IPO at Your Risk !

Every one wants to make a quick buck in an IPO ( Initial Public Offer). A young couple told me recently that they had planned investments anticipating a killing through investments made in a spate of IPOs. Their youthful exuberance led them to believe that they had a sure shot approach to almost instant financial success.

Yes, a Tech Mahindra gave you a 307 % increase climbing to Rs. 1483 on March 23, 2007 against IPO of Rs. 365. But all stocks don’t have such attractive returns.

Business Today has “Six Questions To Ask Before You Take The IPO Plunge”:

• Are the promoters known and genuine? Check out past records, promises and performances, and criminal proceedings against them
• What is the reason for the IPO? Is the promoter cashing out, or is the business in growth stage and needs to expand? Is the sector growing? The company should operate in an industry that’s growing at a decent clip or has the potential to grow
• Where does the company stand? Do a comparison check with its industry peers. Take an in-depth look at the financials, balance sheets, profit and loss, industry growth, products and compare with the big and strong players in the segment
• How is it valued? Valuations should be fair and profit visibility should be near-term. It should not account for profits that are two-to-three years down the line. Ideally, it should be valued lower than similar-sized companies
• Is the business scalable? The company’s business should have the ability to grow in size over time, both organically and inorganically

Ask these questions and then take the plunge. Otherwise, your plunge may, over a period of time, cause you more grief than joy.

Filed under: Personal Finance

Numbers of Note

A column which grabs my attention in every issue of “Business Today” is called “Numbers of Note”. Here are shown stats. on different subjects spanning the globe including some very interesting trivia.

A sample of numbers from the issue dated April 22;

1. 16 lakh (16,00,000) :The number of people living in penury in New Delhi. Translates to 1/10th of the city’s population.
2. 163 million: Total teen population of India. Nearly 1/2 of India’s 1 billion+ population is under the age of 20.
3. 2.3 million: The expected stregth of the IT/BPO workforce in India by 2010.
4. 250 million: Total number of users of Yahoo !mail worldwide. The highest amongst email service providers. Gmail has 51 million users.
5. 1 million: The number of tourists expected to visit India for the 2010 Commonwealth Games to be held at New Delhi.
6. 500,000: The number of jobs expected to be created in the tourism, hospitality, aviation sectors because of the 2010 Commonwealth Games.

I have no doubt that our teen population of today, given the right environment and our value systems, will transform us to an economic powerhouse of tomorrow.

Filed under: Numbers

The End of Job Loyalty

Years ago, or should I say decades ago, it was fairly common for people to join an organisation -and stay there for the rest of their working lives!

What now are described as “old world” organisations thrived in a ” cradle to grave” culture where the loyalty of employees was pretty much assured. The reasons are not hard to find. Firstly, there were not too many opportunities. Secondly, corporate culture prevailing at that time, frowned upon transient job hopping. “A rolling stone gathers no moss” reflected the popular sentiment. In today’s world, most people do not subscribe to high levels of job loyalty. It’s the age of “Me. Inc”.

In a recent survey, almost 88% of the respondents said they are either actively looking to change jobs, thinking about looking or would take a new job if the opportunity presented itself. Not surprisingly, “more money “ranked as the No. 1 reason for moving to a new position. The other important draws ranged from more training opportunities, working with new technologies, more challenging assignments and a quest for more time for oneself to pursue interests and cater to non-job responsibilities. People who left organisations typically spoke of poor relations with their supervisor/others, broken promises, lack of communication and internal politics.

It was interesting for me , therefore, to recently meet a lady who continues to work in the same organisation for 34 years! There aren’t too many like her left.

Filed under: Trends