This one is for Blogreader Salafi from Chennai ~ Goldstone Infratech @ Rs 10 ~ Open Offer at Rs 23 or at Rs 43 ? Supreme Court will decide ~ but it seems a Win-Win either way.

Background of the Open Offer

On November 4,2008 Saffron Capital Advisors of Mumbai ,as Manager to the Offer and on behalf of the Board of Directors of Goldstone Exports Ltd (GEL) the Acquirer (now Trinity Infraventures),issued  a Public Announcement in the Newspapers that the Acquirer makes an Open Offer for 20% of the Equity of Listed Goldstone Infratech Ltd (GIL) (erstwhile GoldstoneTeleservices) at the Price of Rs 23 per share

On December 16,2008 SEBI advices the Acquirer to use October 29,2008 as the Reference Date to determine the Offer Price

It was on this Date when Shares were allotted to GEL on conversion of the Share Warrants they held ~ The Offer Price arrived at  was Rs 43

GEL had used the Reference Date of January 25,2007 when the Board of GIL had decided to issue 1.5 cr Share Warrants to GEL which could be converted into Shares at Rs 22 within 16 months of the allotment ~ GEL held 9.51% of GIL’s Equity of 2.1 cr shares of FV Rs 4  at the time and the conversion would take their stake to 47% ~ The Conversion took place on October 29,2008 when GIL issued 1.5 cr shares to GEL

GEL disputed SEBI and appealed to SAT which admitted the Appeal on February 16,2009 and later upheld SEBI Position ~ GEL then took the matter to the Apex Court,Supreme Court in 2009 (Civil Appeal 7666 of 2009)

On hearing Counsel on August 13,2012  the Court ordered to put it up for Final Disposal on October 10,2012 ~ It has been listed but never comes up for Hearing ~ the next listing date is July 9,2013  ~ so hearing is actually overdue after 16 ordered listing till date  in 2009 (1),2010(2),2011(5) and 2012(8)

An Investment Opportunity to consider in such a situation

GIL is available at Rs 10 ,near 52 Week Low of Rs 9 ~ 52 Week High was in October 2012 at Rs 17.60  on BSE ~ It is also listed on NSE

Market Cap is Rs 36 Crs ~The Volumes are not to heavy ~ Two Week average is below 5000 on BSE and yesterday it was under 1000

Current Shareholding of GIL as at March 31,2013 ~ Equity is Rs 14.43 Crs of FV Rs 4 comprising 36080737 shares

The Open Offer will have to be made to Non Promoter Shareholders to pick up 20% of the Equity

Thus 20% of Equity works out to an Open Offer for 7216147 shares => is @ 40.7% of the Non Promoter Shareholding of 17733222 Shares

This would mean that for every 10 shares held ,the Open Offer Success Ratio should be 4 Shares

Now lets assume you invest in 10 shares of GIL at current Price of  Rs 10 => Investment is Rs 100

This will how your Returns will pan out if  Supreme Court decided in favour of GEL or SEBI

If you sell the remaining 6 Shares at expected Post Open Offer dropped share Price of  Rs 5 (see reasoning below )you’ll get Rs 30 ~ so if GEL wins then the returns on your Investment of Rs 100 would be  Rs 22 or 22% (Inflows Rs 92 + Rs 30) and in case SEBI wins as is expected then the Returns are quite handsome at 102% (Inflows Rs 172 + Rs 30)

It’s a Win-Win in either case

 However Risks You should Consider

• Holding Period ~ It could stretch from a few Months to  two to three Years as the Supreme Court has a heavy backlog even though this Case was filed in 2009 and now up for final disposal at the next hearing ~ it keeps coming up in the cause list but because of the backlog it simply never comes up for hearing
• GEL may not Honour the Open Offer ~ This may appear as a Real Risk as the payout is Rs 31.03 Crs at Rs 43 in case SEBI wins  and Rs 16.6 crs at Rs 23  in case GEL wins ~ have not considered  any Interest from 2009 ~ However it has an Escrow put up pending disposal of the case and the Goldstone Group,even in a declining profitability scenario, may have more to loose if they do not honour the Open Offer committment
• Post Open Offer the GIL Share Price may nosedive sharply from the current Rs 10 ~ Let’s figure out how much could it be  by looking at the Earnings and Book  ~ These are the Financials and Relative Valuations

Financials & Valuations (Rs Crs unless specified)

I have assumed that GIL will maintain dividend of 5% or Rs 0.20 per share even in FY 13 despite declining Profits

Potential Share Price Decline Post Open Offer

GIL’s Share Price is currently at Rs 10 to reflect some buoyancy in this Open Offer Pricing Dispute Situation pending with the Supreme Court  ~ My sense is that Post Open Offer the Share Price of  GIL will drop sharply from current Rs 10 to reflect declining profits ~ However if it maintains Dividend and because Book yet remains at Rs 20+ the Share Price may not drop to Rs 2.50 which would reflect Earnings Multiples of 8 on an EPS of Rs 0.36 for FY 13 and may remain above Face Value of Rs 4 and therefore can assume a post open offer share price of Rs 5

GIL  continues to face many Operating Challenges ~ it has invested Rs 6.01 crs in a wholly owned subsidiary TF  SolarPower Pvt Ltd which has incurred capex of Rs 9 crs till date but work has been put on hold since 2012  because of falling solar module prices and a troubled solar energy sector ~ In it’s Business of Polymer Insulators ,GIL is facing competition from cheaper imports  ~ Power Sector Woes continue and despite huge Potential for the Insulator Business because of the ambitious 12th year plan for Power Generation,it looks unlikely GIL will see any significant uptick in business in the near term ~ It also has Long Term Debt of Rs 30+ Crs to contend with ~Interestingly the Debt is also secured by Equitable Mortgage of Immovable Property and Corporate Guarantee of the Acquirer in the Open Offer and Chief Promoter of GIL  ,namely GEL  now called Trinity Infraventures Ltd

However what caught my eye and  intrigued me is that despite Profits in FY 12 their Consolidated Networth dropped from Rs 99.27 Crs+ to Rs 73.12 Crs + and the reason is that they have written off as Impaired Obsolete Machinery of a huge Rs 27.22 crs ! because they have discontinued Jointed Telecom Kits and BPO Business ! ~ they say nothing was recoverable !~I checked their Fixed Assets Schedule and even over Rs 6 crs of Computers have been knocked off ~ suspicious if you connect this with Judgement Day approaching in the SC where if Goldstone Exports,now Trinity Infraventure,loses they will have to shell out over Rs 30 Crs to pick up 20% Equity of GIL

And therefore I don’t think Goldstone will  put their hands up ~ they will honour the Open Offer whether they win or SEBI does

On April 1,2013 GIL announced recently that their Company Secretary and Compliance Officer , Srikanth Adalat ,had resigned as on March 30,2013

Adalat goes even before the Apex Adalat gives a verdict !

