Bombay Dyeing gives up DMT plant opting for PSF instead The dimethyl terephthalate (DMT) plant of Bombay Dyeing situated at Patalganga has been sold off with an envisaged plan of switching over to manufacturing of polyester staple fibre (PSF). The Nulsi Wadia managed company, has till date been the largest producer of DMT which serves as a key ingredient in the manufacturing of polyester. With a production capacity of 165,000 tons of DMT, the Patalganga unit serves various industries engaged in making polyester fibre, film, filament and yarn. Sources from the company informed Fibre2fashion that so far, the unit fetched about 65 percent of the company’s total revenues but now, this plant has been taken over by Gujarat based trading company Laxmiraj who will dismantle the DMT plant for its own purpose. Bombay dyeing has other plans including venture into PSF which is expected to yield higher revenues and increase the present margins. Production has already been commenced in October 2007 and the move to modify the DMT plant to PSF is estimated to cost about Rs3500 millions.

Network Updates... BUY Short Term Delivery (BSE Code : 523558 – CMP 42) To invest Rs 600 cr in Appu Ghar promoter firm. Private equity major DE Shaw is investing Rs 630 crore in Noida-based International Amusement Ltd (IAL) its a Network Group company, the promoters of Appu Ghar. This is the country's first private equity (PE) deal in an amusement park. The deal values IAL, which is closely held by the Vijeshwar family, at Rs 3,000 crore. However, the exact equity stake picked up by DE Shaw is not known as the company has issued a convertible instrument. 3i, ICICI Ventures and Merrill Lynch also looked at the deal, sources familar with the developments said. Enam Securities was the sole advisor to the transaction. When contacted, Robin Vijeshwar, managing director, IAL, said the company is in talks with several private equity funds, but declined to discuss the details of the transaction. The company plans to use the funds for its 350-acre Jaipur amusement park, and some other ongoing projects. "We are looking at bigger formats of entertainment parks ranging from 50 to 500 acres and are in talks with several state governments as we plan to have a pan-Indian presence. The funds raised will be used for acquiring land, procurement of rides and construction of parks," Vijeshwar added. According to industry players, amusement parks are catching the fancy of PEs as they expect an IRR ( Internal rate of return) of 20 to 25 per cent over a three-year investment. These entertainment initiatives, which are effectively considered social infrastructure, are a great revenue earner for the state governments in the form of entertainment tax, apart from creating indirect employment and big opportunities for SMEs (small and medium enterprises). Subash Chandra-promoted Essel group, the promoters of Essel World and Fantasy Land, is another major player in the amusement parks business in the country. DE Shaw, one of the world's largest alternative assets provider with over $36 billion in aggregate investment capital, has made considerable investments in the country, such as in a unit of realty developer DLF and in a renewable energy project.

Formula of success.... One more dull day for the capital market though Nifty showed some glimpse of sharp recovery on short covering. Any way most of the players have lost hope in A gr as they are now expecting market to go as low as 12000 on various pretexts. OIL, inflation, FII selling, Karnataka loss of ruling party and absolute lack of buying interest is making Sensex under check. Yes, it is true that out of 100 trades 90 in favour of short sell and even technical calls have lost its lethal power and started giving intra day buy calls 1% gain or so. Instead we stick to our focus of not trading in A gr shares. Meanwhile see B gr are giving good returns. Stocks correct for shorter time but the conviction level gives a chance to enter at lower level. Conviction is must to enter handsome amount of profit. When market was in full flow and FII were buying we were not hesitant to look at Swan Mills even at Rs 150 per share. The same stock is now available at Rs 53 even below the rate where major drive had entered and therefore you can merry such stock which will give at least 200% return. G E is selling consumer finance biz worldwide. It sold its unit in Australia. It is focusing on banking biz. Sources says that G E is trying to take over a bank in India. The change is structure could mean huge upside in the stock. Have a close look at this MNC which is available at throw price. If this kind of investment can give us 15 to 20% return in a week why should we have a look at F & O stocks at all…..? At the same time we continue to recommend our stocks in S C section though the period is getting delayed and delayed. It is very easy to close all the calls at one go saying loss booked but we will never do it because we