Please read the DISCLAIMER at the bottom of the blog.

Rakesh Jhunjhunwala is considered to be the greatest investor in Indian Market. He is supposed to have made Rs 5000 crores by just investing Rs 5000 in Indian Stock Market. Rakesh Jhunjhunwala guru mantra to be successful in stock market is as enumerated below:

(a) He advises people to become interested in a stock when none is interested in the same stock. As per him BUY RIGHT & HOLD TIGHT for years to come. He has been holding few stocks for last 10 years and he is still minting money from those stocks.

(b) He further advises that one should not follow big investors blindly as their risk profile and long term goals with time frame may be difficult to be followed by retail investor.

(c) Market is supreme and every thing is reflected in the price and thus their is no point in fighting the trend as market is always right.

(d) One should be able to create a balance between the fear and greed.

(e) As per his words one has to learn the stock market trading as none can teach the market as stock market experience is the best teacher.

Thus follow Rakesh Jhunjhunwala advice in stock market, BE PATIENT and grow big like Warren Buffet or this iconic man from Dalaal Street.

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Monday, November 17, 2008

BOT projects are not viable: Nagarjuna Construction and Punj Lloyd (Rakesh Jhunjhunwala has a stake in both these companies)


The government’s ambitious highway projects under the public-private partnership mode are in serious trouble. Construction companies have either not put in bids or have withdrawn from 20 such projects, which fall under the build, operate and transfer (BOT) scheme.

Large construction companies like Larsen &Toubro, Hindustan Construction Corporation, Nagarjuna Construction Company, Maytas Infra (promoted by Satyam Computer boss Ramalinga Raju), DLF Infrastructure, Gammon India and GVK Industries have withdrawn from over 15 highway projects planned in various parts of the country.

In the last two months, nearly five highway projects worth nearly Rs 3,000 crore could not find a single bidder.

These companies said that they find BOT projects unviable due to the high interest costs which have squeezed profit margins, faulty traffic projections and stiff penalty clauses if the project is delayed for reasons not under their control.

All told, the government had plans to hand out 50 such projects, which would have involved an investment of Rs 60,000 crore and thereby, given a boost to the slowing Indian economy. But things are not moving according to plan.

In most of these projects, the companies that have withdrawn from the bids were already amongst the top six players selected during the technical qualification stage. This, experts said, will leave only smaller construction companies with not too much experience in the fray.

"We have withdrawn from at least five highway packages after being qualified in the technical qualification stage in the last few months. Most of the highway projects on a BOT basis are not viable because of faulty traffic projections and high cost of construction," said Nagarjuna Constructions Company Director AN Raju.

When bidding for a highway project, infrastructure companies normally take into account a profit margin of 10-15 per cent on project construction and an internal rate of return in the range of 15-20 per cent throughout the concession period. But, these companies have now argued that the actual project cost could go 25-80 per cent higher than estimated in the detailed project report, which can throw their profit calculations out of gear.

Also, with interest rates at which banks are ready to give loans to these companies going up to 14-16 per cent, compared to 10-12 per cent earlier, these projects now look unviable. A senior Punj Lloyd executive said: “We have consciously avoided BOT projects because with such high interest rates, these are not viable".

As per Sep 08 share holding pattern of LUPIN, Rakesh jhunjhunwala is holding 1,661,881 and 1,130,254 shares in the name of Jhunjhunwala Rakesh Radheshyam and Jhunjhunwala Rekha Rakesh respectively

As per Sep 08 share holding pattern of the company (
www.bseindia.com), Rakesh Jhunjhunwala is holding 6,250,000 shares and his wife Rekha Jhunjhunwala is holding 9,750,000 shares in Nagarjuna Construction
Source

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DISCLAIMER

DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.

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