Yet what’s the Risk in GIL at Rs 10 !

Cheers !

P S : Salafi,if you make some monies on this ,do be kind enough to remember me ~ and email me privately ~ my email is on this blog ~ and I shall tell you where to send my Fees !

USA Debt Ceiling is US $ 16.7 Trillion ~ President Obama & the Democrats want it raised while Republicans want Spending Cuts

This is a Simple way to understand the Fiscal Cliff that USA is standing on right now

Last Time USA bought Time not to fall of the fiscal cliff from January 1,2013  with both sides agreeing to disagree and deferring the call to raise the debt ceiling down the road in 2013

Both sides are not any closer to a compromise yet but will have to deal with before September 2,2013 or else the financial implications not just in USA but Globally are far weightier than what Lehman’s Collapse triggered in 2008

Quantitative Easing by pumping in liquidity even if it has meant excessive printing of Currency,has been the panacea prescribed by the Fed Governor Ben Bernanke and the Democrats as the way forward for the Economy to revive  ~keeping Interest Rates Low with Fed rate near Zero, encouraging Investments and Consumption ~ Falling unemployment rate from near 10% levels to current 7.5 % as in April 2013  &  Inflation rate raising it’s head even if ever so slightly has been seen as signs of  a recovery and that QE Measures are making an Impact ~ The Record US Dow at 15000+ is being seen as a reflection of a recovery ~ Housing Prices are showing signs of a Revival

Is this a sustainable Reality or just an Illusion ~ Does nobody realize that US is simply trying to solve their Huge Debt Problem by Resorting to More Debt  and leveraging the US $ Status as being the World Reserve Currency to keep it’s Mint running 24 by 7 !

More than half the US Debt has been created after President Obama assumed Office for the First Time and now has been re-elected for a second term

For example if you do use the CPI Inflation Calculator in the above Inflation link it indicates that US $ 1 in 2008 (Lehman Collapse Year) has the same buying power as US  $ 1.08 in 2013 ~ That’s not really any significant rising Inflation that should indicate with conviction of a sustainable economic recovery in progress

Unemployment Rates Falling too a good indicator of jobs market becoming active again but one has to factor in the new stringent  US Employment Restrictions that have been prescribed for overseas recruitments and outsourcing  ~ and the fact that US has signed Big Business contracts in Billions of Dollars with India in particular in the field of  Aerospace and Engineering and Nuclear Technology in particular has created thousands of jobs in USA ~ and one more point ~ many of the new jobs created are temporary or contractual in nature ~ in fact an Economy Policy Institute Report warns that even by 2020 30% of the American Workers will be engaged in Low Paying Jobs defined as below poverty line to support a family of four ~ not much change from 2010 ! It further warns that given that 50% of the American College Grads are currently unemployed or underemployed it will be most of these that will hold such jobs ! In fact currently 46 Million Americans live on Food Stamps ~ that’s 15% of the Population

And whether Excessive Printing of the US Currency to fund QE measures is the Only Solution that will position USA  to bring it bank into the pink of health or whether Spending Cuts to bring down Spiralling and choking Debt that mortgages the future generations too is the way to adopt I shall leave it to the Democrats and Republicans to fight out on the Fiscal Cliff they stand on !

Choking Total Debt is already globally estimated to be US  $ 223 Trillion ~ that’s over Three times the Global GDP of US $ 70 Trillion end 2012  ~ The Developed Countries are worse off with US $ 157 Trillion Debt which amounts to nearly Four Times their GDP while the  Emerging Markets Debt is at US $ 66 Trillion at  twice and quarter of  their GDP 

Of Total Debt of US $ 223 Trillion the Government Debt Component is  @ US $ 56 Trillion or 80% of Global GDP with Japan leading the Way at 220% Government Debt to GDP Ratio 

The World has never before been as heavily leveraged as it is currently and there is every indication that the US $ will sooner than later be unplugged as the World Reserve Currency ~ and not ‘if’ but ‘when’ this happens the US $ will overnight be considerably depreciated as it will not be required for countries to hold US $s in their Reserve for Trade ,especially Oil Trade Settlements and US will find unwilling Lenders through US $ Denominated Notes and Bonds ~ Even big US Giants like McDonalds & Caterpillar have recently raised Funds issuing Chinese Yuan Bonds   

What I do want to see in my Life time is that there emerges a wider distribution of Economic Wealth on Planet Earth for we have seen that concentration in  just USA and a few other Developed Nations can wreak financial havoc globally ~ In this Context China & India are emerging strongly to balance the Global GDP see-saw  between USA & Europe on one side and Asia on the Other

It’s not a Comfortable & Peaceful World we live in ~ with Economic and Nuclear Flashpoints reminding us of this  every single day and keeping the Planet wide awake lest we all die in our sleep if someone presses the ultimate trigger !

Yes the Dow will seek more record highs this year pumped more by excessive liquidity that has scarce other opportunities to apply itself in ~ too early to conclude with conviction that any Economy Recovery seen is sustainable

…..and our Sensex will follow ~ it’s already holding above 20000

Just be cautious of the triggers ! ~ September 2,2013 is just one of them

…..and for India it could be the General Elections being held earlier than 2014 as scheduled where Indians  are yet again expected when casting their Votes  to actually Vote their Castes ! and the warning yesterday by S & P that it continues to hold a negative outlook for India and there in a one in three chance that it may just reduce India to a junk status in the next 12 months from the near junk status of BBB- 

The Ugly side of IPL has cast it’s Shadow yet again with the arrests this morning of Sreesanth and two other teammates of the Rajasthan Royals for Spot Fixing

IPL ~ Close it or Clean it

There’s too much as Stake to kill a Golden Goose ~ the Brand,the Franchise Owners Investments ~ so IPL commentator Harsha Bogle and BCCI President N Srinivasan said closing IPL  is not the solution ~ let’s strengthen the Cleaning Process instead and weed out what is bad about the IPL

Really ! Ironically and tongue in cheek  Cleaning IPL would reduce the stakes ~ would it not ! ~ and if the Rot begins at the Top,cleaning it would mean Closing down the IPL itself !   ~ ask Mr Unclean himself,ex IPL Commissioner ,Mr Lalit Modi who tweets that he has not created the IPL Monster but the Monster sits in Chennai !

Put the Fear of God in the Players ~ convict those arrested and Jail them says one Expert on TV News Channels

But what about putting the Fear of God into those who administrate the Game ! ~or are they God !?

