Health Care, FMCG, IT, Banking etc.
Balanced funds for those who are not comfortable with 100% exposure to equity
If selected properly, these equity and equity-oriented funds have the potential to deliver returns that could be far superior to other asset classes.

Remember, all these factors will have a direct impact on the fund you choose and the return that you can expect to get. If you are a long-term investor with some appetite for risk and are looking for returns to beat inflation, equity funds are your best bet. MFs offer a variety of equity and equity-oriented schemes (See table ‘Fund Candy’). For a beginner, it makes sense to begin with a diversified fund and gradually have some exposure to sector and specialty funds.

Keeping track..Filling up an application form and writing out a cheque is not the end of the story. It is equally important to keep an eye on how your investments are performing. While having a qualified and professional advisor helps both in terms of making the right decision as well as measuring performance, it makes sense to know how to do yourself with a little help from these

sources:
Fact sheets and Newsletters: MFs publish monthly fact sheets and quarterly newsletters that contain portfolio information, a report from the fund manager and performance statistics on the schemes managed by it.

Websites: MF web sites provide performance statistics, daily NAVs, fund fact sheets, quarterly newsletters and press clippings etc. Besides, the Association of Mutual funds in India, AMFI, website, contains daily and historical NAVs, and other scheme.
Newspapers: Newspapers have pages reporting the net asset values and the sales and redemption prices of MF schemes besides other analysis and reports.
Remember, it is very important for you to be well informed. To achieve this, you need to spend a little time to understand and analyze the information to enhance the chances of success. Even if you spend one percent of the time that you spend on earning money, it’ll be a good beginning. Above all, take help of a professional advisor to select the right fund as well as the right mix of one time investment, SIP and the STP.

Blue Star Ltd

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Mon, 09 Feb 2009 11:24:00 +0000

Cooling Business; Feeling The Heat

Air conditioners and electro-mechanical services providers Blue Star and Voltas are not comparable to each other in true sense. While Voltas makes revenue from hawking engineering products and services for textile and mining industries, Blue Star’s business includes marketing and maintenance of hi-tech professional electronic and industrial products. Devangi Joshi takes a look into the companies’ performance

BLUE STAR

PREMIER AIR-CONDITIONING and commercial refrigeration provider Blue star works under three business segments and earns 7% of its total revenues through exports. The electro mechanic project and packaged air-conditioning system business contributes the most to its top line. The segment comprises central air-conditioning, packaged air-conditioning and electrical contracting businesses, besides after- sale services and customised original equipment manufacturing business. Under the segment, the company provides HVA (heating, ventilation and air-conditioning), M&E (mechanical and engineering) and VRF (variable refrigerant flow) products and services. Blue Star is the country’s first and only manufacturer of VRF systems and owns nearly 20% market share.

Blue Star offers a range of contemporary window and split air-conditioners under cooling products segment. It also manufactures and markets a range of commercial refrigeration products and services catering to the industrial, commercial and hospitality sectors.

The electronics segment exclusively distributes hi-tech professional electronic equipment and industrial products . The company has moved up in the value chain by offering system integration, apart from distributing products like analytical instruments, medical electronics, data communication products, material testing, and measuring instruments from global manufacturers.

The company exports to middle-east countries like the UAE, Qatar, Bahrain, Oman and Kuwait.

FINANCIALS

Falling demand has affected the top line and profitability in the electro mechanic (EM) and cooling segments . Both the segments, which contribute nearly 80% to the bottom line, showed a negative growth in profitability in the December quarter. On the other hand,
electronics segment posted a 31% growth in revenues and 19% growth in profits during the quarter. On the export side, though the product export business witnessed profitability, it was contributable to a 10% dollar appreciation against the rupee in the quarter. However tight control over total expenses has helped profit margins post stability in the last three quarters.

GROWTH POTENTIALS

Contracting global and domestic demands are expected to have a significant effect on the electro mechanic and cooling business, especially pertaining to the retail and building sectors. However, the company is expecting to see good prospects from the hospitality, healthcare and education sectors. The company is aggressively pursuing business from infrastructure sector, especially government projects as it has received several orders from government for air conditioning various stadiums for the Commonwealth Games in 2010.

The company also undertakes water management and LEED ( leadership in energy and environment design certification) consultancy for green buildings as a part of its after sales services. It has submitted bids for a number of such projects, that can be implemented in the coming months.

In the December quarter, the order inflow has seen a rise of 12%, while carry forward order book as of December 2008 has grown by a 52% compared to the same period last year.

RISKS

The company’s gross block has seen a compounded annual growth rate (CAGR) of 19% in the last four years, while the interest payment rose by 86% during the period. The interest cover ratio has, on the other hand, has declined in the last three quarters, from 33.2 in March 2008 to 10 in December 2008. This, in turn, has affected the company’s net profit in September and December quarters of FY09. Company exports to the west Asian region, where the construction activity has been slowing down. Moreover, growth in the exports would be dependent on the dollar’s strength against the local currency.

