Today's Calls

1. Buy IDFC Bank Ltd at Rs.62.35, T: Rs.68 -72, SL: Rs.61.40. In a significant development, The promoters holding in the company stood at 52.92 % while Institutions and Non-Institutions held 34.45 % and 12.63 % respectively. The stock is trading above its 50D and 200D SMAs. It's 200D EMA is placed at Rs.60.97.

Photo: Trustworthy No.1 

The private lender IDFC Bank, picked up a 5% stake in financial services major IIFL Holdings for over Rs.502 crore through an open market transaction, at the beginning  of this month. On that day the stock of IFL Holdings closed at Rs.322.90 in the BSE. Today it is quoting at Rs.384, adding value to the shareholders' wealth. Also, IDFC Bank will replace BOI in Bank Nifty from March 31, 2017. All these developments bode well for the shares of IDFC Bank Ltd. 

2. Those who are holding the shares of RCOM at (Rs.37) can continue to hold the same, with addition on every decline. Once the mergers get completed, the stock is likely to give huge returns to the patient investors.

3. The domestic markets are trading with caution ahead of the release of GDP data for Oct - Dec period -- the shares of telecom and public sector oil companies will be in focus; apart from Bank Nifty.

4. Buy Hindustan Oil Exploration Ltd at Rs.75.30,  T: Rs.78-82, - 86, SL: Rs.72.60. Hindustan Oil Exploration Company Ltd. engages into field of oil and gas exploration. Incorporated in the year 1983, Hindustan Oil Exploration Company Ltd. is based in Vadodara.

Hindustan Oil Exploration Company (HOEC), which won rights to develop two already discovered, marginal fields in a recent government auction, says it sees early monetisation of the one in Arunachal Pradesh.

The Kherem field in Arunachal Pradesh lies about 60 km from HOEC’s Dirok field, which is expected to start producing gas next month. Kherem is a small field with 3 million barrels of oil — that can produce 200 barrels a day to start with — and 17 billion cubic feet of gas. Twinning Kherem with Dirok will neither be difficult nor expensive, P Elango, Managing Director, HOEC, told BusinessLine. The 16.45 sq km Kherem field, discovered by Oil India Ltd (OIL) in 1994, has a couple of exploratory wells doing down.

Today's Calls

1. Buy Reliance Power at Rs.45.80,T:  Rs.49-51, SL: Rs.45. Reliance Power Ltd's net profit in

the December quarter rose 14.4% as its plants performed better.

The Anil Ambani-led power producer reported a consolidated net profit of Rs.275.70 crore, against Rs.241.06 crore a year ago. Net sales rose 14.2% to Rs.2,456.31 crore in the quarter from Rs.2,150.49 crore a year earlier. Moreover, the future of other power companies such as Torrent Power (Rs.205.30) and Adani Power (Rs.37.55) also looks bright; though the share price of these two power companies at their CMPs looks fairly valued -- therefore the best bet at this point of time is invariably Reliance Power Ltd.

2. Those who are holding Punj Lloyd Ltd (Rs.21.60), can continue to hold with a SL at Rs.20.50. The construction and power stocks will be a major beneficiary, as the economy picks up steam, post demonetisation.

3. Those who are holding 63 Moons Technologies Ltd (Financial Technology) from Rd.81.70 can average the scrip, but should keep a SL of Rs.76, for any short term.trade. CMP: Rs

81.50.

4. Those who are holding the shares of Reliance Communicatioms Ltd ((Rs.37.10), can continue to hold the same and add in all declines. This stock will make millionaires out of patient investors.

5. Buy Kolte Patil Developers Ltd at Rs.101.50, T: Rs.115. SL: Rs.96. According to.the analysts the company is likely to gain from the Budget proposal, to accord infrastructure status to affordable housing.
Pune-based realty developerKolte-Patil Developers has reported 30% on-year rise in net profit at Rs 18 crore for the quarter ended December. Revenue for the quarter rose 27% to Rs 226.4 crore, the company said in its earnings release. 
During the quarter, the company reported new sales bookings of 0.32 million sq ft against 0.52 million sq ft a year ago and 0.57 million sq ft in the previous quarter. The value of area sold during the quarter stood at Rs 195 crore as against Rs 304 crore a year ago and Rs 329 crore in the preceding quarter.

