Schadenfreude ~ Pleasure derived from the misfortune of another !

Came across Schadenfreude ~ Pleasure derived from the misfortune of another

….came across the use of this word while reading the Huge Mess of Hydel Power Projects in Arunachal Pradesh & the likes of business houses like Jindal Power,IL & FS & Lanco approaching National Hydel Power Corporation (NHPC) to take over their projects….NHPC is not too keen….Says M Rajshekhar,the author of this report “The reason for its reluctance goes beyond understandable schadenfreude. Its solitary project in Arunachal – Lower Subansiri – is stuck in a quagmire as well 

Rather Ironic now that many such Hydel Power Projects were actually taken away from NHPC between 2005 & 2009 and given to the likes of Reliance Energy,Jaiprakash Associates,DS Constructions,Jindal Power & KSK Energy….Most of them,if not all have turned into white elephants….and the privatisation actually led to many misdeeds like signing MOUs merely to raise monies and sell the MOUs itself !

Real woes experienced were the ” absence of roads and power lines. Not to mention local protests and extortion rackets, especially by local student unions. The state government too was a factor. While it wanted 26% equity in each project, it did not have the cash needed to pay for those shares.” says M Rajshekhar

And Now Presidents Rule is being imposed in Arunachal Pradesh !  

Of Course Political Patronage & Crony Capitalism have combined in this Privatisation endeavour that’s created this mess

Remember Reliance Power’s IPO in January 2008 at Rs 450 and the Prospectus announcing the roadmap to create nearly 30000 MW by 2016 & which included Hydel Projects in Arunachal Pradesh !

4 thoughts on “Schadenfreude ~ Pleasure derived from the misfortune of another !

  1. NHPC was also my defensive pick as a SS 4 (Scrip Shield) Select years ago….being a Utility Select it can at best protect your Capital if invested at Lower Levels of Rs 20 and below but do not expect it to be a bagger…have covered it extensively in the past…check this post from June 21,2012 http://www.gauravblog.com/nhpc-rs-18-from-defensive-to-default-despite-dividend-declaration-fitch-downgrades-long-term-issue-default-rating-outlook-to-negative/

  2. What is your view on Reliance Power now? Is it a good buy with a five year horizon? Do you think it can achieve a price of 300 in the next 5 years? I am looking forward to your views.

    1. Hey M Kumar,Reliance Power was all hype pre IPO at Rs 450 in Jan 2008 and post it immediately became powerless and prompted a 3:5 Bonus in May 2008,just four months after IPO!…it too failed to prop up the price which saw wealth being destroyed rapidly.It touched all time Low of Rs 33 a few months back in August 2015 and since then nearly doubled to Rs 61 last month in Jan 2016 only to correct back to current levels of Rs 40+ as we close out Feb 2016….to climb to Rs 300 in 5 years which you have asked if possible,it needs to be a 6+ Bagger from here.That would depend on Earnings Based Valuation going forward…Look forward to an elaborate blog post on RPower soon.Relative Valuations currently record under PE 10 & under PBV 0.6.However Operating Capacity currently is just 5945 MW (largely Sasan & Rosa).What was outlined in the 2008 IPO Prospectus was 28000+ MW by 2015/6!…Huge Let down is an understatement & it’s been a Wealth Destroyer.Asset’s Carrying Value of Rs 9345 crs is under threat for the Samalkot Power Plant which faces commissioning uncertainty on non availability of gas.This would mean Consolidated Networth of just over Rs 21000 crs at December 31,2015 needs to be tested.RPower has earned Rs 1042 crs in the nine months till December 31,2015 and even paid a maiden 10% Interim Dividend on FV Rs 10 with Equity at Rs 2805 crs….will write an elaborate post soon to show if it can drive Earnings significantly to support any uptrend in share price & whether the Share Price can reach Rs 300 in 5 years !

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