Showing posts with label SATYAM SCAM. Show all posts
Showing posts with label SATYAM SCAM. Show all posts

Tuesday, August 25, 2009


The reason why I have undertaken this particular exercise of Portfolio Analysis is simple. Here is the time to take hard look at your portfolio, if you have one. I am going to give answers to some investors who have been enquiring as to what to do with the present holdings in their portfolio. To start with this exercise let me take up the portfolio of one Mr Abhinav, who wants one year's view of his portfolio. His portfolio holding reads like this:-
Holding 500 shares at average price of 75. Closing price on 26 Aug 09 was 88.6.
Resistance - 94.
1 mnth tgt - 114
6 mnth tgt - 135
1 yr tgt - 172
3iinfotech is in 2nd phase of Bull run and the correction for 1st phase of Bull run has already happened upto 50%. Hence it is an eligible candidate for hold. It needs to be accumulated at every serious dip till it reaches its 1 yr target.
Holding 500 shares at an average price of 22.5. Closing price on 26 Aug 09 was 31.9.
Resistance - 35
1 mnth tgt - 41
6 mnth tgt - 52
1 yr tgt - 62
Arvind Mills has completed its 50% correction of 1st phase of Bull run and presently in 2nd phase of Bull run. It can be accumulated at every dip for its 1yr target of 62. Presently a strong contender for hold.
Dish TV
Holding 250 shares at average price of 38. Closing price on 26 Aug 09 was 48.65.
Resistance - 57.
1 mnth tgt - 65
6 mnth tgt - 75
1yr tgt - 103
Dish TV looks pretty to be held through its journey in 2nd phase of Bull run since the scrip has completed 50% retracement of its 1st leg of Bull run. Hold and accumulate in major dips till its 1 yr target of 103.
Mirc Electr
Holding 2000 shares at average price of 16. Closing price on 26 Aug 09 was 19.45.
1 mnth tgt - 23.5
6 mnth tgt - 26
1 yr tgt - 28
Mirc Electronics has completed 50% correction of its 1st phase of Bull run and is sailing in 2nd phase of Bull run. Hold this scrip till it achieves its 1 mnth's target of 23.5. After that wait for major correction and again pick it up at around 18 for its 1 yr target of 28
Holding 350 shares at average price of 110. Closing price on 26 Aug 09 was 93.6.
1 mnth tgt - 139
6 mnth tgt - 180
1 yr tgt - 255
Suzlon has also completed 50% retracement of 1st leg of Bull run and is well poised for substantive jump in its 2nd leg of Bull run. Hold for impressive returns. One can accumulate more at current level also for 1 yr target of 255.
Holding 800 shares at average price of 136. Closing price on 26 Aug 09 was 110.2.
1 mnth tgt - 145
6 mnth tgt - 185
1 yr tgt - 320
Satyam needs to be held till 145 at least, but this has to be again picked up at regular corrections till it achieves its 1 yr target of 320.
GMR Infra
Holding 100 shares at average price of 136. Closing price on 26 Aug 09 was 142.9.
1 mnth tgt - 170
6 mnth tgt - 200
1 yr tgt - 260
GMR Infra can be liquidated initially at 170 and again bought at 150 for its 1 yr target of 260.
Ind Hotel
Holding 150 shares at average price of 60. Closing price on 26 Aug 09 was 65.75.
Resistance - 80
1 mnth tgt - 90
6 mnth tgt - 120
1 yr tgt - 132
Hold Ind Hotel for its 6 month's target of 120.
Zee News
Holding 400 shares at average price of 43. Closing price on 26 Aug 09 was 44.35.
Resistance - 50
1 mnth tgt - 62
6mnth tgt - 75
1 yr tgt - 95
Hold Zee News for its 1 month's target of 62. Keep accumulating at major dips for its 1 yr target of 95.

Wednesday, January 28, 2009


Satyam scam which involved Rs 70 bn or may be more, is not something that will fade away in a hurry. Former Chairman of Satyam Computers, Ramalinga Raju courted arrest after admitting to the fraud, but he has set the wheels of intrigue into motion. One can sense that there must be many scams within the main scam, many plans within the main plan, many crimes within the main crime and many actors alongside the main protagonist.

We are being consoled that Satyam scam is just a one -off case , an exception to an otherwise honest and trustworthy system of governance of Indian companies with myriads of foolproof checks and balances. Believe all these official statements at your own peril. Otherwise seek answers to the following shortcomings :-

(a) After someone admits to a financial crime of horrendous proportion in public, does it take the law-keepers more than 72 hours to even talk to the perpetrator? That too after the fraudster himself walks into Police Headquarters to surrender? It is now believed Ramalinga Raju did a Charles Sobhraj act in order to escape the long hands of the firm and just Law of United States of America which could put him away for 25 years for cheating its citizens. He therefore decided to get legal proceedings initiated against him in India. In this fashion the US Law-Keepers will have to wait for the proceedings to be over in India before they can get hold of his neck , which by conservative estimate should not be before 15 years. Here on home ground Ramalinga Raju can enjoy the luxury of being on bail. Should we allow Ramalinga Raju to execute this plan?

(b) Why did Raju ostensibly come clean while submitting his resignation? Did anyone ask him any discomforting questions? Not a single eyebrow was raised on the economic viability and vibrancy of Satyam before he sang. Even the Goliaths of the Financial World were rudely taken by surprise prompting them to jettison shares of Satyam from their Portfolios at fire-sale prices. The question that still begs an answer is this - what propelled Raju to tell the world that look here I am, a fraud. The extent of my fraud is Rs 70 billions and now come and catch me . Something is amiss- something escapes logic.

India cannot afford to let Satyam drift away into oblivion. Brand India cannot afford to let Satyam be quoted in history as a failed company. As things unfold, the unshaken belief of investors and stake holders of Satyam in Satyam will be vindicated. What the world has to realise is that the company never failed- there has been a robbery in the company. Some robbers have been nabbed and rest of the accomplices will also be ferreted out by the investigators.

The global investor is gauging India and its ability to contain such individual acts of looting and daylight robbery. To reassure him that this scam is a one -off case there should be determined and elaborate exhibition of swift and exemplary punitive action against the perpetrators of the crime. This should be coupled with a comprehensive financial resuscitation programme for the company . Even now its not too late to show the world India's keen sense of purpose to deliver justice and restore Satyam Computers to its rightful health. In case we are unable to deliver properly on this issue of Satyam , then rest assured there will be many more Satyams that we have to deal with. God forbid if that happens; then we can never ever restore faith of the global investor in Brand India? This branding exercise has taken painstaking 15 years or so, which may be blown away by our inept handling.. We will in that case witness a domino effect on Indian industry, starting with IT industry?

We need no crystal ball gazing to arrive at the conclusion. Indian economy is at a threshold of either leapfrogging ten years ahead or retracing ten years backwards . Lets acknowledge that we are witnessing a Watershed Moment in the history of Indian Economy. Let us all pray that India plays the cards properly, starting with Satyam.