GauravBlog Logo

A Lion’s eye on the Bulls and Bears

“In India, companies may fall sick, but promoters rarely do!”

Gaurav's Blog

Categories

June 2014

Bangalore or Bumbai ! ~ oof ! these Babus & Legislators

Bangalore or Bumbai ! ~ oof ! these Babus & Legislators

Just back from Bangalore or should I say Bengaluru….where this time I experienced worse traffic than ever before…and there too the Rains have been elusive in June though the weather is far more cooler than Mumbai

Was amused to see a Karnataka Legislative Assembly Green Tagged Honda CRV with Driver and a Full Family in it….Austerity is only for the Masses while for Legislators gas guzzling CRVs are alright !

Then at Mumbai Airport was awaiting my car and noticed this Bureaucrat’s Official Car parked quite brazenly just outside the Arrival for a long time with the driver hovering around it…where over five minutes would invite car parking charges

Special Privileges ~ some official and some not, but taken for granted ~ for the Babus and those Elected to Legislate !…. while Masses are subject to Rules & Regulations or else Bribes !

Is it just a coincidence that Both States Karnataka & Maharashtra are currently headed by Congress Chief Ministers !?

Have tagged this post also in ‘Chuckle’ but there’s little to chuckle on this !

LIC will never go Public & Essar Oil wants to go Private ! ~ What is the Connection !?

LIC will never go Public & Essar Oil wants to go Private ! ~ What is the Connection !?

Corporate Governance….rather the lack of it !

In January 2010 LIC picked up a huge Equity Stake in Essar Oil from Matterhorn in a NSE Deal

LIC picked up 2.21 cr shares or 1.83% Equity Stake in Essar Oil at Rs 140 in a Rs 309 cr Block Deal on NSE on January 22,2010

I had blogged on this LIC Deal too on January 25,2010

Shareholding Pattern reported by Essar Oil right from March 31, 2010 to the Exchanges does not show LIC as a Public Shareholder with a stake of 1% and above !

And is this how LIC ,apart from supporting the Government sell offs,goes about it’s Investments in Non Government listed companies too  and expends Rs 309 crs of our Premium Monies !!! ?

If LIC is privatised or comes out with an IPO  and yet remains a  Government Entity in substance if not in form,the standard of Corporate Governance will be challenged ferociously with Shareholders demanding more accountability,transparency and disclosures…rationale of such deals will then be a matter for open criticism,accusation,suspicion and debate

Will they let LIC ever go Public ! ? Nah ! Too many Skeletons !….I daresay it’s like  a Parking Lot…actually a Car Dump…or should I say Shares Dump !

….and LIC Chairman S K Roy reportedly has strongly conveyed to the Finance Minister why LIC should not be listed !

Have a Look !…the share Price of Essar Oil has never really again touched LIC Purchase Price of Rs 140  in the last four years and five months to date since their investment except for a brief few days in January & April of 2011  !…This is on BSE…Share Price is in Rs

Year

Open

High

Low

Close

2010

140.60

162.45

115.05

137.70

2011

138.50

147.80

45.10

50.10

2012

50.70

73.75

44.80

70.25

2013

70.95

96.15

46.05

54.50

2014

54.40

119.30

44.50

108.40

….The High of Rs 162 was reached earlier in the month than the LIC  Deal on January 22, 2010 and some price range stability and even marginal buoyancy was seen till mid 2011…and it’s been dropping since to a low of even Rs 44.50 this year in 2014….It closed the Month below or around Rs 50 in January to March 2014 this year…April 2014 saw a closing of Rs 60 before May 2014 took it away higher to Rs 90…It now is Rs 108.40 as on Friday June 20,2014

Strong Delisting Moves have obviously been known to Insiders from May 2014 and the Price has since moved past Rs 100 to close Friday at Rs 108.40 on BSE

Funny really…actually not so funny really !….that the Company responded just a month ago on May 21,2014 to a BSE query on whether there was substance to the ‘Essar Group Companies to Consider Delisting’ Coverage that a Stock Channel had broadcast….The Company clarified to BSE  that they had not received any communication/proposal from the promoters of their intention to delist   …..why could not BSE & NSE have followed up or drafted the query to cover all delisting awareness angles !? Of course they had not received this…it came later (see below)…but surely they knew !….how else did the Stock Channel know !? read more

Government or Corporates Want Money ? Simple ~ Just tap 1200 million Indians !

