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Nooresh Merani

@nooreshtech

Aug 27, 2019 • 10 tweets • 7 min read • Read on X

History of #Disinvestment in India

1) The IPOs-1990-1998
2) CPSE to CPSE cross holdings/ Privatization– 1999-2004
3) Golden Opportunity Missed -2004-2009
4) Disinvestment Back again through OFS/FPO- 2009-2014
5) All out -Buybacks,CPSE to CPSE , ETF , OFS -2014-2019
2019-2024?

History of #Disinvestment in India - Through Numbers.

6) 2020 - #Disinvestment Target = 1.05 lakh crores.
Until now only 12357.49 cr done through 10000 cr from CPSE ETF, 475 cr from RVNL and 1881 cr from Enemy Shares Sale. The disinvestment left is 92643 cr to be completed in 7 months.

Why is this number a big one and tough one?

In 2008 FIIs sold less than 1 lakh crore in a year. The last time the government could do 1 lakh crore was in 2018 thanks to 37k crore HPCL to ONGC sale in 2018 and could do 85k crore in 2019 thanks to 14500 cr through #REC to #PFC.

The RBI decision to transfer a sum of 1.76 lakh crore is eventually an additional 58000 cr to the government kitty above the #budget2020 provision. The #RBI dividends have been around 50k crore for a long time.

If the government can do the target without much of a #CPSE to #CPSE sale or some other asset sale it will be the largest seller of Indian #equities in a single year or in a 6-month time frame ever!! Even the highest buying by #FIIs has crossed 1 lakh cr only once in last decade.

The process also takes time - For example #IRCON OFS merchant bankers advertisement came in mid July is yet to take place. Selling through #ETFs will also need a few more tranches. Or are we looking at a creative/unconventional route to #disinvestment in coming years?

Given the #fiscal pressure look like this 1 lakh cr target of 2018, 80k crore of 2018 and now 1.05 lakh crore in 2020 makes this #disinvestment number a permanent entry in the #Budget for few years. How tough is that going to be? We will look into that in our next #tweetstorm.

So here comes the #cpse to #cpse sale. wap.business-standard.com/article/compan… but still will need another 50k cr this year.

https://twitter.com/nooreshtech/status/1169191541329428481

https://twitter.com/nooreshtech/status/1169191541329428481

Still not creative/unconventional yet.

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Nooresh Merani

@nooreshtech

Mar 2

#LTCG - #LTCG - Not Much Revenue Gain for Lower Foreign Capital and Market Cap.

A Thread

India is the only country that taxes Foreign Capital
Foreigners own 25.6%
( FPIs= 17.4% & Foreign promoters= 8.2% )

Also when Indian Domestic Money has just started coming in Equity

2) Revenues for Government

This article suggests Long Term Capital Gains collection from Direct Equities was nearly 1 lakh crore.

But there is no Data for only Securities LTCG but this data matches for total LTCG.

Let's see the data.

3) Income Tax Data Clubs Equity + Real Estate etc

LTCG announced in Jan 2018.
So that implies AY 2017-2018 or before had no tax on long-term in Equity/MF.

There is still data for LTCG
Implies it's for Real Estate and other Assets

Read 12 tweets

Nooresh Merani

@nooreshtech

Feb 21

Insider buying / Promoter buying –
What to Look For & What to Avoid ?

A thread 🧵

In simple terms – Insider is someone who knows about the company more than we do – Promoters, Directors and any other connected person with UPSI

Why do we look at Insider Buying ?

👉No risk of Hostile Takeover, Activist Investing in India. More examples of promoters having board control with 5% ownership also.

👉Selling is taken more Negatively ( Much tougher to sell in bear market). So one way entry.

👉So why would a Promoter put more Money & increase Stake. Promoter Cash Flow is too less compared to Market Cap !!

Few Good Reasons that make sense for Promoters

👉Undervalued as Stock has fallen a Lot. ( 400-500 companies saw Insider buying March-May 2020)

👉 Future Potential

👉 Giving exit to Family/Funds/Private Equity etc. (Non operative brother selling)

Read 9 tweets

Nooresh Merani

@nooreshtech

Feb 9

Multi-Year Range Breakouts in Nifty50 Stocks but Nifty50 Making Lower Tops –What to Do ?

Apart from that

1) Global Indices – US and Europe near all time highs but India continues to struggle and making lower tops.

2) Stocks in Same Sector – One at all time high the other one at 30% drawdown.

3) What to trust the Breakout Moves or Breakdown Moves ?

This creates a dilemma for a Trader – To trust the Breakout/Breakdown or Not ?

Now lets c the Charts

The Struggling Nifty50

Positive divergences on new lows.
Still in lower tops.
Last major swing highs at 24200.
Swing lows at 22800.
Every big positive candle does not see any follow up action over next 1-3 sessions. Wait for this to change.

Read 14 tweets

Nooresh Merani

@nooreshtech

Feb 4

Midcap Over-Ownership & Over-Valuation !!

#Retail Inflows continue to be strong but Sebi categorization of Stocks > 33k cr Mkt cap being considered Midcap has led to over-ownership and overvaluation in the Top Midcap & Smallcap ( > 20k cr )

Data from Monarch AIF Note.

1) Price CAGR >> Earnings CAGR

Nifty50 and Nifty500 have moved inline with earnings cagr.

NiftyMidcap 100 has seen max re-rating. A price cagr of 27.3% against 11.7% earnings.

2) Concentrated Flows

Mid + Small + Thematic = 55-60% share of MF pure equity net inflows in CY23 and CY24

Read 10 tweets

Nooresh Merani

@nooreshtech

Nov 13, 2024

Nifty & RSI Positive Divergence

Nifty – Oversold and Triple Divergence

Like I have said in my earlier posts that RSI is a good indicator for bottoming out analysis on Nifty50.

Now is the time with RSI being oversold it gets into practice for us.

Oversold and a possible Triple Divergence in making.

In majority of the instances a RSI divergence has led to a Strong Bounce.

A cluster of supports closer to 23300-23600.

Recent lows can be broken tomorrow and ideally one would expect a good bounce from the support band.

The trade is to look for longs in the band of 23300-23600 or as close to it or stock specific.

A bottoming out can take a few sessions as per previous instances. A stoploss of 2% from entry closer to 23000.

A bounce to the tune of 30-50% of the downmove is the initial target. That would come to 24500-25000.

The past instances

The 2021-2023 – RSI divergence bounces

Nifty from top to bottom corrected 18% but there were multiple bounces and sideways range.

In the same period many stocks/sectors did really well.

For example the June 2022 bounce was led by Banks.

The RSI Divergences in 2015-2016

Although the trend was down there were many bounces.

Textiles/Chemicals and many sectors continued to do well.

Read 4 tweets

Nooresh Merani

@nooreshtech

Sep 28, 2024

Nifty50 RSI at 80. Sell Everything and Run Away

Did you all get this Forward/Post of how #Nifty of how 80 RSI was followed by a Correction !!

A Thread.

A) March 1992.

Nifty50 index started in 1996 with a 1-2 year backdated data. NSE started operations in 1994.

So I have no clue where the 1992 data came from. Sensex monthly RSI was 92 in 1992 in 1985. So that also does not match

B) Dec 2003.

My data shows 78.5. But fits the Curve and Narrative.

The next 4 months are sideways. May 2004 elections led to the 30% correction.

So now we start with the actual 80 + RSI instances.

Read 11 tweets

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