In recent years, we have seen a rapid change in telecom services. It is almost a revolution. In one lifetime, I have gone from waiting patiently for a phone connection (it took years after getting all documentation right), to reduced queues for phone connections; from assisted dialling to automatic subscriber dialling, booking trunk calls, to STD, to differential pricing on calls (remember those calls after 10pm at quarter rates?); from expensive mobile phones, to affordable mobile phones and now a choice of operators in every circle on all services. We have come a long way but this has unfolded over 30 years since I got my first phone at home in my small town, Hubli. The change can sometimes surprise you, even though you are used to the convenience of modern telecom. Here is an example.
Recently, I left Pune in the morning for a routine business trip to Mumbai. I parked my laptop in the rear seat and got into the more comfortable front seat with the taxi-driver. We had driven for perhaps 15 minutes and I wanted to SMS a friend when I discovered that I had left my mobile phone at home. I told the driver to pull up, looked at my watch and realised it would cost me 30 minutes to go back and start over. I nervously asked the taxi-driver if I could use his phone to make one call and in the same breath told him I would pay him. He let me do that and we started off on the journey. I didn’t call. I sent an SMS to my friend asking him to call me back at the number. A few kilometres later, the driver veered off into a petrol pump and went to a little shop in the far corner towards the exit. He acquired a Rs60 card, scratched the mask with a coin and sent an SMS to some number. We instantly got an acknowledgement that the charge was topped up. With a grin on his face, his chin held high, a protruding lower lip and a hint of the paan showing, he mumbled that I was set for the day. What the man had done during his minute-long pit-stop enabled me to pay for and work for a day - with his phone. Back in the shop, a little board said “it’s a good idea!” which, indeed, it turned out to be. I didn’t use the phone until 8 that morning as I was a bit amazed with this rapid sequence of events that eliminated my worry of not having carried along my mobile phone. My day went well and I did what I set out to do. But even today I wonder about how well the taxi-driver has assimilated the mobile technology that saved my day.
I’d like to believe that this sort of progress is now inevitable. The press has been glorifying Dayanidhi Maran’s actions as the main reason for the proliferation of telecom services. I am not sure if we can attribute it to him. The key is enabling multiple providers and fostering competition. More the merrier. At least for me. I am bullish on India.
D Venkatesh, Pune, by email
Music & Accounting
This refers to “Notes - musical & accounting” (MoneyLIFE 7 June 2007). In my student days, while learning about accounting and mathematics, I noticed slow background music helped me in understanding these subjects better. If you are doing online trading, slow background music may help also in more concentrated thinking and may result in more profits but do try it at your own risk! I remember, in the old and golden days, you could listen to music of your choice at many restaurants by inserting coins in a Juke Box. Everybody sitting in the restaurant used to enjoy it. Now with Walkman, Ipod, mobile, etc., music has been reduced to something only for personal pleasure.
Mahesh Kumar, Kolaba Chambers, Connaught Place, New Delhi, by email
I have been reading your magazine for about a year now. I also subscribe to Outlook Money. From Outlook Money, I get elementary knowledge about new investment opportunities. For unbiased analysis, I read MoneyLIFE.
I eagerly look forward to reading the special interviews (Careers: turning point). The interviews are in depth and inspiring. Keep it up. I look forward to an interview with Capt Gopinath, MD of Air Deccan. Hope to read more about ULIPs focusing on its mis-selling by agents. Please do a special feature on how even LIC took many investors for a ride on Money Plus.
Also, MoneyLIFE helps me in making an independent investment decision. Do keep us updated about the series of capital protection funds being launched or recently launched. Also publish a page of glossary, which would help readers understand some financial concepts.
Give a chart about Mediclaim Policy offered by various companies, chart on interest rates for auto, car and home finances. It helps a lot.
I have written a lot on consumer rights during my days as a journalist with PTI and Business Standard. Now, I work for Down to Earth magazine published by Centre for Science & Environment, New Delhi)
Sandip Das, Mall Road, Indirapuram, Ghaziabad, UP by email
Thanks. We will soon put a glossary of terms and your other suggestions on our website www.moneylife.in -- Editor
Long-term Picks, Please
I have been reading your magazine for a long time. I am a long-term investor. I really get confused by your stock recommendations in each issue. I would like you to give some suggestions for long-term investors like me. Can you select the stocks in large-, mid-, small- and micro-cap to buy for a long term (2-3 years), when the market falls?