Today's Calls

1. Buy 63 Moons Technologies (Financial Tech) at Rs.82, T: Rs.93, SL: Rs.79.63 Moons Technologies, formerly Financial Technologies (India),  earlier set up an investment committee and has  now a new policy to protect the company’s wealth. The company, is sitting on around Rs .2,000 crore cash after selling its stakes in various firms.. 63 Moons Technologies, formerly Financial Technologies India, has introduced a trading platform for the equity markets. The platform uses artificial intelligence, social, mobile, analytics and cloud, cognitive computing and natural language processing.
Named Odin Voice and Odin Bot, the conversational user interfaces could disrupt the way people transact. “This technology will revolutionise brokerage services and be the trendsetter in financial technologies,” said Keshav Samant, president and chief executive officer, brokerage technology solutions, 63 Moons Technologies.
63 Moons Technologies has been offering financial technology solutions for over two decades. Its innovations include products and platforms such as Odin, iWin, Net.net, STP Gate, MCX, IEX, SMX & DGCX.

2. Those who are holding Punj Lloyd should now keep.a SL of Rs.21.40 and keep holding for targets of Rs.27-29.

3. Those who are holding Rolta Ltd should book profit at Rs.64.40 and exit the counter, the stock.is not performing.

Today's Calls

1. Buy Dena Bank Ltd at Rs.37.30-37.50, T: Rs.40-41, SL: Rs.36.60. Dena Bank, like all other

banks, has had a dream-run on the deposits front during the 50 days following demonetisation. Copious deposit inflows in the form of scrapped high-denomination notes helped the bank shed bulk deposits amounting to about ₹9,000 crore. Meanwhile, Dena Bank reported a net profit of Rs.35.31 crore inQ3FY17, as compared to Rs.662.85 crore loss reported last year for the same period. Public sector Dena Bank is also in talks with few insurance companies to raise capital, its CMD Ashwini Kumar said, this week. Kumar said for Dena Bank, the worst was over. "For my bank, the worst phase is over. Things postdemonetisation is now improving", he said. 

2. Those who are holding the shares of Reliance Communications Ltd (Rs.32.95), can look for good days ahead, as the company goes for merger with Aircel -- SSTL and Telenor. It will also get the backing of Mukhesh Ambani, following infrastructure and spectrum tie ups. We can look forward for levels of Rs.47-55 in the coming days; from where it fell.

3. Those who are holding the shares of JSW Energy (Rs.61), can continue to hold with a SL at Rs.57, for targets of Rs.67-68. However, the problem with this scrip, inspite of having fundamental, is the lack of interest from retail players. The company has a complex business model, which many retail investors cannot fathom.

4. Those who have invested in Punj Lloyd Ltd (Rs.20.10), should wait for the scrip to give a closing above Rs.20.50, before taking fresh entry. However, those who are already invested should keep a SL of Rs.19.60.

5. Brokerage Call: Buy IDFC Bank Ltd at Rs.63.50, T: Rs.68-72, SL: Rs.60.

Today's Calls

1. Buy JSW Energy Ltd at Rs.60 -- 60.50, T: Rs.67-68, SL: Rs.57. The good

news is that the Vijaynagar plant has commenced a short-term PPA at Rs.4.18/unit approved by the regulator. The company said that it is raising long term funds through the issuance of redeemable non-convertible debentures upto Rs 1,000 crore by way of a private placement.
The company said its wholly-owned subsidiary, Karcham Wangtoo Hydro project of Himachal Baspa Power Company has filed a petition for determination of final tariff with Central Electricity Regulatory Commission (CERC). Pending the receipt of final tariff order, the revenue from sale of power under long term power purchase agreements are being recognised in terms of expected tariff as per the available guideline. The hydro projects were acquired during September 2015, it said.
Though JSW Energy Ltd still has 1160MW open-ended capacities, it is likely to get a good value, as the demand for power increases, post demonetisation. 

2. Those who are holding Reliance Communications Ltd (Rs.33.10) can continue to do the same for a shirt term target of Rs.37-38. Reliable Communications Ltd is now virtually (Unofficially) RJIO.

3. Those who have taken position in Punj Lloyd Ltd (Rs.20.20) yesterday should wait to see if it crosses above Rs.20.50 or not to take fresh entry. On breaking of Rs.19.60, it becomes a sell.

4. Those who have entered Reliance Power Ltd, should continue to hold with SL of Rs.41.80.

The power sector is set to do well as the economy picks up steam, post demonetisation.

5. Buy Rolta India Ltd at Rs.63.50, T: Rs.71-72, SL: Rs.61.60. Today most of the IT and defence stocks are doing well and hence Rolta Ltd should also move up in tandem. 
In earnings reported earlier, net profit for Q3FY17 came at Rs 98.7 crore against Rs 127.3 crore quarter-on-quarter, while total income was up 0.2 percent at Rs 343.9 crore versus Rs 343.2 crore.
A share of a company reporting Rs.98.7 Cr quarterly profit should trade above Rs.100 as against the CMP of Rs.63.50. Moreover, yesterday volume of 52,000 in the BSE will be crossed today, as brisk buying is seen in the counter.

