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 !

A Dose of Rakesh Jhunjhunwala

Rakesh Jhunjhunwala on Future of Equity Market

Methinks every Indian Equity Investor needs a dose of Rakesh Jhunjhunwala (RJ) every few years! ~ any sooner it could be an Overdose !  😆 ~ just kidding !

I like the guy ! ~ right since I interacted with him when I invited him around 15 years ago at the turn of this century for interacting in an evening  Q & A session with my packed class of @ 90 participants in my Equity Portfolio Structuring and Stock Analysis Workshop at the BSE Training Institute as I thought he would add practical value & he did

“Boss ! I’m a Sadak Chaap ! ”  he had told us then as also how he had reconstructed his equity portfolio to concentrate only in a few stocks after the 2000 ICE debacle…so in a sense most of his Wealth has grown only in this Millennium in the past 15 years ~ and to his credit in Selections that were not really Blue Chip or Core

Yesterday had gone for an  IMC interactive meet in Mumbai to check out if RJ has sobered & matured in his ‘manner of speak’ over the years ~ I rarely watch Stock Channels ~ don’t even have a TV in office~  so was not really conversant with how & what he delivered in his appearances though knew of his initiating big stakes in companies

I am delighted to blog he has not changed ! ~ shot straight from the hip & mouth again as he always does ” I’m a satodia(translated to mean speculator)  & investor & not an economist” ~ his investment portfolio has spread into the Alternatives of  Bollywood Movie Production too with Kareena & Arjun starrer ‘Ki & Ka’ being his latest co production~ is into horse racing too and owns a few horses ~ passions perhaps where return on investments need not be measured in monies !?

Many perceive him as Dehati or Crude Dude for his rustic loud boorish way of speech~ but don’t let it fool you ! & he does not make any pretenses ~ he’s a CA by training & wears a fairly sharp mind

Money Talks & Crowd Laps it up all !~ many vigorously & ‘knowledgeably’ nodding in agreement

These RJ’s views & responses to questions posed should interest you :

On The Future of Equity Markets ~ Reiterates this is only the Trailer & we are going to witness a Mother of all Bull Runs.India is a thriving young Democracy with US $ 600 b in Savings every year.Equity Markets receive just US $ 50 b from this.This has to improve and it will ~ anyone ,any  doubt!?   

On Returns from Equity  ~ Ironically while his riches have been through multibagger 1000% + equity gains in concentrated high weightage stocks like Titan & Crisil he asserts that one should be happy with 18% CAGR gains and if it goes to 24% one should be really happy

read more

Kingfisher Airlines NPA~Exposes Political & PSU Banks Nexus to Lend against Brand!

Kingfisher Airlines NPA~Exposes Political & PSU Banks Nexus to Lend against Brand

It was clear to me right in 2009 itself of the danger of lending against the Kingfisher Airlines Brand 

This was my Warning on July 23,2009 

Borrowing against Brands !…Interesting,but Risky area opening out !

Thursday, July 23rd, 2009

Multiple Posts on my views on the KFA Debacle &  Vijay Mallya have been categorised above under Kingfisher Airlines ~Machiavellian Mallyas

KFA was my case study at several Seminars & Workshops where I warned  that it was on it’s way to becoming like Global Trust Bank that vapourised and the over 2 lakh shareholders should exit immediately and potential aggressive investors should not get seduced to buy into it !

Who will now bell the Cat and reveal why the PSU Banks actually lend to KFA,especially under the intangible Brand which Grant Thornton had valued at ,I believe US $ 750 m! ….. the Banks were unable to monetise this to recover their dues !….no surprise here at all !….makes to recall how E & Y had valued in just One Day(Company Law Board had pulled them up for this) the Properties at a value in the Satyam-Maytas Deal to fill the hole in Satyam Balance Sheet ! ….in fact the Banks even converted Part Loan to Equity at Rs 64 !  

Clearly Vijay Mallya’s Proximity to Political Leaders had a hand when the Loans were given & even till date this Proximity is the reason for his continuing arrogance and brazenness ! …. his Rajya Sabha MP Candidature from Karnataka as an Independent was supported by a few Political Parties just to defeat the Nominee of another !

I can only surmise that the Glitterrati,especially those who celebrated with him his 60th Birthday in Granduer, & continue to fawn over him and defend him and his son ad nauseum in columns and  on debate panels on TV News Shows have been and/or continue to be beneficiaries of his largesse with public funds,if i daresay ! ~ Nothing is Free !

