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 !

Indiabulls Ventures Ltd at Rs 33~ Up 100% in a month ~ More in Store?

Indiabulls Ventures Ltd at Rs 33~ Up 100% in a month ~ More in Store? ~ 52 Week high was Rs 39+ a year ago in July 2015 & 52 Week Low was Rs 13 this April 2016

The Market Cap from @ Rs 500 crs a month ago is now kissing Rs 1000 crs

It was earlier called Indiabulls Securities Ltd

The uptick has been brilliant in quick time & the writing has been on the wall..read that as Company Notifications on the BSE & NSE in the past few months

May 13,2016 ~ Granting of 9.5 Million Stock Options at an exercise price of Rs 16(current price at the time) under the ESOS 2009

June 15,2016 ~ Board Approval of a Preferential Issue of  58.3 m Convertible Warrants to Promoters & CEO at exercise price of Rs 19.75

June 20,2016 ~ EGM Notice for July 15,2016 to pass the Preferential Issue as above & SALE OF INVESTMENT 

July 2,2016 ~ Granting of 19.7 M Stock Options at an exercise price of Rs 24.15(price a few days ago) under ESOSs 2008 & 2009

So what’s the Big Deal ?

Big Deal is being planned to happen & that’s disclosed in the June 20,2016 Notification of SALE OF INVESTMENT for improving liquidity & reduction of debt purpose which is Item No 2 and relevant part extracted as below

“….to sell upto 100% of shares held by Indiabulls Distribution Services Limited, a wholly owned subsidiary of the Company (“IDSL”), in India Land and Properties Limited, a wholly owned subsidiary of IDSL, on the terms and conditions, including the consideration, which shall be more than the amount invested by IDSL, in such shares, as the Board may finalize” 

This actually is the Sale of One Indiabulls Park,Ambattur,Chennai which was bought in November 2014 at @ Rs 600 crs from Madrid Based NRI Investor Harish Fabiani (he’s also invested in Edelweiss & Indiabulls Group Companies + others)

FY 15 Consolidated Accounts as on March 31,2015

Consolidated FY 15 Accounts of Indiabulls Ventures Ltd shows Net Fixed Tangible Assets at Rs 550 crs  of which 77% is this Property reflected  with a aggregate value of Rs 426 crs ~ Rs 320 crs for the Building + Rs 15 crs for Furniture + Rs 91 crs for Plant & Machinery

Long Term Debt at March 31,2015 was Rs 331 crs ,all of which relating to the One Indiabull Park Property ~ 150 crs 10 year (monthly EMI) Lease Rental Discounting Facility + Rs 185 crs 5 year Loan Against Property

FY 15 also shows Goodwill on Consolidation of Rs 109 crs,most of which is related to this property acquisition by subsidiaries

FY 16 Consolidated Accounts as on March 31,2016 reveal :

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L & T Finance Holdings recovers to Rs 70 & up 44% from Low inside Two Months

L & T Finance Holdings recovers to Rs 70 & up 44% from Low of Rs 48.30 on February 12,2016….that’s inside Two Months…it also trades in the F & O Segment

It opened 2016 at Rs 65  when Sensex levels were at 27500 +  and closed January 2016 at Rs 58 only to drop sharply below Rs 50 to Rs 48.30 on February 12,2016 and in fact closed February 2016 at Rs 52

Today it’s up to Rs 70 on a day when RBI has dropped Repo Rate to 6.50% ~ cut of 0.25% as expected by the markets & therefore priced in earlier.The Sensex post Noon  & announcement of repo rate cut has corrected over 330 points and is below 25100 currently  but L & T Finance is up 7.4% to Rs 70 !

Have always had a soft corner for L & T Group even when they’re in soft times  & in midst of controversies like just  two years ago in mid  March 2014 when it was introduced for trading in the F & O Segment in mid month just when parent Larsen & Toubro offered a stake through OFS on the Stock Exchange Window at a Floor Price of just Rs 70 on SEBI allowing this route even though they had sold shares in the prior six months.The F & O trading pattern a day or two before showed insiders ( who must have known lower floor price before hand) short selling at Rs 85 levels  & SEBI investigation revealed parties who had never before ever done F & O having indulged in it to make several Crores of Profit

Had been disappointed with L & T Finance Holding’s inability to leverage strongly on the parent L & T Brand in their Finance Foray….This Listed Company should have been over Rs 200 by now inside 5 years  after it’s IPO at Rs 52 in mid 2011….Had recommended it strongly in 2011 & saw it’s price move smartly to Rs 95+ Highs in 2012 & 2013 only to slide back….then had recommended exit as was not enamored with top management who always wore a bored & disinterested look at analyst meets

