Friday, October 21, 2011

Erosion of shareholder value


Here's an example of how shareholder value is destroyed by PSUs on a continuous basis.
I've come to a conclusion that PSUs do not have the shareholders value in mind at any point of time.

 MOIL:  Share price since its IPO.

If this is what is going to happen, I would prefer there is no disinvestment in the PSUs. 

Heights is how the hell did the lead book managing bankers ( IDBI Capital, Edelweiss Capital and JP Morgan India in this case) manage to price the shares so high. One should learn from these companies to create a hype, make the pitch and sell a useless product with audacity. These I believe are the pure markting companies, guess even better than those FMCG companies. These bankers know how to use their brand power to mobilize money.  A perfect way for government to get public money.

I was thinking of investing in MOIL but thankfully I didn't do so because of my habit of delaying.
No investing in PSUs.

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