Wealth Destroyers as Potential Multibaggers~ Mumbai Equity Workshop Sat June 17 2017

Wealth Destroyers as Potential Multibaggers~ Announcing a Full Day Mumbai Fundamental Equity Workshop on Saturday, June 17 2017 

🙂 This time in this Stock Selection ~Value Vs Price Workshop have kept an exciting Theme :

WEALTH DESTROYERS : POTENTIAL MULTIGAGGERS

As Limited Seats would advice to Book Your Seat right away here => http://www.jsalphaa.com/register.php

Plan to cover over 25 Wealth Destroyers to assess any Turnaround Value vs Price & thus a chance to redeem themselves and become Wealth Creators from here… or should just one move on in many of such Wealth Destroyers that are now beyond redemption

Here’s what some participants said of the December 2016 Mumbai Fundamental Workshop on Stock Selection : Value Vs Price…and this was before IB Ventures zoomed 7 x in months from Rs 20 to Rs 140 & HOV doubled in the same time to cross Rs 300… we had covered both these & more in Earnings & Asset Basis Valuation exercises

“Amazing… Awesome Session about Fundamental Stock Selection & Wealth Creation ”

“Full of Inspiration, filled with wisdom…. am really proud to be a part of this wonderful session”

 & from a repeat participant “recreated the same old magic of Bangalore in Mumbai… great Saturday”  

Would love to interact with you ~ So do invest one Saturday ,June 17, 2017 with me in my Mumbai Fort Office near BSE and above Starbucks & Croma

Register here => http://www.jsalphaa.com/register.php

Here’s the Detailed Template of this Workshop if you want more details on coverage

gap-master-class-mumbai-17june2017

🙂 See you Saturday, June 17, 2017 at my Mumbai Fort Office Conference Room… we’ll figure out if Suzlon will continue to be ZZZZZlon!  & dissect many such Wealth Destroyers!

Cheers !

Sterlite Tech Shareholders short circuited in the Demerger ! ?

Sterlite Technologies (STL) Shareholders short circuited in the Demerger ! ?

I was approached to buy some unlisted shares of Sterlite Power Transmission Ltd (SPTL) & then was astounded when told an offer had already come in for Rs 270 already !

So what’s the Big Issue ? ~ How Can the Value of unlisted SPTL change dramatically upward by over 300% from Rs 112.30( as on March 31,2015 cut off date) that the company offered for in the demerger of STL  and paid in August 2016 & just eight months later value the same atR s 464.46 ! on March 2,2017 when they announced an EGM for March 29,2017 to issue new shares !(Details Below)

It’s thus  to do with the low Valuation of unlisted SPTL as on cut off date March 31,2015 that was the subsidiary of listed STL that got the Power Division of  STL in the Demerger & then ceased to be a subsidiary post demerger.

Haribhakti & Co LLC did the valuation on a NAV (for Holding Co) & Income DCF Approach (for Operations) at a maximum of  Rs 111.50 /share.Price Waterhouse & Co LLC also used similar Valuation approach and got  mariginally higher Maximum Valuation of Rs 112.30.Both had valued SPTL below Rs 900 crs only ! despite Income Approach having to consider Potential of Scale Operations in coming years.Both Valuation Reports are dated May 18,2015 in sync with STL Board Meeting Date as below.STL has gone with PWC

These are the relevant Dates  & all relevant documents for Shareholder/Court/Exchanges Permissions & Approvals can be found here :

May 18,2015 ~ Board of STL in a corporate restructuring decision approves the Scheme of Arrangement between the Demerged Company STL & Resulting Company SPTL (then subsidiary of STL)effective date April 1,2015.Decides to keep SPTL unlisted unlike the Adani Group that listed Adani Transmission after their restructuring exercise

December 15,2015~ Court Convened Meeting of STL Shareholders passes the Scheme

April 22,2016 ~ Mumbai High Court issues an Order approving the Scheme

May 23,2016 ~ Order becomes effective on date of filing with Registrar of Companies

June 15 & 16,2016 ~ STL begins ex demerger quote on June 15,2016 as Company has set June 16,2016 as record date for STL shareholders entitled to receive Demerger benefits of SPTL.SPTL ceased to be a subsidiary of STL on this Demerger & it was decided to keep it unlisted unlike the Adani Group which demerged & listed Adani Transmission.