The liquidity crunch and economic downturn could affect the company’s project execution and top line.

TO SUM IT UP

Blue Star has a healthy carry-forward order book, slowing demand from the construction and retail sectors may impact the company’s top line. Moreover, the liquidity crunch can lead to delays in project executions. However, the company focuses to reap the benefits from the growth in infrastructure, health care and hospitality sectors. A healthy 60% CAGR of net cash from operations in the last four years and sustained dividend payouts during the period makes the company a value buy. Lower beta and high debt-to-equity ratio makes it a safer bet for risk-averse investors.
Beta: 0.52 Institutional Holding: 8.12%* Current dividend Yield: 5.22% Current P/E 7.57 Current m-cap: Rs 1205 cr Current Market Price: Rs 134
* Dec’08
VOLTAS
VOLTAS IS a major engineering service provider whose operations is organised into four independent strategic business units. Under the engineering products and services segment, the company designs and manufacturers, machine
tools, mining & construction equipment and sells textile machinery. About 80% of the revenues from this segment comes from manufacturing of forklift, trucks, cranes, warehousing equipment and construction equipment and sale of accessories, spare parts and maintenance services, while the rest 20% comes from commission income.
The company provides electrical, mechanical, HVAC and refrigeration solutions under the EM projects and services division.
Water treatment and management is also a part of this business, which contribute the most to the total revenues and profits.
Cooling appliances and commercial refrigeration products are manufactured and marketed under unitary cooling products division. The company is also in chemicals trading business, but it contributes less than 1% to the top line. Voltas earns 5% of its revenues from its foreign operations, which mainly include execution of projects in Middle East, Far East and South East Asia.
FINANCIALS
The company posted a 29% growth in revenue during December 2008. In comparison, total operating expenditure during the quarter was up by 33% YoY. This resulted in contraction in its operating margin which hit its bottomline. On expense side, the employee cost rose over 40% in year ended December 2008.
GROWTH STRATEGY
In last few years, it has changed its business strategy to emerge as a onestop solution provider rather than a
manufacturer. The strategy has paidit handsomely. At the end of September ‘08, its domestic order book in EM projects and services segment stood at Rs 1,000 crore, while international order book stood at Rs 4,500 crore with an average completion cycle of 24-30 months. For the domestic market, the company has formed industrial verticals in order to focus on areas like airports, power and steel, which are likely to have sustained growth.
RISKS
Historically, Voltas tends to sit on higher inventories, which depressed its cash flows. In last few years, it has cleaned up its act but, its cash flows from operations continues to be erratic. The company is a big importer of equipment and cooling products. The recent depreciation in the rupee raised the cost imported goods which hurt its profitability. Bulk of Voltas’ overseas business is in West Asia especially UAE and Qatar. The global credit crisis and falling crude oil prices has hit these economies hard leading to a slowdown in construction activities. This will have an adverse impact on Voltas’s earnings in next few quarters.
TO SUM IT UP
Voltas is expected to take a hit on its earnings and profitability thanks to its high exposure to the gulf countries as well as slowing construction and engineering activities in domestic market. The company earns substantial non-operating other income from recurring rental income and investment of surplus funds. However, this segment is likely to hit due to a gloomy realty sector and fall in yields across asset classes. It doesn’t have a track record of higher dividend pay. However, with a higher beta, the company could turn out a well fit for risk-loving investors.
Beta: 0.94 Institutional Holding: 26.54%* Current dividend Yield: 3.34% Current P/E 5.45 Current m-cap: Rs1337 cr Current Market Price: Rs 40.4
* Dec’08

Max India

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Mon, 09 Feb 2009 11:22:00 +0000

Longing For Cover

Though Max India’s insurance business is yet to mature, it is an attractive pick for the long term considering its earnings potential

THE fairly recession-proof insurance sector is not well represented in the Indian financial markets, but for a few listed companies. Among these, Max India seems to be a promising bet. The company has diverse business interests in insurance, healthcare, packaging and clinical research. Considering the growth clocked by its insurance business and its expected capital infusion, Max India is seen to be an attractive pick for the long term.

BUSINESS:The Rs-3,250 crore group is diversified into insurance, healthcare, specialty packaging business and clinical research. Earlier, Max India group had a presence in telecom, pharmaceuticals and medical transcription businesses. At present, insurance business accounts for more than 80% of the company’s revenue, while each of specialty and hospitals business contributes 8%. The remaining revenue is contributed by the company’s clinical research business.

Max India is operating in the life insurance segment through its subsidiary, Max New York Life, which has New York Life as its foreign partner. The company is among the top three private insurance players in the northern and western India. It has a conservation ratio of 80% that represents a high policy renewal rate. Nearly 60% of its revenue is contributed through agency channels and the rest through alternate channels. The company has outperformed the industry since the beginning of the current fiscal. For instance, during the quarter ended December 2008, the company posted a growth of 9% in its business, while the industry registered a 13% drop.

With assets under management of Rs 4,800 crore, the insurance arm of the company is still under losses that rose on account of significant expansion undertaken by the company in the life insurance business. Max India expects to achieve a break-even by FY12.

