Insights
Dhan ki baat
Opinion on finance, people and strategy. Most of these pieces first appeared in Deccan Herald; one original essay appears only here.
Original essay 14 min read
China de-coded
A factory in an Indian export zone, automated and set up at over INR 200 crores, still pales next to a Chinese town making the same cookware. How did China manage that, and what should India learn from it?
Read the essayIn Deccan Herald
Opinion pieces published in Deccan Herald. Each page has an introduction and a link to the full article.
- UP’s race to nowhereMuch has been claimed about UP’s development. It is the singular pitch of the current dispensation’s estimated Rs 50-crore-per-day advertising campaign promising to make UP a $1 trillion economy, parroted from PM Modi’s presentation to BRICS in 2019 about making India a $5 trillion economy by 2024, with UP driving that growth. What’s the reality?Deccan Herald
- The Underbelly of BankingThe Reserve Bank of India’s recent directive, acting on the unbridled growth of unsecured loans, is timely, but the move may actually lead to banks raising interest rates and charges. The solution lies in banks moving away from unbridled retail lending. But that may not happen because the banking system in India, overall, is taking easier routes to make its money insidiously from vulnerable segments of the population and the industry that are hungry for debt to sustain their living, and veering away from the more difficult core banking business that would help fuel the Indian economy. And they are doing so quietly and opaquely. Here are just four examples.Deccan Herald
- Wake up, SEBIUsing valuation to buy companies that are in a much lower multiple and putting it all together to make an ‘Action Defining Logic’ entity with a monster value was a strategy that was working and logical for the edtech company in that heady world of acquisition-led and fund-infusion-based valuation fantasy, before taking the company public and placing the monkey of that overvalued monster squarely on the shoulders of believing, FOMO retail investors. …My questions to Madhabi Puri Buch, the Chairperson of SEBI, are these: Where is the potential for wealth creation for the retail investor if valuations are 10-times the industry median? Would SEBI have allowed the listing of the parent at $22 billion or the offline subsidiary at $4 billion if the can of worms hadn’t ope…Deccan Herald
- The Adani Saga: What were the regulators doing?Hindenburg was accused of having a vested interest on every news channel — that the company significantly benefited in bringing down Adani share prices. Look at the timing, they all said. Point is, of course, that short sellers have a vested interest. The better short sellers do extensive research and then seek value in betting their own money against overvalued stocks and sectors. Short selling brought about the downfall of the housing market that brought down the global economy in 2008. Was Michael Burry, the short seller, jailed or labelled an anarchist? …The Adani Group is not a company without value. It has real assets in the form of ports, airports, power transmission, etc. This matter could well be more about fugazzi and opportunism than it is about being a fraud like Enron. The company has two options…Deccan Herald
- Behind the LIC brouhahaIt was never about creating wealth for the retail investor. It was about the government’s need to meet its divestment target.Deccan Herald
- Putin’s calculusHung or lost wars that result in economic bankruptcy have led, time and again, to regime change — from the Greeks stretching themselves too thin to the East, to more recently the British Empire, Hitler’s Germany, and well, the Soviet Union… The economics that backed Putin’s decision to go to war is more obvious than, say, the calculus of Hitler’s Germany. For one, Russia is one of the large producers of fossil fuels, contributing 11% of the world’s oil… Is Putin banking on the West to blink on the altar of self-preservation and let Russia off the hook? It is possible when the rhetoric dies down and new lines are drawn. It is perhaps the reason why everyone went out on a limb to play down Biden’s statement.Deccan Herald
- A ‘dukandaar andolan’ in the makingThis dichotomy between real income and valuation-based net-worth income has led to a peculiar shift in the way money is earned and invested today, changing the demographic and the mindset of the ‘entrepreneur’ with serious, though unmeasured, consequences… About 90% of what gets consumed in our continent-sized economy flows through “trade”, or traditional distribution…. But from a systemic viewpoint, the long term is important, and we must not shy away from the reality, which is this: India has over 12 million retail outlets, most of them being small family-run stores; 11% of the Indian population, or over 150 milli…Deccan Herald
- Time for SEBI to step in“It’s a damn conspiracy, and everyone’s in on it!” – Jailor Norton, The Shawshank Redemption. Paper money is being made at every level by every player, where companies are bought and sold amongst themselves for paper value. They all gamble on a hypo…Deccan Herald
- The economics behind the news anchor’s ‘performance’In India, the licence granted to a media house for use of sovereign airwaves is granted by the Government of India for a public purpose — to inform, hold a mirror to society, and to hold to account institutions — for the common good.Deccan Herald