My Clear Sense is that the Anti Corruption Unit of BCCI should have kept a tab on Bookie and Player Movements ~ how could they not realise that bookies were staying in the same Hotel as the Players in Mumbai ! ?

Another Vocal Panelist, a lawyer who is now a famous activist bluntly stated that the local police are the business partners of the bookies and it is they who give the go ahead to the bookies to go about their business !

A Film Director tweeted that like Horse Racing Betting ,even Betting in Cricket should be legalised ~ does he not realise the huge extent of Fixing that takes place in Horse Racing  !

I particular loved one response in the social media that exclaimed what’s the big deal that the player sells an over in spot fixing ! ~ Does not BCCI and IPL sell hundreds of Players in Open Auctions !

If the Delhi Police had conveyed last month itself  to the BCCI that they have these players and bookies under wiretap surveillance because they had leads on them,I bet this situation would not have arisen as these players would have been warned by someone ! ~ Deliberately and wisely the Delhi kept it under wraps from even the Anti Corruption Unit of the BCCI lest it leak out  ~ It was not a Joint Operation !

Of course Fans are cheated of a fairly fought game ~ seriously one of those who spend thousands to go for any one of the three games in which Spot Fixing has been detected and arrests made ~ namely  in Mumbai last night,or Jaipur or Mohali should take BCCI and the Franchise Owners to court accusing them of having failed in their responsibility to curb Spot Fixing and Corruption that resulted in them watching deliberate under performances,rather under-the-table performances in these three matches !

Where there are Obscene Levels of  Monies Involved and therefore High Stakes it will quickly breed a Fertile Ground for Corruption and Fixing  ~ IPL Cricket is no exception  ~ Tennis  & Premier Football leagues in the World  ~ all have been hugely tainted by Bribery and Corruption and rampant Match fixing and dropping Scandals

Now you must easily guess and realise why top Politicians head State & National Cricketing Bodies !

T-20,in my view, is formatted for sheer entertainment to bring in the crowds and popularize the game to a wider audience ~ the Game was  otherwise losing popularity worldwide in often boring 5 day test Matches that ended in Draws and even 50 Overs ODIs that were not as entertaining ~ Speed and Instant Nirvana are the two guiding Mantras ~ we want the big Hitters all the time ! ~ Purists hate this version and as for me I don’t hate it but am simply not enamoured by it as it’s more a Hit Out or Get Out Version and a budding Cricketer cannot truly hone his Cricketing Skills like he can in the traditional version  !

Actually My Prayers go out to the Rankha Family in Mumbai ~ they lost their 13 year old son a few days ago ~ he was kidnapped by his elder cousins for ransom but killed by them  ~ what conspired the kidnapping plan was that the cousins had to pay up for huge IPL Betting Losses  ~ what an irony if they had bet against the fixing bookies on the three matches under cloud of Spot Fixing ! ~ they could never have won!

And Mr Harsha Bhogle this is one of the serious bad sides of the IPL ~ the good side as you state are the livelihoods created for hundreds of middle class families by their IPL Cricketer Sons Earnings ~ but what about the bad side that involves the Underworld and has millions in betting and losing millions,in probably spot fixed matches and resorting to crime to repay !

Perhaps T 10 is next !

IPL Spot Fixing Scandal Erupts today  with Sreesanth & Two Teammates,Ankeet Chavan & Ajit Chandila of Rajasthan Royals arrested  along with Bookies and Foreign Players and other IPL Team Players too under the Scanner ~ Chandila has revealed that he was following Sreesanth’s instructions 

Perhaps Harbhajan should have done more than just Slapped Sreesanth in an earlier year and which had him in Tears ~ More to Cry now for Sreesanth if he really has indulged in Spot Fixing and received huge Sums of Monies from the Bookies !

Should be Fun reading what ex IPL Commissioner Lalit Modi, who’s run away to London to escape from being arrested in India for IPL mismanagement and malpractices etc,has to tweet on this matter ! ~ his BCCI Powerful Friends have turned into Foes for him now !

Have been saying this for Years that Cricket is no longer a Gentlemen’s Game ~ Check earlier blogs on this as linked below  ~ have simply never been enamoured by IPL  and the way BCCI administers the game like a ‘Hitler’ ~and all because of  the Obscene Monies Involved that I believe has spoiled all involved in it too ~ from Cricketers and Administrators to Commentators and Owners and Associates that  includes  even Media Personnel ~ but I do love the Cheerleaders !  ~ and sadly even two days ago caused the murder of a young  Mumbai 13 year old by his cousins who had lost heavily in IPL Betting and had kidnapped him for ransom but killed him

……and you guys have been paying Thousands of Rupees to go see IPL Matches Live ~ now many of them under Cloud of being Spot Fixed !

….and all this bullshit ‘Zero Tolerance ‘ Policy by BCCI and IPL Franchise Owners is less to do with punishing perpetrators strongly and more to do with those who are exposing it !

Seems the Players being jailed in England for Spot Fixing has not really been a deterrent

Media Reports that a well known Overseas Player also from Rajasthan Royals is under the scanner ~ Check out the full 32 Member RR Squad for IPL 6 and the 10 Overseas Players in it 

Media Reports say that there is a video recording with the Delhi Police that  Ankeet Chavan had agreed  with the Bookies to Spot Fix and give away atleast 13 runs in  an Over in the 66th IPL 6 Match against Mumbai at the Wankhede Stadium in Mumbai last evening ~ He actually gave away 15 in the Third Over of the Match  with 14 coming of the first three Balls ! ~ he had Opened the Bowling for RR ! This is the Ball to Ball hitting by Glenn Maxwell off Chavan’s second and Innings third Over ~ Chavan was deliberately allowing Maxwell to hit ,so it is alleged ~ and here we were applauding Maxwell for the Two 6s while the Bookies and Chavan were applauding themselves and laughing all the way to the bank  for the deliberate bad bowling as had been agreed on before in Spot Fixing !  ~ Chavan has been with the RRs from 2011 and has played only 3 of the 15 IPL 6 Matches for RR this season

Just a coincidence that Mumbai won by 14 Runs ! scoring 166 and RR chasing to fall short by scoring 152 

• 02.6	A Chavan to A Tare, no run, 91.46 KM/H good length on middle stump. He goes hard at the ball, but straight to the fielder

• 12.5	A Chavan to G Maxwell, 83.30 KM/H good length going down leg. He picks up a single down to fine leg

• 02.4	A Chavan to G Maxwell, no run, 85.72 KM/H good length on leg stump. Straight to the fielder

• 62.3	A Chavan to G Maxwell, 82.25 KM/H good length just outside off stump. He hits a great shot for 6, that has gone all the way straight down the ground

• 22.2	A Chavan to G Maxwell, 80.89 KM/H good length just outside off stump. He picks up two through mid-wicket

