life in financial markets: india's budget documents online

If you want to access the Indian documents containing budgetary allocations for 2008-09 that are being submitted to Indian Parliament today you can go to this government website. The site also provides a link to the Economic Survey 2007-08 document submitted to Indian Parliament yesterday.

A little bit of my past research/comments with regard to the budget of last year (February 2007) can be read here, here and here.

life in general: "i sit here watching..."

"I sit here watching..."

10.45 pm, Monday, 25 Feb '08: As I sit here watching, on my notebook computer, Parzania movie (I did a review of this movie exactly a year ago in February 2007) for probably the umpteenth time I am yet again moved deeply by the many moments and scenes in the movie.

Of those many scenes, I wish to describe just one in this post -- it involves the American character in the movie typing in his typewriter and commenting on the Parsi woman (played by Sarika) who lost her son in the Gujarat genocide of February-March 2002. He types, "I sit here watching the strongest woman I have ever known understanding that the Lord only gives a person a burden they are strong enough to handle; that the burdens must fall somewhere in this world and when they fall on you it is not just a test but a symbol that life knows you have the strength to endure them. Never in my life I would have guessed that religion could both be the cause of the problem and the solution."

life in general: criminal water wastage by all of bombay!

The way Bombay uses its water and is dumb about it would shock any sensitive society concerned about using natural resources properly. There is criminal wastage of Bombay Municipal Corporation-supplied processed drinking water by the thousands of residential co-operative housing society buildings, private bungalows and office buildings.

This wastage happens when water is pumped from the ground-level storage tank to the tank at the terrace. When the terrace tank gets filled up it overflows. The watchman at the ground level, even if alert, gets to know about the overflow only when he sees it in the drain pipe that comes from terrace to ground floor, and only then he goes to the pump room to switch off the pump. It takes anywhere between 3 and 10 minutes before the water overflow is halted. It is much more if the watchman does not immediately see the overflow and sees it 5-20 minutes later.

When this happens, in a single building itself, about three to seven thousand litres of water get wasted every day. This happens in all those buildings who have not installed electronic cut-off mechanisms that automatically stops the pump when the water in the terrace tank reaches a little below the overflow level. In my estimate, 7-8 of 10 buildings do not have this. Even in those who have it in a lot of cases the electronic system gets faulty and is not repaired, rendering it useless.

The BMC turns a blind eye to this criminal wastage. It is high time it is made accountable for it.

But the onus is also on the affluent citizens staying in the residential buildings or working in the office buildings to be aware of this kind of water wastage and install electronic systems to put a stop to it.

Of course, water gets wasted in other ways too -- keeping water taps open at full force, keeping showers on when applying soap on body while bathing, keeping tap on while brushing teeth or shaving, using 10-15 litres flush tank water for every little piss in the toilet, not repairing leaking taps, and so on and so forth.

life in financial markets: ipo turbulence

The primary market in equities in India has seen a major shake up in the last month. Here is something on it I wrote for Business World last week:

IPOs TORPEDOED

It was not unexpected but the level of investor indifference for recent IPOs has exposed the hollowness of the primary market.

Over the last 10 days, many cups of tea and coffee have been consumed thanks to the turbulence in the primary market, the market for initial public offers (IPOs). Investment bankers and promoters of companies have been holding long meetings in the midst of their ongoing IPO offer period to decide whether to abort their IPOs due to extremely poor response from investors.

The late January global equity markets' mini-meltdown and the continuing chill this month has led to an inevitable shake-up of the Indian primary market for equities. The grammatical irony too is not lost on some market players -- the secondary was taking the lead and the primary was following later.

It began in late January with offer price revisions in some IPOs. It kept getting progressively worse. This month saw issues not just revising their offer prices 10-20 per cent down but also extending their bidding offer period by 2-5 days. It finally exploded with three IPOs--Wockhardt Hospitals, Emaar MGF Land and SVEC Constructions--fully withdrawing their issues mid-way through. No doubt this was the end result of those umpteen cups of tea and coffee in their meetings with their investment banking firm-issue lead managers. "The potential reputation risks to our clients were weighed in the context of the loss of credibility that it will suffer if at the close of the IPO bidding period the issue was not even fully subscribed," says an official of one of the leading investment bankers involved with the Emaar IPO who did not want to be named.

