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Is Power is the new dotcom?

Is Power is the new dotcom? The report in some media papers refers to the surge in the number of companies of all kinds wanting to get into the power business. This is a scary scenario. This is given that power is not an easy business to pursue.With a host of regulations and execution risks that even large power companies face, new players will have a tough time making any business sense of their overtures.

Forget the small companies, i am also wary of some large companies that recently floated IPOs to raise money for their power sector plans and this is where i believe things could turn out to be worse than the dotcom bust. With backgrounds in non-related sectors like real estate and trade, some of these companies are just jaywalking into the power minefield. And when they would realize their incapabilities in the future, probably it might've been too late for them, and their investors.

It is important to stay away from such companies that are foraying blindly into the power sector. I agree that the potential to grow can be huge. But so will be the risks!

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