Here it is. After $20 billion in nine monhths till December, courtesy the crony capitalists much in disfavour elsewhere, India's exports of management and corporations with outward M&A have finally been funded and FDI taken up a notch higher in one stroke. After suffering a lot of ignominy watching the world spiinning from the sidelines, cheerleaders for the World's third largest Economy got a reprieve par excellence when Mukesh Ambani's Reliance that had almost been given up on in Exploration and Drilling got a 50:50 JV with none other than cash rich and ego bruised Brisitsh Petroleum, now BP plc. BP paid $7.2 billion for pipeline building and marketing rights for 23 blocks of mostly GAS from the looks of it and in one stroke funded the entire Mukesh Ambani funding deficit, Next, Big brand Anil Ambani to save the world with a few movies and we will back be in the running for no. 2 as China struggles with inflation, hot money and hot headed banks not necessarily in the order the world lists the problems.

The BP deal is worth $9 billion including a $1.8 billion component for performance based on profits for the JV and promises some private investment in pipeline infrastructure for the nation as well. All in all a good deal with almost no downsides unlike the almost extinct Cairn Vedanta deal as her e the PSCs (Production Sharing Contracts) have been fairly evaluated and sold without shadow equity transactions usurping the valuation and a premium which ONGC already admits to be a honest premium on the said valuation of OIL well contracts. Reliance finally gets the world a big ticket story after a load of shale gas bumping up its trunk and we are all happier for it

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Here it is. After $20 billion in nine monhths till December, courtesy the crony capitalists much in disfavour elsewhere, India's exports of management and corporations with outward M&A have finally been funded and FDI taken up a notch higher in one stroke. After suffering a lot of ignominy watching the world spiinning from the sidelines, cheerleaders for the World's third largest Economy got a reprieve par excellence when Mukesh Ambani's Reliance that had almost been given up on in Exploration and Drilling got a 50:50 JV with none other than cash rich and ego bruised Brisitsh Petroleum, now BP plc. BP paid $7.2 billion for pipeline building and marketing rights for 23 blocks of mostly GAS from the looks of it and in one stroke funded the entire Mukesh Ambani funding deficit, Next, Big brand Anil Ambani to save the world with a few movies and we will back be in the running for no. 2 as China struggles with inflation, hot money and hot headed banks not necessarily in the order the world lists the problems.

The BP deal is worth $9 billion including a $1.8 billion component for performance based on profits for the JV and promises some private investment in pipeline infrastructure for the nation as well. All in all a good deal with almost no downsides unlike the almost extinct Cairn Vedanta deal as her e the PSCs (Production Sharing Contracts) have been fairly evaluated and sold without shadow equity transactions usurping the valuation and a premium which ONGC already admits to be a honest premium on the said valuation of OIL well contracts. Reliance finally gets the world a big ticket story after a load of shale gas bumping up its trunk and we are all happier for it

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Brokerage reports continue their 2010 bias, DB pre calling a new bull run last week and CIti and CLSA now betting on a pullback, Citi betting on banking's new value based outlook after the crashing spiral and CLSA on much of the other sectors including IT With PE plays and MNCs making a lot of the interesting retail lifestyle sector in the sub continent and questionable practices dogging telecom and real estate, subsidised pricing dogging energy and chemicals (fertilisers) the public markets depend now more than ever on the mainstream large caps which would be populated in 50% of the market by the banks. Despite slow credit growth ( i.e. slower than our own benchmarks of 20% though better than everyone else) banks in india including ICICI Bank and SBI underline profitability and maintaining NIMs of 3-4% is pretty much run of the mill for us.

Of course in theexploding market cap pie , a lot of healthcare education and retail consumption(lifestyle) stories will add large values but they would never steal the  preeminence of India's self sufficient and savvy banks compete effectively with MNC players and leverage rules hat are stacked against them in the global markets. The 90% unbanked population has mobile banking, the urban poor have cash withdrawals at their grocer and most Tier I, 2 and 3 towns have access to consumer credit for cars, homes and other personal consumption. That is not to say we can continuing to grow into the hitherto unbanked, much as no one expects Indian IT to really penetrate much more of the global IT services market, but we remain the #3 economy and we would be growqing faster than most. also our credit needs and nvestment needs have much more literate efforts behind them egging them to grow faster as we continue to expect more than 20% growth from any above average public company in the country. That is the imperativer for the value buyer which our markets serve and it would not take more than a blink of the eye for buying to catch on where selling has been paramount in the seemingly tired 2011.  

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The opinion piece below predated the deal particulars which show the promoters buying the 26% stake from Honda based on bridge loans from GIC and Bain who will then get the 12% stake from Hero at 1600 per share to help them pay off the loan Thus the PE pricing is more reflective of the valuation while getting PE quick gains from the bridge loan interest, while the Hero promoters have paid off Honda based on a much lower price.

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