A missed opportunity

The government has swung into election mode by announcing a substantial decrease in the price of petroleum products. It is good for the consumer, but is it good for India overall? Granted, we have had a crash in oil prices and a period of relative stability over the past 2-3 months. But, who knows what the situation may be in 6 months. If the price of oil skyrockets, will we again go into a cycle of under-recovery and a mounting subsidy bill?

 The prudent thing for the government would have been to take advantage of the low prices to bring about a degree of deregulation. They could have revised prices on a monthly basis or even rationalized the taxes and duties on petroleum products. But that would have been too much to expect from the worst government in Indian history.

Satyam

India's Enron...No truth at Satyam... the headlines are flying thick and fast. I'd predicted its downfall when the scandal initially broke, but I never suspected that a fraud of this magnitude was possible.

Beyond the uncertain future of the company and its employees, it raises quite a few questions

- How will it affect the image of Indian IT? All along, we'd held them up as ethical role models in a generally corrupt and immoral corporate system. How many more Satyam's are waiting to be discovered?

- How will it affect the Indian stockmarket? Will FII's pull out or will India's growth potential override this? There was some kind of recovery happening over the last couple of months, will this spell an end to that?

- Coming to Satyam's employees, I think with almost no cash on their books, they are going to have to do a mass layoff of all the non-billable resources. With the Indian IT job market already looking bleak, what will happen when thousands of people are added to the list of job-seekers?

- Will Satyam's customers jump ship? If they do, will it be to other Indian IT companies or will the MNC's benefit?

On a side note, I'd picked up Satyam shares in December at 115. Yesterday, I exited at 180, making it one of the best investment decisions I ever made. But somehow, I am not feeling that thrilled about it.

Karwar Trip

Here are some photos from our trip to Karwar over the New year

Karwar Trip