In 1995 IDBI the DFI came out with an IPO at Rs 130.I had given it the notorious sobriquet ‘Instant Death By Investment !’ as the Pricing was way to High.The IPO was bailed out by UTI at the time in a quid quo pro really as then IDBI subscribed to Unit 64 at the high purchase price which was a scam in itself as it was 60% higher than the actual Unit 64 NAV which hovered around par of Rs 10 !
Then in 2004 IDBI the DFI merged with IDBI Bank and in 2010 I had recommended it at Rs 130 in 2010 for several reasons.It did climb past Rs 200 the same year but then disappointed and started it’s downward slide as NPA Demons begin surfacing big time.
Last Month in the second week of February these NPA Demons caused the Share Price to drop below Rs 50
On February 29,2016 our FM made this specific budget phraseology for IDBI :
“The process of transformation of IDBI Bank has already started. Government will take it forward and also consider the option of reducing its stake to below 50 per cent”
It was a no brainer for the Share Price to begin rising the same day from Rs 58 levels to cross Rs 60
It’s now moved up @ Rs 68
Here’s the Share Price Trend of IDBI Bank from 2004 to 2016 (in Rs)
Year
Open
High
Low
Close
2004
62.90
115.00
29.25
109.80
2005
110.95
130.95
76.30
97.15
2006
98.15
110.00
48.50
76.30
2007
76.80
181.00
66.50
165.30
2008
166.50
180.30
53.00
67.65
2009
68.00
140.00
39.75
127.45
2010
128.00
202.25
105.85
164.75
2011
165.75
168.30
77.40
77.80
2012
78.30
121.50
77.15
111.40
2013
112.10
118.20
52.30
66.45
2014
66.85
116.50
52.95
73.15
2015
73.25
95.70
52.45
87.80
2016
90.80
91.15
47.40
68.85
The Book Value of IDBI Bank is over Rs 110 giving the relative Valuation of 0.6….that’s of course one accepts current audited GPA levels of Rs 19615 crs ,that’s 8.94% of Advances and with a 62.92 % of Provision Coverage
Government owns 80.16% of IDBI Bank and if it is open to bring this down below 50% as proclaimed in the Budget by our FM then it begs the question ~ Will they just bring it down but yet retain Management Control or will IDBI really be up for Privatisation and therefore up for Sale ! ?
Quickly the IDBI Employees have voiced their displeasure and threatened to go on strike in the crucial last week of this month of March 2016 which closes out FY 16
Why would the IDBI Employees resist Privatisation or Government diluting it’s stake below 50!?
Seriously ask yourself this ! I reflected and immediately came up two big reasons in my view :
Insecurity of Jobs ~ This is understandable as Employees have huge job security under the Government ~ Bank can Hire but not Fire ~ at best Government can try VRS as they’ve been doing over the years in PSU Banks ~ Connect this with how bloated Government Enterprises really are on workforce be it the Railways or Coal India
Accountability & Transparency in Operations ~ This would open a Pandora’s Box in the Bank for all the NPAs & who really is responsible in the Bank to have advanced Loans that have turned Bad.Of the over Rs 2 lakh crores advances ,the Bank reportedly has an exposure of Rs 7000 crs to the JaiPrakash Group,Rs 15000 crs to the Essar Group and @ Rs 925 crs to Kingfisher Airlines.In fact the ED is investigating Vijay Mallya & his Kingfisher Airlines for Siphoning off @ Rs 300 crs Funds from the Rs 900+ crs IDBI Loan
So will our Government be influenced by the IDBI Employees opposition & not go ahead with it’s plans to sell it’s stake in IDBI Bank to bring it below 50% ?…the Budget already shows FY 17 Disinvestment Target of Rs 36000 crs + Precise Strategic Disinvestment of Rs 20500 crs.This would include IDBI Bank Stake Sale plannedread more
Make no mistake…The 28 year old Russian Maria Sharapova is a stunner as you’ll can see but now she’s stunned all of us with admitting to failing the drug test at the Australian Open in January 2016
I’ve been a great fan of Tennis Superstar Maria Sharapova & willed her on to win everytime she steps on court …even let it be in 2014 when she did not know who Sachin Tendulkar was and later apologised for it !
But…
Her failing drug tests at the Australian Open raises serious Questions
Sharapova says she has been taking Mildronate,also known as Meldonium for 10 years after she was regularly falling ill. She had a magnesium deficiency and family history of diabetes.
She has been provisionally suspended to play Professional Tennis
Big Sponsors like Nike,Porsche & Tag Heur have suspended association with her that will cost her Millions of Dollars Endorsement Fees
While I wish this 28 year old is not forced to retire & does get to play World Grand Slam & ATP Tennis again (she can’t be suspended from wearing a bikini though!) my mind is perplexed with two questions :
Question 1
For the last 10 Years was Maria Sharapova taking Mildronate also known as Meldonium ,and prescribed by her family doctor,from 2006 because of a health issue as she claims or because it was a performance enhancing drug as identified as such by World Anti-Doping Agency (WADA) and banned from January 1,2016 ? ~ As a Tennis Superstar her Life is always under a microscope .Then why have we not heard of such a Health Issue that she yet must have for such a prolonged 10 years !?
Question 2
How many such performance enhancing drugs are yet out there which have yet not been identified as such and therefore not yet banned & therefore consumed regularly by sportspeople for unfair advantage when competing ?
Meldonium is used to treat ischaemia: a lack of blood flow to parts of the body, particularly in cases of angina or heart failure
It is manufactured in Latvia and only distributed in Baltic countries and Russia. It is not approved by the Food and Drug Administration for use in the United States and is not authorised in the rest of Europe
It increases blood flow, which improves exercise capacity in athletes
WADA found “evidence of its use by athletes with the intention of enhancing performance” by virtue of carrying more oxygen to muscle tissue
The decision to add meldonium to the banned list was approved on 16 September 2015, and it came into effect on 1 January 2016. Wada had spent the previous year monitoring the drug before adding it to the banned list
The drug was name-checked in the latest investigative documentary on Russian doping reforms by the German Hajo Seppelt . The documentary referred to a 2015 study in which 17% of Russian athletes (724 of 4,316) tested were found to have meldonium in their system
A global study found 2.2% of athletes had it in their system
It is classed as an S4 substance under the WADA code, which addresses hormone and metabolic modulators
The standard ban under the World Anti-Doping Code is four years
A memo was sent out to athletes by Russia’s anti-doping agency last September informing them of the decision to ban its use
Several athletes have been suspended since the turn of 2016 after testing positive for the drug. A few of these are Abebe Aregawi, the 2013 women’s 1,500m world champion ~ Endeshaw Negesse, the 2015 Tokyo marathon champion ~ Olga Abramova and Artem Tyschcenko, two Ukrainian biathletes ~ Eduard Vorganov, a Russian cyclist ~Ekaterina Bobrova, a Russian ice dancer.
