My View on Market and Economy : Debarghya Mukherjee

[Debarghya Mukherjee]

NO INDIAN IN TOP 10 RICH LIST? SHAME!!​

 

[Debarghya Mukherjee]

Hedge Funds are strengthening in India : What will be the after effects?​

Slowly but surely, India hedge funds are beginning to offer the kind of strategies that can attract big fish such as London hedge fund giant Man Group, whose fund of hedge funds business could make its first direct allocation to an Indian hedge fund within a year, according to Asia business head Patric Gysin.

The entire Indian hedge fund universe is modest at around 50-60 funds. When that universe is boiled down to reveal those funds sophisticated enough to attract larger institutions and marquee fund of hedge funds (FoHF) investment from Europe or the US, it could more appropriately be described as a small planetary system if one was feeling generous.

The $15bn FoHF portfolio of London-based hedge fund giant Man Group, for example, is 10-15% exposed to emerging markets and 1% exposed to India. None of the latter exposure is achieved through direct investment into dedicated India-based hedge funds, but rather via the firms global emerging markets or pan-Asia funds, which then allocate a variable portion of their pot to Indian securities.

However, according the firms Asia business head and senior portfolio advisor Patric Gysin, this is likely to change. Indeed, encouraging signs of life at the more liquid end of the Indian hedge fund market mean Man could realistically make its first direct investment into an India hedge fund within a year, he says.

Currently the firm is working closely with around ten India-based hedge funds around half a dozen of which Gysin describes as really serious India hedge funds with a track record and a mandate which suits our needs, and the remainder, which are recently launched funds offering encouraging new levels of flexibility in their approach.
Typically, India-based hedge funds are relatively risk-averse and illiquid equity funds, which fall somewhat short of the highly liquid, short-selling, alpha-generating strategies synonymous with the hedge fund tag. Strategies which can help alleviate the volatility inherent in emerging markets, Gysin says.

The India hedge fund universe is fairly limited. There arent many liquid India strategies, he says, noting that the lack of shorting tools available in the Indian market has held its evolution back. Hedging has been more difficult in India than most Asian markets, which hasnt helped. We are looking at maybe half a dozen liquid long/short India hedge fund managers. If we look at mandate and market structure and tick those boxes, that leaves a really small selection, which is why we dont have a dedicated India manager.

But a recent uptick in the launch of more nimble India-based hedge funds predominantly from within Asia as opposed to the West suggest that the hedge fund industry is becoming more aligned to the requirements of sophisticated investors like Man.

There have been some promising hedge fund launches in the region, says Gysin, who declined to name individual fund managers. We have come across some interesting managers who have launched liquid strategies in the last two years, which is encouraging. What weve seen in the last six months or so leads us to believe we will have a dedicated India exposure in the next 12 months.

According to Gysin, many of the existing 50-60 India-based hedge funds focus on small/mid-cap, Private Investment in Public Equity (Pipe) and pre-IPO investments as their staple diet. This doesnt fit with what we are looking for, he says. Indeed, the theme of manager flexibility is paramount to Mans emerging market fund selection process, and the firm broadly avoids the small, illiquid names investing in these kinds of transactions.

There is nothing wrong with Pipe transactions but you need a longer term investment horizon, incorporating three-year lock-ups. Many funds out there are static, he says. We feel more comfortable with more liquid investors in emerging markets such as India; if things go wrong, which they regularly do in these markets, liquid managers are able to reduce their positions fairly quickly.

According to Gysin, Mans underlying managers have in common a flexible approach in terms of how much market risk their funds can take some often operating as low as 10-20% net long, and sometimes even net short if necessary.

[These managers] have proved they can really reduce market risk and take on market risk as well. We think having this flexibility is important in investing in emerging markets those are volatile growth markets, so we think it is reasonable to have market exposure but to take a flexible approach to managing this exposure, he says. When these managers think there is a storm on the horizon, they really reduce the exposure and risk in the portfolio, and on the other hand, when they think things are improving, they can take more risk.

If Man does eventually add an India-focused fund to its approved list, investment into the fund is most likely to be done via one of the firms diversified long/short emerging market or pan-Asian funds, which have remits that allow them to invest in a large number of managers, Gysin says. The firm runs a wide range of products some of which have limitations on the number of funds they can invest in, and are more likely to invest in regional hedge funds rather than country-specific offerings, he adds.

