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The New Dawn At The Dalal Street



The president of the world bank Mr Jim Yong Kim is scheduled to meet the Indian Premier as well as the Finmin soon just to understand the priorities and road map of development and thus unlock India's growth potential to its fullest .

The target is close to 60,000 crores of disinvestments by the finmin and this is to be achieved within the next ten months and the stakes on sale are coal India and ONGC  and hence the positive sentiments and the market capitalization is good and the investors are building long positions already in anticipation .This disinvestment is nothing new for example even last year there was a block deal for BHEL (Bharat Heavy Electricals Limited) and also cross holdings for Indian oil co (IOC)  But this case of coal India is a bit different and in the lines are Hindustan Aeronatics  Ltd and Rashtriya Ispat Nigam Ltd and (RINL)  and Vizag steel , For the stake sale is Hindustan Zinc Ltd (HZL), SAIL and Balco So the targeted ones are those where the government holdings are more than 75% and here the bankers will come into the picture as they will do valuations and thereafter the stakes will be sold either through FPO(Follow on public offer or OFS(offer for sale) which is to be decided by the cabinet approvals duly.A special fund NIF( National Investment Fund) has been has been created for this purpose and because these stakes are to be sold in the open markets so an assets management company is underway soon. Moreover certain companies are on its path of revival as the revival packages are announced.

The PSU Exchange Traded Fund (ETF)  in the Indian stock markets are not strong as it is stock related .The markets are looking good and the capitalization are just the signs of a healthy market which is out of the ICU at last ., This only further suggests that the Indian companies especially the ones engaged in infrastructure developments are now bucking up in sweeping cleanup their balance sheets and thereby trying to reduce some of their debt burdens , and now the debt-equity ratios have shown signs of improvements and so now the companies will be made clear to face up the consequences of borrowing loans beyond their capacities as the days of defaulters are long gone by and all because of these steps of debt easing up the re-rating of the banking sector is up on the cards .The indications of a strong revival in the Indian economy went down well with the lenders as well as the companies who get back to the financial health and thereby make timely repayments.
Even the de-leveraging of the corporate has played off well so far so good with ten billion worth of assets already sold out and close to 8 billion still to go .

Companies such as JP Associates ,Aban Offshore ,Reliance Communications GVK Power and Infrastructure ,IVCRL and Jet Airways have all been able to reduce their debts drastically by either through sales of their assets and stakes  or monetization of assets after the fallout of the fantabulous run  in the equities markets through capital raising’s 15,000/- crores has been raised by the  JP Associates by the sales of assets and Rs 1,500 crores through qualified institutional placements (QIPs).Moreover the infrastructure companies have a total debt of Rs70,000 crores. So after the equity offerings the debt -equity ratio has boiled down to 6 that is 6.8 times so also the Reliance communications debt ratio sank from 0.2 to 1.1 times ,GMR infrastructure by 1.1 to 4.9 times .All thanks to the projects completions and regulatory clearances which has boosted the overall outlook on cash flows from the overseas. 

Rhythm is back at the dalal street and is back on top gear after some cough post budget as in Nifty Futures and options the traders are building long positions and suggestive of bullish bets and the FIIs have bought $493 millions worth of Index options during the last week .This current trends by capital goods and the banking will continue to gallop. Now is the right time to build bullish bets on large cap and the midcaps. Markets will continue its accent improving corporate earnings and strong fund inflows. Must watch are the quarter results of HDFC, Idea cellular, Wipro ,Axis Bank ACC and Ambuja cement and close watch on the global indicators .So we can proudly say the that it’s the new renovated designer dressed  India .