Friday, April 4, 2008

DLF+Reliance+ICICI+Pantaloon =DRIP

So much muck to rake, so little time.. so much comedy, so many clowns..

For too long BRIC has been foisted on us as the grand global scheme thru 2050 and still stands out as a bandwagon with all wheels intact(the trick is the far cannot be seriously challenged till year 2040 and hopefully Roopa Purushothaman will have lived a happy, rich clairvoyant life in the meantime ).
But even so, quick to recognize the extreme short term outlook of firms like Goldman Sachs or any real usefulness of her 2050 projections she deftly monetized her fame to team up (the degree and star struck) Kishore Biyani who happily renamed his business "Future" group to reflect this move up from trousers. But recently he has put her to shorter time(and useful) frame projects like creches in his outlets to ensure she does not while away her time,on his dime, projecting year 2100 economic winners, a year he may not even witness. More on her later..we love future economists!

So all this global attention soon galvanized the worthy Indian "promoters" and business "leaders" into a libidinous growth pattern that soon separated the men from the boys.

Buying into this immense entrepreneurial energy was a no brainer and not be outdone by young birds flitting down from New York, our team soon cobbled together a gang of four stalwarts which the drawing dept. soon extrapolated into four largest and most respected companies by the year 2050 and coughed up our own homegrown acronym: DRIP . Below we list the pillars 2050:

D:DLF : The Goliath of Indian real estate , this phenom came from nowhere (actually the sleepy village of Gurgaon) to suddenly land in the centre of a frenzy that even surprised chairman K.P.Singh out of his afternoon siesta.He had no inkling his father-in-laws land banking fetish in olden times barren Delhi outskirts could catapult him into billGates' four-ball.The action caught him by such surprise he's had to disrupt his game of golf regularly to be lectured how he needs to hire "professionals" other than gardeners and caddies..frankly, he cannot understand the reason for such extravagance as he's doing just fine with periodically releasing a bits of land for "development" and planning pan India projects at the clubhouse with this new "IPO" money.
We know this group should be able to attract a few tens of billions of PE and leveraged professionally moronic money to throw into hare brained schemes.

R:Reliance : This group is actually the entire "I" in the BRIC quad. In India, if it moves, Reliance wants a piece..period. The brothers extraordinaire wake up each morning to leap into another new business before breakfast, glance at the financial dailies to see if their PR machine's yesterday's planted articles have the biggest fonts on page one and (god help them) if any negative articles didn't get smothered before daybreak.
With the regular new gas finds getting staid, Muckesh today launched into semiconductors and 21 other, unrelated, new projects( as happily reported by media) while A-nil fought hard to prop his otherPeoplesCapital empire thru buying own shares and random coal mine purchases costing 1000 cr ($250 m) for value 20,000 cr($5b) ..don't believe me ? Economic Times reported these figs...though, as usual "company officials refused to comment" but somehow "sources" are always available for every fabulous spiel emanating from the creative jugglenauts of corporate India. The undisputed go go boys.

I:ICICI Bank: Quite a few years back MV Kamath looked into the mirror at his freshly dyed(jet black) hair and realized he was surely most female bankers softest fantasy. Not one to ruminate important decisions he strode into the office that day and promoted everything female and walked on two legs , that he encountered , into senior and important positions at the Bank.
With all kinds of Govt. connections, subsidies, opacity, mediocrity and license to underperform, Kamath and his girls were onto a good jig and soon covered the whole country with *scale* banking.
As he and his flock have internalized over the years.. the manna is growth, because as long as you can grow, capitalize, securitize, layerize and obfuscatize .. nobody is the wiser esp. the "professional" money(FIIs,Hedgies,PEs) suits who love growth potentials and large branch networks.
Lately though he's having trouble finding good suckers for his securitized loans portfolios which even Chandas and Morparias have no clue how/where to collect from..add this to his trouble sweeping the subPrime cash cows under the carpet and he's promised to now highlight his hair to get schwing back in the banking miracle we know as ICICI..c'mon , he's just spotted a new flock of ladies that would put the fire back into Indian banking.We're bullish on this bull..chicks love him ;).

P: Pantaloon: Kishore Biyani was an ordinary shopkeeper minding his business selling trousers(not doing too well) till the retail revolution knocked down the building next to his parked scooter. Never one to not spot an opportunity knock(you don't need to knock many buildings next to his scooter) he was on his way to claim the retailKing title.
Very early on he realised there were no profits in this game, he'd spent enough time in this line to not waste time on trying to be profitable..the mantra was to roll the money..rotate the money..grow the business(not the money)..grow,grow,grow and the world grows with you..stop growing and they start asking funny questions like profitability, bottomline .
So at the time of going to press everything about this group is future,Future this, Future that , Future All( except of course real profits) .We are on because history has shown you never actually get to the future so this is covered.

Here's the common thread in DRIP companies, none of them, nada, zero, have any legs if you take away the growth, hype and the fine skills of capitalizations all expenses(to be amortized next 3 decades conveniently) and recognizing all (in fact a bit more..bit naughty) revenue this quarter.
Growth , more debt, bigger market cap, bigger ambition ..these are heady days.

We, of course , are just drippy about our DRIP strategy.

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