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10 Oct, 13 tweets, 3 min read
1. Will Air-India be an" Elephant in the Room" or a "White Elephant" for Tatas ? Some thoughts .
2.There has been almost universal approval of the Govt's decision to hive off Air-India. For the Govt it is like a Stop-Loss moment. The tax-payer benefits the most since he no longer will subsidise a losing proposition. The Govt. may actually benefit more than what appears.
3.While on the face of it Govt. is taking 46 K Cr. debt on its books, but it has got 3K Cr. Cash, will retain Real Estate & Sundry Assets. including the vast Art Collection, which insiders peg the value at more than Rs.5 K Cr. The RE can be packaged & monetised. Win-Win situation
4. What about Tatas ? While everyone seems to be having a warm & fuzzy feeling of nationalism & goods returned to their "rightful" owners, the question to be asked is whether it's "Hosh" or "Josh" which prompted the decision of the Tatas to bid.
5. In '07 when Tata won the bid for Corus there was similar eruption of Nationalistic fervour that India was a Global player etc. & there were critics also whether they had overpaid since the final bid was 34 % more than their own bid a year earlier. blog.ipleaders.in/tata-acquired-…
6. For Ai-India ,Tatas have bid 20 % more than the next bidder (Spice Jet consortium). So will Air-India go the Corus way since there are so many similarities. eg Huge Labour, Highly competitive Industry, Input costs, Govt regulations etc.?
7. Tata's need to address the issue of Fund Flows, Debt restructuring, Bloated workforce; optimisation of the infrastructure etc. and do it quickly.
8. An optimistic view :1. Visionary Mgt. under Chandra. 2. Raise debt in the International Market @ prevailing low rates & come with an IPO since the market is hungry 3. Get more passenger traffic by leveraging the workforce of the Group
9. Price the competition out locally since they have scale now.5. Ruthlessly reduce manpower after 12 months 6. Leverage with International carriers. All this because, it's an Elephant in the room by its sheer size in the domestic market (Air Asia+ Vistara+ Air India Express)
10. However, if they don't articulate a credible & quick plan for raising funds "cheaply", then the market may consider it to be a "White Elephant", bought more because of Nostalgia/Emotional value (JOSH) which will bleed Tata Sons for a long time to come.
11. Point to note is that more than 95 % of Tata Sons Income comes from Dividends/Corporate benefits given by TCS. Going forward, TCS is likely to be in focus, not only for their corporate performance, but also for that of AIR-INDIA.
12. Here's hoping that acquisition of Air-India by Tata Sons is the JIO moment of Air transport in India.
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More from @sainik636

11 Oct
1.Interesting to note that D-Mart is making new highs on a day its rival is planning to open 7-11 stores in a BIG WAY. That's the "insanity" of a Bull Market
2. Interesting to note a company which uses Coal as a RM going up when there are reports of huge Coal shortage. That's the "insanity" of a Bull Market
3. Interesting to note an Index which is very interest rate sensitive making an ATH when the 10 y yield reaches a 6 month high. That's the "insanity" of a Bull Market.
Read 8 tweets
4 Oct
1. A brief summary of discussions on CH on 3/10/2021 "Will Oct spring a surprise - Lessons from History ". “October: This is one of the peculiarly dangerous months to speculate in stocks. Others are July, Jan, Sept, Apr, Nov, May, March, June, Dec, August & Feb.”
― Mark Twain,
2. Oct has had the biggest fall (22 %) & the biggest rise (16 %) in a study of S&P 500 since 1964. Oct'29 & '87 are well known. In India too, Oct '94,'98,'08 are known for the downside while '07 rallied. In summary, Oct is a very "dangerous" month due to "mindless" volatility.
3.This time Oct is likely to witness the same kind of mindless volatility due to extended valuations; geo politics; RBI policy; Fed mischief, Inflationary trends, results season, China shenanigans etc .
Read 16 tweets
1 Oct
1." LOOKING BACK, LOOKING AHEAD" or as @CNBCTV18Live would say: "Quarter se Quarter Thak".Kudos to that copywriter who devised this phrase QSQT.{ As an Ad professional who cut his teeth in Ogilvy Advertising for me this would have been a dream line}👍 Some thoughts on Markets.
2. At the beginning of the last Quarter had charted out mentally that September would most likely be the "peak" month, did not speculate on what would be the Level, though must admit that, the levels did surprise me.
3. While the Indices have come down significantly from the highs of September we still don't know whether they were the "Peaks". Nevertheless the moves indicate that any rallies from here are on, are likely to be sold since "something" has changed.
Read 9 tweets
29 Sep
1."The Train has left the station" aka "Do the Advisors have Skin in the Game" ?.
2. Huge Interest in the Market & large number of market Analysts/Strategists expectedly giving "gyan" on Indices/Markets & collecting huge fees through Webinars/TV Appearances sucking in the naïve retail folks. Recent volatile moves have made these guys go on to overdrive .
3. Moving Targets are being given on Indices with most of them blithely asking followers to sell ONLY Below xyz levels while looking forward to higher & higher targets ignoring ground realities. Recency bias at peak since they have been successful in the past.
Read 9 tweets
29 Sep
Short term UGLY ( one week). : Hind Petro ( 289) SL 286; Target 299. Disc: Skin in the game.
Pushing my SL to cost
Booked half @ 296 , increased SL to 292. Target upped to 305.
Read 4 tweets
26 Sep
1. UGLY DUCKLINGS vs DIRTY DOZEN. Recently ( July 23rd) had devised a hypothetical portfolio of stocks which were popular at one time, but were being shunned by the markets at that point of time. Called them as "Ugly Ducklings". 15 in number.
2. Most of them had good fundamentals ; however where there was a sharp deterioration in fundamentals, it was visible in the exaggerated decline in their prices eg Yes Bank & IDEA.
3. Typical of any powerful Bull Market, this portfolio also has performed well, however the point to note is, that this portfolio was designed to withstand the ensuing Bear Market, whenever it comes. (My definition of a Bear Market is: 25 -30 % drop in Nifty from the TOP).
Read 11 tweets

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