I want to sell SBI @ Rs.10000 per share - Not kidding

hi]
after reading the whole post,,,
i just could not resist myself ,,in putting my view,,,,SBI 10000..though the points have been based on fundamentals,,, but kindly answer my questions,,,,to the one who has spotted this figure ....10000
to which broking group u belong
second,,,,,10000 sbi in say 3 yrs,,,what does it mean,,nifty going upto?????? heavens level
after so many ups and downs....nifty reached 4600..and sb ,from previuos severe downfall from 880 levls just doubled,,to 1600....so ,carefully calculate ,,and see ,,,sbi will give whta return at 10000...and compare to nifty...

if this is sounding so much and ,,god,,and true ,,then obviuosly not single broking firm ,,full of mbas ,would not neglect this point,,,and would shout at leats to there private clients to gather sbi at nay rate...and they too also would do so,,

so i think ,,,,,jsut think a bit sensibly ,,,and rate sbi ,,accordingly,,say 2000/3000 ,,,it is not like lakshmi machine works,,,,,,,,,,,which moved from 5000 to 15000,,ok
i hope u will think again,,,and dont misguide ,,,anyone,,,,and dont let tehm think ,,out of the world,,,,,,,,,,at least mkae there dreams true,no m,atter ,,less,,and few

renu daga

Dear,
I will not redicule you. But please consider the following points carefully and please answer all of them before putting all your money on SBI. I have already cautioned you and adviced you not to have excessive emotional attachment or strong opinions on any stock in Traderji chat room even before posting this thread. Someone in this thread has already cautioned you from putting all your money on SBI. Now the points which I would like to have an answer from you are as follows: -

Note: These are corresponding points to the analytical points made by you in recommending SBI stock.

1. Agreed that SBI is the largest PSB in India and it has got largest network of branches in India, which no one in the near forseeable future can match or atleast hope to match. When the seven subsidiaries of SBI stand merged with SBI (this one may also be a reality in distant future, but I donot know when), it will be a gigantic bank by "Indian" standards. I am not disputing point no.1 mentioned by you.

2. Do you honesty think that staturoty auditors of SBI can hide Rs. 200000 Lakh Crores in its account books without auditing it? Do you honestly think that this will escape the attention of RBI. If it can, then I am eagerly awaiting your reply as to how this money has been accounted and where this money has been accounted by SBI and under what account head this amount has been hidden. Investment in Bonds will be reflected under the head "Investments" in the annual report of SBI.

3. Splitting of face value does not do any more good. It is dividing the same cake in to 10 pieces and giving all of them to the same person. If it is something else, please explain.

4 and 5. How much the government has to dilute its stake in order to comply with BASEL II norms? Do you think that the Government will allow its stake to go down anywhere near 51% let alone going below it? Further, what will be the effect of huge amount of extra shares floting in the market due to the dilution of Government stake? Do you know what is the capital base and asset base of international leading banks and their market valuation. Where does SBI stand in comparison with them? If I am not mistaken, SBI does not come anywhere near the top 10 Banks in the world. So do you think that these FII's will pay exaggerated value to purchase SBI stake?

6. I agree that SBI may be having huge land bank which might have been valued at book value in its accounts. Here I must confess that I have not seen audited accounts of SBI. But do you know where they are situated and what is their worth and more importantly how much more can be extracted from them? Or are you simply building castles in the air?

7. SBI has lost very precious years under the "leadership" of one of its former chairman. I do not want to name him. It lagged behind ICICI Bank, HDFC Bank and every other leading private sector banks when this person was their leader. Even its profitability was also down. The present chairman is now desperately trying to boost the income and revenue of SBI. He is working hard to bring SBI to its former glory. Some of his efforts have born fruits or at least begining to show results. But the fact is that during all these years the other private sector banks have grown at the expense of SBI.

Please think and answer. Answer from the mind and not from the heart. When you sincerely search answers for the above questions, evaluate your strategies. Do not ruin your budding carrer as as trader.
Thanks and regards
R. S. Iyer

SBI board agrees State Bank of Saurashtra merger

The board of State Bank of India has agreed to the merger with its subsidiary, State Bank of Saurashtra. SBI will seek the Reserve Bank's approval for the merger soon. The merger is expected to help SBI expand its network and improve its balance sheet.

T S Bhattacharya, managing director, State Bank of Saurashtra, said the bank has some crucial branches in the Saurashtra region which would definitely help State Bank.

-----------------------------
This an area of strength that SBI has - the value that lies in its half a dozon (or a few more perhaps) subsidiaries which does not appear in its balance sheet at present. More such mergers are likely to happen (as the left wouldn't oppose the idea of a stronger SBI).

Regards,
Kalyan.