While Gysin notes that there are certain areas of the India market which he thinks need to improve in order to encourage Indian hedge fund activity mainly revolving around ease of access and investment flexibility equities will continue to present the best strategy for India-based hedge funds, and long/short equity investing will continue to form the basis of Mans Indian hedge fund exposure.

India is pretty much an equity story. Hedge funds can only be as liquid as the underlying market; if the markets are drying up, so do hedge fund investors. The India equity market is fairly developed for local investors, and I would expect equities to be the most interesting way to capture upside, Gysin says.

But to encourage the Indian hedge fund industry to grow, the regulations for shorting stocks have to improve its a headache for offshore managers investing in India through Mauritius entities. Whatever the regulators can do to ease market access for hedge funds will be positive for the markets if the market has hedge fund participation, it increases liquidity and helps pricing mechanisms, he adds.

India is still a challenging market to get exposure to, Gysin says, noting that while a massive institution like Man has the global resources to conduct thorough research and get close to the Indian market, smaller firms without a presence in the region will continue to find this difficult.

However, despite the challenges, the Indian bourse continues to appeal, and as Indias economic story unfolds it looks increasing likely that Man will find an India-based hedge fund that ticks all the boxes. Indeed, even without allocation to a dedicated India manager, Mans exposure to Indian securities has increased via its regional funds, Gysin says, and the firms long-term outlook for the market is very positive.

Our exposure to India has increased in the last couple of months; the elections were important in order to get some clarity around the future of government, ongoing reforms and the expected reduction of Indias fiscal deficit, which is all perceived as good news and we feel more comfortable in taking positions in India, he says. Last year people considered the Indian market to be way too expensive, but the market has corrected somewhat, which has changed opinions a little, and more managers started to increase their Indian exposure over the last couple of months.

However, some caution still remains among Mans investors. People are still worried the biggest concerns I hear are over inflation, says Gysin. Oil price is also a big risk to the Indian economy for obvious reasons, and the other risk I still hear is the geo-political risk regarding Pakistan. But over the medium term we have a positive view especially with reform, privatisation and infrastructure shaping up.

Moreover, Gysin thinks hedge funds are the best vehicles through which to maximise the phenomenal growth on offer in Indias huge, rapidly growing but relatively turbulent economy. More than 40% of Indias population is below 20 years old, which points to very strong demographic trends. The workforce is well educated and developed, and the ingredients are there for this to become a longer term success story. Long term, we are not worried by being long on India, he says. But that comes with volatility, which is why we think a hedge fund strategy which can reduce downside considerably while participating in upside is the most appropriate strategy with which to approach India, and other emerging markets.

 

[Debarghya Mukherjee]

ALWAYS INVEST MONEY OR YOU WILL LOOSE IT​

A movie ticket was for a few paise in my dads time. Now it is worth Rs.50. My dads first salary for the month was Rs.400 and over he years it has now become Rs.75,000. This is what inflation is, the price of everything goes up. Because the price goes up, the salaries go up.

If you really thing about it, inflation makes the worth of money reduce. What you could buy in my dads time for Rs.10, now a days you will not be able to buy for Rs.400 also. The worth of money has reduced! If this is still not clear consider this, when my father was a kid, he used to get 50paise pocket money. He used to use this money to go and watch a movie (At that time you could watch a movie for 50paise!)

Now, just for the sake of understanding assume that my dad decided in his childhood to save 50paise thinking, that one day when he becomes big, he will go for a movie. Many years pass. The year now is 2006. My dad goes to the theater and asks for a ticket. He offers the ticket-booth-guy at the theater 50paise and asks for a ticket. The ticket booth guy says, I am sorry sir, the ticket is worth Rs.50. You will not be able to even buy a paan with the 50paise!!

The moral of the story is that, the worth of the 50paise reduced dramatically. 50paise could buy a whole lot when my dad was a kid. Now, 50paise can buy nothing. This is inflation. This tells us two important things.