June 27, 2016 to August 8,2016 ~ Election Date Range for @ 122000 shareholders in STL up from under 120000 shareholders at June 30,2015 when the Demerger plans were announced in May 2015 and I wrote a detailed blogpost in July 2015 (see later below) .There were two options for Resident Shareholders ~ receive Equity Shares of  SPTL at Rs 112.30 (FV Rs 2) in a 1: 5 ratio for shares held in STL or go for the 8% Preference reedeemable shares of Rs 112.30 in the same 1: 5 ratio that would be reedeemed at Rs 125.55 in eighteen months from allottment.FPI/FIIs?Non Resident shareholders had to sell their shares back to the Promoters or their affiliates. read more

Promoters rooting for Change of Infosys Chair~Seshasayee to Subrahmanyam?

The Infosys Situation is getting as explosive as the Tata Group’s did with  Promoters rooting for Change of Infosys Chair~Seshasayee to Subrahmanyam?

Corporate (Mis)Governance Issues~First Tatas & now Infosys !~Chairman & Board under Attack by Promoters

It’s been disruptive global times in many ways with Trump now US President and India re-gearing up Post Demonetisation & the Indian Corporate Big League crying out “Me Too” .

Headlines were hogged for months as first Promoter Family’s Ratan Tata led the unusually aggressive initiative  in the illustrious Tata Group to fire it’s Chairman, Cyrus Mistry & now Promoter N R Narayana Murthy has called to replace Infosys Chairman with Prof Marti Subrahmanyam .Ex Directors T V Mohandas Pai & V Balakrishnan support Murthy on this  & are calling for the Chairman’s resignation for serious misgovernance on issues of High Severance Packages,Hike in CEO Package ,Director Appointments,Inducements to bag Contracts,non disclosures among others that strike at the very core values Infosys was build on

Narayan Murthy has just asserted in an interview that the unusually high severance package to the ex CFO was just hush money cloaked & that he was concerned about falling standards in corporate governance

Whoa ! That’s a criminal charge in my view !

N R Narayana Murthy is rooting to replace Seshasayee with Prof Marti Subrahmanyam,Charles E Merrill Professor of Finance at the New York University Stern School of Business.The Professor has already served as an independent director on the Infosys Board for thirteen years till 2011

Four Years ago in January 2013 I had an opportunity to interact with Prof Marti Subrahmanyam when he delivered a paper at BSE on the  manipulation of Libor Rates.I had blogged on this then.I had asked him if the  Banks simply had to rig the rates to survive & if this was the case then the orders had to come from the top.Prof was taken aback a bit by the query & clearly reluctant to confirm this.Expected truthful answer should have been “Yes” as the question was rhetoric.Instead he had brushed it off abruptly & I got the impression of an intellectual arrogance at display.That view has stayed as I’ve not got another opportunity to interact to be able to change this view …He’s quickly thrown in the hat to become Infosys Chairman.Clearly Narayan Murthy has been in touch with him on this before putting up his name to replace Seshasayee,Murthy has always been straightforward and blunt like in yesterday’s interview calling the severance pay as hush money !.Can’t imagine Subrahmanyam to be as straightforward & I daresay will be Murthy’s ‘Voice’ just as Ratan Tata,in my arguable view,wanted a ‘Yes’ Man Chairman to head Tata & which Cyrus Mistry turned out to be not read more

Equity ~Life Changers or Life Maimers ?

Equity ~Life Changers or Life Maimers ?

This Thought was inspired by a Whatsapp Forward received this morning titled Power of Equity .It listed many Life Changing Wealth Creators that grew many fold from just Rs 10000 invested in each  & carried a concluding Message in Capitals ” INVEST WISELY WITH LOTS OF PATIENCE “

This was the List & I’m assuming the Years & CAGR Maths is correct with Dividends not being considered :

  1. Eicher Motors-1992 => Rs 80 lakhs
  2. Asian Paints-1986 => Rs 90 lakhs
  3. HDFC -1990 => Rs One Crore
  4. Brittania – 1985 => Rs 1.06 crs
  5. MRF – 1985 => Rs 1.10 crs
  6. BOSCH -1985 => Rs 1.20 crs
  7. Amara Raja -1991 => Rs 1.25 crs
  8. Shree Cement -1990 => Rs 2.90 crs
  9. Infosys – 1993 => Rs 3 crs
  10. Dr Reddys -1986 => Rs 10 crs
  11. WIPRO -1981 => Rs 400 crs

Cannot Argue with this Message for I’ve seen three of my Scrips,in even relatively quick time inside five years of investment too becoming over 100 Baggers ~Matrix Labs( early Millenium & now delisted as sold to Mylan),Mercator(early Millenium) & WIPRO ( from 1997 to  early 2001)

It is rare for most investors to live the Conviction & Temperament to hold for long & ride the Huge Life Changing Gains.Imagine if more than Rs 10000 had been invested in each of the above,especially WIPRO!