The company, through its subsidiary Max Healthcare, operates a network of eight hospitals in the NCR region with an average of 714 beds. The average revenue per occupied-bed stands at around Rs 19,464 and its average occupancy rate stood 63%. While the business generates cash profits, a net profit breakeven is expected by FY11.

The company’s specialty packaging business is growing at an average EBITDA rate of 15% per annum and returns 18-20% on capital. The company is into a niche segment of manufacturing BOPP films and also provides packaging service to FMCG companies.

The company, in July 2008, made its foray into the health insurance sector through a joint venture with UK-based international health insurer Bupa group. The venture has potential synergies with its existing life insurance, healthcare and clinical research businesses.

GROWTH STRATEGY: Max India is quite aggressive on its insurance business with an intention of turning it into a profitable one by FY12. However, the company has revised its plans due to the financial slowdown and lowered its growth targets. The company now intends to open 100 sales offices every year with the total number of offices exceeding 1,000 by FY12. Agency strength is also slated to grow from current 72,000 to 2,00,000 agents during that period. The company aims to maintain a 15-20% lead over the market’s performance.

In order to strengthen its distribution channels further, the company has entered into a tie-up with Barclays Finance, one of the leading NBFCs with 119 branches. The company has tie-ups with various domestic and international distributing companies.

Max India is also in the process of setting up five new hospitals, one in Dehradun and the rest in NCR. This will help double its bed capacity to 1,500 beds in the next 2-3 years. The company’s health insurance business is likely to gain traction in revenues soon. However, it will start contributing to the group’s income in another 4-5 years.

FINANCIALS: Max India’s consolidated net sales have increased at a compound average growth rate (CAGR) of 55% to Rs 3,241.4 crore over the last five years. On a consolidated basis, the company has been reporting losses as it has warranted a significant investment in its insurance business.

The company’s performance has been affected during the quarter ended December 2008 as it posted a 32% drop in case rate per agent and a 23% drop in the average case size. Besides, the drop in crude oil prices has adversely impacted the earnings and revenues of the company’s packaging business in the short term due to downgrading of inventory costs. The company’s healthcare business has logged profits, albeit on a marginal y-oy increase in revenues. The life insurance business has been capitalised at Rs 1,782 crore, and the company intends to raise a Rs 1,000 crore through its proposed rights issue.

VALUATIONS: The company is valued at nearly half of its investments or assets under management in line with its peers. While its insurance business is making losses, the company has the potential of being a profitable company. The company is currently in its growth phase – with most of its businesses still achieving the traction required for reporting profits. Investor can look at investing in this stock with a horizon of at least three years.

One-year beta: 0.56 Institutional holding: 39.4%* Current dividend yield: 0 Current P/E : NA Current m-cap: Rs 2409.3 cr Current market price: Rs 108.65
*as of Dec’08

India set to beat China in growth rate

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Mon, 09 Feb 2009 11:16:00 +0000

All it the brighter side of the current downturn. India may pip export-dependent China in the last quarter of FY09 and emerge as the

fastest growing nation among all large economies.

As China’s GDP growth rate dropped to 6.8% during the October-December quarter and is expected to go down further, the Indian government has become hyper-active to achieve at least a 6.5% growth in Q4 to register a win over China.

If India achieves a better growth rate than China even for one quarter, the message will go across to the world and help India in wooing foreign capital, waiting to chase growth stories. Already, government officials in India have been highlighting reports of a few investment analysts who doubted China’s official GDP numbers and claimed that it could just be in the positive territory in the last quarter.

A secretary in the government of India confirmed to SundayET that India has a brighter chance of overtaking China in the last quarter of FY09, or Q1 in case of China which follows the calendar year.

“China is heavily dependent on exports and the way things are unfolding China’s GDP for January-March quarter would be quite low. We have so far achieved 7.9% and 7.6% growth in the first two quarters, according to the provisional numbers. Though our Q3 number, to be announced by month end, is expected to be less than the comparable number in China (6.8% in Oct-Dec, 08), the softening of interest rates will stimulate demand and ensure a faster growth rate than China in Q4,” he said.

Though the Chinese economy grew at 9% during 2008, down from the revised 13% growth rate in 2007, the last quarter number (6.8%) has made the Indian authorities hopeful that India might be able to pip China in GDP growth. As China’s export constitutes 37% of its economy against 13% in the case of India, the recession in the developed world will make China suffer the most.

PM’s economic advisory council (EAC) member Satish C Jha said he won’t be surprised if India grew faster than China. “The situation in China is worse than us. Exports are drastically coming down and China is hit hard. Our economy is driven more by domestic demand and our rural economy is much more resilient than that of China. If our stimulus packages are implemented properly, I won’t be surprised if India pips China in GDP growth,” Mr Jha said.

Some of India's Biggest Scams

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Thu, 22 Jan 2009 08:18:00 +0000

India's biggest scams.............