Firstly: Do not keep your money stagnant. If you just save money by putting it your safe it will loose value over time. If you have Rs.1000 in your safe today and you keep it there for 10years or so, it will be worth a lot less after 10 years. If you can buy something for Rs.1000 today, you will probably require Rs.1500 to buy it 10 years from now. So do not keep money locked up in your safe.
Always invest money.
If you cant think where to invest your money, then put it in a bank. Let it grow by gaining interest. But whatever you do, do not just lock your money up in your safe and keep it stagnant. If you do this, you will be loosing money without even knowing it. The more money you keep stagnant the more money you will be loosing.

Secondly: When investing, you have to make sure that the rate of return on your investment is higher than the rate of inflation.

 

[Debarghya Mukherjee]

THE SECRET TO BECOME MILLIONAIRE​

The secret to becoming a millionaire lies in just one simple word compounding.
Wait! The concept is not as intimidating as the word itself sounds. In very simple terms, compounding is the process of earning income on income. In other words, it is all about earning interest on interest on interest...
An example below will make the idea crystal clear.
Suppose Aarti puts Rs.5000 p.m. in a Recurring Deposit for 30 years. Bhavna starts 10 years later and saves Rs.7500 p.m. for 20 years. Chitra takes 10 more years to start and saves Rs.15000 p.m. for 10 years. Thus all three would have saved Rs.18 lakhs.
Assuming they earn 10% p.a. interest, at 55 Chitra will have about Rs.32 lakhs, Bhavna about Rs.56 lakhs and Aarti an astounding Rs.1 crore. As you can clearly see, saving for more time gives much better results than saving more money. This happens simply because Aarti keeps earning interest on interest on interest for years together; which is much better than investing 3 times the amount as Chitra does.
Aarti Bhavna Chitra
Start age 25 35 45
Amount/month 5000 7500 15000
No. of years 30 20 10
Total saving Rs.18 lakhs Rs.18 lakhs Rs.18 lakhs
Amount at 55@10% returns Rs.1 crore Rs.56 lakhs Rs.32 lakhs

This is the magic of compounding. This is the secret of becoming rich. (You make also like reading the article Why millionaires are millionaires).
As you will observe, you need 3 things to become a millionaire:

1. Some small amount of money
2. Time, Discipline and Patience
3. A little bit of financial knowledge

Given the ingenuity and bargaining skills, I am sure that saving a small amount from the monthly budgets will not be a very big challenge for the housewives. All you need is to start say with even Rs.500 every month. As you go along, you will learn to squeeze more and more amounts. And slowly but surely you will be on track to becoming a millionaire.
And, of course, when it comes to (a) giving time, (b) maintaining discipline and (c) being patient, the aptitude, potential and competence of a typical housewife is legendary. She would simply outclass men in all these areas. [In fact, I am of the firm opinion that women have more self-control and willpower then men; and hence are likely to be more successful in managing money.]
Opening an RD does not require any financial expertise. But you may need some financial knowledge if you want to fast-track your millionaire aspirations. Believe me, handling financial affairs is no rocket science. Dont get disturbed by all the jargon thrown at you. Dump all heavy-duty calculations into the dustbin. None of it is necessary. It all boils down to plain and simple common senseand loads of commitment.
Just 6 months to 1 year would be sufficient to become sufficiently proficient in money matters. You are intelligent enough to turn your small children into doctors, engineers and scientists. So I see no reason why you cannot turn small amounts into millions. Trust me this will be a lot easier than bringing up kids.
Moreover, given that the financial knowledge is going to serve you for your lifetime, you should begin as early as possible. But it is never too late to start. Besides, you can pass all this financial wisdom to your kids too. So, in effect, your efforts to acquire financial knowledge are going to be rewarding for generations to come.

 

[Debarghya Mukherjee]

Rakesh Jhunjhunwala: Poster boy of Indian Stock market​

Rakesh Jhunjhunwala is the son of an Income tax officer who started dabbling in stocks while in Sydenham college and plunged into investing as a full time profession soon after completing his education. He started his career with $100 in 1985 when the BSE Sensex was at 150. He made his first big profit of Rs 0.5 million in 1986 when he sold 5,000 shares of Tata Tea at a price of Rs 143 which he had purchased for Rs 43 a share just 3 months prior. Between 1986 and 1989 he earned Rs 20-25 lakhs. His first major successful bet was iron ore mining company Sesa Goa. He bought 4 lakh shares of Sesa Goa in forward trading, worth Rs 1 crore and sold about 2-2.5 lakh shares at Rs 60-65 and another 1 lakh at Rs 150-175. The prices then went up to Rs 2200 and he sold some shares.