However my Thought is what about Wrong Convictions on the High Fliers that became Wealth Destroyers &  Life Maimers !

Here are a few of them ,most yet listed & struggling to revive & how much worth would your Rs 10000 invested in each of them be now ….most are Horror Stories of the past decade or a little more…sure you can contribute more…My Horror Stories  have been the Damania Group’s Damania Capital Markets to mention one.Bad Judgement Call that Cost!It was compulsory delisted in July 2004.

~Suzlon -2005=>Rs 842  &  2008=>Rs 348 ! => 92% to 97% wiped out after considering 10:2 Split in January 2008 when it reached an all time high of Rs 2300 before split.Current Price Rs 16.Promoter Tulsi Tanti is yet on board though Dilip Shanghvi of Sun Pharma Group has acquired a major stake in it @ Rs 18 in February 2015.Mandatory Open Offer at Rs 18 to other Shareholders in January 2016 met with no success.The Share Price had raced to Rs 30 from where it has halved & is below the Open Offer & Stake Price of Rs 18.Shareholders hold out Hope of Revival back to Glory Days in the years ahead under Dilip Shanghavi.So far it’s been a muted share price trading range in recent months.

~Unitech-2006 => Rs 505 => 95% wiped out after adjusting for 12:1 Bonus & 10:2 Split in June 2006 & 1:1 Bonus in Aug 2007.Reached a high of Rs 14800 in 2006 before Bonus & split .Current Price under Rs 6

~Kingfisher Airlines-2006/7 => 0 ! => 100% wiped out & scrip suspended for trading from 2012/2013 & restricted trading from June 2015 ~ reached a High of Rs 335 in 2007 read more

Voda Idea ! ~ Share Price Bonanza for Idea Cellular on Merger Talks with Vodafone

Voda Idea ! ~ Share Price Bonanza for Idea Cellular on Merger Talks with Vodafone

Given the cut throat competition in the Telecom Provider space,Consolidation has been inevitable for quite some time & with just a handful of players it was not rocket science to predict who would make the first move

Insider Play ?

Obviously Insiders knew of the preliminary talks and their friends in the Media were fed the news to facilitate the likes of Economic Times splashing a Vodafone & Idea Merger scenario in their print edition yesterday

Then it was the Stock Channels turn to take credit as Vodafone confirmed such talks yesterday

Ironically neither BSE nor NSE Authorities received any pro-active notification from the listed Birla Group Company Idea Cellular.It was on the Exchanges re-actively seeking a clarification did the company send one to confirm they were in preliminary talks with Vodafone

But look at the recent chronlogical events that prefaced yesterdays drama & draw your own conclusions

August 23,2016 ~ Idea Cellular calls all such merger speculation baseless and absolutely false & sees it’s share price correct back into the 90’s after the surge past Rs 100   …It drifted even lower below Rs 70 in the last quarter and then regained to remain in the Rs 70 to Rs 78 range till Friday ,January 27,2017

January 11,2017 ~ Idea Cellular notified the exchanges that Q3 FY 17 December 2016 results will be declared on January 23,2017.

January 13,2017 ~ Idea Cellular notifies The Shareholding as on December 31,2016.Pilani Investments,a Birla Holding Company picked up 8168500 shares or a 0.23% equity stake  in Idea Cellular in the quarter ended December 2016 taking the Promoter Birla Group stake to  42.45%

January 19,2017 ~ Idea Cellular notified again that the Q 3 FY 17 Results declaration has been postponed and a new date will be conveyed

Yesterday,January 30,2017 ~ Economic Times carried the Merger Scenario forcing the Exchanges to seek Clarification from Idea Cellular.Vodafone had already confirmed to the Media in the morning itself that talks indeed were being held

Idea Cellular Share Price simply rocketed over 25% to cross Rs 100 from the Friday Close of @ Rs 78  before closing at Rs 98 yesterday, .It also is in F & O Segment with a lot size of 7000