Today's Calls

1. Prajay Engineers Syndicate Ltd (Rs.12.20) came out with a reasonably good bottom line in Q3FY17.
With affordable housing being the catchphrase of Budget 2017, the focus could well shift from core areas of Hyderabad to its cheaper peripheries, helping the companies like Prajay Engineers Ltd.
The city's outskirts, where land rates are cheaper, are perfect destinations for such ventures that have so far not been economically exploited. The benefits extended to this segment in FY18 budget is very encouraging.
Apart from an increased carpet area, affordable housing was also awarded the 'infrastructure status'. This will result in bigger homes for buyers and lower interest rates for developers. The average projected cost of these homes ia generally around Rs 15- Rs 20 lakh.
This will push more local players (Prajay Engineers Syndicate Ltd is a local player) to take up small projects that they shied away from until now.  The investors are suggested to hold the scrip with a SL of Rs.11.70. The scrip could again attempt to cross Rs.16, in the coming days.

2. Those who are holding Punj Lloyd Ltd (Rs.20.50) can continue to add on declines, for  targets of Rs.27-31. Yesterday, the percentage of deliverable quantity to traded quality was high at 41.41%.
There is speculation that the company is working towards a turn around, leading to profits in the coming quarters. Some experts are of the view that the company expects an increase in construction activities and hopes to bags projects post budget 2017.

3. Those who are still holding the scrip of NBCC Ltd (Rs.286) from Rs.284, can book some profits at Rs.288 and can hold the rest with a SL at Rs.281. 

4. Those who are holding Reliance Power Ltd can continue to add on declines, for targets of Rs.47-51.

Today's Call

1. Buy Punj Lloyd Ltd at Rs.20.65, T: Rs.27-28, SL: Rs.19.60.

Punj Lloyd posted its Q3FY17 standalone results on February 11, 2017. Company’s

Photo: The ET

standalone revenue for the quarter came in at Rs. 997 crores, registering marginal 1.1% yoy decrease. This was in the wake of 2.7% yoy decline in revenues from EPC services that contributed nearly 93% to revenues.

EBITDA for the quarter came in at Rs 8.8 crores as against EBITDA loss of Rs 12.3 crores posted in Q3FY16. Company’s total expenses dropped 4.3% yoy to Rs 1018 crores.

Company posted a net loss of Rs 232 crores as against a net loss of Rs 309 crores in Q3FY16. The recovery in losses was driven by 122.5% yoy increase in other income. Company also posted a decline of 13.3% yoy in finance costs. However, finance cost stands very high at Rs 224 crores. [Source: India Infoline]

2. Those who have bought Reliance Infrastructure Ltd (Rs.533) yesterday, at Rs.528, can continue to hold positions for targets of Rs.545-552-571. The company as expected came out with good FY18Q3, numbers, which should propel the stock to higher levels.

3. Those who have entered Reliance Power at Rs.44.60, can continue to add in any intra-day dip for targets of Rs.47-51. There is no need to keep SL.

4. I hope most of you have booked profits in Future Enterprises Ltd at around Rs.30.80. The stock could come down to Rs.20-21, before moving up. The scrip if you remember was recommended at around Rs.17.50-18, last month.

Today's call

1. Buy NBCC Ltd at Rs.284, Rs.298, SL: Rs.277. NBCC Ltd, a Navratna Company has fixed February 21, 2017 as the record date for 1:2 bonus issue of shares. Exit at Rs.284 or near that price, for intra day traders. The stock is not preforming, as expected.

2. Buy Reliance Infrastructure at Rs.528, T: Rs.545, SL: Rs. 526. Temporary bottom seems to have been formed on daily chart.

3. Buy Reliance Power at Rs.43.60, T: Rs.45-47, SL: Rs.42. The Anil Ambani-led power producer reported a consolidated net profit of Rs275.70 crore, against Rs241.06 crore a year ago. Net sales rose 14.2% to Rs2,456.31 crore in the quarter from Rs2,150.49 crore a year earlier.

Reliance Power's Sasan project is the world's largest power generation plant to be registered under the UN framework, entitling the company to earn 22.4 million carbon credits.

Arun Jaitley’s 10% tax on income from carbon credits is good for companies like Reliance Power Ltd.

According to the explanatory memorandum to the Finance Bill, the income tax (I-T) department has been treating the income earned on transfer of carbon credits as business income subject to tax at the rate of 30%. 


Now Direct taxes code had recommended that income from sale of carbon credits be treated as business income. Therefore, the tax levy of 10% may be considered to be beneficial, for companies like Reliance Power Ltd (Rs.43.60).