But he credits Madhu Dandavate's Union budget of 1990 as the inflection point for his investing career which quintupled his net worth.

Just like Warren Buffet, Rakesh Jhunjhunwala is the long term investor and invest in stocks for very long time horizon.

Mr. Jhunjhunwala is the Chairman of Aptech Limited and Hungama Digital Media Entertainment Pvt. Ltd and also sits on the Board of Directors of various Indian listed/ unlisted companies like Prime Focus Limited, Geojit Financial Services Limited, Bilcare Limited, Praj Industries Limited, Provogue India Limited, Concord Biotech Limited, Innovasynth Technologies (I) Limited, Mid Day Multimedia Limited, Nagarjuna Construction Company Limited, Viceroy Hotels Limited, CRISIL & Tops Security Limited.

Rakesh Jhunjhunwala Investment Philosophy

His stock picking strategy is influenced by the lessons from Mr George Soros's trading strategies and Dr Marc Faber's analysis of economic history. He endorses the thumb rule of 'trend is my best friend'.

He is the poster boy of the Indian bull run but admits to have been a bear in the Harshad Mehta days and believes that a person in the market should be like a chameleon. He calls the markets as temples of capitalism and believes that they are the ultimate arbitrators.

Much like Mr Warren Buffet, he buys into the business model of a company and for judging the longevity and growth potential, he gives top priority to 'competitive ability', 'scalability' and 'management quality' of the enterprise. The 'entrepreneur', according to Mr Jhunjhunwala is what makes an invaluable difference to his expected investment returns. According to Mr Jhunjhunwala, believing in the vision and the beliefs of the entrepreneur and validating the risks that may not be perceived by the entrepreneur are the key success factors for an investor.

Mr Jhunjhunwala has managed to identify numerous multi-baggers in the past decade, notable being Karur Vysya Bank, Praj Industries, Crisil, Titan, Nagarjuna, HOEL and PSUs like BEML and Bharat Electronics, among others. The typical traits to look for while identifying potential multi-baggers, according to Mr Jhunjhunwala are - low institutional holding, under-researched and general pessimism about the stock.

 

[Debarghya Mukherjee]

Radhakishan Damani : Bull OR Bear?​

It is said that in politics there are no permanent friends or permanent enemies; only permanent opportunities. A similar rule extends to the stock market as well, where there is no place for permanent bulls or permanent bears. Only those ready to swear by this axiom can hope to survive the rough and tumble of Dalal Street, where fortunes are made and lost every day. A late entrant to the world of equity investing at 32, it did not take long for Radhakishan Damani to figure this out. And that is the main reason why the 50-something broker-turned-proprietary investor, Damani is still said to be in the pink of financial health, even as most of his contemporaries have either faded into obscurity, or been forced out of the market altogether.
Mr Damani started his career as a trader in ball bearings, far from the battlefield of bulls and bears. Following his fathers death, he shut shop and joined his brothers stock broking business, inherited from their father. Just 32 and lacking knowledge of market dynamics, Mr Damanis only asset was his keenness to learn.
He was not a value investor to begin with; he began his career in the stock market as a speculator, says a Damani watcher.
Mr Damani was quick to realise speculation was the not the best way to grow capital. Inspired by the legendary value investor Chandrakant Sampat, he started playing for the long term. Often, his strategy was simple. When he bet on Indian Shaving Products (later bought by Gillette), his reasoning was: People will shave no matter what.
It took Mr Damani some time to gain a foothold, and several of his initial bets flopped. But he steadfastly refused to follow the herd, and concentrated on evolving trading strategies of his own. Gradually, he began getting his calls right, and within the next couple of years he had joined the ranks of the big boys on Dalal Street.
Few players possess the kind of patience he does. But when he is convinced about any stock, he would buy his desired quantity in one sweep. And if he felt that a stock had run its course, he would dump his holdings at one go, says an associate. Also noted was his promptness in cutting losses. Unlike many other players, ego would never get in the way of his booking losses, says the associate. Mr Damani himself once said: Cutting your losses is like performing a surgery on one arm with the other; painful, but it has to be done, otherwise the arm may have to be amputated.
Mr Damani likes to keep a low profile. He is not very articulate and does not communicate much, but he is a great listener. He patiently hears out everybody and never scoffs at any idea. It is a different matter that at the end of it all, he would back his judgement and instinct, says the associate.
All along, Mr Damani made some great calls both on the long and short sides of the market. Yet, many players viewed him as a bear rather than a bull. In India, anybody who is skilled at short selling is frowned upon, the general perception being that short sellers destroy value, says a close friend of Mr Damani.
His limited circle of friends is said to include Dalal Streets latest cult figure Rakesh Jhunjhunwala. Often, the market believed they hunted as a pair. Even if one of them was active at a counter, broking circles would say the duo was in it.
A string of successes notwithstanding, it was the epic battle of 1992, in which he emerged victorious, that would mark Mr Damani as a stock market legend. It was the battle with the Big Bull, Harshad Mehta.