Shame !!! ~on these 17 Banks & the many years it has taken them to declare KFA & Mallya as a wilful defaulter  & seek his arrest….investigate who in the Banks was responsible to lend in the first place !…the truth will be revealed then as to why they lend & who made them !

Shame !!! ~ on those defending Vijay Mallya…a lawyer on a panel says to follow due process of law….another says he will pay !….if the due process of law was followed  in time then Vijay Mallya would have been history by now !….the irony is that the victims,the KFA Employees ( a captain on a panel voiced this) want him free so he’s able to pay them their dues….for if he goes behind bars so goes their hopes!….a stock market scamster comes to mind who was arrested & convicted as he owed the  banks heavily but has been on bail  on an Apex Court Appeal now pending for years and has been able to repay the Banks despite his accounts being frozen ! ~ tacit!? …think about it !….manipulated & rigged stocks & got into trouble….then manipulated & rigged stocks again to repay !….the World is round indeed !

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Spicejet Up & Indigo Down this morning !

Spicejet Up & Indigo Down this morning !

As expected both airlines have had a stellar record Q 3 FY 16 profit on the back of  favourable lower cost of Aviation Turbine Fuel that constitutes over 50% of Expenses

However Indigo declared their Q 3  post market on Thursday,January 21,2016 revealing Rs 657 crs PAT in the December 2015 Quarter.On Friday,January 22,2016 the Interglobe Aviation (Indigo) Share Price crashed 20% before recovering slightly to close at Rs 968.75 on BSE

This Monday Morning,January 25,2016  it has sunk further by over 7% in the first 20 minutes of trading to drop below Rs 900 !

In contrast Spicejet declared a record  Rs 238 crs Q 3 FY 16 PAT postmarket hours on Friday,January 22,2016 and had held steadier @ Rs 70 levels after recovering from Rs 63 on the back of Indigo’s collapse

This morning Spicejet opened strong up 10%  @ Rs 77 in contrast to Indigo’s continued fall and touched Rs 80 before correcting to @ Rs 75/76 levels,yet up over 7% over Friday closing inside first half an hour of trading

Spicejet has made Rs 334 crs profit for the nine months at December 31,2015.Thus Full Year FY 16  EPS is likely to be @ Rs 10 on current Equity of @ Rs 600 crs (Face Value is Rs 10)

However the Auditors ,while not qualifying their report, have directed attention to the huge net liabilities over assets of Rs 882 crs ,being accumulated loss of Rs 2877 crs against shareholder funds of Rs 1995 crs that could materially impact company’s survival going forward

However,as Spicejet is on a recovery turnaround path,with Ajay Singh,it’s co founder in 2005 back at the helm & aided by lower & therefore favourable Aviation Turbine Fuel Prices,it should be able to meet operating and financial challenges

Market Cap of Indigo presently  this morning at 9.45 am is just under Rs 33000 crs at Rs 910 Share Price levels while SpiceJet’s Market Cap is just over Rs 4600 crs at Rs 76.70 levels

Sensex is up  over 210 points at 24650 levels

Crude Oil Price has shown some re-bounce to US $ 31 a barrel from lows of US $ 28 a few days ago

Aviation Sector will continue to thrive on lower ATF which will remain it’s underlying for Profitability levels

Will be interesting to see how Jet,Indigo & Spicejet play out in 2016 !

Go Air too is lining up for an IPO

Disclaimer : Have an interest in Spicejet

FLY INDIGO !~Lists high at Rs 850+~Why!?~Read My October 2015 IPO Note

IndiGo has had a brilliant listing this morning at 10 am opening at Rs 856 on BSE and racing to a high of Rs 898 and  now is at Rs 860 levels at 10.20 am.The IPO Price was Rs 765

Why this Premium on Listing !?

Go through my  IPO Note below to get some sense and wonder why Retail Investors missed out and why many  ridiculed the Pricing and the over liberal Dividends

October 29,2015

SCRIP SCAN

FLY INDIGO !