Punj Lloyd Ltd: Buy

CMP: Rs.21.95

Last quarter saw some acceleration in execution in their projects. The management is positive on gradually improving macro environment and an enabling policy framework of the present government,  which is likely to improve the performance of the sector.  

A key development at the end of last year was the Cabinet decision on payment of arbitration awards by government agencies to EPC companies. This, the company, believe is a significant positive for the industry and will go a long way towards reducing debt.

Thus, implementation of the measures taken by the government like release of 75% of arbitral award to construction companies will help improve prospects over the medium term. Some construction companies have already received this payment in their escrow accounts against bank guarantees.

According to a recent  (rating agency) ICRA Report: the order book of construction companies is expected to improve with the government awarding sizable infrastructure projects over the last two years and many in the pipeline,

"The Government of Indias focus on infrastructure sector, particularly roads, railways, and urban infrastructure segments, is evident from the increased budgetary allocation to these sectors as well as the slew of measures taken to revive the sector," ICRA said in a statement.

Of all the infrastructure segments, the Railways have the highest planned capital outlay with Rs.8.56 trillion over the five-year period of 2015-2019. To keep up with this plan, the annual capital outlays for FY2016 and FY2017 was increased significantly.

The two ongoing dedicated freight corridors (eastern and western) are worth over Rs. 0.81 trillion. The other major capex planned is towards station modernisation and redevelopment and the high speed rail corridor (HSR) or bullet train project.

"These are likely to offer sizeable opportunities for the construction sector," the statement said.

"The budgeted capital outlay for the Railways is expected to increase from Rs 1.2 trillion in FY2017 to Rs 1.4 trillion in FY2018. However, given the 5-year plan this still would require to be ramped-up significantly in the remaining years. "The merger of the Railway budget with the central budget will provide an additional leeway for an increased outlay. While a major part of the outlay is expected to be towards the ongoing projects, sizeable newer projects are also expected to be awarded, providing construction opportunities, particularly for large players," said K Ravichandran, Senior Vice-President and Group-Head, Corporate Ratings, ICRA.

Moreover, valued at $180 million per annum in the 1970s, Indo-UAE trade is today around $50 billion, making the UAE India's third largest trading partner for the year 2015-16, after China and the US --- among the several private and public sector, Indian companies, working in the UAE, Punj Lloyd Ltd also figures in the list. 

Besides, a section of the market believes that Punj Ltd like HCC Ltd (Rs.41.80) is a BJP company; the former paying Rs.1 Crore in 2009 elections to the BJP. 

The promoters holding in the company stood at 36.14% while Institutions and Non-Institutions held 9.08% and 54.79% respectively. The total public holding stands at 63.86%. The stock is currently trading below its 50, 100, 150 nd 200 D SMA.

Therefore, buy the shares of Punj Lloyd Ltd around R.21.75-21.95 for short targets of Rs.27-28. The company is coming up with results on 11 February, 2017, where I am expecting a turnaround.

Note: The scrip was recommended to the Premium Group members today and it was displayed in the Premium Blog: http://sumanspeakspremiumservices.blogspot.com.

Winning Strokes: Think Different

The stock of HDIL (Housing Development & Infrastructure Ltd) was given a buy around the support of Rs.64.50 for a short term target of Rs.72 to the Paid Members on 1st February, 2017; based on the theme that Union Budget 2017 proposed several positive measures for the real estate sector, which includes Infrastructure status to affordable housing, which will reduce the cost of funding for the builders; the benefit of which can be passed on to the customers. The stock touched Rs.66.15, on last Friday. 

Join my Paid Service or Trade through my Brokerage House, to stay ahead of others. If you have a portfolio size of around Rs,2 lakhs and trade through my recommended brokerage house, then get Free Assistance in stock market. 

Future Enterprises Ltd was given a buy at around Rs.17.50-18, a couple of days weeks back. The scrip touched Rs.23.15 intra-day on last Friday. The investors are suggested to book some profits. 

Photo: The Hindu

The stock of Reliance Communications Ltd moved to Rs.40.40 in the NSE on last Friday clocking a volume of 87,824,962 shares. A special court last week dismissed the cases against the Maran brothers,  saying saying that the "perception or suspicion" was not backed by concrete evidence. The special CBI Judge O.P. Saini, in scathing observations, said that no minister or senior government officer would be safe if "contradictory oral statements" of witnesses are made legally acceptable. Judge Saini discharged Maran, his brother Kalanithi Maran, Kalanithi's wife Kavery Kalanithi, South Asia FM Ltd (SAFL) Managing Director K. Shanmugam and three companies -- SAFL and Sun Direct TV Pvt Ltd (SDTPL) and South Asia Entertainment Holdings Ltd, Mauritius in two related but different cases. Dismissing the cases against them, the judge said the oral statements, which were used by the CBI and ED to frame charges, were a "dangerous trend" and that if it were allowed "anybody and everybody in the government can be made to face prosecution". 