Reining in the Big Bull

The flashy Harshad Mehta shot into prominence thanks to a daring rally that lasted the better part of 1991, only to eventually fizzle out in April 1992. Mr Damani, on his part, was bullish on the market only till February 1992. Even as the Big Bull was pumping up the shares, Mr Damani began to go short. He reasoned blue chips had already run up a lot and fundamentals no longer justified the rally. What Mr Damani had not bargained for was the seemingly limitless supply of funds to Harshad Mehta. The market kept rising, but rather than cutting his losses, Mr Damani rode on his conviction and doubled up his short positions. The market took off vertically between February to April, and RK was trapped badly, recalls a veteran broker. His losses were huge, and if the rally continued for a few more weeks, he may even have had to shut shop.
But then, it emerged that Harshad had been siphoning off funds from the banking system and using them to buy stocks. When the scam got exposed, the market went into a tailspin. Mr Damani not only regained the lost ground, but walked away with a tidy profit.
Harshad Mehta was to lock horns with Mr Damani once more in 1998, but this time with fatal consequences for the Big Bull. Harshad now focused on three stocks BPL, Videocon Industries and Sterlite. The prices of these shares touched dizzy levels even as the broader market fell. It was as though Harshads picks were defying gravity.
All the time, Mr Damani was biding his time on the sidelines. A disciple of the old school of investing, his assessment was that the stock price had run far beyond fundamentals. At the time he thought was right, he started building short positions. Prices continued to climb and he had to square off some initial positions at a loss. But soon, signals came that the Big Bull was having trouble financing his positions. And Mr Damani moved in for the kill. He simply doubled his short positions, under the weight of which, the market caved in.
Panic set in. The prices of the three chosen stocks plunged 60%. Some brokers say exchange authorities even tried to bring together Mr Damani and Harshad for a compromise but the talks failed. It would be wrong to say that RKs call was motivated by a desire for revenge, says a market watcher who once worked with Mr Damani. It was all about the price... He would have short sold those stocks irrespective of whoever had a bullish view on them, he says.
When Mr Damani came to know that some small shareholders were left with positions they could not exit, he covered up a part of short positions by buying shares from these investors at a negotiated price. This was not the first time he had done such a thing. In the early 90s, Mr Damani had accumulated a pile of ACC shares. When a payment crisis loomed, Mr Damani responded to a request from authorities and offloaded a part of his holding at a discount. He was among those probed by regulators for suspected price hammering, but was eventually given a clean chit.
Towards the fag end of 1998, the overall market sentiment began to improve. Before long, the market was in the grip of a bull run led by technology stocks, which would peak out in February 2000. RK continued to trade, but those close to him say he had already begun scaling down the number and size of his bets. Was he preparing for a self-imposed exile from the market beginning somewhere in 2001 for the next few years? Friends say he was always passionate about retailing, but were there other factors also that influenced Mr Damani to retreat from Dalal Street?
After the stock market crash of 2001, bear operators were once again under the regulatory scanner, the allegation being that they had colluded to hammer stock prices. Needless to say, Mr Damani also figured on the list of suspects. Like any other operator, RK made most of his money being on the long side of the market, says a broker who knows Mr Damani for long. He had a finger on the pulse of the market and would not hesitate to sell short if the situation called for it. Unfortunately, his short (selling) calls attracted more attention than some of his long (buying) calls, he says.
Some players say that Mr Damani found himself a bit out of depth during the technology boom of 1999-2000. He stuck to the classic rules of trading, short selling shares that he felt were over valued and going long on the under valued ones. But stocks from the sectors that he had an sound understanding of cement, automobile, steel were out of favour. Technology was the buzzword at the bourse, and irrespective of whether those companies were making money or not, investors were falling over each other to buy into them.
And Ketan Parekh had now taken over the as the reigning Big Bull, and carved out a reputation for himself as a champion of new economy stocks. Mr Damanis old school strategies did not work well for him in this period.