😥 Government or Corporates Want Money ? Simple ~ Just tap 1200 million Indians !

😥  Unless there is a rollback the Indian Public will have to pay 14.2 % more for Railway Passenger Fare and 6.5 % for Rail Freight…the NDA Government has just announced this increase which had been planned by the UPA but deferred till post election

😈 The Way I see this is that the Government has already derailed the Indian Public with this huge Rail Hike……  Next in queue are the Corporate Vultures…..in  this Bullish Market they are licking their lips to feed on  the Indian Public and seduce and sucker them yet again with IPOs at obscene premiums !

👿 SEBI is facilitating them by announcing liberal measures in the garb of attracting Retail Investors back to Equity Markets !

🙄 Invest in Equity !? Yes,of course but do exercise Caution !

😯  BSE & NSE should have these statutory warning Boards up !

  • Tresspassers will be prosecuted !
  •  Beware of Dog,it Bites !
  • Valet Parking at Owners Risk
  • Caution, Manipulating Men at Work
  • Vested Interests at Play
  • Entry Inside only for Insiders

😐 Should try being a Stand Up Comedian !…the Reality is that I’m not !….and it’s not a Laughing Matter

Edelweiss at 52 Week High Levels of Rs 60+ ~ What is Broking!?

Edelweiss at 52 Week High Levels of Rs 60+ ~ What is Broking!?  ….BSE showed over 8 lakh shares volume today and price stability at @ Rs 61

Edelweiss ~ A Royal Flower in the Swiss Alps or a Lovely Classic Song from The Sound of Music or just another Indian Broking & Financial Firm !?

It’s a No Brainer that Heady Market Day spells  great times for Broking Firms or Groups

Edelweiss has seen a High of Rs 1600 + in 2007 on a FV Rs 5 share….then came a split to FV Rs 1 in 2010 and a 1:1 Bonus Issue  in August 2010….so the high gets adjusted to Rs 160+

First many Employees,including Excustive Director Himanshu Kaji took the ESOP at Rs 33 in April 2014….then last week on June 12,2014 Rakesh Jhunjhunwala picked up One Crore Shares at Rs 55 in a BSE Deal with Greater Pacific Capital (GPC) Mauritius I & III LLC selling off and exiting completely now their eight and a half year stake after a part exit in 2010

Promoters Rashesh  Shah & Others held 37.15% of the Equity of Rs 76.90 crs held by nearly 131000 Shareholders at March 31,2014….of this Promoter holding 5.66 % are pledged or encumbered (2.10% of Total Equity)

FIIs held 22.58% of the Equity on March 31,2014.This needs to be adjusted for the GPC Mauritius Sale in June 2014…However in a May 17,2014 Meeting the Board has approved FII holding cap to be increased from 28% to 40% 

Here are the FY 14 Results….Consolidated Topline  was Rs 2534 crs with Bottomline at Rs 220 crs….EPS was Rs 2.86.Networth was Rs 2729 crs with Reserves at Rs 2657 crs and Investment in Company’s Own Shares deducted from Share Capital & Premium….this Investment is through Rs 160.81 crs lend to Employees Trusts which has been used to buy Shares for later alottment under ESOP…The Book Value is Rs 35.5

Relative Valuations at Share Price of Rs 61 give a PE of 21 and a PBV of 1.7

In April the  board approved a buyback from the Open Market upto Rs 45/share and an aggregate of Rs 145 crs….This Buy Back commenced on May 5,2014

The Own Capital Employed at March 31,2014 was Rs 2729 crs  with most of it deployed in Credit Activity that included Retail Finance

Segmentation is into 4 Revenue Streams ~ Credit incl Retail Finance most of it in Housing Finance,Commodities,Financial Markets including Asset Management & Life Insurance….Most of the Revenues ,Rs 1885 crs to be specific ,are from Capital or Fund Based Business….Finance Costs were Rs 1540 crs in FY 14 read more

L & T Chairman A M Naik expresses anguish and prescribes action for the Indian Economy

This is an informative and impressive interview given by A M Naik,Chairman of Larsen & Toubro in today’s edition of Economic Times expressing his anguish on the mistakes made and how to address challenges to bring India’s Economy back to a sustainable 9% to 10% GDP Growth Rate with financial inclusion

Some thought provoking bytes…..