The court questioned that "If such oral statements, which do not flow from the record or find corroboration from anywhere from any circumstance, are given judicial recognition, what shall be the fate of the rule of law?" "If such a practice is allowed, anybody and everybody in the government can be made to face prosecution. "No Minister or Secretary would remain safe or for that matter anyone working in the department." "This is a dangerous trend and can strike at the root of rule of law and the constitutional democracy as wrongdoers can gang up against those, who, by the perusal of record, are innocent," the court opined.

In another major development, the Chief Justice Khehar of Supreme Court, flanked by Justices N.V. Ramana and D.Y. Chandrachud, orally observed during Aircel-Maxis hearing: "He [Mr. Ananda Krishnan] does not care for the law of this country. He does not care for the Supreme Court of this country... then we will punish him... we will see to it,” 

Mr. Singhvi, the counsel for Aircel, urged caution on the court’s part, saying a restraint order meant to enforce the appearance of the Maxis owner and the other three would harm Aircel. The lawyer said Aircel had no control over Mr. Ananda Krishna and was not his “alterego.” “Why should Your Lordships punish me for something done by Mr. Ananda Krishnan,” asked Mr. Singhvi.

I feel Mr.Sanghvi has a valid point and I would make a humble request to the Honorable Bench of the Supreme Court, to maintain some sanctity of law of the land and act prudently; without any individual bias and whims. The small investors who are holding positions in Reliance Communications Ltd, should not suffer because of one of the promoters did not turn up in a court. This attitude of the honourable Supreme Court Bench to punish "Ram" for the Faults of "Rahim" is very unfortunate and puerile. I would therefore, like to ask the Supreme Court Bench on the basis of which (legal) section, the court is entitled to sell the shares of company, because one of its promoters has failed to appear in a court. The law is blind to emotions and I feel, not only the merger of Aircel - Reliance Communications Ltd, but also the shareholders of both the companies, should not suffer because of some individuals. Besides, this kind of attitude could tarnish the image of the honourable Supreme Court (and make it look like a Rogue) and I strongly feel, it will not set a good precedence for the Indian Jurisprudence's history. The court should instead should ask the Narendra Modi government to request its Malaysian counterpart to find ways to bring Mr.Ananda Krishnan to India, if his presence is absolutely necessary. 

Important

1. Prajay Engineers Syndicate Ltd (Rs.14.93) has hit the upper circuits in both the exchanges. Where is the stock heading ?  Can it cross Rs.27, considering that Hyderabad is now a happening city and lot of real estate opportunities are avaliable in Vijaywada too. Trade through my recommended brokerage house and get my assistance FREE. 

2. Buy Future Enterprises Ltd near the support of Rs.17.50 . If you are buying at the CMP of Rs.18.45, then please do keep a SL at Rs.17.30. Targets: Rs.28 - 31.

3. Reliance Communications Ltd (Rs.31.40) is better placed among all the incumbent Telecom players to handle the RJio menace. It is because it has tie up with RJio as regards infrastructure and spectrum sharing -- RCom has one of the highest holding of the  lucrative 800 MHz spectrum used for (highly penetrative) 4G transmission; apart from 1800 MHz category. RCom is gettin royality from RJio for the use if these spectrums.

Today's Calls

1. But LT Foods Ltd at Rs.367, T: Rs.377-381, SL: Rs.362. Exit out of LT Foods at Rs.371, the stock is not performing according to expectations.

2. Buy Torrent Power in intra-day dips at Rs.191, T: Rs.197-201, SL: Rs.187.

3. Buy State Bank of India at Rs.259, T: Rs.270, SL: Rs.252.

Today's Calls: BTST

1. Buy Reliance Capital at Rs.461,T: Rs491, SL: Rs.455.

2. Buy IRB Infrastructure above Rs.220.50,T: Rs.235, SL: Rs.215

3. Intra day buy Axis  Bank at Rs 486, T: Rs.491,SL: Rs.476.

Today's Calls

1. Buy KEC International Ltd at Rs.151, T : Rs.159 - 167, SL - Rs.139.

2.  Buy Dewan Housing Finance Corporation Ltd at Rs.273.40, T: Rs.285, Rs.265.

Advantage: Anil Ambani..? Or Jio Buy - out..?

The Financial Express writes on 13 January, 2017: Right now, incumbents are using 4G spectrum to offer data services to subscribers and continue to offer voice calls using older GSM networks. If there is a surge in voice traffic after free voice becomes the norm, these telcos will then have to invest more in capacity to augment their ability to carry voeice traffic on their GSM networks. Their best bet, in such a situation, is to accelerate their migration to VOLTE networks of the type RJio has—some of them have, in any case, been carrying out trials on this in select areas. 