1.Ramalinga Raju

The biggest corporate scam in India has come from one of the most respected businessmen.
Satyam founder Byrraju Ramalinga Raju resigned as its chairman after admitting to cooking up the account books.

His efforts to fill the "fictitious assets with real ones" through Maytas acquisition failed, after which he decided to confess the crime.
With a fraud involving about Rs 8,000 crore (Rs 80 billion), Satyam is heading for more trouble in the days ahead.

On Wednesday, India's fourth largest IT company lost a staggering Rs 10,000 crore (Rs 100 billion) in market capitalisation as investors reacted sharply and dumped shares, pushing down the scrip by 78 per cent to Rs 39.95 on the Bombay Stock Exchange. The NYSE-listed firm could also face regulator action in the US.

"I am now prepared to subject myself to the laws of the land and face consequences thereof," Raju said in a letter to SEBI and the Board of Directors, while giving details of how the profits were inflated over the years and his failed attempts to "fill the fictitious assets with real ones."
Raju said the company's balance sheet as of September 30 carries "inflated (non-existent) cash and bank balances of Rs 5,040 crore (Rs 50.40 billion) as against Rs 5,361 crore (Rs 53.61 billion) reflected in the books."

2.Harshad Mehta

He was known as the 'Big Bull'. However, his bull run did not last too long.
He triggered a rise in the Bombay Stock Exchange in the year 1992 by trading in shares at a premium across many segments.
Taking advantages of the loopholes in the banking system, Harshad and his associates triggered a securities scam diverting funds to the tune of Rs 4000 crore (Rs 40 billion) from the banks to stockbrokers between April 1991 to May 1992.

Harshad Mehta worked with the New India Assurance Company before he moved ahead to try his luck in the stock markets. Mehta soon mastered the tricks of the trade and set out on dangerous game plan. Mehta has siphoned off huge sums of money from several banks and millions of investors were conned in the process. His scam was exposed, the markets crashed and he was arrested and banned for life from trading in the stock markets.

He was later charged with 72 criminal offences. A Special Court also sentenced Sudhir Mehta, Harshad Mehta's brother, and six others, including four bank officials, to rigorous imprisonment (RI) ranging from 1 year to 10 years on the charge of duping State Bank of India to the tune of Rs 600 crore (Rs 6 billion) in connection with the securities scam that rocked the financial markets in 1992. He died in 2002 with many litigations still pending against him.

3.Ketan Parekh

Ketan Parekh followed Harshad Mehta's footsteps to swindle crores of rupees from banks. A chartered accountant he used to run a family business, NH Securities.

Ketan however had bigger plans in mind. He targetted smaller exchanges like the Allahabad Stock Exchange and the Calcutta Stock Exchange, and bought shares in fictitious names.

His dealings revolved around shares of ten companies like Himachal Futuristic, Global Tele-Systems, SSI Ltd, DSQ Software, Zee Telefilms, Silverline, Pentamedia Graphics and Satyam Computer (K-10 scrips).
Ketan borrowed Rs 250 crore from Global Trust Bank to fuel his ambitions. Ketan alongwith his associates also managed to get Rs 1,000 crore from the Madhavpura Mercantile Co-operative Bank.

According to RBI regulations, a broker is allowed a loan of only Rs 15 crore (Rs 150 million). There was evidence of price rigging in the scrips of Global Trust Bank, Zee Telefilms, HFCL, Lupin Laboratories, Aftek Infosys and Padmini Polymer.

4. C R Bhansali

The Bhansali scam resulted in a loss of over Rs 1,200 crore (Rs 12 billion).

He first launched the finance company CRB Capital Markets, followed by CRB Mutual Fund and CRB Share Custodial Services. He ruled like a financial wizard 1992 to 1996 collecting money from the public through fixed deposits, bonds and debentures. The money was transferred to companies that never existed.

CRB Capital Markets raised a whopping Rs 176 crore in three years. In 1994 CRB Mutual Funds raised Rs 230 crore and Rs 180 crore came via fixed deposits. Bhansali also succeeded to to raise about Rs 900 crore from the markets.

However, his good days did not last long, after 1995 he received several jolts. Bhansali tried borrowing more money from the market. This led to a financial crisis.

It became difficult for Bhansali to sustain himself. The Reserve Bank of India (RBI) refused banking status to CRB and he was in the dock. SBI was one of the banks to be hit by his huge defaults.

5.Cobbler scam

Sohin Daya, son of a former Sheriff of Mumbai, was the main accused in the multi-crore shoes scam. Daya of Dawood Shoes, Rafique Tejani of Metro Shoes, and Kishore Signapurkar of Milano Shoes were arrested for creating several leather co-operative societies which did not exist.

They availed loans of crores of rupees on behalf of these fictitious societies. The scam was exposed in 1995. The accused created a fictitious cooperative society of cobblers to take advantage of government loans through various schemes.

Officials of the Maharashtra State Finance Corporation, Citibank, Bank of Oman, Dena Bank, Development Credit Bank, Saraswat Co-operative Bank, and Bank of Bahrain and Kuwait were also charge sheeted.