Then came in Bain Capital in September 2015 to stir the shareholding in the company by picking a preferential post issue  stake of 5.27% through an aggregate of 95.66 m shares & warrants ( to be exercised from six to eighteen months from allotment)  @ Rs 74.This would infuse over Rs 700 crs into the Company.It  also created another Rs 600 cr exposure through a 4.95 % post issue stake by buying 85.2 m shares from parent Larsen & Toubro in market deals at @ Rs 70…the Sensex at the time was @ 26200 levels with the Share Price of L & T Finance Holdings in the Rs 67 to Rs 70 range

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Sensex disappoints in FY 16 as many of the 30 constituents lose big value

FY 16 has been a mixed year for Stocks with Markets on a downward drift  with  Sensex closing 9.4% lower  at 25341

Sensex disappoints in FY 16 as many of the 30 constituents lose big value 

Interesting & Heartening to it’s Shareholders ,Reliance has been the biggest constituent gainer at @ 27% while at the other end BHEL has lost half it’s value at 51% !  ~ another 11 companies have lost between @ 19% to 30 % values

Domestic Concerns revolved around  second consecutive failure of monsoon in 2015 &  slow pace of Reforms  & Corporate Earnings Lethargy with growth in single digits despite boasts of GDP Growth of over 7% and lower Inflation and Oil Price falling 40%

Global Concerns revolved around  China’s Growth slowing down considerably & It’s Stock Markets losing a lot of it’s froth in panic falls, continuing recession in Europe & expectations of the US Fed raising rate

Consequently FPI Inflows which were a record US $ 17 b in FY 2015, reversed to outflows of US 2.1 b in FY 16.These outflows would have been higher if last month March 2016  had not seen a reversal back to FPI Inflows of US $ 3.2 b 

In the first three months of this Calendar Year 2016 , January &  February 2016 witnessed significant outflows of US 1.67 b & US $0.8 b respectively that dropped Sensex to 23000 levels.On the back of many countries like Japan,Switzerland and Sweden embarking on Negative Interest Rate Policy,the  US Fed send out dovish signals and has delayed Rate hikes.This saw FPI Equity Inflows smartly cross US $ 3 b in  March 2016  getting them back into the Green in 2016 & revive the Sensex back up @ 10% to 25500 levels or else FY 16 would have seen a Sensex drop of nearly 5000 points & @ 18%,double than what it actually did in the end

Here are some FY 16 Trend observations :

  1. Sensex closed down 9.4%.It was down @ 18 % just around a month ago but smartly pulled back on record US $ 3b FPI Inflows in March 2016
  2. Of the 30 Sensex Constituents,amusingly after a seven year itch perhaps 🙂  Reliance is the biggest gainer  at 27% taking it’s Market Cap to US $ 49 b,next only to top TCS  which  despite a flat year retains Top Market Cap of US $ 73b !
  3. Six Scrips,including all weather favourite TCS (Market Cap US $ 73b) have remained flat
  4. Of the Four Banks,only HDFC Bank stays in the Green just about,the rest have lost lot of value from one third to one fifth
  5. India Growth Proxy Larsen & Toubro has lost 26% Value
  6. Four Pharma Majors have also dropped significantly from 13% to 28%
  7.  Three IT Bellweathers saw Wipro down 10%,Infy up 10% and TCS  in between remaining flat
  8. Of the Five Auto Majors,the two 2-wheelers are both in the green,two ,Maruti & M & M are flat while Tata Motors has lost 30% value
  9.  Three eternal FMCG Favorites,ITC,Asian Paints & HUL have held up
  10.    After a Steel Sector Battering past few years,Tata Steel is now catching it’s breath
  11. All  Five  Non Bank PSUs continue to flounder ~ BHEL has lost half it’s Value follwed by ONGC down 30% ,Coal India down 19%,NTPC down 13% & Gail down 8%
  12. Housing Finance Leader HDFC too has taken a beating of @ 16%
  13. Controversial Adani Group’s Adani Ports is down 20%
  14. Telecom Leader Bharti Airtel is down 11% despite getting a 4G breather as Reliance’s Jio ,expected to be a sector disruptive force,launch continues to be delayed but should be fully operative by FY 17 year end

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Anil D Ambani Reliance Group~Market Cap & Debt ~ Defence to its Defence

Have a Look at the Market Cap (today closing March 28,2016)& Consolidated Debt (September 30,2015) of these Five Listed Companies of Anil D Ambani

Name Of The Company

Market Cap (Rs.Crs)

Total Debt (Rs.Crs)

Reliance Power

13015

31428

Reliance Infrastructure

13747

24645

Reliance Capital

9117

22730

Reliance Communication

12457

35254

Reliance Defence

5098

6884

Total

53434

120941

Rs 120941 crs was the Aggregate Consolidated Long & Short Term Debt of Anil Ambani’s Reliance Five Listed Group Companies as on September 30,2015 while today’s Market Cap is Rs 53434 crs.Aggregate it and you’ll get Enterprise Value without adjusting for any Cash    

