Food for Thought shared in last 3 months by many and including me finds place prominently in newspaper , why IPO's not coming inspite of Nifty is at all time high

Food for thought In addition ...of higher equity, longer tenure, repricing, as per latest central bank suggestions,(see the linked news clipping) of Economic Times what is more important is special situations fund and special situations management company with Govt creating a fund for equity support with a Repayment /buyback clause. It's again business and governance by the big daddy as head of the family. This can be achieved in the same fashion as in case of large psu funds are permitted Mode, contribution and management like Major Mutual Funds are managing pension, providential fund money. Is it not the same state of affairs when PSU's were started, nationalisation happened, developing and then selling off at premium. Most developed and saturated economies like USA, Japan have been able to sustain only because of Debt padding and developed Debt Market, with Japan having 6trillion USD of outstanding listed and tradeable debt. US bailed out banks and large Corporates in 2008 crisis. Many of the banks and corporates have since returned the money back to Govt..that was short term structured debt in the form of quasi equity China has done recapitalization of more than 100busd....China has been appreciating its currency every year to attract FDI, it has today 1.5trillion USD of reserves. Europeans and tax heavens have always kept their economic and currency stability .Switzerland is going for refrendum to have 20% assets in Gold to strengthen the currency and trust of people. The question that needs to be attended or may be considered as root cause is the fact that most of the industries worlwide gives PAT at 5-15% per annum and debottlenecking, expansion, investments, dividends etc if all are taken care of out this, very little is left. Any new capital intensive project would need 30/40% capital, and 5 years of construction /go live period. Considering cost over runs, lack of transparent and unclear norms and eventually public interest litigations and supreme court showing the way, in these 5 years allocation and availability of surplus out of PAT towards new project is always a challenge and this needs support and that is where equity support by way of conversion is suggested again. Most of the event of default clauses and Common Loan agreements already provide for this to happen, still execution is a challenge . The fact that 3rd world countries are developing with vast liability and responsibility of just towards basic needs of people and humanity, super natural profits beyond a certain point comes out of fringe market and fringe price dynamics leading to shorter industrial and product life cycle leading to inflationary conditions, stagflation and maybe then recession...with no one really knows where and when to draw the thin line and dilemma or catch 22 situation continues , for some solution is interest rate, for some it is liquidity etc but the simple fact is the quantum of precautionary money, charm and incentive of satisfaction of buyer. It is another IRONY when bankers say that there is asset liability mismatch and banks don't have long term funds....It is unfair to ask an individual or a corporate to make a fixed deposit of 30 years. Even with re-pricing clause. So the money in long term can come from PF's, pension funds, endowment funds, government treasuries, trade surpluses, such international funds , government sovereign funds, insurance companies etc. Such long term funds can be made available and brought in by a nation only when inflow and outflow is made simple, listed, treadeable, and condition of delivery of similar maturity, average maturity duration paper with an acceptable deviation in maturity and rate of interest. Carry Trade and interest rate will settle and balance the equation as long as surplus on current account and capital account is managed, which will help give room for appreciation in currency and creating a cycle of appreciating REER which even now suggest that INR is over devalued. Happy investing and saving so that precautionary money is no more required, for a 30 year Fixed Deposit. Even if one goes to a bank for a 15 year FDR...banks refuse ...they say RBI doesn't permit...this has not gone into the ears of many 3rd world central banks. Posted By Dinesh to Dkgoelenkash Views at 12/05/2014 03:01:00 AM; views are purely personal and with disclaimers.