On reviving GDP Growth Rate….“has to retrace itself to 9-10% and be sustainable for many years without stoking inflationWhen we grow at 10% the rich get wealthier,and therefore,it is important that it should be inclusive growth “

On Freebies….“I am not in favour of Freebies as it takes away the Dignity of Labour”

On Narendra Modi as PM…..” He is going to make a difference,that too a big difference”

On Driving Growth….” Look at our Trade Imbalance with other countries.It has grown in the last 15 years.If you import raw materials,it adds value to the nation.But if you bring ready-made TV,ready-made cars,then what jobs are you creating here?”

On Free Trade Agreements….“….thing that has damaged India is the indiscreet signing of free-trade agreements (FTAs)…the very word is free trade but where the trade traffic is one way you are exporting jobs and not creating jobs within the country.The Prime Minister in the BRIC Summit ais India has to create 10-15 million jobs.Yes we did.But we created them in foreign lands….We export iron ore to China which means we take it out from Mother Earth and the Chinese add value by making steel and export.That’s why manufacturing which was 22% of the Indian GDP went down to 17% and from a growth of 12% at one time it is registering negative growth.It was directly created by government policies…take a relook at all FTAs….We (Indians) are not bonded labour for life.”

On what should be the three Priorities of the Government…First,and foremost create jobs…restore the manufacturing’s contribution to GDP from 17% to 22%.China has 46%,Malaysia 40%,Indonesia 46%….Do you expect India’s population to daily wake up every morning and worry from where they get their lunch?”…Second,a country can be said to be powerful not just by it’s economic wealth but if it has it’s own independent and powerful defence sector …The government is willing to import and become the largest importer.But you are not willing to give the indian private sector it’s rightful opportunity…India’s defence is in a real bad shape…..We should agree to 49%,subject to genuine transfer of technology.But nowhere in the world,even in the most advanced nations like the US,which has a high-tech defence sector,do they allow foreign companies to hold a majority stake….Forget about sharing technology,it’s not going to happen…..create a strong defence equipment manufacturing base….third is to attract large FDI in Infrastructure….We are talking about a trillion-dollar investment in India and we haven’t even spend one-third of it in infrastructure…The Indian private sector  no longer has the appetite for public-private partnership(PPP).The previous government used to talk that half the amount would come from PPP-$100 billion a year.Today,through PPP even $ 5 billion cannot be raised….The private sector has no moneyThe route to invest in PPP does not exist anymore…Even the Centre’s own ability to spend so much money is limited because of the fiscal deficit,freebies and waiver of loans.The government has a plan to set up 100 cities and high-speed express rail…the quadrilateral is 6000 kms…Rs 100 crore/km…That is about Rs 6 lakh Crores…when you put your hand in the tijori,the money doesn’t exist….The only answer is large foreign direct investment” read more

Lovely Commencement Speech by Jim Carrey at Maharishi University

A lovely Commencement Day Speech by Jim Carrey at the Maharishi University of Management  in May 2014

Five  thought provoking bytes …

  1. “You can fail at what you don’t want, so you might as well take a chance at doing what you love.”
  2. “..and Oh! why not take a chance on Faith as well…not Religion but Faith…not Hope but Faith…I don’t believe in Hope…Hope is a Beggar…Hope walks through the Fire & Faith Leaps over it “
  3. “Letting the Universe know what you want and working towards it while letting go of how it comes to past “
  4. “Open the Door in your Mind and when the Door Opens in Real Life just walk through it”
  5. “Your need for Acceptance can make you Invisible in this World.Risk being seen in all of your Glory”
Scroll to Top