The problem, however, is that while lower frequency bands are better suited for this, none of the incumbents have a pan-India network of, say, 900 MHz spectrum where VOLTE networks can be deployed. The best bet in such a situation is 700 MHz, but thanks to the regulator putting an arbitrarily high reserve price for this spectrum, and pegging it at four times that of the 1800 MHz band, there were no bidders for this band in the last auction.

The result of this was that telcos which already have spectrum in the 800/900 MHz bands continue to enjoy an unfair advantage—the 800 MHz spectrum RJio is using was ‘liberalised’ by RCom at a cost of around Rs 5,300 per MHz as compared to the Rs 11,485 crore reserve price for 700 MHz. 

In the past, when the regulator had come up with irrational reserve prices, the government had reduced it—in 2012, while Trai recommended 800 MHz be priced at twice the 1800 MHz price, the Cabinet lowered this to 1.3 times and when the auction still failed, the reserve price was further cut by half in 2013. 

For reasons best known to it, the government chose not to do the same this time. Were the government to continue to price 700 MHz spectrum very high, this will result in a big advantage to RJio.

Reliance Communications Ltd (Rs.31.40) has one of the highest concentrations of 800 MHz spectrum among the telecom players, for which it is going to get Royalty from RJio. So, an advantage to RJio gives indirect positives to RCom, which has been mentioned here umpteen number of times.

Earlier, the Junior Ambani has shown the white flag to Mukhesh, by announcing that RCom has virtually merged with RJio.

However, on the flip side off late there are strong rumours in th market that Mukhesh Ambani wants to lap up RCom at dirt cheap price, through an open offer by hammering its shares.

It is to be noted that, Anil and Mukesh Ambani, despite being brothers, have had a tumultuous relationship in the past.

The Telegraph writes on 14 January, 2017: It is a saga worthy of a Bollywood melodrama. The story of the Ambani brothers is one of vast fortunes and billionaire glamour, a bitter feud and a vicious business rivalry.

Now one of Britain’s biggest companies is caught in the crossfire of the 15-year battle between Mukesh Ambani and his younger brother Anil. Vodafone is suffering in India, to the tune of at least £4.4bn in write-downs so far, as the elder Ambani, India’s richest man, mounts a £20bn onslaught on the mobile market, hitherto Anil’s territory.

RCom had already signed a 17-circle airwaves sharing pact in the 800 Mhz band with Jio. It has also agreed to sell its 800 Mhz airwaves in nine service areas to Jio where the latter does not have spectrum in that band. But still it gives RCom an edge over RJio in the 800 MHz space.

Anyway, under the partnership announced earlier, RCom brings in most of the spectrum while Jio provides the network and much of the cash for conversion of the spectrum. The regulators should look into this aspect too; as the minority shareholders continue to suffer.

Today's Calls

1. Buy VEDL at Rs.236, T -  Rs.242 - 248, SL- Rs.231.

2. Buy IPCA Laboratories Ltd at Rs.566,  T - Rs.580-600, SL - Rs.548.

3. Buy Gujarat Ambuja Cements at Rs.215 , T -  Rs.221-227, SL -  Rs.206.

Aircel - Maxis (Deal) Fiasco: The Apex Court and Some Thoughts..

In the Aircel-Maxis deal case lodged by CBI and the Enforcement Directorate (ED) it was alleged that South Asia FM Ltd (SAFL) and Sun Direct TV Pvt Ltd (SDTPL) had received Rs.742.58 crore as "proceeds of crime" from Mauritius-based firms.

Later ED alleged before the court that Dayanidhi had generated funds worth Rs.742.58 crore through illegal means and there was sufficient prima facie material to proceed against him and other accused in the case. And thus the narrative changed..

Now, DNA India, a BJP sympathetic web portal writes: 

The Supreme Court order preventing Aircel from disposing of its spectrum and licences through a proposed merger with Reliance Communications is a befitting response to the its promoters disregarding Indian laws. Aircel is owned by Malaysian company Maxis, whose Indian origin promoter Ananda Krishnan has been chargesheeted by the Central Bureau of Investigation, in one of the 2G spectrum scam cases. Though the court is slated to frame charges, it will not be able to proceed with the trial against Krishnan unless he appears in person to defend himself.

The Supreme Court stayed the sale and trading of the licences and spectrum noting that spectrum was a “very valuable resource” on which a lot of money could be made. The court noted that if that money was earned on account of fraud and Krishnan was not facing the legal process, “then we cannot allow that money to be earned by anyone”. The loudest criticism against the Supreme Court during the UPA-II years were that courts were hurting investment through judicial activism.

