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Archive for June, 2010

It was like any other day at office; I reached at 8.20 am and began my work. Engrossed in work I did not realize that it was already 5pm in the evening and time to leave for home….When I got up from my seat to look around and check if the driver had arrived to pick me up. I realized that it was raining heavily and the lane facing the office was flooded with water…

I am not faking it…that was for real…the whole place was flooded with knee high water. The worst part was witnessing the cars parked on the sideways submerged under water…. moving with the force of the gushing water and my colleagues trying to tackle their car and get it out of the water…A colleague of mine was trying to get into his car and drive it to a safer and drier place….

The view was crazy….as I may put it….

When I saw this, the first thought that came across my mind was, a small area and water could move cars, imagine if the water had accumulated further, it would have caused further damage…

However, thank God, the rains reduced over a span of time and the area cleared a tad.

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I believe there are 2 sides of the same coin..

1. RNRL has reached a realistic pricing.

2. Stocks have been influenced by sentiment more than fundamentals.

As seen earlier, Anil’s IPO: RNRL was over priced right from the beginning piggy backing the Ambani brand name. However, over the past few months the stock has corrected and adjusted to new levels reaching a fair valuation. Despite the low levels, investors have continued to pose faith in the company expecting the Dadri project to come through.

However, the SC (Supreme Court) verdict in favor of RIL has largely shattered investor confidence in RNRL. The SC has fixed RIL’s gas sale price to RNRL at $4.20/mmbtu way above the family MoU price of $2.34/mmbtu. This has exerted additional cost pressure on the company adding to its existing woes of poor past performance owed to delayed project implementations.

On a broad level, RNRL share pricing has been largely based on the Ambani brand and on expectations of successful implementation of the undertaken projects. However, the SC verdict has shattered the investor confidence leading to huge sell offs across board. Looking at RNRL from an investor’s point of view, it is fair to state that the stock is overrated, overpriced and should correct further.

However, looking at the other side of the coin; it is safe to state that majority of the stocks in the market are ruled by market sentiment and a bit by fundamentals. For example, Jubilant Foodworks is a classic example of it with market cap expected to soon surpass the parent firm Dominos. Keeping the market sentiment theory in mind, market men added fuel to the already falling price of the RNRL stock.

Hence, we can safely conclude that RNRL has been continuously witnessing a bad phase. Not only has it been beaten down by weak fundamentals but also poor investor confidence.

Though you may own the stock and have sympathy for the younger Ambani, one cannot deny Mukesh’s ability to tweak the system to bend rules to cater to his business interests. Adding to his kitty are strong financials and buoyant investor sentiments. The SC has announced the verdict for gas price fixation, “Gas is national property and no family MoU can be placed higher than national interest”. Therefore, for the time being Anil will continue to face the brunt of the situation with investors losing money on the stock. So i believe either hold the stock till the fundamentals improve or sell your stock and consolidate your position.

*(RIL and RNRL have been involved in a legal battle over the gas supply of 28 million units in the coming 17 years at $2.34/mmbtu to RNRL from the gas fields of Krishna-Godavari basin)

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Su and me went to watch the much hyped about Prakash Jha movie….”Rajneeti”…My personal inclination to watch the movie was Ranbir Kapoor…as he looks so cute….and fits into any role like a glove…

However, when the movie finally began rolling in the multiplex…i realized that it was a mixture of too many things….Firstly, the writer has drawn inspiration from the long lineage of the Gandhi family, I believe most of the incidents were adopted from theirs. Though the scenes were tweaked a little with Ranbir Kapoor’s Firangi girlfriend being killed in the bomb blast…..Arjun Rampal dying instead of Ranbir Kapoor…etc….I must say….The director and writer did a fair job…

Secondly, the power packed acting clan did justice to all the scenes…however, the story was a bit of a hotch potch….with too many killings within a short span, a US bred guy turning into a political pro overnight, Brothers killing each other, Love story intermingled with betrayal, etc…..

Despite all the turmoil love blossomed in parts of the movie that lent a certain amount of subtleness to the action power packed scenes…Though my personal favorite among actors was Nana Patekar…he does act very well…rather call him deft….

Thus the 3 hour movie did work well…for our money’s worth and did bring a few moments of laughter where we could speak the dialogue “word to word” even before the Actors did the same…causing a riot of laughter….accompanied by words “I told you so”…

Overall the movie was good….well done Prakash Jha….to pull off a stunt of this magnitude….

The movie left a bitter sweet taste in my mouth….so after the movie I had four take aways ….

Don’t trust siblings (Is it really possible not to trust people who you have grown up with????)

Power makes u greedy (I agree on this completely…very few powerful people have their head on the shoulders)

Even a US grad can becum a (politician) pro overnight (Bollywood can make anything possible)

Women in the movie are highly fertile….lol….(How can all the actresses become mom’s in the first shot…doesn’t appeal to my logic…?????)

Anyway that’s my view….if you have any other views post them or hold your peace….

Disclaimer:

This is a personal blog and not meant to offend anyone…Apologies if it does and please take it with a pinch of salt….

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