• 62.1	A Chavan to G Maxwell, 75.27 KM/H short length on leg stump. He hits a great shot, 6 ! that has gone all the way through mid-wicket

A Thought  cannot escape my Mind ~ How do we view the fantastic record breaking and Match winning Innings of Gayle and Miller and Watson and Pollard in this IPL ? ~ in that they could not have done this without Spot Fixing and therefore being allowed to hit ! ?  ~ and they all won the  Man of the Match Award too !  ~ The Shadow is Cast Deep and Wide ! ~ and as ex India Pacer Atul Wassan comments on TV Channels ~ ” In our Cricketing Network  we know all this happens but I cannot give names as to who indulges in this and have got away too ! ~ This new Expose & Arrests is only the tip of the Iceberg !” ~ Well Mr Wassan,it is your Duty to come forward and tell the Police what you do know ! ~ or else you would be viewed as a passive accomplice or a guy who just boasts that he knows

Once Upon A Time Cricket was a Gentlemen’s Game…Now tainted forever with Match and Spot Fixing and Illegal Betting…my passion for the game has ebbed considerably

Tuesday, May 15th, 2012

Sting Operation on Matchfixing exposes current Pakistan Cricket Players……Cricket stopped being a Gentleman’s Game a Long Time ago….Racism , Matchfixing ,Corruption ,Nepotism,Selection Bias,ICC Bias…

Monday, August 30th, 2010

IPL Cricket Stink…providing a link to some bluntness

Wednesday, April 28th, 2010

Twitter Shashi Tharoor gets a Taste of Twitter Lalit Modi !

Tuesday, April 13th, 2010

Modicracy and Tharoorgate !…do you really expect them to be sacked!?….Tharoor may merely resign…Modi will not!

Sunday, April 18th, 2010

WTF ! JUST DON’T DIAL ! 

That’s My First Take on the ‘Just Dial’ IPO ! 

How can SEBI,Exchanges,MOF,Company Law Board even allow this IPO of just under Rs 1000 crs ! ~ there are no  real Objects to the Issue as  it is fully an Offer For Sale by Existing and Part Exiting Promoters and PE  Shareholders and the Company does not get any IPO Money

If you do subscribe in the IPO you’ll make these Existing and Part Exiting Promoters & Other PE Shareholders more very very very filthy rich in no time and making  yourself poor in time to come ! 

The Just Dial IPO opens on May 20,2013 in the book building band of Rs 470 to Rs 543 for a FV Rs 10 share ~ Shares on Offer for Sale by 9 Shareholders  total 17497458 with 75% amounting to 13123095 shares reserved for QIB Portion (normally it is 50%) ~ At top band Price of Rs 543 the Issue Size is Rs 950 crs with all the Monies going to the selling shareholders that include three Promoters,V S S Mani,Ramani Iyer and V Krishnan and 6 Funds that include Sequoia III,SAIF,Tiger Global Four JD Holdings,Tiger Global Five Indian Holdings ,EGCS and SAPV ~ All are Part Exits except for EGCS who exits in full

Plan to write a  detailed note on this Obscene IPO but be forewarned now with these few details and perspectives

Am stunned simply at the gaul and audacity of the Company guided by it’s Lead Issue Managers Citigroup Global & Morgan Stanley  to come out with such an overvalued IPO that is totally an Offer for Sale providing part Exit to Promoters and some PE Players !

SEQUOIA’s Role Play as an Illustration 

SEQUOIA III (Yes,it also holds shares as Sequoia I and II) ,for example at the top band price of Rs 543,will make an obscene 836% Return inside four years on it’s initial Investment in July 2009 at an average Price of Rs 58 a share after  adjusting for a  crazy 55: 1 Bonus in 2010 ! ~ even this Initial Investment of  Rs 38.35 Crs was a Transfer of 118014 Shares on July 21,2009 from another Shareholder Clearmist Ltd at Rs 3250/share  The Liberal Bonus 55:1 on April 24,2010 took the holding to 6608784 shares ~ Of this they are offering 3207934 shares in this IPO and would stand to get Rs 174 crs at Rs 543 and yet be left with 3400850 shares  !

I mean they came in at Rs 50+ and want us to come in at Rs 500+ through their shares ! Whoa ! ~ all for a Company that they just pumped in Rs 250 crs again in  

Promoters exiting make even more ! as their holding cost is between Nil to just 64 paise per share !

Sequoia significantly lifts Just Dial Networth in July 2012 

Just Dial’s Networth was just over Rs 100 crs on March 31,2012 ~ It rose dramatically to over Rs 400 crs on December 31,2012 ! because Sequoia I & II each invested Rs 125.50 crs aggregating Rs 251 crs by subscribing for 2568243 shares each at  Rs 488.66/share on July 21,2012 ~ Also a fortnight later on August 8,2012 both picked up shares from the Promoters and other shareholders at the same Price of Rs 488.66/share  

So one can view it this way that Sequoia I & II Investment of Rs 251 crs directly in the Company less than a year ago on July 21,2012 will be returned to the extent of Rs 174 crs to Sequoia III in this Offer for Sale IPO !

Sequoia  I,II and III currently  hold an aggregate of  12842546 shares in Just Dial at an aggregate Investment of @ Rs 343 crs   averaging Rs 267/share ~ Sequoia III is offering 3207934 shares in the IPO ~ At top band Rs 543 it will receive Rs 174 crs ~ Post IPO it will then hold 9634612 shares at Net Investment of Rs 169 crs or Rs 175 per share

Interestingly in Q2 FY 12 the US Operations of Just Dial under Just Dial Global Pvt Ltd were demerged ~ The US Company is owned by the Promoters in their Personal Capacity alongwith Sequoia

Don’t Get Carried Away by…..

• And don’t get carried away with Crisil  giving a top 5 on 5 IPO grading  ! ~ IPO Grading has simply no connection to the IPO Pricing  which is over 50 Earnings Multiples and over 9 Book !

On February 6, 2013 I blogged on this too 

Are IPO Gradings Misleading in the Initial Public Offers (IPOs) ? ~ Yes !

Wednesday, February 6th, 2013

• Dont get comfortable by even the Safety Net that is now mandatory for Retail Segment upto a certain period and number of shares per allotee ~ this is restricted to a 180 days time period from date of Listing and the Safety Net Trigger Price will be the volume weighted 60 days trading price from the relevant date which is 60 days before close of the 180 days period.If such a Price falls below the IPO Price then a Tender Offer will be enforced for Eligible Retail Allottees and their Eligible Shares,both defined in detail in the Prospectus ~ Only 10% Retail Reservation is there in the IPO and my guestimate is that the liability if any of the three main promoters who are providing this Safety Net will not exceed Rs 25 crs ! ~ probably much less

• And dont say Wow ! just because Amitabh Bachchan holds 62794 Shares which at Rs 543 Top Band Price are worth Rs 3.4 crs ! ~ this Celebrity is Just Dial’s Face in their Media Advertsing Blitz and probably this Shareholding represents being paid for in part or full  by Shares….probably….wonder at what price!?