If judges have to look beyond the constitutionality and legality of cases and also factor in the fallout of their decisions, it is impossible for justice to be delivered. The Supreme Court judgment ruling that scarce natural resources must be auctioned raised a hue and cry from telecom operators and the power sector complaining that business would turn unprofitable and costs would increase for consumers". 

Now the point is when the deal involves only Rs.742.58 crore, what is logic of blocking a Rs.65, 000 crore deal, especially on the ground of possible personal and political vendetta..? Judicial and too much political activism, accompanied by over regulations has hereto destroyed the once vibrant telecom sector.

Now if the Judges, start to frame policies by their whims and caprices, then it is a very bad news for India. Any justice should have a human touch instead of hard and rock solid bookish judgements. In this context let me quote from Law Live:

The necessity of a judiciary which is in tune with the social philosophy of the Constitution has nowhere been better emphasised than in the words of Justice Krishna Iyer which we quote: “

Appointment of Judges is a serious process where judicial expertise, legal learning, life’s experience and high integrity are components, but above all are two indispensables — social philosophy in active unison with the socialistic articles of the Constitution, and second, but equally important, built-in resistance to pushes and pressures by class interests, private prejudices, government threats and blandishments, party loyalties and contrary economic and political ideologies projecting into pronouncements. (Mainstream, November 22, 1980)” Justice Krishna Iyer goes on to say in his inimitable style: “Justice Cardozo approvingly quoted President Theodore Roosevelt’s stress on the social philosophy of the Judges, which shakes and shapes the course of a nation and, therefore, the choice of Judges for the higher Courts which makes and declares the law of the land, must be in tune with...tune with the social philosophy of the Constitution. Not mastery of the law alone, but social vision and creative craftsmanship are important inputs in successful justicing. (Mainstream, November 22, 1980)”...

Therefore, we can conclude that any judgement which does not take into account a broader social perspective, is artificial and is not likely to help in true nation building.

In Aircel - Maxis case too the apex court should act in such a way that it creates minimum pain for the innocent minority shareholders, while identifying the true miscreants and punishing them, according to the laws of the land. The question is why should the shareholders suffer and their wealth damaged because one of the promoter's of that merged entity is failing to appear in the court....😰😰😰😰. The court instead of penalizing the retail Investors should have gone all out for bringing Ananda Krishnan to India, isn't it

This is like an old Bengali Joke: "Because I could not get hold of you, I will take action against your shit wherever I get them...!! Sardonic, are some of the Apex Court directions/actions and judgements. Really what to say!!

However, it seems on the short term there is relief on the anvil for the shareholders, as a news on the ET of 11 January, 2017, almost echoes my view:

"The telecom company may seek an opportunity to present its side of the issue and is likely to stress that any decision on its spectrum holding would have implications for stakeholders such as lenders, vendors and employees, apart from shareholders besides Maxis. Senior lawyer Harish Salve said he has been consulted on the matter, but did not comment further".

Reliance Communications Ltd: Where it is heading?

CMP: Rs.33.30

It has been a harrowing tale for all those who invested in the shares of Reliance Communications Ltd. The stock had been falling since the last few months even though the much expected tower sell deal, a mega merger, a number of investor friendly steps, etc has been effected. However, it seems with the near termination of the free offer of RJio, this bas phase looks to be over. The sun is again likely to shine over the telecom horizons.

Moreover, telecom sector being from the essential service space should be least affected by the demonetisation fiasco; as we are approaching the deadline of 30th December 2016. The stupid and mindless demonetisation move of  Narendra Modi -- Urjit Patel has already failed, as expected and as predicted by eminent economists like Prof.Amartya Send and Dr.Kaushij Basu. Besides, no RBI governor, I have seen has spoiled the reputation (so badly and cheaply) of the RBI like Dr.Urjit Patel has done. After the failed demonetisation drive it remains to be seen whether he is being impeached by the Parliament or not. He seems to have got inuenced by the Narendra Modi - Amit Shah disease (BLUFFS and Jumlas).

Anyway, yesterday, a buy call was initiated in the counter at Rs.33 with a short term targets of Rs.35-37. Today the scrip has already touched Rs.33.85 in the NSE, with strong volumes. What I feel is that the investors can increase their holdings in RCom or average keeping a stop loss of Rs.31.

But one rumour which is gaining momentum is that of price rigging of the sharez of RCom by Mukhesh Ambani group to bring down the price of open offer. There is media speculation that RJio is likeky to by out Rcom in a cash+equity deal. The authorities (SEBI) should look into this matter on urgent basis and if necessary take appropriate actions.

