Notes From India | stockbee


Notes From India

After spending a couple of days in Bombay (or Mumbai) , I am now based in Pune. Pune in last decade has grown up to be a major industrial center and alternative to Mumbai.

One of the biggest problem I have encountered so far is finding a reliable broadband internet access. That should surprise most considering India's reputation as IT outsourcing destination of choice worldwide. For residential use broadband is still in infancy here. The price is very high. The procedure is so bureaucratic that as a tourist you can forget about getting a connection in hurry. It requires local tax ID number, photograph and proof of residence. The coverage in patchy. The alternative in Cyber Cafes, which are in most cases very slow and expensive. Plus most don't allow you to plug in your laptop in to their network. I will have more about my experience of trying to get broadband later.

Here are couple of things I noticed based on my few days of observations and interaction with people here:
  • Stock market and commodity trading boom- look like every single person and relative I interact with here can not stop crowing about his or her exploits in the stocks and commodities market. I have seen this movie before during Harshad Mehta days, we all know of the consequences.
  • Watching CNBC in India: This is latest craze with even my mother in law actively tracking the ticker to see how much her share has moved higher. Last I counted there are around 7-8 channels devoted to only stock market coverage.
  • Organized Retailing : This is the biggest trend and it has legs. The mom and pop stores have dominated Indian retailing for centuries. For the first time organized, multi format , modern retailing formats are being set up and I visited some of these outlets in last couple of days and the crowd in unbelievable. I will have more details on this later.
  • Low cost airlines: When I shifted to USA in 2001, there were only 3 domestic airlines, today you have dozen airlines and hundreds of flights to small locations, never ever serviced by airlines before.
  • Building Boom: This is the biggest building boom I have seen in my lifetime and even the old people like my father and father in law believe that this is the biggest building boom in last 60 to 70 years in India. Every where you go, it is one big construction zone. From small towns to big cities, you can not simply miss the incredible building and infrastructure boom going on here. Residential and commercial property values have gone up so much that when I hear prices I am shocked. In last 6 years prices are up 1000% plus in some areas.
  • Farm land becomes hot commodity: Farmland closer to cities, mini cities, towns and industrial areas is in so much demand, that most farmers I spoke to cannot believe their luck. This has had significant social implications as the high prices are leading to family fights and lawsuits. Those who have sold their land have made so much money that they do not know what to do with instant riches.
  • Mobile Phones: 10-15 years ago you had to wait 2-5 years to get telephone connection. Today cellphones have replaced landlines. Most of friends and relatives I visit have no landlines but several mobile phones with every member owning mobile phones. Mobile phones are everywhere from the rich to poor owning one in cities. The technology used here in the mobile industry is much ahead of the technology in USA, as these networks were set up in last 10 years. Youngsters have taken to mobile phones like fish taking to water. My niece and nephew, who stay and work in Mumbai were telling me that after rent the second biggest monthly expenditure for them is mobile phone. Their mobile phone monthly bill is almost twice that of their monthly food bill.
These are some of my initial reactions and it is fascinating to watch so much change in just last 6 years since I relocated from here. It is an economic miracle at work.


Jim said...

thanks for the reports.

KN said...

Hi Pradeep

when I went to India two months ago it was my first time, so I had no idea how the country changed in the last few years.

In Pune I could see buildings going up like mushrooms, also the Taj Blue Diamond Hotel, where we stayed was fully booked with businessmen all over the globe having meetings with their Indian counterparts.

There was also a huge IBM convention for a day in this hotel, so yes business is definately booming there.

Driving between Pune and Mumbai one could also see building work going on.

My only concern is the infrastructure, the roads are just not up to scratch for the sheer volume of traffic.


market operator said...

In New Delhi, there is a hotel called the Ashoka hotel, it was a state owned hotel for years. Although it was rated 5-stars, it was not as nice as the privately owned hotels (Hyatt, Le Meridien, etc.) On my last trip there about 2 years ago, to my surprise the hotel had a Bentley & Lambourghini dealership in the LOBBY. I was amazed!!

Semsons said...

It's amazing to see the same things at work in differnt places.

In Spain has been also a huge building boom during last decade. A country with about forty million people has built more new houses than the whole EU. Nowdays this boom is coming to the end, and there will be eventually a crash in the economy driven by this huge bubble.

I guees the rally in building in India has legs, it'll last many years. Finally it'll crash. The same story around the globe.


QUIKTDR said...


Besides using the 4% breakout PCF, what other PCF do you use in an EZScan to differentiate recent IPO stocks from others?

Thank you in advance!

DebugGuru said...

Thanks for the report. I am sure when I will go back to India, it will be big shock to my system. I believe the economic boom is in big cities only. People in small towns are not really getting benefited from this. The gap between rich and poor is widening in India.

QUIKTDR said...

I am going to answer my own question. If I am looking for IPO's from last 90 days I am going to sort by C90. Anything that doesn't sort true means that stock has been trading>C90

Prashant said...

It's nice to know that you are from Pune 'cause I'm from there too :) The last time I went there was in Dec 2005 and yes, there was a lot of change (malls, real estate boom, etc.). It would be nice to hear more on the real estate scene there. From what I have been observing, it looks like the wild price appreciation has stopped (like it happened in mid 2006 in US). So now, it might go down very slowly unless the economic outlook in India changes, which is a possibility.