Manmohan S Negi, by email
The last two issues of MoneyLIFE were just too good. Your stock picks of Kotak Mahindra and Centurion are very good. Another assured growth story in banking is Yes Bank. Excel Crop is a good idea but will remain at the current level for the next few years. I think the current market is more for high-quality growth stocks. The last few interviews (Alka Deshpande, Shivajirao Patil, Keki Gharda) were all wonderful. I expect an interview of Medha Patkar or Dr Abhay Bang. Congrats for your new section on SME. But also cover interviews with small, listed companies. Sucheta wrote about loans to needy people. I remember, a few days ago, I went to Prime Finance’s well-furnished office near Mulund station (in Mumbai). The interest rate was 2.5% per month. They charged 3.5% for 1st year and 1.75% for the next year. This is a market where the poor and needy have to pay more.
Santosh Mhamunkar, Mumbai, by email
Whose Side Is SEBI On?
I would like to bring to your notice how retail investors who apply for IPOs are suffering losses due to the inefficiency of intermediaries like brokers (who do not bid though application are submitted to them on time), bankers (who misplace the cheque or DD), registrar to the issue (who wrongly rejects the application though applications are perfect for allotment). Many investors who apply for IPOs do not inquire about why their application is rejected, though they were eligible for allotment. Either they do not know why the application got rejected or they may be small investors who do not have the knowledge and resources to find out and fight against injustice.
Indeed, it is very difficult to know the reasons for non-allotment. If any application gets rejected, the registrar to the issue does not give reasons for the rejection. Investors assume they have been unlucky.
This happened to me and my client. I am a sub-broker. One of my clients applied for Idea IPO (application no. 72521612) for 630 shares. Though he was eligible for allotment of 172 shares as per the basis of allotment, he did not get any shares and received full refund. On inquiry, the registrar told him that his demat account was blocked by SEBI and he was asked to get in touch with the depository participant India Bulls. The DP confirmed in writing that the demat account was active and there was no ban by SEBI. In spite of writing several letters to the registrar Bigshare, they refused to reply in writing. It shows that they are covering up their mistakes by keeping quiet.
The same client has also suffered at the hands of India Infoline, the collecting agent, who did not bid for the IDFC IPO, where his application was rejected and money refunded, though he was eligible for allotment as per the basis of allotment. After writing several letters to India Infoline and SEBI, he got a letter from India Infoline offering shares 13 months after the IPO had closed. But the letter was a false promise. India Infoline has not given IDFC shares. It is ignoring the investor’s complaints - as is SEBI.
Another investor I know applied for the Opto Circuits issue where the banker, ICICI Bank, misplaced the demand draft causing loss of opportunity and interest. He has now filed a case in the court against ICICI Bank. It is very difficult for the investor to get justice in these types of complaints. They can file complaints with SEBI and investor helpline but it simply does not work.
Some people sincerely try to get the grievance redressed. Praveen Raghvan (Deputy General Manager, SEBI), Jeevan Sonparote (Deputy General Manager, SEBI), and MoneyLIFE did their best to get the complaint against India Infoline addressed. But companies like India Infoline get away by giving vague replies to investors, SEBI and media. Also when a complaint is sent to stock exchanges, no action is taken. Two years after closure of IDFC’s issue, investors are still waiting for justice. I hope SEBI will initiate measures to ensure justice for small investors.
Hitendra Kumar Jain, Bangalore, by email
In our 7th June issue, we had labelled DSP Merrill Lynch Mutual Fund’s Equity Fund Scheme as a laggard. The article, “10 Laggards in Any Market”, identified the worst performers in terms of returns coupled with their record of underperforming their benchmarks in 7 distinct bull and bear periods that we identified in the last four years. In response, Mr S Naganath, Chief Investment Officer of DSP Merrill Lynch Fund called to clarify that this was incorrect. The scheme is a dividend scheme not a growth scheme, even though it is called an Equity Fund. Therefore, it should not have figured in our sample.
We rely on the database of Mutual Funds of India (MFI) for the raw data, which classifies this scheme as a growth scheme instead of an income scheme. MFI also does not take into account the re-investment of dividend as an option, resulting in incorrect calculation of returns. In all MFI analyses of growth schemes, this scheme of DSP Merrill shows up as a growth scheme. We have written to MFI for clarification and suggested that they make appropriate changes to the database. When reclassified, the Scheme is not a laggard.
Value-added service (VAS) provider OnMobile Global has sold 8% of its 35% stake in VerSe Innovation Pvt Ltd for about Rs10 crore. OnMobile now holds 27% stake in VerSe.
During 2009-10, OnMobile sold 67,475 shares of VerSe Innovation worth Rs3 crore.
Mumbai Angels is planning to invest in Kolkata-based Milk Mantra Dairy Pvt Ltd. No financial details were provided.
Established in 2009, Milk Mantra has raised about $5 million through debt and equity to start its dairy business. It is planning to launch fresh milk in cartons, where fresh milk is available only in plastic covers.
Milk Mantra aims to provide direct-to-home service of fresh milk packed in a more hygienic manner and has tied up with about 50,000 farmers in Orissa to procure milk. It expects to start business this year and in the initial phase it will be available in Kolkata and Bhubaneswar.