The comeback

If anyone had not noticed, Mr Damanis right calls on Tata Steel and State bank of India made them aware of his return to the stock market this year. But this time, it has been a mixed bag of hits and misses, those close to him say. Over the last one month, he has been as successful or unsuccessful as other players in his league, says a Damani watcher. It may be premature to judge the old fox when the markets have not shown a clear trend. India, like other equity markets around the world, has been volatile over the last month as a result of the crisis involving sub-prime loans in the US. It is anybodys guess how things will go from here.
The market has also undergone a sea change during Mr Damanis absence. The number of participants, stocks and liquidity have risen manifold. If there is greater transparency, there is also more volatility to contend with.
Admirers or critics, everyone is impatient to know whether and how Mr Damani is going to pull it off this time.
Source: ET

 

[Debarghya Mukherjee]

The global markets were focused on the Euro crisis last week, waiting for a glimmer of hope that the leaders will be able to thrash out a solution to the problem that has been haunting them for years. The debt crisis, which has already affected the sovereign States of Ireland, Portugal and Greece, now appears to affect other Euro zone economies too. Spain and Italy are witnessing their credit default swaps spreads widen and rating agencies are threatening downgrades.

Solution remains elusive

The Euro zone debt problem will remain a concern in the near future. In a scenario of increasing debt, a country is forced to set aside a larger share of its budget towards the interest payments. The governments are then forced to spend less on the welfare of the people. They have to implement austerity measures, tax their people more or borrow more to balance their budgets. As the affected countries go down the path of austerity and higher taxes, the man on the street finds life unbearable and tends to vote the government out.

When we are talking of 17 nations who share a common currency, the Euro, and an additional 10 nations who are on the periphery and have a say in the solutions to the crisis, getting the right solution becomes very complex and any one country can derail the process by going to its people for a referendum.

Hence, getting a solution for the Euro debt crisis which is agreeable to all 27 member nations with sufficient controls to please Germany, but with enough flexibility to win British support, will be a near-impossible task.

Recession imminent

Europe's financial crisis has intensified after two years. Some 1.1 trillion Euros (USD 1.5 trillion) of short and longterm Euro area government debt becomes due in 2012. Finding money to repay this debt or trying to roll-over this debt at reasonable interest rates will be a big challenge for the European countries.

Germany is the only country that has a strong balance sheet to bankroll a part of the debt. But the German view of imposing austerity measures and sanctions on countries that do not spend within the given limits is unpalatable to borrower nations. Increasing austerity would intensify the vicious circle of debt deflation, more income losses, lesser GDP, less tax revenue and ultimately less money to repay debts. With Germany insisting on austerity and others unwilling to accept it, the Euro region is destined to head towards recession for the next few years.

Impact on India

The next big question is what will happen to the domestic economy in these times. Recessionary trends in Europe will have its impact on India. The first and foremost will be the negative sentiment - impact of global recession.

The stock markets are waiting with bated breath for a magic solution to the Euro crisis. Anything short will send the markets into a tailspin. One does not expect the markets to discriminate while reacting to global events.


