Failed to Understand Reliance Jio $25 Bn Investment vs. Ignoring Acquisition of Incumbent with Market Cap of $ 12 Bn

Reliance Jio is at the verge of launching India's biggest Startup service and it took them six years to lay down the network from scratch. It's really nice to see that some of the Indian Industrialists believe in Indian consumer and are willing to invest fortune to offer low priced service to make the service affordable.

It's also truly admirable aspect that Reliance Jio kept on investing relentlessly without  even thinking that they are risking their investment as many complex technical and business related issues were arising on daily basis.

At the same time, I am just trying to understand that why Reliance Group decided to wait for six years , investment of more than $25 Bn, Shattering their balance sheet from Net Cash positive company to debt laden company. Idea Cellular is one of the most dynamic companies and was in the process of rebuilding the brand coupled with great growth potential. With Reliance Cash generation as well as credit creating capabilities, Idea Cellular was most suitable target for them at that point of time. I am considering today's valuation including debt on their balance sheet and that is just half of what Reliance Jio invested in brand new network which is not even tested with multimillion concurrent users.

In current scenario, Reliance Jio will take another 15 years to recover their cost and incurred interest provided they capture number 1 position and by that time renewal period of spectrum will come whereas in second scenario if Reliance would have gone for Idea Cellular acquisition, by now Reliance could have changed the whole dynamics of Indian Telecom sector.

I failed to understand so thought of sharing with reader and if someone can give their point of view then it would be great.

Failed to Understand Reliance Jio $25 Bn Investment vs. Ignoring Acquisition of Incumbent with Market Cap of $ 12 Bn

Reliance Jio is at the verge oflaunching India's biggest Startup service and it took them six years to lay down the network from scratch. It's really nice to see that some of the Indian Industrialists believe in Indian consumer and are willing to invest fortune to offer low priced service to make the service affordable.

It's also truly admirable aspect that Reliance Jio kept on investing relentlessly without  even thinking that they are risking their investment as many complex technical and business related issues were arising on daily basis.

At the same time, I am just trying to understand that why Reliance Group decided to wait for six years , investment of more than $25 Bn, Shattering their balance sheet from Net Cash positive company to debt laden company. Idea Cellular is one of the most dynamic company and was in the process of rebuilding the brand coupled with great growth potential. With Reliance Cash generation as well as credit creating capabilities, Idea Cellular was most suitable target for them at that point of time. I am considering today's valuation including debt on their balance sheet and that is just half of what Reliance Jio invested in brand new network which is not even tested with multimillion concurrent user.

In current scenario, Reliance Jio will take another 15 years to recover their cost and incurred interest provided they capture number 1 position and by that time renewal period of spectrum will come whereas in second scenario if Reliance would have gone for Idea Cellular acquisition, by now Reliance could have changed the whole dynamics of Indian Telecom sector.

I failed to understand so thought of sharing with reader and if someone can give their point of view then it would be great

Invest in Fortis Healthcare - Medium to Long Term Bet

After painful restructure of domestic and international business, Fortis Healthcare is back to profitability during Q1FY17. It is also encouraging to observe that equity price of the company is going up. Fortis Healthcare is more or less done with their capex cycle to increase the total bed offering and invested millions of $'s in the last three years. At the same time, they exited from International market in order to focus on domestic business. The sellout of International Business helped Fortis to reduce their debt level and ultimately helped the EBITA on the positive side.

The recent talk of monetizing the pathological unit post the successful IPO of Dr Lal Path Labs and Thyrocare Technologies; Fortis Healthcare management formed a committee to explore the opportunity to increase the shareholder value. The committee tenure ends by 30th August 2016 and it is widely expected that committee will propose IPO of some of the units of Fortis Healthcare to unlock value.

In my point of view, investor who is willing to invest on delivery basis should pick Fortis Healthcare during the down day of Street and accumulate it for the better return in medium to long run.

Indian Mobile Advertisement - Opportunity for Disruptive Innovation Player

This article is in continuation to my earlier article " Indian Mobile Advertisement - ShootingBlindly". In my point of view, it is important to know the problem before identifying the opportunity out of it. In my previous article, I categorically pointed out that how blind communications channel impacted the advertisement dearly both in adoption, usages and return on investment.

Still the segment is not fully evolved wherein End users are offered advertisement as per their needs. There are few companies who tried to execute the location based targeting based on the contextual behavioral pattern of the user but they failed to yield any result. The continuous struggle by the Advertisement sector prompted advertisers to change their model and started focusing on retention and Return on Investments. The move is going to impact Incent wall players in coming months while companies engaged in innovation which comprises of Indian regulation would be able to come up with disruptive model as it will help them to identify the end user for today or tomorrow. In my point of view, Even big advertisement giant from all geography missed that part in big way. Article can be considered as indicator where innovator may choose to think. If anyone want more information are free to ping me anytime.

Why Escorts Is On The Verge Of Major Growth Path

In recent quarter, Escorts indicated to Investor community that they have done the transformation through innovating product line. The different business unit of Escorts such as Heavy Machinery, Agricultural Tractors, Hydraulic Mobile Cranes, Farm Equipment's and Railway suffered downturn from 2013 to Early 2015 and forced the organisation to change their strategy on the Research development to Product development to market positioning. The pain went out of control post last two year of draught and slow economic growth.

The continuous effort by the Promoter group and relentless effort by its Product and Sales team turned the company in the last two quarter. For the past few months Escorts is showing positive sales report on their management is positive about the sales growth and expect the sales growth to be in the range of 15 plus % point year on year.

The stock price in the last few months shouted upwards and also attracted the best investor Rakesh Jhunjhunwala eye who bought good chunk of equity at lower price.

With very good monsoon trend in North India where Escorts is having very strong footing, I will not be surprised that they gain market share and achieve more than 20 % y-o-y growth path. The cost optimization also helped them to improve their cash flow and profitability. I expect that equity price will easily give 30 to 40 % in next 6 to 9 month. It's a must have equity for all retail investor. I call these kind of companies as pension companies. Given their market cap, I must highlight that their land properties is more or less value the market cap of the company.

Disclaimer - Please consult your financial advisor

Investment in Tribhovandas Jeweller's - An Opportunity for Long Term Investor

Tribhovandas jeweler is ones of the most respected jewelers in North India for their quality product in the gold segment. They entered into the equity market with full fanfare but faced the turbulent time post dismal performance. Management quickly identified the gap and move strategically to start increasing its footprint through franchisee model in tier 2 and tier 3 cities. 

The stock price stumbles from 180 level to 60 INR in the last one year. Company in recent quarter made respectable profit and the market capitalization's is also under 500 Cr.

As global economy is again entering into economic crisis thanks to confusion created by UK referendum coupled with unrest in Middle East. The lack of economic growth and the signal supported by US Federal Reserve indicate the investor to turn towards Gold and the price went above $1400 ounce. 

It is expected that the gold price will cross $1550 in coming quarter. At the same time, Indian economy is coming on track and the monsoon  is tracking in the right direction which in turn will give more bump to gold buyer community during festive time especially in tier 2 and tier 3 where Tribhovandas already showing their presence. 

It will help company to increase their margin and subsequently increased profitability which will attract retail investor towards the company equity. In my point of view, the stock price may jump more than 50 % very quickly with little good news flow from the company.

Disclaimer - Consult your financial consultant before investing