Today,Tuesday,January 31,2017  it has surged another nearly 20% to record a high of Rs 118.90 & as I blog this @ 1.30 pm it’s at @ Rs 116 with a Market Cap now @ Rs 42000 crs from under Rs 30000 crs just two days ago on Friday,January 27,2017 read more

Congrats Shobhit ! You win the retro TAP GAP 2016 hamper for Lakshmi Energy & Foods

Sadly TAP GAP 2017 cannot be announced  for now as SEBI has proposed a blanket ban on such competitions.More on this at the end of this post

But First the Good News for Shobhit who contributed MIC,Subex and Lakhsmi Overseas in TAP GAP 2016.MIC lost one fourth value in 2016 while Subex is down 6.5% after promising starts

But Hey Shobhit ,your Lakshmi Overseas,now named Lakshmi Energy & Foods Ltd,came from behind in the second half of 2016 and recorded the highest gains from all the 101 entries in TAP GAP 2016 pipping Vishal Kejriwal’s Kisan Moulding to second spot .Your gauravblog hamper ,as promised ,will soon be on it’s way to you

Here’s the final performance in 2016 of all the 101 entries after adjusting for Bonus & Splits in 2016 in several scrips.If I’ve left out some adjustment do let me know.Kaveri Seeds,for which I had announced Pushkar as the winner,earlier in 2016 has gained @ 28%,even though it had  locked horns with the Government on Monsanto’s high royalties on their genetically modified cotton seeds

It’s been a near even split with 51 recording gains of which 9 more than doubled. 49 showed negative returns of which serious wealth destruction was seen in many notably Sanjivani Paranterals,Ricoh (suspended last month) & Trilogic Digital 

Scrips CMP

(Rs)

Intra 3/1/2017

Inv Price

(Rs)

Overall Gain

(Rs)