Shifting sands. At the other end of the spectrum, at the trading desks of foreign institutional investors (FIIs) and the homes or workplaces of individual high net worth or retail investors, the dynamics of the analysis of the fundamentals of the IPOs was undergoing a subtle transformation. "Realisation is dawning on many investors that IPO valuations may be on the higher side and they are becoming rational now and their risk appetite has been moved by recent global market weakness," says Stuart Smythe, executive director and head of equity, Macquarie Securities India." "In such times of increasing volatility across all markets, preservation of capital and managing existing positions rather than putting efforts to build new positions becomes a priority for global equity fund managers."

This was clearly visible in the IPOs that were withdrawn mid-way. Take the case of Emaar's Rs 6,000-odd crore IPO issue. It first revised its book building price band from Rs 610-690 to Rs 530-630 and then extended its offer period of 1-6 February to 11 February. At the close of bidding hours on 8 February, it had received subscriptions of only 29 per cent of the quota reserved for FIIs and domestic institutional investors, even as the retail investors category was subscribed a bit higher at 47 per cent and the non-retail non-institutional investors' quota was filled by 78 per cent. It was the lukewarm response from FIIs that terrified the company and its book running lead managers, Enam Securities and DSP Merrill Lynch, enough to withdraw the issue on the next bidding day, 11 February, also the last day of the offer period.

It was worse with Rs 625-odd crore Wockhardt Hospitals IPO that opened on 31 January but at the close of 7 February saw only six per cent of its institutional investors' quota getting subscribed, 51 per cent by retail investors and only five per cent of non-institutional non-retail.

Implications. The withdrawals have severe implications for the equity market. "The IPO market is important from the economic perspective; it gives opportunity for companies to raise resources and acts a channel for investors to invest in such companies," says Devendra Nevgi, CEO and CIO of Quantum Asset Management, the managers of Quantum Mutual Fund. "When companies withdraw their IPOs you have to ask the question whether they really required the money in the first place."

The valuation question looms large on the IPOs presently notwithstanding the fact that majority of IPOs in the last year have listed at a 10-100 per cent premium over the offer price raising questions about whether the promoters could have fetched a higher price for their issues. "If an IPO is priced at a premium to regional and local peers, global money managers struggle to justify assessing a new offering at a premium, when their existing holdings are at discount, or comparables are trading at fairer values than a new offering," says Macquarie's Smythe. For instance, the Price to Earnings ratio of Emaar, a realty play, was much higher than the listed realty stocks like Unitech and DLF that had fallen steeply in the secondary market slide.

The secondary market prices of newly listed stocks from IPO in the last two months have also seen a significant correction in their prices (see table IPO torpedoed). The most dramatic case was the Rs 10,123 crore IPO issue of Reliance Power. Issued at Rs 450, with a discount of Rs 20 for just the retail investors, it got listed on 11 February. It was the first big IPO in recent history that got traded at a discount to the issue price on the day of listing. Its average traded price on the National Stock Exchange on the listing day was Rs 416.8, a 7.4 per cent fall from the issue price.

IPOs Torpedoed
Recently listed IPOs have taken a harsh beating from the market
	Issue size (Rs crore)	Issue price (Rs)	Listing date	Listing day's price (Rs)	Price on 12 Feb (Rs)
J. Kumar Infraprojects	72	110	12-Feb-08	100.1	100.1
Reliance Power	10123	450	11-Feb-08	416.8	356.1
Future Capital Holdings	490	765	1-Feb-08	882.0	873.8
Precision Pipes & Profiles	75	150	11-Jan-08	142.8	80.6
Manaksia	248	160	8-Jan-08	178.9	83.3
BGR Energy Systems	438	480	3-Jan-08	898.8	576.8
Brigade Enterprises	647	390	31-Dec-07	382.4	270.3
Transformers & Rectifiers	139	465	28-Dec-07	727.9	473.5
Jyothy Laboratories	304	690	19-Dec-07	790.7	694.5
Kolte Patil Developers	276	145	13-Dec-07	187.6	128.1
Edelweiss Capital	691	825	12-Dec-07	1525.2	856.9
Mundra Port and SEZ	1769	440	27-Nov-07	984.7	681.4
Source: NSE, BW research

Though not completely unexpected the dramatic abortions of IPOs have bought the investment bankers to some senses. "We do not have a crystal ball," says the investment banking official. "Through our road shows for institutional investors we had gauged the response and also priced the issue accordingly, but that a major crash in the secondary market would happen in the time lag between the road shows and the issue offer period was not predicted."