Cashless India: Advantage Telecom Companies

Photo: The Indian Express

The NDA government at the centre is taking lot of measures to make a 86% cash economy into cashless. But the things should have been done slowly, due to India's structural problems.

Anyway, it is important to mention here that, India has among the highest usage of cash across global economies. According to a 2015 report from PwC, 98% of all transactions by volume happen in cash. 68% of the total value of transactions are conducted in cash.

Admittedly, high cash usage often comes with a cost. In 2013, research firm McKinsey found a strong correlation between high cash usage and the size of a country’s shadow economy. 

The size of India’s own shadow economy — which includes black market transactions and undeclared work—is roughly a quarter the size of gross domestic product (GDP).

Indeed, India suffers from a serious rash of corruption, which hurts honest, hardworking families. According to Transparency International, the South Asian country ranks 76 out of 168 countries in its 2015 Corruption Perceptions Index. 

In May, Indian government data showed that a scant 1% of Indians pay income taxes. Cashless India is an answer to most of these kinds of problems.

Now, in one of his speeches, the PM, Narendra Modi, has spoken of using the mobile phones as banks and as a device which will promote the cause of cashless India. He gave a clarion call to use the smart phones, as a part of everyday transactions and plus the loop holes, which gives more muscles to a parallel economy.

This gives some legs to the Indian telecom companies to increase their businesses, as more and more people use smart phones and internet, to do their necessary transaction; without any physical transfer of Cash, lowering the cost of printing of new currency.

Already, I am  told that Airtel has come up, with a Bank whose services can be used for a number of purposes, apart from making an user a permanent customer.

Now, more use of telecom services means more number of towers and fibre cables needed for the installation and execution of the same. This is therefore, a very good news for both the tower and wireless telecom companies.

In such a scenario, I would suggest you to slowly accumulate the shares of telecom companies which are now trading near their 52 - week low prices. Top picks:

1. Bharti Airtel Ltd: Rs.324.90.
2. Bharti Infratel Ltd: Rs.393.65

3. Reliance Communications Ltd: Rs.35.90

4. Idea Cellular Ltd: Rs.73.35.

It is to be noted that, I have recommended all these stocks yesterday in Facebook.

Narendra Modi's demonetisation: A Monument of Chaos & Confusion....

According to some media reports, though lndia's GDP grew at the fastest pace for a large economy in the September quarter, the nation could experience some amount of uncertainty in the third quarter of fiscal 2016-17 due to the government of India's (led by the BJP -- Bluffers' Party of India..?) decision to demonetize Rs.500 and Rs.1000 currency notes. Also, the Contraction in capital investment deepened further.

India's Gross domestic product (GDP) clocked an annual 7.3% growth between July and September, faster than 7.1% in the previous quarter and higher than China's 6.7%.

It is pertinent to mention here that, Reserve Bank of India posted this notice on November 8:

Government of India, vide their Notification number 2652 dated November 8, 2016 have withdrawn the Legal Tender status of ₹ 500 and ₹ 1,000 denominations of banknotes of the Mahatma Gandhi Series issued by the Reserve Bank of India till November 8, 2016.

This is necessitated to tackle counterfeiting Indian banknotes, to effectively nullify black money hoarded in cash, and curb funding of terrorism with fake notes.

Let us now observe what Patrick W. Watson, wrote in  Forbes, 1 December, 2016:

This whole idea of a “cashless society” used to be a kooky fringe belief. Conspiracy promoters said jackbooted government thugs would kick in your door any minute and confiscate all your vegetables.

Guess what: the kooks had a point. People in high places really do want to take away your cash, or at least most of it.

I , for one, will oppose this (if they bother to ask my opinion). People with criminal intent will find other ways to keep their businesses hidden. Eliminating cash would create hassles for everyone, for no real benefit.

Modi’s “demonetization” turned into a mess. The government’s sudden decision to withdraw large-denomination currency from circulation, has caused enormous hardship to millions of people in the country’s predominantly cash-based economy.

Lines formed at banks, with people waiting for days, only to find the bank ran out of smaller bills. Those without bank accounts had no way to make routine transactions. Already impoverished people had to spend their work time waiting to exchange their money. New bills intended to replace the old ones were scarce.

The results spread through the economy like wildfire. Merchants lost sales because customers couldn’t pay. Some resorted to barter. Media reports suggest restoring normal commerce could take months.

A few people reportedly died, most of them elderly citizens waiting outside banks for days, but also some overworked bank employees.

Analysts are already saying the sudden contraction will hurt economic growth. Economists at Ambit Capital cut their 2017 GDP growth estimate almost in half, from 6.8% to 3.5%. They think the effects will last into 2018, too.

With consequences ranging from disruptive to fatal, why would any government do something like this?