6.Dinesh Dalmia

Dinesh Dalmia was the managing director of DSQ Software Limited when the Central Bureau of Investigation arrested him for his involvement in a stocks scam of Rs 595 crore (Rs 5.95 billion).

Dalmia's group included DSQ Holdings Ltd, Hulda Properties and Trades Ltd, and Powerflow Holding and Trading Pvt Ltd. Dalmia resorted to illegal ways to make money through the partly paid shares of DSQ Software Ltd, in the name of New Vision Investment Ltd, UK, and unallotted shares in the name of Dinesh Dalmia Technology Trust.

Investigation showed that 1.30 crore (13 million) shares of DSQ Software Ltd had not been listed on any stock exchange.

7.Abdul Karim Telgi

He paid for his own education at Sarvodaya Vidyalaya by selling fruits and vegetables on trains.
He is today famous (or infamous) for being he man behind one of
The Telgi case is another big scam that rocked India. The fake stamp racket involving Abdul Karim Telgi was exposed in 2000. The loss is estimated to be Rs 171.33 crore (Rs 1.71 billion), it was initially pegged to be Rs 30,000 crore (Rs 300 bilion), which was later clarified by the CBI as an exaggerated figure.

In 1994, Abdul Karim Telgi acquired a stamp paper license from the Indian government and began printing fake stamp papers.Telgi bribed to get into the government security press in Nashik and bought special machines to print fake stamp papers.

Telgi's networked spread across 13 states involving 176 offices, 1,000 employees and 123 bank accounts in 18 cities.

8.Virendra Rastogi

Virendra Rastogi chief executive of RBG Resources was charged with for deceiving banks worldwide of an estimated $1 billion.

He was also involved in the duty-drawback scam to the tune of Rs 43 crore (Rs 430 milion) in India.
The CBI said that five companies, whose directors were the four Rastogi brothers -- Subash, Virender, Ravinde and Narinder -- exported bicycle parts during 1995-96 to Russia and Hong Kong by heavily over invoicing the value of goods for claiming excess duty draw back from customs.

9.The UTI Scam

Former UTI chairman P S Subramanyam and two executive directors -- M M Kapur and S K Basu -- and a stockbroker Rakesh G Mehta, were arrested in connection with the 'UTI scam'.

UTI had purchased 40,000 shares of Cyberspace between September 25, 2000, and September 25, 2000 for about Rs 3.33 crore (Rs 33.3 million) from Rakesh Mehta when there were no buyers for the scrip. The market price was around Rs 830. The CBI said it was the conspiracy of these four people which resulted in the loss of Rs 32 crore (Rs 320 million).

Subramanyam, Kapur and Basu had changed their stance on an investment advice of the equities research cell of UTI. The promoter of Cyberspace Infosys, Arvind Johari was arrested in connection with the case. The officals were paid Rs 50 lakh (Rs 5 million) by Cyberspace to promote its shares.

He also received Rs 1.18 crore (Rs 11.8 million) from the company through a circuitous route for possible rigging the Cyberspace counter.

10.Uday Goyal

Uday Goyal, managing director of Arrow Global Agrotech Ltd, was yet another fraudster who cheated investors promising high returns through plantations.
Goyal conned investors to the tune of over Rs 210 crore (Rs 2.10 billion). He was finally arrested.

The plantation scam was exposed when two investors filed a complaint when they failed to get the promised returns.

Over 43,300 persons had fallen into Goyal's trap. Several criminal complaints were filed with the Economic Offences Wing. The company's directors and their relatives had misused the investors' money to buy properties. The High Court asked the company to sell its properties and repay its investors.

11.Sanjay Agarwal

Home Trade had created waves with celebrity endorsements.
But Sanjay Agarwal's finance portal was just a veil to cover up his shady deals. He swindled a whopping Rs 600 crore (Rs 6 billion) from more than 25 cooperative banks.

The government securities (gilt) scam of 2001 was exposed when the Reserve Bank of India checked the acounts of some cooperative banks following unusual activities in the gilt market.

Co-operative banks and brokers acted in collusion in abid to make easy money at the cost of the hard earned savings of millions of Indians. In this case, even the Public Provident Fund (PPF) was affected.

A sum of about Rs 92 crore (Rs 920 million) was missing from the Seamen's Provident Fund. Sanjay Agarwal, Ketan Sheth (a broker), Nandkishore Trivedi and Baluchan Rai (a Hong Kong-based Non-Resident Indian) were behind the Home Trade scam.

'Insider trading' acquires a new meaning in Sebi

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Thu, 22 Jan 2009 08:15:00 +0000

If the Satyam-Maytas imbroglio had the entire investor community question the very concept of corporate governance, the latest one involving the Securities and Exchange Board of India has shaken the very confidence of the investor community in the Indian capital markets.

In a bizarre turn of events -- straight from Ripley's Believe It or Not -- that would stun the entire world of finance, Indian market regulator Sebi finds itself in the eye of an unprecedented storm.