But the psyche of the companies, investment bankers and the investors, though scarred by this month's experience, would evaporate the moment equity markets worldwide pick up on renewed global equity funds inflows. Such is life in the financial markets!

life in general: (part 3) left's modi on rampage again...

The chemical SEZ (special economic zone) (see here for more) that was cancelled in Nandigram is now coming up at Nayachar. At Nandigram, the people displacement issue was predominant that led to stiff resistance. At Nayachar, the ecology is in terrible danger of being completely devastated (for photos of Nayachar download this pdf document). I share below an insightful write-up on this matter.

The way I look at it is that Buddhadeb Bhatachara, the chief minister of West Bengal, is to the Left parties in India what Narendra Modi is to the Right-wing parties in India. He is the Left's Modi (more here and here). Some similarities in their colleagues also -- Brinda Karat is to the Left what Sushma Swaraj is to the Right.

Here is that report:

Date: 16 Feb 2008 08:26:12 -0000
From: seztrack@yahoogroups.co.in
Subject: [seztrack] Digest Number 478
To: seztrack@yahoogroups.co.in

An Article on Nayachar

Posted by: "Sukla Sen" suklasenp@yahoo.co.uk Sat Feb 16, 2008 12:41 pm

This was published in The Statesman dated 12th. Feb.'2008

Nayachar - Terminal Symptom of a Malady

The proposal for a chemical hub at Nandigram, in West Midnapur district was aborted due to an unprecedented revolt encompassing most sectors of Civil Society. The West Bengal Government has now zeroed in on Nayachar, an island that emerged from the sea in the nineteen thirties in the offshore region of the Bay as an alternative.

Located near the confluence of the Haldi river and the Bay and virtually within the coastal offshore zone, it is a very small and flat island fully made up of unconsolidated alluvium that rose just three metres above the sea. GSI drilling also showed that it is similar material down to thirty metres. In the same offshore region, Lohacchhara, Supari Bhaga , Kapasgadi and Bedford islands were submerged by global warming effects. This was indisputably established by Jadavpur University researchers.

Somewhat later, Nayachar may share the same fate. Any industrial infrastructure shall necessitate substantial raising and consolidation of land by dumping colossal quantities of imported material. In fact, this process itself may expedite land collapse. Even then, would it be strong enough to bear major industrial infra-structural load ? Furthermore, such an island shall always remain susceptible to tidal waves and erosion.

Consequent on activating the proposed chemical hub, enormous quantities of hazardous wastes (including carcinogenic, mutagenic, and toxic to reproduction category) shall be generated with no safe dumping arrangements within the island. Obviously, these will be dumped into the sea, wreaking havoc on offshore marine life including fish and planktons. Most ominously, the seasonal offshore currents operating in the zone shall transport the pollutants along the coast into the Sundarban deltaic system and tidal currents will push them further into the Indo-Bangladesh river network.

The Chief Minister very recently reiterated from the ramparts of 'Fort Brigade Parade Ground' that Nayachar shall have the chemical hub. Even with the insensitivity of the State to valid scientific criticism, such a decision is simply mind boggling! Yet, there are alternatives available.

Having land fully government owned land, this island was handed over to the State Fisheries department about thirty years ago. A number of fishing cooperatives were formed and more than three hundred ponds were leased out to local fisher-folk and small entrepreneurs, commuting by ferry from Haldia. The island also has six hundred squatter families eking out at least a meagre livelihood as labourers in the ponds or catching fish. The socio-economic fallout of setting up a major industry cannot be ruled out, with inevitable problems of livelihood loss and rehabilitation of the displaced families.

The Jurong Consultants appointed by the Salim Group, has endorsed the Nayachar location, citing the examples of islands off Singapore! Whereas those islands form part of the Himalayan arc itself, Nayachar is an offshoot of eroded Himalayan material and transported over thousands of millennia to form one of the thickest alluvial basins on earth. Singapore has no such vulnerable alluvial basin to pollute ! Instead of wooing industrialists with questionable credentials, the State should organise and support fisheries to be developed and run by local dwellers. Obviously, with moderate investment, the losses shall be miniscule compared to industrial development even if the island is submerged after a few decades. This would be an optimum utilisation package for such a chunk of ephemeral land.