are confident to sail you through. Yes, it will take time and those who have no patience may decide their course of action. We too are fully aware of all negative factors such as cruel crude, thorny inflation, uncertain political flux, and never thought of monsoon ahead of its actual coming. We know the consequences too. But there are certain issues. One BJP won in Karnataka which means ruling party is shaken badly and prepared for 5 years term. Therefore election can be only in 2009. Enough time to control inflation. Yet I want to sound a strong warning is that we may touch 10% inflation as the growth is never stopping. With rise in inflation to 10% the GDP too will shoot up to 9% and I think we will have accept that scenario very soon. It is also true that Govt will not digest this and try control inflation even at the cost of monetary measures. This may lead to political loss to ruling party and BJP may do a clean sweep in the next elections. Either way for market it will be a very good sign and market will find its rhythm back. But before that the game will be done as usual. In 06 crash investors were stuck with B 2 stocks which took really long time to recover whereas in 08 crash they are stuck with A gr stocks. Even promoters are not willing to buy back now or may have exhausted their limits and hence the prices will not move up unless the blocks are closed once again like one you have seen in idea. Operators still have lot of liquidity and at every fall they are digesting the flow like never ending appetite. This is the precise reason even after steep FII selling of Rs 1400 crs on one single day market is not crashed. It is just down by little percentage. In fact, we at I Develop knew about this scenario and therefore were advising traders to stay away from F & O all along. Even today though we have buy calls in S C Section we are advocating buy in B gr shares which are real value buys and giving good amount of profits. Success will never lower its standard to accommodate us. We have to raise our standard to achieve it. Even nature provides food to every bird but definitely not in its nest.

Who 330 minutes...? Oil fell and Market recovered. Oil is set to fall vertically in coming days which will help market recover lost grounds to a great extent. It is really difficult to see how long it will take to change the factors required to take Nifty past 5400 but fro sure 5100 is in sight. Even that will kill short sellers. Surprisingly punters and traders come to know about the adverse and bad factors only at the bottom of the cycle where they sell heavily to get themselves trapped. I have seen N of times that those who trade on either side will get screwed. Their success rate can’t be over 50% and with success rate of 50% you can’t make money. We always prefer to take one sided call and whenever market falls we take this opportunity and may be make little money but for sure make money. Today I was reading headlines that FII have started selling stake in the cos feeling overheated and promoters are unable to hold the selling flow. It is true and easy when you get easy money and use that money for expansion but when it’s to supporting them you run out of ideas. This is the precise reason I always advocate that do not buy a stock where FII have large stake and not at fancy price which can be seen better on paper. Sandur, howsoever good is the stock one should book profit and enter in new stocks which are replica of sandur and at the beginning of cycle. We advised investors to exit from Panyam today irrespective of the fact that this stock has lot of steam. But this stock is in full control of operators and they might rig up the price to Rs 300 but then they will start selling and distributing and you can’t get exit. It is better to exit when the things are in your control. We were recommending Panyam at Rs 90 to 100 very aggressively and in 2 months it is doubled. Now this is time you must sell panyam and enter FII owned stocks which is full of value such as Gremach and Kernex Micro. Their exit will make this stock to bounce back by at least 100% which means you are making exit in panyam at 400 safely. We have acquired stake in Network a Delhi based co today as we find the merger of PPS Tower very interesting. PPS Tower is holding co if Network as well as into entertainment biz. Going forward we feel there is case of another sandur into making provided the merger goes through properly and all the value of merging co gets into merged co. It has also spinned off its retail biz into a separate co which is again very positive. Since the preferential allotment to value investors in this co had happened at Rs 50, anything below Rs 50 is a good price for investors for long term basis. We also have vested interest in all other stocks we have spoken in this section directly or indirectly. Morning means one more innings given by GOD to play and win. So play your best innings today and have a winning day.

