Deep Impressions

      Safeguarding Indian Realty from Evergrande phenomenon     All published in The Print   While the above issue does raise concern, however,  before one addresses the above, a more fundamental question needs to be answered : “Why do developers end up borrowing more than they can chew ?”   And the answer lies in the structural uniqueness of real estate business.     1.       Capital requirement remains unpredictable     A developer typically plans his funding through three sources :   ·        Own equity ·        Borrowings from banks etc. ·        Customer Advances      Owner’s equity has physical limitation, bank borrowings too are limited by regulatory norms. Since customer advances remain unpredictable, financial closure quite often remains a puzzle.  Further when  the projects gets completed, developer’s capital requirement comes down significantly, therefore, developer would prefer capital that can be repaid after the project.    To address all the above concerns, developers en

Telecom and Real Estate : A strange case of similarities     अति रूपेण वै सीता चातिगर्वेण रावणः। अतिदानाद् बलिर्बद्धो ह्यति सर्वत्र वर्जयेत्।।     Extreme beauty of Sita,  Extreme haughtiness of Ravana,  Extreme charity of Bali  were the cause of their troubles.  Therefore, extreme is prohibited everywhere.     ~ Chanakya Neeti (Chapter 3, Shloka 13    )     The summary of the above i.e.  Ati Sarvatra Varjayet    (extreme is prohibited everywhere), has brought two sectors with no commonalities – Telecom and Real Estate – on the same table. The differences among these are, of course, very obvious. The former, being technology driven, represents the modern and experiences things moving at the speed of light    Real Estate represents the old and is slow in reacting to events. If Telecom costs are about a small monthly charge and Real Estate purchase is about biggest expenditure in one’s life. Differences are so much palpable that according to a few analysts the two are set at cross purpos

    Medicine, Money  & Morality : A Contrary View       There are two vociferous demand these days :   ·        a loud cry against the high prices of medicines and health essentials  ·        an appeal to make covid vaccines off-patent      The former complains against lawlessness ; the latter demands a temporary lawlessness.  The former is creating waves domestically and the latter internationally.  Strangely, the both have a common unanswered question.     Yes, we all agree that one should not be greedy, one should not be insensitive and one should not be adamant in these times. And therefore, there is a strong case for the covid vaccines to go off-patent. However, there is also a counter argument. It says that before giving the waiver, one should also consider the implications for the next pandemic.    Will during the next pandemic, investors put billions of dollars in inventing vaccine if they know that the vaccine they would fund could go off-patent within a year of invention

Let the virus not 'SIP' through middle class savings Let the virus not SIP through middle class savings India, as of now, remains amongst the less affected nations by Covid 19.    However, the heart breaking fall in sensex has ensured that Corona jitters reach larger number of middle class savings – enabled mainly through the exposure to SIP (Systematic Investment Plan). In 90s, only a small percentage of household savings were invested into stock market. To achieve government’s agenda of shifting larger share of household savings into financial instruments from hard assets like gold and real estate, the Mutual Fund    (MF) Industry undertook a major PR exercise and advertising campaign focussing on benefits of long term disciplined investing in equity MFs. And since every mass revolution requires an icon, SIP became the icon for this revolutionary shift in investment habit. As a result, majority of Indian middle class (from a travel agent to techie