As we write this blog, the price of Vedanta (formerly Sesa Sterlite) has corrected almost 60% from the highs achieved last year. In fact, since the merger between Cairn and Vedanta was announced a couple of months back, Vedanta has corrected close to 30% and is already at a yearly low. The merger deal has run into rough weather because of large shareholder institutions like LIC and United India Insurance Company (UIIC) raising doubts about the validity of the 1:1 swap ratio. Continue reading
In the past few months three independent pointers have once again raised the specter of bank loans to the steel sector. A report by a leading brokerage has raised serious questions about the steel exposure of Indian banks, which runs close to $45 billion. In another event, the highly conservative HDFC Bank preferred to hive off its Rs.550 crore loan to a steel company at a discount rather than participate in a recast. A few days ago, the Finance Secretary sent an SOS to the Steel Secretary on the exposure of Indian banks to steel companies. Continue reading
What every Indian investor needs to ask…
After touching a peak of 9122 in March 2015, the Nifty has drifted in a range of 1000 points. Typically, any move closer to the 8000 level has attracted buying support and any move closer to the 9000 mark has attracted selling. It is time to ask a pertinent question. Are current valuations for Indian markets justified? Or are we thriving on hope? Continue reading