Andhra and other states are satisfying the huge demands of such a fish hungry State. The East Kolkata wetlands fisheries have been decimated by planned and relentless state sponsored urbanisation to pamper major realtors. Although miniscule, Nayachar may provide an example to emulate in such a warped development scenario. Even the state government admits that West Bengal has started facing shortfalls in food production; fish is certainly a major protein food item.

Nayachar is another decisive step in West Bengal's journey of no return into the path of devastating its invaluable natural resources. Despite concerted protests, it is providing the cradle for Tata-Nano miracle in prime farmlands of Singur and development of Rajarhat. Further plans to build highways, bridges and Kulpi inland port shall inexorably destroy theinvaluable and vestigial mangrove swamps of the Sundarabans that protect the state from the disastrous cyclones. The Teesta Project has started constructing a chain of dams and barrages in the tectonically active Himalayan foothills zone. Indications of a major disaster are already being perceived in a series of major landslides, along with water logging in the plains.

Yes, the Government is transforming the State into an environmental inferno, basically for the benefit of a miniscule affluent urban minority! Instead, by forsaking the globalisation highway, it could always choose the country roads of a resurgence that would include small agro-based industries. This would be sustainable and endow benefits on the overwhelming rural majority of the State.

Subrata Sinha
Formerly , DDG,Geological Survey of India
15 A/1 Khanpur Road, Kolkata 700047
Landlines 2481-8559 / 24110576

life in general: when will we (india) guarantee a life of dignity to our sisters and daughters?

It is not the first time we get to read about the heinous crime of rape and also not the first where the victims are little girls. But I am absolutely nauseated to read about the 15 February rape of a 12-year old girl by a Railway Protection Force constable and 6-7 other accomplices at the slum cluster near the Kanpur railway station (below, at the end of this post, is a complete news report on this incident; some other newsreports on it are here and here).

A majority of personnel working in the various police forces in India have become utterly corrupt and immoral. Their political masters are not any better. In the meanwhile, the majority of affluent and middle-class urban Indians are so steeped in their mindless consumeristic lifestyle that they won't even raise a murmur of protest against the horrific crimes taking place in their cities.

(THE DRAWING TO YOUR RIGHT HAS BEEN TAKEN FROM www.dudleythegorilla.com/images/sketches/kay.jpg)

I pray that the mother, father and siblings of that 12-year old little girl, who was killed after being raped, get justice. Such a crime is the rarest of rare and if the police authorities of the state of Uttar Pradesh and in the entire country as a whole have any shame then they should leave no stone unturned to provide justice to the tragically-devastated family of that little girl. To begin with they should release to the media the entire details of the culprits; right now the media reports don't even give the full name of the RPF constable.

We see such crimes happening in a scattered manner across the country with ominous frequency. We have also seen worse -- organised sexual violence against women of minorities in Gujarat in 2002, in Bombay and Surat in 1993 and in Delhi in 1984. What kind of India is this where we can't guarantee a life of dignity for our fellow sisters and daughters?

Here is one of the newsreport on the shocking incident:

http://timesofindia.indiatimes.com/Lucknow/Kanpur_rape_4_suspects_held/articleshow/2788642.cms
Kanpur rape: 4 suspects held
17 Feb 2008, 0136 hrs IST,Faiz Rahman Siddiqui, TNN

KANPUR: A 12-year-old girl was gangraped in front of seven younger siblings allegedly by eight people in Kanpur. The incident came to light only after the victim's mother, Sarita, who was away in Delhi to borrow money from her relatives to get her husband Rajesh Keshari released from the Naini Central Jail in Allahabad, returned late Friday night.

The post-mortem confirmed that the girl was raped and later killed. The police have handed over the body to her mother, a daily-wage labourer.

Kanpur SSP Anand Swaroop said four suspects, identified as RPF constable Vinay, contractor Amar Singh, Santosh Kesharwani alias Lambu and Pappu alias DV, have been taken into custody.

The girl's mother claimed the constable, Vinay, had recently arrested Rajesh, who used to work as a vendor at the Kanpur Central Railway Station and sent him to jail on fake charges. Sarita, who belongs to Sasaram in Bihar, said, "The accused had tried to outrage my daughter's modesty earlier too. When I objected, RPF constable Vinay and other accomplices threatened me with dire consequences."