Don’t Fall for Such Plays Again & Again….
I smell a Stink here !~ A Premeditated Plan in Operation  for the past three to four years whose success depends on us having poor memories and therefore becoming suckers and of course the existence of friendly QIBs in an Obscene IPO Exit  ~ I,actually we all have, seen such ‘passing the parcel’ playouts before with PE Investments coming in and Liberal Bonus Issues being splashed before the IPO Exit at an Obscene Price at buoyant Sensex Levels of 20000 yet again ! ~ Don’t fall for such Plays again and again

If you see the Just Dial Capital Construction and Build Up of Shareholder Holdings you’ll be intrigued by Purchases and Sales and Buy Backs and Liberal 55: 1 Bonus in 2010 and Capital Reduction and Gifting and Optionally Convertible Preference Shares and Preference Shares A,B & C Series and…..Phew ! ~ for instance Main Promoter V.S .S Mani (can be pronounced as Money!) has purchases shares in 2006 from SBI ‘s Magnum Fund,Morgan Stanley Emerging Market Funds etc at Rs 440/share  and in December of the same year 2006 has sold shares back to his own Company in a buy back at Rs 2574/share and  two months later in February 2007 sold some more  at Rs 2651/share to his own Company in another buy back !   

~ worse than even Suzlon Pre IPO cornering manipulation by FIIs and Overseas PEs,one of who is also a Lead Manager to the Just Dial IPO

~ worse than even the SKS Microfinance IPO that I thrammed in July 2010 ~ Sequoia was offering for Sale in this Issue too ~ Just a Coincidence or have these guys mastered a Brazen Plan to repeat it again and again !? ~ and I was bloody right  in SKS ! 

I have an Issue…actually several…..with the SKS Microfinance Issue !….Intentions may be Noble but Actions are Profit Motivated and not singularly Selfless !

Thursday, July 29th, 2010

Of course the unholy nexus will ensure the Just Dial IPO is successful  ~ Am sure you guys out there are smart enough to know how ! as some friendly QIBs (75% of the Offer is reserved for them) will enter in  this obscene  higher IPO  Band !

Rational !? ~ who in their Right Mind would subscribe in the Just Dial IPO in this Price Band !?

A Raging Question that continues to Rage my Mind through years ~ Who will bell this ‘Substance over Form’  Equity Cat ~ SEBI,CRISIL,Stock Exchanges,Ministry of Finance,Ministry of Corporate Affairs? ~ because the Form may have been complied with for SEBI to have cleared it for an IPO  and the Exchanges to have cleared it for listing  ~ but what about the IPO Substance ! ~ because this is what influences,impacts,affects and makes or breaks Primary Market Investors

And Government and SEBI wants Retail and Small Investors to come back to Equity ! ~ Why !? ~ so that they become suckers again in Obscene  IPOs ! ~ after all there has to be buying by the Masses  for Insider Classes  to make obscene Monies on selling !

Watch out for some more as I scan the Prospectus even more vigorously…… 

Update on May 18,2013

Check this more detailed Note posted on my company website

Just Don’t Dial this ‘Just Dial’ IPO at Rs 470 to Rs 543

We have not given it an ‘Apply’ Staus and rather have adviced ‘Just Don’t Dial’ on two broad concerns of

1. Corporate Governance Issues and if one wants to move past these then
2. High Valuations in the IPO Pricing increases the Investment Risk Considerably

Even Google at US $ 910 and a Market Cap of over US $ 300 Billion offers a Trailing P/E of 27 and a Book of  under 4

Just Dial  at Rs 543  is at 60 Earnings and 9 Book Multiples and will yet be under Market Cap of Rs 4000 crs and a Billion dollars  

And Yes Amitabh Bachchan got his Shares in 2011 at just par Rs 10,probably in lieu of  his promoting Just Dial in the Media and being it’s Face

There will be other Less Riskier Investment Opportunities in the future….unless of course you are a prankster who  just dials blindly to talk mischievously to anyone who answers ~ just remember this prank costs high at Rs 470-Rs 543!

Cheers !

Nearly Five Years ago on July 21,2008 I had covered Nirma refusing to honour their committment of an Open Offer to Shree Rama Multi-tech Shareholders and that the matter was before the Supreme Court

Nirma disallowed to withdraw offer for Shree Rama Multi-tech

Monday, July 21st, 2008

I have posted this Update on the above blog post but for easier access and viewing have repeated it as a new blogpost now

Latest Update Sunday,May 12,2013 

After years  finally Supreme Court upheld SAT and Nirma will have to make the Open Offer to Shree Rama Multi-tech Shareholders to pick up 20% Equity at Rs 18.60

http://www.business-standard.com/article/companies/sc-dismisses-nirma-plea-in-shree-rama-open-offer-113050900201_1.html

Shree Rama consequently hit 20% upper circuit at Rs 5.74 on Thursday,May 9,2013 and another 10% on Friday,May 10,2013 at Rs 7.56 to give a market cap of Rs 44 crs

Nirma of course has delisted at Rs 260 in March 2012

However Dont get too excited and expect Shree Ram Multi-Tech to rise to Rs 18+ as only 20% of the Equity of Rs 31.76 crs (FV Rs 5) is the Offer Burden and so all shares will not be accepted  and post offer scenario the Share Price may drop below par of Rs 5 again

Shree Rama Multi-tech boasts of top Clientele but continues to make Operating Losses though in FY 13 it has recorded a Profit of over Rs 8 crs for the 9mFY 13  because of  Exceptional Item that relates to a settlement with a lender of less than 1/3 the amount (see below)

The accumulated Loss remains huge and Networth remains negative at @ Rs 90 crs with Long term Borrowings yet above Rs 200 crs

The company has filed fresh scheme of compromise and arrangement u/s 391 of The Companies Act, 1956 vide petition no.401 of 2008 in Gujarat High Court and the same is pending before the Hon’ble High Court

During the first quarter ended June 30,2012 in FY 13 the company has entered into settlement with one of the lenders and principle amount of Loans and Borrowing of Rs 72.63 crs was settled for Rs 22.57 crs. The resultant gains were credited to the P & L A/c by Rs 24.39 crores and to Capital Reserves by Rs 25.66 crs as per the end use of the Loans

Will be interesting to see if Shree Rama Multi-tech can be reborn again after  Scheme of Compromise and Arrangement is passed by the Court and further settlements take place with lenders to bring down Debt significantly ~ After all the Company  did notch Sales of Rs 72 crs in FY 12 and Rs 64 crs for the 9m FY 13

Upfront Disclaimer : Neither My Family nor I have ever owned Khoday India Shares and don’t know of any who have or do, except perhaps RR ,a blog reader and pretty well informed and savvy investor too,  who conveyed in a private email his dismay and disgust on what Khoday is upto ~ he may be justified and has prompted me to go deeper and post this Blog as a result ~ it is not intended to offend anybody or entity and there is no bias or vested interest involved  and should therefore be read as an attempt to put forth the facts and arguments and perceptions so that Investors understand the Risks of Investing in such Companies like Khoday India   

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Khoday @ Rs 66 ~ Delisting by Serving an over diluted Peg at Rs 75 to Shareholders !?

