JBF Ind ~ From Rs 300 to Rs 169 ~ KKR Investment destroyed 44% inside two months

JBF Ind ~ From Rs 300 to Rs 169 ~ KKR Investment destroyed 44% inside two months

In July 2015,it was decided that KKR Private Equity led by Sanjay Nayyar,ex Citi Head would infuse @ US $ 150 m  in the JBF Group through a preferential allotment

On Cue on July 31,2015 the 52 Week High of Rs 318 was recorded

It’s been downhill since &  is currently at 52 week lows of Rs 169

The Preferential allotment took place in end December 2015 with KKR Jupiter Investors Pte Ltd as below & when the Market Price was yet respectable at Rs 245  :

  1. Rs 491.23 crs Invested in listed JBF Industries through 16374370 shares at Rs 300(Rs 10 FV + Premium Rs 290) to acquire a 20% stake of post allotment Equity of Rs 81.87 crs
  2. Rs 500.65 crs Invested in JBF Global Pte Ltd,a wholly owned subsidiary of listed JBF Industries,through 12210527 Compulsory Convertible Preference Shares equivalent to US $ 75649902

KKR nominated Nikhil Srivastava on the Board….would be interesting to be a fly on the wall during Board Meetings now!

JBF Industries also has six step down subsidiaries through it’s  wholly owned subsidiary,JBF Global Pte Ltd based in Singapore

Through one of its step down subsidiary, JBF Petrochemicals Ltd, it is implementing a 1.25 m tpa greenfield PTA Project at Mangalore which should be completed in six months although it was expected to be completed in FY 16 as expressed in the FY 15 Annual Report

So what do you think ?

Did KKR pay an inexcusably high Rs 300 per share for it’s 20% stake ?

Do you sense an Opportunity at Rs 169?

Bumped into the Guy whose firm advised on this Placement at Rs 300 & I asked  him how did they manage to make a sucker of KKR !

He said it’s a “No Brainer” !

🙂 Wonder if he meant it’s easy to make a sucker of KKR or that it’s a great opportunity to buy now in the secondary markets !

KKR ,you guys should have touched base with me before deciding on this Investment !

Don’t tell me you don’t know who played this Scrip in 2015!

 

Sat Aug 4 2018~Mumbai Funda Equity Workshop~Spotting Gold Mines & Side Stepping Explosive Ones

Fundamental Equity Workshop in Mumbai
Stock Selection ~ Value Vs Price

Indian Equity ~ Goldmine to a Few & Explosive Mine to Many ~ Training Minds to be Minesweepers to differentiate

Saturday, August 4, 2018

Wealth of Mind & Monies must move in tandem.Click above or here to attend my next Mumbai workshop on  Saturday August 4,2018.It’s yet again at my Fort HO,above Starbucks & Croma & a hop step & jump from the BSE

Q’ attend karey? 

‘Q’uality’~how to focus on it~ Discipline of never Deviating~never? what about that potential multi-bagger turnaround or sapling that carries high risks ? Equity is all about Growing Wealth while Protecting it ~ taking & managing risk

The above Registration link also displays the Workshop Template outlining what shall be covered & why you should invest one Saturday with me

We’ve had real Fun at all the Equity Workshops in the last three years with some lovely entertaining interaction with & between participants from all over India & Overseas while playing the Corporate Tambola  or  even playing around with ‘Experts’ Views on our Sensex & Nifty or what Trump will do or not do next ! or whether any North Korea Missile is pointed at our Sensex ! or   explaining & evaluating practical applications of Investment & Financial Concepts through discussion & debate in Company Case Studies with focus on  assessing ‘Value vs Price’…we’ve seen the impact of FPI flows,Interest,Inflation & Exchange Rates,Fx Reserves,Oil Prices & Budget Deficits…we’ve discussed the importance of Corporate Earnings on Valuation & in many cases how it’s the Assets that give Value…we’ve examined the four legs of the Equity table ~ Valuation,Liquidity,Sentiment & Momentum & how to gauge rising risk when Markets run ahead of fundamentals…many of you have been rewarded too at the workshop for great lively answers & interaction

Here’s another Opportunity in August 2018 in Mumbai to Train & sharpen Minds to become more efficient MineSweepers to spot & differentiate between Wealth Creating Gold Mines & Wealth Destroying Explosive ones

We’ve tackled Valuations & Risks of Bombay Dyeing,I B Ventures,HEG ,Yuken,Ruby Mills & HOV among many others in the recent past & discussed the serious Corporate Governance Issues in the Essar Oil Delisting,Kwality,JBF & Vakrangee among others & the huge Risks associated with  wealth destroyed companies GTL Infra,ESL,Suzlon,Subex & Uttam Galva that yet keep offering hopes of a turnaround

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Kwality destroyed 90 % from Rs 160 to Rs 21 in a year !~Blame the Brokers for going broke?

You were looking for 100% gains in a year…Poof ! now you see your Principal evaporating near 100% 

Kwality Limited’s Share Price has evaporated nearly 90 % from Rs 160 to Rs 21 in a year !

Blame the Brokers for going broke?  

Where was the Quality in the first place !...it was clearly basking in the sunshine of the surge in the share price of other Dairy Companies like Heritage & Parag Milk

I recollect how aghast I was when Kwality Ltd was recommended strongly by not one but several well known broking houses in 2016 & 2017 when it was being quoted in the Rs 110 to 140 range.Targets given by them were extremely tempting to succumb to ! ~ one gave Rs 263 ! ~ another projected Rs 200 !

I have often  mentioned this Company at my Fundamental Equity Value Vs Price Training Workshops when illustrating severe Corporate Governance Issues

A few months ago on March 27, 2018 Kwality had responded to the Exchanges on their concern of falling share price that there was no strategically significant development in the organisation or business & that they were committed to deliver sustainable value to its shareholders at all time…Wow!

The Problem perhaps was on news of Promoter Dhingra pledging shares…or the Company complaining to the exchanges that a broker was fradulently selling shares in the market .Earlier this month Kwality has also been put on the Additional Surveillance Measure (ASM) List.Their June 20,2018 Board Meeting to consider buyback and /or Bonus has been rescheduled to July 3,2018 as majority of the Directors could not make it

What’s going on here !

The Exchanges have just been notified of a downgrading of credit rating by Brickwork .It was just two months ago in April 2018 when Brickwork had given their last ratings  

Today Kwality  was  on lower circuit at Rs 21.15 with heavy volumes before opening up to hit upper circuit & closing a little lower at Rs 22.95 on BSE…relief rally or someone finds real value now !? …52 Week High was @ Rs 160 a year ago…that’s nearly 90% wealth destroyed  from a Market Cap of  @ Rs 3800 crs to just above Rs 500 crs !

This is not to condemn the Broking Houses or vilify them…after all the Money & Risk is all yours…no one held a Gun to your head to invest in Kwality !…so don’t blame the brokers for going broke in this ! even if they had any vested interest in recommending the Company for Investment

Just to warn you not to be carried away by momentum & sentiment in bull markets & follow anyone blindly

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