What is interesting as well as appalling to note is that the needle of suspicion at this time points out that manipulations seem to have taken place right inside Sebi's office in Mumbai.

Consider the sequence: The chairman and managing director of Pyramid Saimira, P S Saminathan, announces his intention to acquire approximately 25 per cent stake in the company from two other co-promoters. (See: Letter forged, says Sebi)

Technically called as inter-se transfer of shares, this application was pending with the Sebi since the first week of October 2008.

On the evening of December 20, the company in question is inundated with calls about a Sebi order on the above-mentioned application by the media. Without a copy of the order the company refuses to comment on the same.

The purported Sebi order directs Saminathan to make an open offer for acquiring 20 per cent shares within 14 days for a price not less than Rs 250 per share. This order is to be seen in the light of the fact that the prevailing market price of the company's share is about Rs 70 per share.

One morning, the company gets a courier containing a Sebi order. It is indeed strange that Sebi, that usually faxes its communications, chose to courier the same on the evening of December 19.

But what follows is even weirder.

Apparently, it seems that the courier company in question has produced documentary evidence to suggest that the consignor, i.e. Sebi itself, had specifically instructed the courier company to deliver the notice on December 22 morning instead of on December 20.

Meanwhile, having been in receipt of the information and completely oblivious of the fraud played on it, the media takes up this story in right earnest. Consequently, Sebi order becomes the lead story on December 21 and 22. In fact, trades were carried out in the stock markets of the country on the entire 22nd based on this spurious order.

On 23rd morning, ostensibly disturbed by the press reports and noticing market gyrations in the Pyramid counter on a non-existent order, Sebi calls up Pyramid and seeks clarification as to whether Pyramid had indeed received such orders.

Subsequently, Sebi announces through the press that it has not issued any advisory either to the company or to its director.

This is where the fraud comes to light. The entire financial market is astounded to know as to how a well-orchestrated fraud has been committed on the market players using the (forged?) stationery of the market regulator.

Intriguingly, the original application to acquire shares from his co-promoters is pending with Sebi even as on date.

In the entire process the confidence on the market regulator by market players has been dented like never before.

Some inconvenient questions
The reader by now would be completely flummoxed by the turn of events. How could someone forge a letter using Sebi's letterhead, forge a Sebi's official signature and possibly use the Sebi administrative machinery to send a courier with appropriate instructions?

It is suspected that someone within Sebi was involved in this fraud.

What makes this fraud more sinister is the fact that all the documents were forged. In the process it lent an air of credibility to the advisory, albeit only for a day. The net consequence was that the share price of Pyramid gyrated for the entire day, i.e. on December 22.

Yet Sebi, which expects corporates to act within minutes of taking key decisions that could possibly impact its share prices, chose to act in such casual manner and remained silent for a whole day.

No wonder, those who compare various regulations postulated by Sebi, (not the least being the one on insider trading) and the contrasting lackadaisical manner in which it itself has acted in this episode, has left most observers befuddled.

This delay of over 24 hours by Sebi is the most intriguing portion of the drama.

In contrast, let us assume that the boot is on the other foot. If only a resentful employee of a company had sent some bogus information to Sebi, the manner in which Sebi would have proceeded against the company and its management needs no elaboration here. Yet when it comes to itself, Sebi has a different yardstick.

By now, it should be obvious that those who had certain positions leading to these events were the ultimate beneficiaries of the entire mischief. That someone within Sebi played ball is disquieting. And that the entire Sebi machinery possibly could have been abused in the process is bewildering to say the least.

Equally baffling is the fact that while the letter was being couriered, 'someone' was actively passing on the forged copy of the advisory through some agency to the media.

Whatever it may be, that the office of Sebi has such lax controls and could be easily penetrated is indeed making many sleepless. If the advisory was indeed couriered from within Sebi's premises (as is alleged in some quarters), the fraud would be akin to, say, the Reserve Bank of India allowing its own offices to distribute fake currency.

Forget the origins of the courier for a moment; the delay of well over 24 hours by Sebi in intervening and responding in the matter is creating consternation amongst observers, analysts and market watchers. In the test of alacrity, so crucial in the working of markets, the market regulator has definitely failed.

But who is accountable?
Needless to emphasise, one crucial question remains: who in Sebi is responsible for this? It takes no seer to predict that finally a junior temporary dispatch clerk in Sebi might get the stick. That is, if the courier had been sent through Sebi. Perhaps, the courier company may also have its contract terminated.

Further, with much fanfare, a few brokers may get show cause notices. But given Sebi's track record of being unable to tackle errant players in the markets, brokers may well ignore these notices and continue with their machinations.

Readers may recall that in certain high profile cases it has been our experience that Sebi was able to do precious little, even when it came to enforcing its own regulations.

The recent judgment on Goldman Sachs pertaining to the May 2004 market crash is a classic case in point where Sebi could not walk its own talk

Even if it did on rare occasions (as it did in UBS case or in another case involving Goldman Sachs, both relating to the power of Sebi to call for information and explanations) higher courts -- especially the Securities Appellate Tribunal (SAT) -- had struck down such decisions by Sebi. This has happened much too often, especially on high profile cases.