Minority Shareholders believe that the Value is much more because of Real Estate Interests that are not being disclosed or have been moved away from the company at low values !?

Overview

Khoday was set up in 1965 as a Private Distillery by the Khoday Family .It went Public and got listed in 1986 on BSE,Bangalore and Madras Stock Exchanges.In 1992 the name was changed to the current name of Khoday India Ltd

It’s Registered and Operating Office is in Bangalore.K L Ramachandra is the Chairman and  K L Srihari is the current Vice Chairman & Managing Director .Both are Third Generation Khodays and their Sons & Fourth Generation are on the  Board too ~ Fifth GenNext is also being Groomed

Interestingly,apart from Nominal Sitting Fees ,no Khoday Family Executive or Non Executive Director has taken any Remuneration in FY 12 and none has been provided ! ~Come On ! they cannot be working for free !

It’s not paid any Dividend for the past five Years and performances have been pretty flat ~ Ironically Dividend too died  from the Financial Year  2007 when  the Khoday Head L Narayanasa Khoday too passed away ~In fact there were Losses in three consecutive FYs 08-11 and even in the 9m FY 13

It owns the well known Premium Brands of PeterScot and Red Knight in the Indian Made Foreign Liquor (IMFL) Whisky Segment .In FY 12 Liquor Sales were Rs 292 crs and yet Khoday made a Loss in this Segment !

However it’s Forays into Real Estate Development had perked up substantial Interest in the Company and had even raced the Share Price to a High of Rs 425 in August 2007 from a low of just Rs 37 in January of the same year !

There has been some infighting in the Khoday Family with  an estranged daughter in law and her two children claiming  their share in the Family Property ~ Court has made some observations

Annual Report FY 12 conceals more than it reveals 

The FY 12 Annual Reports conceals more than it reveals ~ there is a certain arrogance once senses in the Promoter Group who seem they could not care less for the way the Company is performing or Corporate Governance Issues and their clear violations of Non Disclosures and lack of Transparency in the Preparation and Presentation of the Accounts

This is a great disservice especially to the nearly 16000 Minority Shareholders and sadly the Regulator,the Exchanges and even the Company Law Board and Ministry of Corporate Affairs are turning a Blind Eye  ~ The Auditors,M/s Rangaraju & Associates have given a Clean Audit Report

Some of the Frowns that appear on Inadequate Disclosures or Explanations are as below

1. Availing of Exemption granted under General Circular 02/2011 of February 8,2011 issued by the Ministry of Corporate Affairs under Section 212 of the Companies Act 1956 and not attaching  the Annual Report  of wholly Owned Subsidiary Khoday Properties ~ However the Investment is a bare Rs One Lakh as Equity in this Company and truncated balance sheet disclosure show insignificant assets and liabilities
2. No Explanation as to the Nature of the Contract Segment Income of Rs 40.69 crs and the nearly all at Rs 39.94 crs Profit from this except mention that it was received from a Firm for making over the Risks and Rewards of a Project !
3. No Information on status of the Rs 61.48 Crs  Investment for a 75% partnership Interest in Laxmi Estates ~ the remaining 25% is held equally by four  Family HUFs ~ Such an Investment begs for it to be included in the Consolidation Accounts but Company apparently feels that only Investments of 51% +  in Companies needs to include such Companies in the Consolidation while Partnerships are exempt ~ if this is a legal loophole it needs to be plugged immediately   
4. No Explanation for the Write Off of Obsolete Raw Material of Rs 2.57 crs and Irrecoverable Advances of Rs 1.91 crs
5. No details of the winding up petition filed against the company and pending in the Karnataka High Court except mention that the company is of the opinion that the dues claimed by the petitioner are time barred and hence the petition is not maintainable
6. Legal & Professional Charges are running high every year ~ in FY 12 they were Rs 4.28 crs against Rs 3.98 crs in FY 11 ~ Why?

Share Capital

The Equity was Rs 14.51 crs of FV Rs 10  till FY 2004 after which Promoter Group was allotted shares at par of Rs 23.08 crs when they merged unlisted private company Khodayss Systems Ltd ~ The Equity went up to the current Rs 37.59 crs

This is the Current Shareholding of the Equity of Rs 37.59 crs of FV Rs 10

Controversial Scheme of  Arrangement between Company & Non Promoter Shareholders just  announced 

On April 26,2013  in the Evening the BSE put up this Notice without putting up any Scheme Documents as it  yet had to receive them

http://www.bseindia.com/corporates/anndet_new.aspx?newsid=57c30dee-05db-496b-8859-57973191c47b

“Khoday India Ltd has informed BSE that the Audit Committee of the Board of Directors of the Company at its meeting held on April 24, 2013, has recommended a Scheme of Arrangement between the Company and its Shareholders under Section 391 to 393 read with Sections 100 to 104 of the Companies Act, 1956″

On May 2,2013,Company send this Covering Letter  http://www.khodayindia.com/pdf/letter_to_bse.pdf  along with a CD to BSE for the attention of  Manager,Mr Jayesh Ashtekar . The CD held the Draft Scheme of Arrangement along with the Annexures F 1 & F 2 referred in Clause 4.3 in the Scheme. The Annexures are crucial as they are the Valuation Report dated March 28,2013 by Independent CA,M/s N C Rajgopalan & Co of Chennai which has valued Khoday Share at Rs 31.39 and a Fairness Opinion dated April 17,2013 by SEBI Registered Category 1 Merchant Banker,Corporate Professionals Capital Pvt Ltd,New Delhi

It’s over a week till date and BSE has not put up this Notice along with the Scheme and Important Annexures !

The Scheme is on the company website but without the all important Annexures at

http://www.khodayindia.com/pdf/scheme_of_arrangement.pdf

So what is the  Real Controversy !? 

