X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
More than Rs 3 lakh crores at stake! - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Nov 26, 2009

    More than Rs 3 lakh crores at stake!

    Yes, you've read that right! If Morgan Stanley India head, Narayan Ramachandran is to believed, Indian companies are expected to raise more than Rs 3 lakh crores (US$ 70 bn) through share sales over the next three years. Speaking at the Reuters India investment summit, Ramachandran opined that Indian companies have raised US$ 18 bn by selling new shares this year and a long list of firms are waiting in the wings, hoping to come out with IPOs and secondary offerings in Asia's third largest economy.

    Interestingly, nearly half of the 3 lakh crores that the Indian companies are expected to raise over the medium term will be accounted for by stake sale in state run firms. Other sectors that would dominate the fund raising are, not surprisingly, companies belonging to the energy and infrastructure space, two of the most important long-term growth drivers for India. Besides, telecom firms are also likely to tap capital markets so that third generation mobile networks could be built across the length and the breadth of the country.

    It should be noted that since most of the fund raising could be done for projects involving long gestation periods, the track record of the management and its execution skills should come into sharp focus at the time of investing in issues.

    Another theme that could gain prominence over the next couple of years could be overseas acquisitions by Indian companies said Ramachandran. A combination of strong currency and cheaper valuations will make the temptation of going in for foreign acquisitions too hard to resist for the Indian companies. However, the companies could do well to not stretch themselves a great deal and make use of a judicious mix of debt and equity to fund their acquisitions.

    Defending oneself against bursting of asset bubbles
    While there is a lot of talk about bubbles being built up currently in a variety of asset classes, the fact remains that most people come to know of it only when it ends up bursting. Hence, the best defense against these so called bubbles may not be in trying to predict the timing of its bursting but making an attempt to minimize one's damage from it. And this is where a nice write up from CNNMoney.com can come in handy. As per the write up, there are three fairly simple defenses that can come to investor's rescue. And these defenses are common sense, diversification and rebalancing.

    While the first one refers to applying old-fashioned independent judgement to whether an asset class has run up too much in too short a time, the second one involves building a balanced portfolio so that one does not get carried away and bet big on a single asset class. The third one involves selling a portion of investments that have outperformed and plowing the proceeds into those that have lagged to bring one's portfolio back to its correct proportions every year or so.

    Let us see how the above crash course will help you. If someone tells you that emerging markets are in bubble territory right now, you will certainly not lose your sleep over it. This is so because you have invested in these markets for the right reasons, which is to ensure more diversification and in the right manner so that if someone would have invested in these markets a year back, he would have obviously done the rebalancing needed by buying into these assets at a time when their prices were low and selling it now, when they have really run up a lot. You can try this with other asset classes as well, without ever having to worry a great deal about bubbles.

     

     

    Equitymaster requests your view! Post a comment on "More than Rs 3 lakh crores at stake!". Click here!

      
     

    More Views on News

    How to Ride Alongside India's Best Fund Managers (The 5 Minute Wrapup)

    Jun 10, 2017

    Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.

    You've Heard of Timeless Books... Ever Heard of Timeless Stocks? (The 5 Minute Wrapup)

    Aug 19, 2017

    Ever heard of Lindy Effect? Find out how you can use it to pick timeless stocks.

    Why NOW Is the WORST Time for Index Investing (The 5 Minute Wrapup)

    Aug 18, 2017

    Buying the index now will hardly help make money in stocks even in ten years.

    Trump Takes a Beating (Vivek Kaul's Diary)

    Aug 18, 2017

    Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.

    How To Read Your Mutual Fund Account Statement Correctly (Outside View)

    Aug 17, 2017

    PersonalFN simplifies the mutual fund account statement for you.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE SENSEX


    Aug 18, 2017 (Close)

    MARKET STATS