Update on RAYMOND & SKSMICROFIN
We had previous post on Buy- RAYMOND & SKSMICROFIN-Avoid and there are quite few update on these stock which should be taken note of:
RAYMOND says it has agreed on voluntary retirement plan with union representing all workers at its Thane plant. Company agrees to Raise Compensation to Rs.309 crore For Its 1,885 Workers from earlier Rs.150crs. This will help company develop a realty project on its 126-acre Thane unit. http://www.bseindia.com/xml-data/corpfiling/AttachHis/Raymond_Ltd_221010.pdf Raymond Ltd, Workers Union reaches agreement on VRS settlement package SKSMICROFINANCE Cmp Rs.1056 has closed @ lowest level after listing as after few arrest of employee of Microfinance made by Andhra police and newspaper reports of few more arrest send the stock down. Financing is worst business globally in my view and people want to borrow but they never want to repay, and this is one major reason for recent global crisis Sub-prime and India is no different. When that is so lending to poor people and recovering money is not easy in my view, Education loans in India has highest defaults percentage says data provided by the government, the outstanding education loans of 27 PSU banks at the end of the last financial year (2009-10) was Rs 34,192 crore across 18,51,106 accounts.
When educated Indian defaults on loans how these big companies or investors of these companies expect repayment from poor Indians who are important vote bank to politicians, I Doubt! These are small loans where going to court is every costly and not worth the try, as we have delayed justice system. Microfinance in India can be done only by local politician/ thugs/ rowdy without any registration where no complaint can be lodged against. In my view this stock can be best avoided by investor @ this point in time.
Wrote The New York Times at the height of the SKS IPO controversy: "SKS was set up as what philanthropists call a "social enterprise" -- a business based on the concept of doing well by doing good... there is no question that the company's 41-year-old Indian-American founder Vikram Akula and investors who include prominent Silicon Valley venture capitalists will do very well indeed from the IPO. Akula has already privately sold shares worth almost US$13 million, and he still holds stock options potentially worth US$55 million. The question is whether the social good will be as amply rewarded." Headlined The Wall Street Journal: "SKS Microfinance's IPO Plans Pit Capitalism vs. Altruism." http://knowledge.wharton.upenn.edu/india/article.cfm;jsessionid=a83082893b3a78ce41412113c2f721465483?articleid=4533 SKSMICROFIN
http://akprabhakar.blogspot.com/2010/10/sksmicrofinance-avoid-let-dust-settle.html SKSMICROFINANCE-Avoid let the dust settle
http://www.business-standard.com/india/news/mfi-activities-in-ap-come-tohalt/412222/ The activities of microfinance institutions (MFIs) in Andhra Pradesh have come to a grinding halt, following an ordinance issued by the state government last week regulating their operations. http://www.business-standard.com/india/news/arrest-blow-then-hc-balm-for-mfis/412460/
http://indiatoday.intoday.in/site/Story/115107/Business/education-loan-defaults-weigh-heavy-on-banks.htm l Education loan defaults weigh heavy on banks