Opportunity Vs Difficulty Today was the last of the day vallan and as usual market was moving as per the positions in futures. Irrespective of fact that global markets were firm on the back of weak oil, Indian market had to behave due to vallan end consideration. Bulls had huge spread of 5000 Nifty though market oscillated between 4820 and 4960 creating a trading pattern at the moment. One more vallan is passed by. Market was anticipating 4200 or 4300 which did not happen in May 08 and now we will see in June 08 what happens next….? For me the downside is very limited due to lack of positions as well as interest. At the same time the selling is getting absorbed across the board. The consolidation may happen till time the selling continues and underlying factors do not change. It is well said that those who buy in most uncertain time gets maximum reward simply because the time can’t remain same. Only for punters the life is uneasy. For earning 1% return they enter in trading calls and finally get married with the position without capacity to take delivery. When market corrects their stop losses triggers. Only in order to combat this we have been suggesting time and again remaining in B gr shares yet there are few investors who are tired of our B gr calls and wants to play only in A gr shares. Please you may try other technical calls on your own as we see no way to make intra day or trading money in A gr until Nifty crosses 5400. The depth of the market which is called heart of the share bazzar is missing post JAN crash and will resurface only when Nifty will cross 5400. Kernex Micro, Bag Films, Swan Mills, Batliboi, Jeyswal Neco, MSP Steel, Bajaj Steel, SS Duncan, Minda, Network, Gremach, RDB, Vishnu all are multi baggers. For upper side movement 2 things are must one huge accumulation and second a trigger to surface. Smart investors are always those who buy in bad times like this and sell in good time when the stock rises. E.g when I started recommending Jeyswal at Rs 26 volumes were in thousands. By the time it reached Rs 40 volumes were in lacs. When it reached Rs 50 volumes rose to millions and when it will reach Rs 100 volumes will be crores. This clearly suggests the volumes theory is only created one. Another important feature is that FII have been selling all along. In fact they have reduced their holding in Sensex co stocks from 23% to 19% that is the reduction of 4% but the moot question is who has bought this 4bn USD selling….? Retail has appetite and MF can’t be that aggressive as far India is concerned. The whole cornering is being done by one who controls the market. For that you need to know that FII can’t control Indian market though they create valuations for us. Now you will understand why I advocate sell when they buy and buy when they sell. Market is full with gossip of vertical fall in stock market in June now instead of May. Reason again oil, inflation, monsoon, political instability, N Deal etc. May the event could not happen as operators were on holiday and they will be back in June therefore the activity will start in June. Good, I can ony say LAGE raho….we need this kind of thinking when nobody owns any stock….? The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty. I am born optimist and try to see how to leverage my gains out of every opportunity.

Watch for more cues... It was the day of Jeyswal Neco where FII entered today in a big way. This is how Cni research works. We started with Rs 25 post crash and today at 52 FII entering. Same thing was true with Sandur, Panyam where FII are now entering. We have decided to quit from any fresh recommendation in these 2 stocks. Panyam still there is steam left due to dolomite valuations but stock has to correct to Rs 130 levels once again. In case of Sandur, though management has given interview of Rs 600 crs pat in 09, we believe that the same could be less than Rs 300 crs and therefore the current market price is justified for exit. Another important reason for the exit is that most of the investors had entered in Sandur in or around June 10 last year which means anybody who will sell these shares after 10th June may not have to pay capital gains tax. This temptation could stop them from making exit from this stock today. For smart investors it is better to pay 15% tax instead of sell the stock at 15% lower price and built own capital. Who knows whether the stock will hold the pressure after 10th June 2008? In any case the investors who had entered in this stock at Rs 70 had made clean sweep by taking huge chunk from IDBI at that price which was visible even at that time. In fact, if IDBI could have prevented themselves from washing dirty linens like this its own share price could have been Rs 1000 plus. (Diff between Govt and pvt organisation). Any way, I am not IDBI management here but for sure there could be huge selling in