The Scheme spells out the Cancellation of  3931042 Non Promoters Shares at Rs 75 by issuing a Cash Warrant for this amount  to the Minority Shareholders ~ The Company will discharge the Taxation for the Premium of Rs 65 under Sec 115 O of the Income Tax Act of 1961 while the Shareholder will have to take on any tax liability for the return of Face Value Capital of Rs 10 ~ The Rs 29.48 crs to be paid by the Company will come from it’s accumulated distributable Reserves .After the  Cancellation the Equity Share Capital will reduce to Rs 33.66 crs all held by the Promoters

While specific mention of Delisting is not there in the Scheme Document it does mention the relevant Sections  391 to 393  read with Sections  100 to 104 of the Companies Acts and in accordance with the procedures prescribed by SEBI Circular CIR/CFD/DIL/5/2013  of February 4,2013

http://www.sebi.gov.in/cms/sebi_data/attachdocs/1359986006632.pdf

Clearly this Circular states that both the Stock Exchange  on receipt and the Company on sending to the Exchange must immediately put up on it’s website the Draft Scheme along with all the Documents specified like Valuation Report and Fairness Opinion 

BSE yet has to after over a week while Khoday has merely put up the Scheme without the accompanying Annexures mentioned in them 

Mischief or Oversight ! ?

The Controversy is that the Minority Shareholders feel that the Value of the Company is much more than Rs 75 that they are being compulsorily offered and have to accept as the shares stand cancelled ~ their argument is that there is huge Real Estate Development  taking place through Khoday’s Investment of Rs 61.48 crs in a 75% Partnership Interest in Laxmi Estates  ~ wonder if the Contract Income of Rs 40.69 Crs received from a Firm (name not mentioned) in FY 12 for making over Risks and Rewards for a Project relates to Real Estate Development and Laxmi Estates !  

The Minority Shareholders certainly may have a very strong point if one goes by just one Khoday and Prestige Estate tie up that was announced in 2012 for Prestige to develop a 40 acre plantation in Bangalore  ,part of a Glass factory land owned by Khodays ~ The land cost alone was Rs 12 crs an acre making the plot worth Rs 480 crs !

http://bangalorerealityspeculation.blogspot.in/2012/06/khoday-and-prestige-ink-mou-for-40-acre.html

Khodays  own or have an interest in  a lot of Agricultural ,Residential and Commercial Properties in and around Bangalore ~ the key question is that the listed company Khoday India has an interest in how many of these and to what extent and through which entity and investment? ~ These details are not forthcoming   

Clearly the Minority Shareholders feel deprived that the Khoday Family is unwilling to share some of the Real Estate Good Fortune with them by undervaluing Khoday India’s interest in them or moving out such interest to the Family at low Valuations ~ The Annual Report lists  Scores of Related Parties and this begs the question ~ Why? 

Thus it becomes vital to see on what basis the Valuation Report and the Fairness Opinion  has been prepared  for the Scheme of Arrangement that arrived at an exact value of Rs 31.39 per share     

The Scheme justifies Rs 75 Cancellation Price stating that it is 2.39 times the Value as arrived in the Independent Valuation Report and 1.40 times the 26 weeks high and Low Share Price Average from October 22,2013 (sic) to April 19, 2013 ! The October Date should have read 2012 ! ~ just shows how comically nonchalant Khoday Promoters and Management are in this exercise that they do not even proof read such an important legal document ! ~ of course they’ll say it was an inadvertent oversight !

For the Record the Audited Consolidated Book Value at March 31,2012 was Rs 28.90 with the Networth at Rs 108.65 crs with Reserves of Rs 71.06 Crs including Revaluation Reserve of Rs 12.19 crs ~ Long Term Debt was Rs 27.71 Crs with Short Term Borrowings of Cash Credit at Rs 70.91 Crs

9M FY 13 shows a Loss of Rs 16.77 crs  dropping the Book down to Rs 24.44 per share  as Networth drops to Rs 91 crs ~ so Rs 75 being paid to Shareholders may look like a Heavenly Exit Price had it not been for the Real Estate Valuation Angle

And are we to really believe that Khoday continues to do badly because 2/3rds the Shelf Price of IMFL is because of High Taxes and that it  was short of Cash to have even defaulted on payments of Just Rs 1.17 crs to Canara Bank and Dhanlakshmi Bank in FY 12 but has Rs 29.48 crs in accumulated Profits to pay off Minority Shareholders under this  Scheme of Arrangement despite a huge Rs 16.77 rs loss for the 9M FY 13 !

The Promoters and the Company make it appear in the Scheme that they are doing a huge favour to the Minority Shareholders by cancelling their shares at Rs 75 ~ stating that this was being done to mitigate the hardship suffered by public shareholders as they never got any dividend and the share price fluctuated in a low price range with low volumes making the investment an unattractive proposition !

A Scheming Ploy perhaps to get the Scheme approved by the Court and the Exchanges and SEBI ! ?

Perhaps Minority Shareholders never really existed for the Khodays !? ~and perhaps they were suckers to think that the Khodays would allow them to ride the Real Estate Story in Khoday India successfully !?  They’re spelling Khoday as Kho-Dey! now !  ~ soon to become “Kho-Diya!”

…and suckers that we are ,we continue to live in Hope that our Primary & Secondary Markets will regain credibility and sanctity and bring back the retail and small investors !

” Mera Karan Arjun Ayega !” ~ ” Mera Karan Arjun Ayega” 

Finolex Industries on 20% upper circuit @ Rs 120 on excellent FY 13 numbers~but continues to drag Derivative Loss Disputes for last 5 years

The Pune based  Finolex Industries promoted by the Chhabrias and India’s largest manufacturer of PVC Pipes & Fittings  has produced stellar results for FY 13.Last it performed like this was in FY 10 ~ It has earned Rs 136 crs recording an EPS of Rs 10.97 on an Equity of Rs 124 crs (FV Rs 10) giving a Multiple of 11 ~The Networth is Rs 721 crs at March 31,2013 giving a Book Value of Rs 58.2 and a multiple of 2 ~ The Dividend has been upped from 30% to 55% ~ Chhabrias hold 52.39% Stake=> @ 6.5 cr shares ~ thus Rs 35.75 crs would flow as tax free dividend to them

Capacities have been expanded with a new PVC Pipes Plant commissioned on March 27,2013  for 30000 MTpa at Masar near,Vadodra in Gujarat.This will be upped to 50000 MT pa in FY 14

The Government has increased the outlay in the 12th Five Year Plan for Rural Water Management & Irrigation ~ This augurs well for Finolex Industries

Would have been happy for Finolex Industries had their not been this Derivatives Loss Disputes Cloud that continues to hang over it,specially that they appear to have willfully defaulted on these lossess raising a Corporate Governance issue