Source: ET

 

[Debarghya Mukherjee]

AMRI fire: Will it impact the future of Emami & Shrachi brands?​

It's a tragedy that has left the country shocked and the business community in Kolkata numb. "Both Emami and Shrachi are revered corporates in Kolkata and this incident [the hospital fire in the city that killed 90 people] will not only impact their health-care plans, but can even risk their core businesses. It's a really sad and unfortunate day for West Bengal's commercial scene," says a city's prominent industrialist, requesting anonymity.

Questions abound in the Kolkata business community about the future of these business groups. Will these groups ever be the same again? What will be the impact on their non-health-care businesses? Right now, there are not too many bright answers.

For decades, Emami and Shrachi have been the pillars of Kolkata's business community. Take Emami, one of the few corporates from the state to take on MNC giants like Reckitt Benckiser nationally in the hypercompetitive FMCG space. In the past decade, its FMCG business has grown five times from `247.28 crore in 2001-02 to Rs 12,77.78 crore in 2010-11. Founded by two childhood friends, RS Agarwal and R S Goenka, Emami was started in 1974 with a modest capital of Rs 20,000.

The Rs 1,000-crore Shrachi group, on the other hand, has local roots and is a mover in Kolkata's real estate business. The Todis of Shrachi have a joint venture with the West Bengal government to develop subsidised housing projects across the state.

Emami and Shrachi entered the health-care space around 1996 when they joined hands to acquire the majority stake in a polyclinic owned by the West Bengal government. Eventually, the facility became popular and tied up with Apollo Hospitals Group for a management contract, and was run as AMRI Apollo Hospital. However, the contract expired when Apollo invested in its own facility in the city and Emami-Shrachi combine started running the show some 7-8 years ago.

Since then, AMRI has grown dramatically. In 2005, AMRI set up their second facility behind the existing one, a super-speciality 190-bed hospital. In 2006, the group acquired a 184-bed speciality hospital in Salt Lake. In February 2011, AMRI launched a speciality women and child-care hospital in Kolkata.

AMRI is 66% owned by Emami, 32% by Shrachi, and the balance 2% by the state government. The company has a turnover of around Rs 250 crore and operates around 800 beds through five hospitals in Kolkata.

In West Bengal, AMRI had plans to further expand by setting up a 500-bed hospital in the city's eastern fringes in Rajarhat. It is also setting up a 100-bed facility in Burdwan and another 250-bed unit in Siliguri. Emami and Shrachi also hoped to take AMRI brand national and take on the likes of Apollo, Fortis and Max. A Rs 2,000-crore investment outlay over the next few years was drawn up.

AMRI was about to unveil a 300-bed multi-speciality unit in Bhubaneswar and had plans for two more hospitals in Ranchi and Raipur. It was recently among the frontrunners to buy Ahmedabad's Sterling Hospitals, but decided against increasing its Rs 640-crore bid offer after a foreign health-care group topped the bid.
Source: ET

 

[Debarghya Mukherjee]

There are many opportunities available in the markets for day traders, as the markets are volatile. However, it is important to track the market movements and developments in the domestic as well as global markets closely. Holding overnight positions might be risky due to uncertainty in the global markets.
It is advisable for day and short-term traders to trade in current volatile market conditions with a tight stoploss level in order to cut down losses if a position turns loss-making .

 

[Debarghya Mukherjee]

This is a market for Traders​

Putting me in a very tricky situation, where does the selling stop for today. That is not something I am controlling here but anyway I can just give some indications of where it could head to and if you look at it, we do not have any real support till we reach above 4730 levels but again I must point out all these levels are like signals we got in the pathway of the stock.

We look for surge of demand or at least reappearance of demand that the levels deem to be support and should act only if we do see such a demand appearing. The market is going down on the back of a reason, it was fairly light as it actually came into the new week and there was an expectation that the way the overseas markets had played out, we would have some positives.

There is a high sense of disappointment in the way that the market has traded and the out of expectation numbers that we saw for the IIP have just added fuel to the fire. So all traders who were hitherto or actually planning on going long have all now turned sellers. So this is a trader driven market right now.

I do not see too much of large player action which has emerged yet as we heard the various experts from broking houses, they had slightly divergent views on how this whole thing actually pans out or what its significance is.

Unless a consensus develops, we may not see sustained selling. So we are seeing trader action. Trader action typically ends wherever the first level of support comes in. So that is not until about 4730 for today.