Quote:
Originally Posted by Parv
Hi
I want to sell SBI @ Rs. 10000 per share. I'm not kidding, infact I'm very serious and I would stick out my neck and would like to point out my reasons for SBI to touch 10000 in the next 3 - 5 years.
1. SBI is the largest PSB in India.
2. SBI has allocated Rs. 1 Lakh crores for Loans and Rs.1 Lakh crores for bonds. If the interest rate increases, they make money through loans and if the interest rate decreases they make through bonds. (Insider News: 2 Lakh crores is not reflected in the financials yet and have to reflect on the paper before March 2009)
3. The face value is still Rs 10/- per share. Anytime the split is going to happen. The face value of Citibank is 0.01 cent and just imagine if SBI is split to 10 paise what will the rate be.
4. 80% of the share capital is still with the Government. Due to Basel 2 norms the Government have to dilute their stake.
5. Once the Basel 2 norms come into effect, any company in the world can buy any amount of shares on any bank in the world. Definitely all the major players will be hungrily eyeing on SBI.
5. They have a huge land bank and even 25 DLF's and Unitechs put together cannot match the land bank value of SBI. The most important part is they have land bank at prime places in most of the cities and towns. This is the most important point if we have to compare SBI with ICICI bank or HDFC bank.
6. SBI is also competing very vigorously in all areas of banking and are extending these services to the nook and corner of the country.
7. There are many people whom I know are doing SIP in purchasing SBI shares and I know atleast half a dozen people rolling over the futures every month since Rs. 550
I am also a strong believer in the fundamentals of SBI and in its future potential. I trade in SBI options too and all the profits I generate in SBI will be for buying SBI shares only. I stick to this theory and waiting to sell @ Rs. 10000 per share very shortly 
Parv |
Point 1. SBI is the largest PSB. Does not mean any thing let alone predict a future price. UTI was the largest mutual fund sometime ago
Point 2. 1 lakh crores benefit when interest rates increase and another 1 lakh crores benefit when interest rates decrease. Dont you think that vice versa will happen and will nullify one another?
Point 3. Face value split is not going to increase the value of the business. I have not seen any public sector company indulging in face value split gimmickry.
Point 4. Govt has to dilute stake due to Basel norms. Basel norms do not require any shareholder to dilute the stake. They require higher capitalisation. The Govt. can participate in the additional shares issued and still maintain the share holding. Issuing additional shares dilutes the value of a business and reduces the share price over time.
Point 5. Basel 2 norms do not talk about if any company can buy shares in any bank.
Point 5.(wrongly numbered) They have huge land bank. I dont get how you measure their land holding against that of DLF. Do you know what and whereabouts of DLF's land holdings? Moreover if SBI sells its property from where it conducts business, who is going to buy such a location? Obviously a competitor bank. After the sale where is SBI going to conduct its business, is it from the pavement? I dont understand the prudence in this kind of analysis. Removing the access to real estate will reduce the business oppourtunities of SBI and will reduce the value of the share.
Point 6. Competition. SBI has actually fallen behind in the last few years.
Point 7. Good luck to you and your friends.
15th July 2008, 07:46 PM
Re: I want to sell SBI @ Rs.10000 per share - Not kidding
Re: I want to sell SBI @ Rs.10000 per share - Not kidding
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