Sandur after 10th June and if FII quota gets over then you have it. Alternatively if the June quarter results miss the nos excepted by analysts then also the stock could falter. The third risk is commodity especially oil and gold are set to fall vertically. Some heat will be felt in iron ore too. Sudden change in demand scenario could deprive you from exit opportunity. On the contrary, Minda Industries which has now proved that it is ahead of industry standards by bagging a prestigious first ever outsourcing order from Volkswagen has to go a long way. The order of Rs 60 crs is a trial order and the analysts tracking this co says co had capability to service even Rs 600 crs order to Volkswagen. In fact, Midna’s entry in the international makes it a good case for international acquisitions. With the acquisitions the size of MindaInd could change from Rs 1000 crs gr to 5000 crs very shortly. As of date the FII ownership is zero in this co is zero and only few very smart investors who have impeccable track record of making 10 baggers have cornered close to 3 to 4% stake in the co. Management holds as high as 74% stake and in no mood to dilute the stake even at Rs 700 per share as their E V is close to Rs 2200 crs on an equity of Rs 10 crs. If you convert Sandur to Minda which has very limited downside could be able to see Sandur growing to Rs 5000 indirectly in 2 years. Rs 3 rise in petrol is fully factored in the market. Oil has started showing weak signs and set to collapse to as low as 90 in next 3 months. But market if has to fall below 4820 then the reason will be something else and not oil or petrol hike. We will wait for further clarity till next Wed. today being Friday, it is also to be seen whether any surprise announcement from RBI comes in to combat inflation. Irrespective the huge volatility and persistent negative factors I maintain my view of new high in 2008 itself. If we don't believe in freedom of expression for people we despise, we don't believe in it at all

Cost of impatience.... Market is clearly missing the buying euphoria as most of the intermediaries have initiated “Sell India” call. The bears have always held 12000 to 14000 Sensex target and to fuel the fire one BSE brokerage house has set a Sensex target of 9000. A real bravo. Though very conveniently a rider is added which generally gets unnoticed while seeing the upper box target, the fact remains that rider itself suggest the lack of conviction. It requires lots of courage to give wild targets such as either 24000 or 9000 and I must pat these guys for setting at least a dream target. With the current state of fluid market situation such an act is not at unjustified too. With most of the fundamentals supporting a bear run such as inflation, gdp, slow down, lack of buying interest by FII, lack of retail interest, monsoon etc it is not surprising to see such a downgrade. The only silver lining is that the said broking house is holding on the heat of slow down. In fact, the entire industry is holding back the heat which is very strange. The first casualty of such a downgrade will be none other than these high handed broking houses. Anyway, there is a freedom to express opinions and views. As far as I Develop is concerned, we are bullish and hold that market has potential to test new high in 2008. This is the reason we had been suggesting to stay invested only in B gr shares for the time being. The current pattern of the market is now suggesting that B gr shares too will hold for a while and there are chances that market may correct by 200 to 300 points if it breaks 4820 decisively for the factors explained by me earlier. It is very common sense that when it is made known to you that you would get things cheaper you would not try to raise the prices to buy costlier. But it is very clear that this time when market will take U turn this will start A gr now instead of B gr because A gr has seen enough value correction. Though Nifty has reached 4800, stocks are available at 2500 Nifty and hence the buying will start in A gr as and when starts. A gr cycle will support B gr cycle this time. The level of ownership is resembles to Sensex 8900 level and hence even if the Sensex falls to any level the value will remain in good stocks. Only few stocks will break the Sensex lower levels in coming sessions. Any attempt to trading in your owned shares (lying in D mat) could deprive you from regaining ownership later on. Money is like water and finds its way wherever if finds parking space. Conserve your assets. There are two main human sins from which all the others derive: impatience and indolence. It was because of impatience that they were expelled from Paradise; it is because of indolence that they do not return. Yet perhaps there is only one major sin: impatience. Because of impatience they were expelled, because of impatience they do not return.