Overall %
LAKSHMIO 65.9 17.1 48.8 285.38
KISAN 72 21.3 50.7 238.03
APTECHT 173.9 61.5 112.4 182.76
STYLAMIND 458.15 188.2 269.95 143.44
UJAAS 49.9 21.3 28.6 134.27
DONEAR 64.85 28.9 35.95 124.39
BAMBINO (2) 263.7 127 273.4 107.64
ASALCBR 95 45.82 49.18 107.33
MRSS 152.9 76.3 76.6 100.39
ODYSSEY 77.95 41.05 36.9 89.89
JKPAPER 87 45.95 41.05 89.34
UDAICEMENT 21.35 11.51 9.84 85.49
KAMAHOLD 2,416.00 1,345.75 1,070.25 79.53
UFLEX 278 156.05 121.95 78.15
TIIL 368.35 212.8 155.55 73.1
INDIANACRY 17.6 10.54 7.06 66.98
VAKRANGEE 274.05 165.5 108.55 65.59
HERITGFOOD 871 526.5 344.5 65.43
VIRINCHI 71 44.9 26.1 58.13
CGCL 56.1 36.6 19.5 53.28
MCX 1,259.90 832.05 427.85 51.42
CAPF 573 381.55 191.45 50.18
FORCEMOT 3,940.05 2,658.00 1,282.05 48.23
IL&FSTRANS 113.2 80.05 33.15 41.41
VINATIORGA 595 421.2 173.8 41.26
DAAWAT 319.4 238.1 81.3 34.15
TRIGYN 106 81.4 24.6 30.22
ISFT 425 327.4 97.6 29.81
DECNGOLD (2) 46 35.5 21 29.58
AVANTI 492.9 383.5 109.4 28.53
KSCL 414.75 324.75 90 27.71
JCHAC 1,380.80 1,087.20 293.6 27.01
SSPDL 74 58.45 15.55 26.6
AMBIKCO* 1,031.60 816.25 215.35 26.38
ALICON 382 302.4 79.6 26.32
MANPASAND 556.85 448.5 108.35 24.16
MULTIBASE 283 228.3 54.7 23.96
GUJBOROS 87.6 70.85 16.75 23.64
LT 1,366.00 1,106.00 260 23.51
IVP 124 102.5 21.5 20.98
KWALITY 128.75 108.4 20.35 18.77
MFSL 558 476 82 17.23
JAGRAN 180.3 155.25 25.05 16.14
HANSUGAR 1.38 1.21 0.17 14.05
PINCON 65.15 57.2 7.95 13.9
SRIPIPES 270.5 239.2 31.3 13.09
FSL 38.6 35 3.6 10.29
ZYDUSWELL 869 800.45 68.55 8.56
NIRLON 187.55 177.4 10.15 5.72
KOTAKBANK 712.5 675.95 36.55 5.41
NCLIND 121 120 1 0.83
WATERBASE 84.45 84.25 0.2 0.24
BATLIBOI 23.7 24 -0.3 -1.25
BIOPAC 17.4 17.85 -0.45 -2.52
SANKHYAIN 36.7 37.9 -1.2 -3.17
MPSLTD 686.05 716 -29.95 -4.18
FCONSUMER 20.7 21.8 -1.1 -5.05
IONEXCHANG 294.2 311.6 -17.4 -5.58
UVBOARDS 20.65 21.9 -1.25 -5.71
SUBEX 9.63 10.3 -0.67 -6.5
REPCOHOME 560 606.15 -46.15 -7.61
TV18BRDCST 37.2 41.15 -3.95 -9.6
TIDEWATER 5,685.00 6,341.25 -656.25 -10.35
TARAJEWELS 38.8 43.65 -4.85 -11.11
LINCOPH 189.6 223.9 -34.3 -15.32
REVATHI 568.85 684.5 -115.65 -16.9
AUROPHARMA 671.1 814.75 -143.65 -17.63
RPOWER 42.05 51.05 -9 -17.63
ZENTEC 77.5 94.8 -17.3 -18.25
ARROWTEX 40.3 49.5 -9.2 -18.59
ROSSELLIND 94.55 116.8 -22.25 -19.05
SURANASOL 22.5 27.8 -5.3 -19.06
BUTTERFLY 190.95 241.1 -50.15 -20.8
COFFEEDAY 198.6 254.3 -55.7 -21.9
MOREPENLAB 21.6 28.2 -6.6 -23.4
MIC 15.49 20.45 -4.96 -24.25
SUNLOC 83.95 112.8 -28.85 -25.58
BINNY 74.95 101 -26.05 -25.79
ARROWGREEN 500 683.75 -183.75 -26.87
BIOFILCHEM 8.3 11.35 -3.05 -26.87
TANAA 44.85 62.45 -17.6 -28.18
KITEX 410 583.2 -173.2 -29.7
KAYA 725 1,041.75 -316.75 -30.41
HFCL 13.21 19.1 -5.89 -30.84
RTNPOWER 7.1 10.57 -3.47 -32.83
REIAGROLTD 0.44 0.66 -0.22 -33.33
ABFRL 141 212.2 -71.2 -33.55
NATCAPSUQ 85.5 133.2 -47.7 -35.81
LITL 3.81 6.25 -2.44 -39.04
MELSTAR 4.95 8.14 -3.19 -39.19
INOXWIND 187.5 317.7 -130.2 -40.98
ESTER 38.5 65.25 -26.75 -41
SYNCOM 6.29 10.72 -4.43 -41.32
JSHL 9.1 15.99 -6.89 -43.09
BHILSPIN 7.7 14.6 -6.9 -47.26
SKMEGGPROD 51.4 150 -98.6 -48.6
BHANDHOS 2.01 4.77 -2.76 -57.86
RADIXIND 75 205 -130 -63.41
SANJIVIN 16.25 57 -40.75 -71.49
RICOHQ 193.45 693 -499.55 -72.09
TRILOGIC 5 27.4 -22.4 -81.75

SEBI’s new Investment Adviser Guidelines consultation/amendment note of October 7,2016 Clause 4.6.3 a) proposes that “No person shall organize or offer any scheme/competition/game/ league on securities or related to securities market”….this is sadly a blanket ban ,yet understandable as was aimed at Trading Leagues that were a win win for those conducting them & in my view encouraged over trading .

TAP GAP never solicited business or monies to participate & in fact winner/s I picked from all entries ,received my blog hamper in appreciation.It was launched years ago in an endeavour to further Investor Education,Awareness & Protection through Fundamental Analysis & Valuation Basis .In my view it has been serving this fundamental purpose quite well indeed as evidenced from rising popularity.I intend to have a dialogue with SEBI on this and get their green signal to continue with this

Many Thanks to all of you,who have participated wholeheartedly and with great enthusiasm in TAP GAP Posers in the years before & I do hope I can continue this with SEBI’s concurrence

Well done Shobhit,the Brilliant Aroma of Lakshmi Enery & Foods Ltd’s Basmati Rice served you very well ,despite the controversy the company’s group companies are embroiled in ,in the NSEL Scam !  🙂   read more