MCX IPO something on table for Investor

As mentioned in last post ONGC auction price was quite high so it did not get response. Now compare that to MCX IPO. This company running commodity, Currency exchange in India put a sensible price for its IPO.
The response was huge. People investing got very few shares. I also got very few shares

The share were listed at 30% premium. Everyone acted sensibly- Investment bankers, promoters.
If  companies don't keep something for investor for immediate gain who would invest? Didn't anyone in ONGC or Indian Government realise this? Or the investment bankers should have told the management of ONGC.

It is easy to blame investors for poor response. Lets hope the new issue of NBCC is priced reasonably.

LIC, ONGC and policyholders loss

Indian Government divested stake in ONGC. It did through the auction route. But the investment bankers  kept prices  so high that investors saw no reason to subscribe. Finally LIC bailed out Indian Government. They subscribed to almost 90% of issue.

So LIC subscribed to issue which was surely a loss. This means that they won’t have  money  to invest in  good opportunities. They would make less money in investments.  So existing policyholders would suffer a loss. 


 The interest rates are high now. So good Bonds are available at reasonable price. These are bonds with high interest rate. When the rates go low the bond prices would rise. So LIC could have capital appreciation and good returns from interest. Now it is all gone.   So premium would be kept high.

So further loss of future business for LIC. A Pathetic way to run business  .So LIC policyholders are carrying load of Indian Government divestment programme. Most of them won’t be aware of this reality.

Ridiculous Social responsibility by Tata Power

Tata Power has been denied permission to recover certain expenses from customers.  The expenses claimed  were for corporate social responsibility activities.  So the company wants to take credit for philanthropy and recover that  money from Mumbai customers. Isn't it ridiculous? As a customer I do not want to pay for CSR activities selected by Tata Power.

Why TATA Power doesn't spend from its profit amount?  Somewhat similar case is with other companies.

Lets take proctor and Gamble India. In the advertisement they declare about giving some money for
building schools and infrastructure in India . Buy a product from P&G so some amount is given for this activity.

The company does not specify how much amount it spent on the activity in last couple of years. In Short, Give me the money for my product. But don't ask how much is given for this activity. No information about how many schools have been built and location. No transparency.  There is no legal requirement to give that information. But why not give it as a good company.

Why not duplicate Berkshire Hathway model. Shareholders select the CSR activity they want to contribute. Berkshire gives money from the share of shareholder not from the profit of the company. They do not want to be selective in CSR activity contribution.

So select a good model. Don't be hypocrite.