IPO of InterGlobe Aviation Ltd (IndiGo)

Book Building Price Band : Rs 700 to Rs 765

IPO refuelling the IndiGo Fleet for Operations & Expansion

IPO refuelling the IndiGo Fleet for Operations & Expansion

Profitable Operations in 7 of 9 Operating Years as a Low Cost Carrier & Bumper Profits on significantly lower Aviation Turbine Fuel Prices in ongoing FY 16 indicate an Earnings Multiple of  just 11 on IPO Top Range Pricing of Rs 765

+

Scale Potential being tapped with Huge Expansion with current 97 Airbus Fleet to be expanded to over 527 (Orders placed) over the next decade

 

Major Risk

 Listing Gains may not be available as :

Indigo drained of all Networth by Dividends to show a negative Networth on June 30,2015 ! +  Offer for Sale Component is huge at @ Rs 1750 crs (nearly 60% of Issue Size) and nearly all shareholders are offloading part of holding

Thus Promoter Mindset perceived to be Greedy by Retail  Investors who tend to invest more on emotion & sentiment than on pure reason and thus response has been tepid from them

“Why should we pay a high IPO Pricing of Rs 765 just for Potential & Promoter Pocket. Moreover Bumper Profits & Over the Top Liberal Dividend Distribution Practice & Policy may not sustain into the Future!”

IPO Opened on

Tuesday, Oct 27, 2015

IPO Closes Today

Thursday, Oct 29, 2015

IPO Type

100% Book Building

Equity Shares  Offered

Fresh shares ~ 16.6-18.2 Million shares (worth Rs 1272 Crs) Offer For Sale (OFS) ~  22.8 Million shares being part of holdings from nearly all existing shareholders

Face Value of Shares

Rs 10

Price Band

Rs 700 – Rs 765 Per Equity Share

Issue Size

Rs 3018 Crs @ Rs 765 per share

Listing on

BSE, NSE

Bid Lot

15 Equity shares and multiple of 15 Equity Shares

Global Book Running Lead Manager

Citigroup Global Markets India Private Limited,  J.P. Morgan India Private Limited,  Morgan Stanley India Company Private Limited

Book Running Lead Managers

Kotak Mahindra Capital Company Limited

Object of the issue

1. Rs 1165 Crs towards retirement of certain outstanding lease liabilities and consequent acquisition of aircraft
2.Rs 33 Crs for purchase of ground support equipment for airline operations; and
3. General corporate purposes
4. To receive the benefits of listing of the Equity Shares on the Stock Exchange

QIB’s

50% of Net Issue Rs 1512 Crs (including Anchor) at upper band

NIB’s

15% of Net Issue Rs 454 Crs at upper band

Retail (upto Rs 200000)

35% of Net Issue Rs 1059 Crs at upper band

  

OVERVIEW

InterGlobe Aviation is the company  that owns & operates the Low Cost Carrier IndiGo Airlines. The airlines commenced operations in August 2006 and is now one of the largest players in the domestic airline space with the largest market share that’s fast closing in on 40%. It ranked seventh in terms of largest low-cost carrier globally in seat capacity in 2014, according to CAPA Centre for Aviation . At the end of August 2015, the airline had a fleet of 97 aircraft.

It has an order book of 180 A320 neo (new engine option) aircraft and expects to take delivery of 15 additional aircraft, including nine A320 neos by March 31, 2016. According to Airbus, A320 neo aircraft are expected to consume up to 15% less fuel than current generation A320 aircraft without shark-lets, which will further reduce fuel consumption per flight.

Indigo has also recently placed an order for 250 new Airbus aircrafts in 2015 which  are scheduled for delivery between 2018 to 2026.

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Indigo Listing this morning ! ~ Grey Market indicates premium listing

 

Indigo Spoofed Pre Opening Quotes on BSE and NSE

Indigo Listing this morning ! ~ Grey Market Premium of Rs 58 last evening indicates premium listing over IPO Price of Rs 765….however it may trade even below IPO Pricing during the day

Qatar Airways making noises to buy into Indigo on listing augurs well

Spicejet has already rallied over Rs 51 on the back of Indigo Buoyancy

Trading should commence at 10 am in Indigo

Till then be happy with spoofed pricing pre opening on both BSE and NSE as above with Buyers at Rs 1338.75  and sellers at Rs 573.75 on BSE and Rs 590 on NSE

Spoofing is a crime in USA as one is not allowed to input orders that one has no intent on executing

Don’t tell me these prices are only for testing !

Had prepared a long note on Indigo IPO and suggested it looks good though risk remains on no gains on listing….will put this note up shortly

 

10 am

What a listing ! at Rs 866 and racing away now in seconds to Rs 880+ ! 15% up from IPO Price of Rs 765