No wonder then that Sebi plans to introduce a Samadhan scheme (and thereby willingly lose its deterrent powers) with such errant players. By seeking to smoke the peace pipe, it at least hopes to fill its coffers by collecting fines rather than eternally ending up second best in its fight with market players.

In the worst of cases, one can literally commit murder in the future and Sebi could at best be negotiating imposition of fines with the errant players. Consequently, Sebi is seen today more as an irritant than a powerful regulator.

As events bear out, Sebi might have become bureaucratic and thus insensitive over the years. And it is ineffective while dealing with the constantly evolving market situations, especially when the market players are highly dexterous, powerful and have deep pockets.

The entire Pyramid Saimira episode reveals another important fact -- corporate battles are now spinning out of control. Interestingly, regulators instead of controlling them are innocently or otherwise becoming part of these corporate wars. What a fall!

Surely, the time for introspection for Sebi is right now. The lessons from affair Pyramid are compelling for Sebi. It comprehensively exposes the workings within Sebi and its organisational weakness. It quickly needs to puts its house in order.

Obviously, a thorough probe is required, a few heads need to roll, appropriate lessons learnt and order quickly restored. Crucially, the culprits need to be nabbed and punished. Otherwise, Sebi could lose its relevance. And if that happens, it would be the proverbial last straw on the already beleaguered Indian capital market's back.

Source :
http://www.rediff.com/money/2009/jan/07sebi-insider-trading-acquires-a-new-meaning-in-sebi.htm

L&T stakes claim, says it has a plan to save Satyam

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Tue, 20 Jan 2009 06:54:00 +0000

Engineering major Larsen & Toubro (L&T) continues to be interested in acquiring Satyam Computer Services. L&T’s Chairman told in a news interview hat L&T, which is one of the largest shareholders of Satyam, is not interested in being a spectator in the ongoing saga.

Mr Naik also expressed his opposition to any IT company taking over the troubled Hyderabad-based company, citing conflict of interest.

The company, which owns 4% in Satyam, is believed to have approached top government officials saying it has an action plan to save the software-maker.

Persons familiar with the matter said Mr Naik has sought an appointment with Prime Minister Manmohan Singh to drive home the point that the engineering company is best suited to take over Satyam, provided the government took care of Satyam’s liabilities.

But, with the board planning to appoint investment bankers, who will examine the option of inducting a strategic partner, it is unclear if the government will directly interfere in the process. Any potential buyer, including L&T, may have to participate in the formal process conducted by the board.

When contacted by ET, Mr Naik denied that L&T has approached the government to take control of Satyam. But, he made it clear that his company doesn’t want to be a passive spectator in the Satyam saga. “I don’t want to be a mute spectator to Satyam’s value being eroded. If we can’t play an active role, we wouldn’t want to take board position,” he said.

L&T is worried that Satyam’s rivals are working overtime to win over its top notch customers and clients. “Unless something is done now, it may be too late for Satyam,” he added.

With elections likely by April this year, the L&T chief fears that the government may slacken in its efforts to salvage Satyam. “My biggest worry is that nothing is going to happen over the next three months, and Satyam will be dead by then,” Mr Naik said. He added, “The need of the hour is to save Satyam from disintegration. For shareholders, it is important that its value is not eroded any further. We are more than ready to help if we are approached by the government agencies,” Mr Naik said.

L&T has been sending feelers to the government that it is not in Satyam’s interest that it is taken over by an IT major, persons in the know said. “There could be a conflict of interest there, and that may not help Satyam retain its top clients. Besides, Satyam’s employees also feel threatened by these big companies, and we need to take note of that,” Mr Naik said.

L&T, which picked up 4% in Satyam before the scandal — dubbed by many as India’s Enron — broke out earlier this month, is sitting on mark-to-market losses of over Rs 400 crore due to a slide in Satyam’s share prices.

Satyam’s six-member board, which includes Deepak Parekh, Kiran Karnik, C Achuthan, TN Manoharan, Tarun Das and S Balakrishnan, is currently in talks with banks and financial institutions to secure the cash it needs to pay salaries to over 50,000 employees by the end of this month and meet other operational expenses.

Also on top of the board agenda is the appointment of a top management team, including a chief executive and a chief financial officer.

L&T was earlier looking to form a strategic alliance with Satyam before the scam broke out, to give a boost to its own IT firm, L&T Infotech. It also wanted to raise its stake to 15% in the troubled software company from the current 4%. “In the past too I had made my intentions clear to raise L&Ts stake to 15%,” Mr Naik said.

rohitshakti_sehgal@yahoo.com (SHAKTI SEHGAL) — Tue, 20 Jan 2009 06:46:00 +0000

Bank fixed deposits regained their lost glory during the hardening of interest rates.

So much so that they even scored over government saving schemes.