Hi Renu,
I agree with you that SBI almost doubled from 880 levels to 1800 level. But if you want to compare SBI with nifty, did nifty also double @ the same rate? No,it has gone up only from 3600 levels to 4500 levels. According to your analysis nifty should have been @ 7200 levels. No always we cannot compare this way. India is a booming economy and nifty levels are bound to go up as time passes, which is a known fact to everyone.
I gave my analysis when SBI was @ 1425. Yesterday it almost reached 1600. So do you think that I was solely responsible for taking up the share , or the so called baffoons or the greatest people in the world (FII's) took my advice and bought SBI. NO WAY!
As Satya rightly pointed out we'll wait for 3 - 5 years and see the outcome.
Infact when I got this news @ around 700 levels I too was a major sceptic like some of you. Now I'm a firm believer and I stick to my theory and hope for the best to happen.

Rgds
Parv

Hi Mr. Iyer,
I'm happy that you are one of the very few people who have tried to analyse instead of taking a new concept as a joke and trying to see it in the broader picture.
Replying to your questions (seeing it from my mind & not from the heart ), I've got the news about this Rs.2 Lakh crore from one of the SBI top man who had come to deliver a lecture on "New banking trends" in a seminar in Aug 2005. Even though I tried to dig in much information from him about the authenticity of this news, he just said that I'll come to know about it when time comes. So I had to accept it as an insider news.
But as far as land bank is concerned, just check any city you'll find they'll have huge properties in the best of the localilites. This is a huge plus point. The main reason for us to believe is every city or town is expanding and SBI had bought properties long back, so obviously it'll be in the heart of the city or town.
Why will splits help the stocks to go up? As the prices of the shares drastically reduce the number of people buying & holding the shares will automatically increase which is a known fact. If I want to invest for short term I'll go for the stocks which are between 100 to 250 as I can get more number of stocks rather for the same amount which is the normal psychology of the short term traders.

Rgds
Parv

I do not know anything about this "insider news". But please note that RBI does a regular and thorough checking of balance sheets of banks governed by it. I sincerely doubt whether any auditor can hide this huge sum without disclosing in the balance sheet. Be careful about this one.

So also many old PSU banks are having huge land banks in their kitty. But the point is, will the management have the conviction and courage to exploit it commercially? Will they be allowed to do so by unions?

It is a myth that stock price goes up on split and bonus. For example, check Indian Hotels (prestigeous Tata Group company). It has split the face value of its shares from Rs. 10/- to Rs. 1. But the price has moved down. Experienced trader seldome bothers about the level of stock price. Whatever may be the stock price, he will adjust his trading quantity according to sound money management rules. Further, scalpers and day traders can never ever dream to push SBI stock from Rs. 1600/- to Rs. 10000/- without the help of big guys (I mean FII's and long term investors).
Thanks and regards
R. S. Iyer

Whats ur problem guys!

Let him sell it for 20,000 !

RE: 1. No question about that. So you think PSB will be the numbero uno stock in stock market?

Re 2: So does that mean they have 2 lack cr surplus cash or they manage 2 lack cr money, if it is the later (it is), then what % of margin they get in an year. Their market cap is already 0.8 lack crore. Your projection puts them around 5 lack crore.

Re 3: Face value is bull ****. SO what if they can split the stock so many times. Its the market cap that values the business and that is not going to change.

Re 4. Ok, I dont know about that. But Govt shedding shares is not such a great news in short term, as there will be suddenly more shares available. See what happened to FPO of ICICI bank. Long term of 2-3 years, I agree it is a good move. But for that it has to happen now, to bear fruit in 2-3 years.

Re 5. I am not sure about that, but I dont think SBI would be up for stake sale or aquisition to outside india anytime soon. (atleast next 1 year).

Re 5b. whom are you kidding?. How many of their branches are leased, how many owned, how many rented? If SBI can match land bank of DLF then they should be doing real estate instead of banking, or atleast have a real estate wing. See they are in-efficient, atleast for the short term.

Re 6: Which bank is not doing that?

Re 7: well this is doesn't mean SBI deserve 10,000. Anyway, why don't they put all their worth at one go when it is cheap now, than doing SIP? SIP is designed for volatile stocks. If it is going up in short term, then why SIP. Advice them to go for lump sum investments.


The point is this:

SBI will not go into "top 5" market cap in next 2 years. It probably will never go into that bracket. If SBI reaches 10,000 then ICICI will reach 9000, ONGC will reach 9000, Larsen will reach 25000.

Make sure SBI is less than 5% of your holdings to balance out. SBI is second bank in terms of most money invested in US debt market.

well I see Mr, R. S. Iyer has raised most of the questions already, in a much better way. I am just beating a dead snake then.

Ratan at his usual best once again. I like that

I have no problem if he sells it at Rs. 20000/-. I will be far more happy if he sells it at Rs. 50000/-

But the real problem is this. He seems to be "pretty sure" that it will go to Rs. 10000/-. He is advocating that one should put the whole trading capital on this one stock. Neither I nor you nor other veterans here will do that. But what about a novice? These novices are attracted by these types of statements. They will buy at Rs. 1600/- hold it for loooooooooooong time by which it will go to Rs. 2000/- and come back to Rs. 500/- only to stagnate at Rs. 500/- for years. That is the end of their trading carrier. I do not want that to happen to any of the members here including Parv.
Regards
R. S. Iyer