The Grand Show Cairn India !

Oil exploration is not an easy job. In fact, it is one of the most complex operations in the world. One that requires tremendous experience, sound knowledge and management depth. What is more, world over, governments insist on prior experience before companies are even allowed to explore. Take the case of the recent BP oil spill. Despite having years of experience in the oil exploration industry, BP became embroiled in the world's biggest oil spill in history. 
So, it was mystifying when the Anil Agarwal owned Vedanta Resources announced its intention of acquiring 51% stake in Cairn India. After all Cairn India is into oil exploration. And Vedanta, which is into metals and mining, has zero exposure to the oil industry. What also works against Vedanta Resources is its questionable management. The company has already been accused of 'having contempt for the law' in its recent bid to build a bauxite mine in Orissa. 
This more than ever highlights how important quality of management is. A good or bad management (as the case may be) may be a game changer in terms of where a particular company's fortunes are headed. One cannot put a number to management quality. But the track record of the company and what the management intends to do to steer the growth of the company forward is important. Justifying a particular strategy by highlighting the huge potential that India has is one thing. But are these decisions taken by the managements in the interest of the companies and their shareholders? Many a time investors give a lot of importance to how high the share price of a company is likely to go. No heed is paid to the managements' intentions and capabilities. And that could be the biggest blunder that shareholders and investors make.