Although taking a cue from the government’s recent policies, banks have now started slashing the deposit rates, term deposit schemes still look attractive, particularly in the light of the current financial crisis as well as the market meltdown.

Check out the latest rates banks are offering:

Interest rates by SBI for domestic term deposits below Rs 1 crore:

7 days to 14 days: 3.50%
15 days to 30 days: 4.25%
31 days to 45 days: 4.50%
46 days to 90 days: 6.00%
91 days to 180 days: 6.25%
181 days to 270 days: 6.75%
271 days to less than 1 year: 7.25%
One Year & above: 7.50%

Interest rates from BOI for deposits less than Rs15 lakh :

Maturity: Revised Rates w.e.f. 19.01.2009

07 days to 14 days: 3.25%
15 days to 30 days: 4.25%
31 days to 45 days: 4.50%
46 days to 90 days: 6.00%
91 days to 179 days: 6.25%
180 days to 269 days: 7.25%
270 days to 364 days: 7.50%
1 year to less than 2 years: 8.00%
2 years to less than 3 years: 8.25%
3 years to less than 5 years: 8.25%
5 years and above: 8.25%

Interest rates for deposits Rs 15 lakh and above but less than Rs1 crore:

Maturity: Revised Rates w.e.f. 19.01.2009

07 days to 14 days: 3.25%
15 days to 30 days: 4.25%
31 days to 45 days: 4.50%
46 days to 90 days: 6.00%
91 days to 179 days: 6.25%
180 days to 269 days: 7.25%
270 days to 364 days: 7.50%
1 year to less than 2 years: 8.00%
2 years to less than 3 years: 8.25%
3 years to less than 5 years: 8.25%
5 years and above: 8.25%

Interest rates from HDFC Bank for regular fixed deposits below Rs 15 lakh:

Maturity Period: Revised Rates w.e.f. 12.01.2009

15 - 29 days: 3.50%
30 - 45 days: 4.00%
46 - 60 days: 4.50%
61 - 90 days: 5.00%
91 – 180 days: 5.50%
6 months 1 day - 6 months 15 days: 7.00%
1 year 17 days - 2 years: 8.00%
2 years 17 days - 3 years: 8.00%
3 years 1 day - 5 years: 8.00%
5 years 1 day - 8 years: 8.00%

Interest rates from ICICI Bank for domestic term deposits

Maturity Period: Deposit of less than Rs 15 lakh w.e.f. 19.01.2009

7 days to 14 days: N.A.
15 days to 29 days: 3.75%
30 days to 45 days: 4.00%
46 days to 60 days: 4.00%
61 days to 89 days: 4.00%
90 days: 5.75%
91 days to 180 days: 6.25%
190 days: 7.75%
191 days to 269 days: 7.25%
270 days to less than 1 year: 8.00%
1 year to 389 days: 8.25%
390 days: 8.75%
391 days to 589 days: 8.25%
890 days: 9.00%
891 days upto 10 years: 8.25%

Interest rates from HSBC Bank for domestic / Non-Resident Ordinary Rupee (NRO) term deposit accounts:

FD Period: Interest rates effective from January 7, 2009

15 days: 3.50%
30 days: 4.25%
60 days: 5.25%
90 days: 5.25%
180 days: 5.50%
270 days: 8.00%
1 year: 8.00%
400 days: 8.50%
4 years: 7.50%
5 years: 7.50%

Interest rates from Axis Bank for domestic deposits:

Period:Interest rate on deposits below Rs 15 lakh effective January 9

15 Days to 29 Days: 3.00%
30 days to 45 days: 4.00%
46 days to 60 days: 5.00%
61 days to less than 3 months: 5.00%
3 months to less than 6 months: 6.00%
6 months to less than 9 months: 7.00%
9 months to less than 1 year: 8.00%
1 year to less than 2 years: 8.90%
2 years to less than 3 years: 8.50%
3 years to less than 5 years: 8.00%
5 years upto 10 years: 8.00%

The interest rates from Corporation Bank on domestic term deposits with effect from January 12, 2009:

Duration: Interest rate on less than Rs 15 lakh

15 days to 29 days: 4.75%
30 days to 45 days:5.00
46 Days to 60 Days: 5.50%
61 Days to 90 Days: 6.00%
91 days to less than 6 months: 7.50%
6 months to less than 9 months: 7.75%
9 Months to less than 12 Months: 8.25%
12 months to Less than 2 Years: 8.75%
2 Years to less than 3 Years: 9.00%
3 Years to less than 5 Years: 8.75%
5 Years and above: 8.75%

Duration: Interest rate on 15 lakh upto Rs 1 cr

15 days to 29 days: 4.75%
30 days to 45 days: 5.00%
46 Days to 60 Days: 5.75%
61 Days to 90 Days: 6.25%
91 days to less than 6 months: 7.25%
6 months to less than 9 months: 7.50%
9 Months to less than 12 Months: 8.00%
12 months to Less than 2 Years: 8.75%
2 Years to less than 3 Years: 9.00%
3 Years to less than 5 Years: 8.75%
5 Years and above: 8.75%