Dalal Street Investment Journal

Growth Is In The Offing

What you do today has an impact on your tomorrow. This is clearly reflected in India’s improvement, which moved by four spots in the global rankings for ease of doing business. India ranked 130 among 189 countries, an improvement of four places from its last year’s ranking of 134, according to the ‘Doing Business Report 2016’. The new rankings acknowledge the efforts undertaken by the NDA government to make it easier for entrepreneurs and companies to do business in the country. This is a clear message to all those critics of the government who were growing impatient that nothing is being changed at the ground level and that the government is engaged more in lip service rather than any action.

Furthermore, you have to understand the situation under which the new government has come to power. There was complete policy paralysis, economy was in a mess, its growth was drifting down, and most importantly, entrepreneurs and corporates were losing faith in the government. Under these conditions it definitely takes some time to get better. However, India still stands last among the BRICS conglomerate. Nevertheless, once this momentum is built, it is easy to improve conditions from here on. And I believe that in the next one year we will definitely be in the proximity of 100.

There are other factors too that are pointing towards improvement in the confidence of India Inc. For example, despite stock indices not going anywhere in the last one year, the IPO market is vibrant and has jolted back to life. Various companies, including InterGlobe Aviation that runs Indian budget airline IndiGo, Coffee Day Enterprises that runs India’s largest coffee chain Café Coffee Day, have raised money through the IPO route. Till now almost Rs 10,000 crore has been raised through this route and more is expected in the next two months. It will be the highest in the last five years and almost ten times what has been raised during 2014. This shows the vitality of the Indian capital market. The current result season also seems to on expected lines with not many disappointments. However, real improvement is still a couple of quarters away.

Last Diwali, we were expecting the BSE Sensex to be around 31,000 by this Diwali. However, it did not turn out according to our expectation. The prime reason for this was the stalemate in the parliament where some of the important bills necessary for improving the business sentiment were obstructed by the opposition party. Slowdown in China, fall in commodity prices and deficient rainfall too impacted the movement of the Sensex. Nevertheless, we may see a surge in the broader as well as frontline indices after the Bihar election results are out. I believe that the NDA will have a clear majority. This will send a right message to the entire opposition party and they will have to start supporting the government in passing important bills.

This issue is exceptional for us as we are carrying a special feature on banking. It covers interaction with banking leaders and their outlook on a host of things as well as where the sector is headed for. In addition to this, we have also done a comprehensive ranking of banks on various parameters. We are thankful to Mr Ashok Dutt, Ex-ED, Dena Bank, who agreed to be the Guest Editor for this feature.

We are also carrying in this issue an interview of Ashishkumar Chauhan, MD & CEO of BSE (Bombay Stock Exchange), who speaks about the several initiatives taken over the past few years to bring more investors into the fold while playing the role of helping the government to raise funds for development projects.

Finally, we are also giving a recommendation of seven stocks as part of our ‘Muhurat Buys’. Our last year Diwali’s portfolio managed to outperform the benchmark index by significant margins. Our portfolio has generated returns of almost 30 per cent while the Sensex in the same time has moved up by only 3.83 per cent. I hope that this year’s portfolio will also definitely outperform the market returns. Please do send us your feedback on comment@dsij.in.