For Loss suffered on Derivative Contracts in 2008/9 by Finolex Industries the Banks had made claims that showed at Rs 222 crs Contingent Liabilities as on March 31,2012 as they were not acknowledged as Debt and were disputed ~ As of February 2013 some were settled and @ Rs 100 crs continue to be unresolved of which Deutsche Bank claims Rs 95 crs   ~ Deutsche Bank had approached the Debt Recovery Tribunal to declare Finolex Industries as a Wilful Defaulter ~ this would have meant the Company would find it difficult to raise finance with banks and even in the capital markets and the Directors would have to resign from other Directorships ~ The Bank relied on an RBI Circular but the Company contested that the circular was not relevant as it covered only lender- borrower situations and the Bank had not lend any monies to the Company  and Derivative Contracts were not covered by this circular and that they had miss-sold such contracts ~ In August 2011 the Mumbai High Court ruled in favour of the Bank as RBI filed an affidavit that the circular did cover Derivative situations too ~ However the Company won the case on a technicality that due process was not followed and all case papers were not given to them by the Bank before deciding to tag them as a Wilful Defaulter ~ However in December 2012 the Supreme Court,where the matter was being heard ruled in favour of the Banks

The Valuations are not exactly a Bargain at Earnings Multiple of 11 and Book Multiple of 2 for FY 13 and even on a Forward Earnings Multiple of 9 + for FY 14

So though the Share Price of Finolex Industries may move some more towards Rs 150,this Derivatives Loss Dispute Continuing Cloud + the fact it yet had Rs 571 crs as Buyers Credits (Bank Acceptances shown as Short Term Borrowings) ,probably largely unhedged like FY 12 makes me wary of getting excited about the Company ~ more so as a Wilful Defaulter is defined as one that can pay but will not !

Wondering how Deutsche Bank did not go to Court to stop Finolex Industries  from declaring and paying Dividend all these years till they cleared or settled the Derivative Losses !

Emkay Global @ Rs 17 in trouble as NSE rejects application to annul trades of October 5 2012

On October 5,2012 Emkay Global suffered a Loss of Rs 51 crs on squaring up trades that were executed from a Templeton order  punched in by a dealer erroneously in  more quantum than it should have been ~ the order was of a value of Rs 17 lakhs but the dealer instead punched in 17 lakhs nos  and the order value shot to nearly a Rs 1000 crs ! of which nearly Rs 700 crs was executed before the mistake was discovered and thus had to be squared off

NSE after an extensive investigation just rejected Emkay’s application to cancel all the relevant Trades of October 5,2012 early morning as there was material error in punching

Emkay has also send a notice to the BSE as below

“We are in receipt of NSE letter dated April 30, 2013 on May 01, 2013 late in the evening regarding the decision of the Relevant Authority of NSE on the application made by us for the annulment of the error trade of October 5, 2012. The Relevant Authority of NSE has denied our application for annulment of trades arising out of a clearly erroneous entry of sale order on October 05, 2012. The Company is considering various legal course of action including challenging the decision in exercise of its statutory right to appeal.”.’

Emkay is quoted at Rs 17 (FV Rs 10) giving a market cap of Rs 41 crs ~ Promoters hold 73.24%

In March/April 2006 it came out with a Rs 75 crs IPO offerring 62.50 lakhs shares in the price bad of Rs 100 to Rs 120 ~ and the following year 2007/8 was their best with Profit of Rs 23.50 crs ~ since then the next four Financial Years  dragged down a loss in 2008/9 followed by Rs 8 crs each profit in the following years and again drifted to a marginal loss in FY 11/12

Current Book Value is Rs 50+ with Networth at Rs 134 crs of which Equity is Rs 24+ crs

Clearly Rs 51 crs loss will be a huge setback to Emkay ~ destabilising their operations big time in very competitive times ~ Emkay will surely appeal

Several years ago the Emkay Promoters had sought a meeting with me as one of their Broking Clients and my Advisory one had made a 600% + gains on his Portfolio inside a year and they wanted to meet with the guy whose advice did this ! ~ they had only recently set up a Research Team taking several analysts from a leading stock market media  house  and they wanted to tie up with me  ~ did not work out as I must have quoted too high I suppose !

…and it’s sad luck that Emkay did this deal on NSE and not BSE for BSE may just have helped them out given it’s past track record for doing so when during Broker Dominated Boards, EDs and Presidents have had to resign for malpractices ~ like opening the Exchange in the middle of the night to insert trades ! or else some brokers would have gone bankrupt on their positions !

In 1996 even I faced such a situation with BSE ~ I was deprived of Rs 3 lakhs in early morning intra day trading profits on the newly listed Bank of Baroda when despite a clear notice that partly paid up shares trading and fully paid up shares trading have do be done in separate Codes,many brokers traded in just one code and suffered losses~ they quickly approached BSE Authorities to cancel the trades ~Mr R C Mathur was the ED at the time  and he took a unilateral decision to do so without even talking with the counter party Brokers whose clients,me being one of them,had made the profits ~ I was livid and spoke directly to Mr Mathur as my Broker was unwilling to take an aggressive stand ~ Mr Mathur had the arrogance and audacity to say he need not have to talk or consult with Brokers before making any decision ! ~ I told him with such an attitude he would not last long  as ED and God help BSE while he was there ! ~But he did last another two years before  He had to take the fall for the 1998 fiasco for Harshad Mehta’s trading and payment crisis on BSE in BPL,Sterlite and Videocon

Given their Closeness with Brokers and past precedence of going out of their way to help them, BSE certainly would have had a soft approach with Emkay

Emkay Bad Luck it had to happen on NSE  and not BSE ~ BSE did not have depth for such Nifty basket Shorts at the time !

Inefficient Markets or Inefficient Valuation !? ~ Saint-Gobain Sekurit India (SGSI) is to amalgamate into Grindwell Norton (GN)

The Ratio is One Share of GN of  Face Value Rs 5(currently quoting @ Rs 259) for every 17 shares of Face Value Rs 10 of SGSI (currently on lower circuit of Rs 2o.25 )

Of course rationally all SGSI Shareholders should exit as the Market Price Gap is @ Rs 100 considering the Amalgamation Ratio ! ~ the Book Values of both listed companies indicated a better ratio of 1:12

Check out the details just posted on SCRIP STANDPOINT Module on my company website

Unfair Amalgamation Ratio of 1:17 ?~ Saint-Gobain Sekurit India into Grindwell Norton ~ 29-Apr-2013

Minority Shareholders of SGSI are just flies being shooed off  yet again after a failed delisting attempt by SGSI  in June 2012!

SEBI  needs to intervene to protect minority shareholders and to confirm which is Inefficient ~ Market or the Valuation !