Reliance Defence (erstwhile Pipavav) has come into his fold now and a turnaround is expected after CDR was approved ~ RCom is planning to reduce Debt substantially by selling Assets like it’s Tower Business.It also is being supported by Big Brother Mukesh Ambani’s tie ups for Jio Roll outs etc ~ RPower has just declared and paid it’s maiden interim dividend of 10% in December 2015 but continues to struggle to commission Samalkot Power Plant on non availability of Gas ~ Rinfra & RCap are the relatively stabler companies

As long as his companies keeps servicing debt the Banks who have lend will not have to classify the Loans as NPAs….In fact with Anil Ambani planning huge Defence Sector Investments and Growth in his other Companies the aggregate Debt may increase even after Asset Sell offs

Problem is that Anil Ambani has not been enjoying good Investor Credibility after wealth destruction in RCom & RPower & suspected involvement of top management in the 2G Telecom Scam.Investigation continues

The Group’s Market Cap is Rs 53434 crs ~ Compare this with Big Brother Mukesh Ambani’s Reliance Industries that closed today with a Market Cap of Rs 330654 crs

Now his big Focus is on Defence with India having embarked on a Huge Defence  ‘Make in India’ Endeavour opening out FDI  Cap to 49% in the Sector

None of Anil Ambani’s Companies have approached it’s shareholders or the Public for funds after the Reliance Power IPO at Rs 450  in January 2008

None have as None could !

The Reliance Power IPO was a huge obscene premium assault on the Public from which the Public has yet to recover (Quotes at Rs 47 today after a Bonus Issue in 2008 itself  from the Premium collected that adjusted the Price to @ Rs 270!) .The Issue was hyped by the Investment Banker Wolves to create a huge oversubscription.

Of course in January 2011 Anil Ambani had entered into a Consent Plea with SEBI without admission of guilt & was investigated for misuse of Overseas Borrowed Funds and was personally fined and banned access to Capital Markets for a year and Reliance Infra for two years   

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Indiabulls Housing Finance & Reliance Communications sinking on Bourses !

Post Bihar Elections Results observe the rapid decline in share prices of Indiabulls Housing Finance & Reliance Communications!

Both are sinking on the Bourses  by 15% + & 10% respectively today ….far more than Sensex drop of 1% to 25600 levels !…and both are traded in F & O Segments too !

Indiabulls Housing Finance down 15% + this morning !

Indiabulls Housing Finance had recorded a high of Rs 820 on BSE on August 10,2015 and was available at even Rs 750 levels end October 2015,just a fortnight ago!.Last few days it has rapidly sunk and today the intensity was a worrying over 15% to sub  Rs 600 levels this morning

This is just a day after it announced it was acquiring 39.76 % stake for US $ 100 m in the UK Bank OakNorth as was announced also by the PM in his address to Businessmen in UK yesterday while on a three day UK Trip.Interestingly this acquisition was guided by the outspoken and blunt Dr K C Chakrabarty who is on the Board of Indiabulls Housing Finance and who retired in 2014 as Dy RBI Governor…I had blogged on him then  when he was blasting the banking rot !…See the link below :

Why Now? ~RBI Dy Governor K C Chakrabarty speaks his Mind on the Banking Rot and seeks to retire a few months early !

Saturday, March 22nd, 2014

 

Recently in September 2015  the Company had also raised Rs 3997 crs in a QIP at Rs 702 that took it’s networth past Rs 10000+ crs.It has just announced a third interim dividend for FY 16 on it’s FV Rs 2 Share

BSE shows an average Two Week  Daily Volume of just 49000 shares .But today there’s mean abnormal selling at just past noon the Volume is 8.6 lakh shares already !

What’s happening ! ? Anybody knows !?

Incidentally the Chairman Sameer Gehlaut too is picking up a 10% stake in the UK Bank in his personal capacity

 

RCom ringing alarm bells on the bourses

Reliance Communication  recorded a day’s low of Rs 63.75 down over 10% this morning and is trying to recover from there.Just last week it was Rs 82 !….having surged from Rs 50 levels end August 2015….down by 20% from Rs 80+ levels inside days !

Average Two Week Daily Volume is 16 lakhs but it’s approaching 30 lakhs already on BSE as we approach 12.30 pm!

Anybody can explain !?

 

Whatever be the reason ! and there has to be !,such Volatility in such F & O Segment Scrips is unnerving for  Speculators,Traders & Investors et all with the exception of Insiders !

And Both were positioned well,despite Corporate Governance Issues,to move further ahead on favourable fundamental developments and on current valuations  !…and I did discuss them at my recent NSE Workshop on October 31,2015 highlighting the Corporate Governance Risks though !

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