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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Freedom251 ! A 3G Phone for just Rs 251 ! ~ Charity or Con!?

Got up this morning to see Freedom251 splashed across the cover of Times of India & it’s sister Mumbai Mirror

It’s a 3G  GSM Phone for Rs 251 for which the Registration & Booking begins today till Sunday February 21,2016 with deliveries in four months

Times also run a news article on the controversial launch

It’s planned to be made by Ringing Bells Pvt Ltd promoted by one Goel Family in Noida with parts from Taiwan

Charity or Con!?….that’s because it’s less than half the price of a subsidised Gas Cylinder & the Company says it’s not receiving any government subsidies   

Company should upfront receive Rs 251 + Rs 40 for delivery=Rs 291 for each phone.That’s Rs 29.1 crs for One Million Orders & 291 crs for 10 Million and 2910 crs for 100 Million !….and it can deliver by June 30!?…they should have names it Rabbit Bells !

It also has not received the time consuming BIS approval…wonder if they have applied!

When you do try to register & pay  it throws you back to the first page….that’s ominous at the start itself !

Its Human Nature to be seduced like this & apply & hope it’s not a Con!

🙂  And I’m a sucker for seduction ~ Stock Market has been a great teacher ! ~ So I’m going to sacrifice my Happy Hours Pizza this afternoon and apply if I get through !

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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Shyam Telecom Upper Circuit at Rs 51+ as RCom buys into SSTL ~ Not Justified

Shyam Telecom was on Upper Circuit at Rs 51+ this morning  as RCom buys into SSTL ~ Not Justified  

Anil Ambani’s listed Reliance Communication just announced a few days ago it’s picking up the wireless business of  Russian Parent’s Indian unlisted Sistema Shyam Teleservices Ltd that operates in India as a Telecom Service Provider under the MTS Brand

SSTL would get 10% of RCom in an all stock deal that was expected to conclude mid 2016.This is current worth just over @ 2000 crs assuming RCom Share Prce of @ Rs 80

I had blogged extensively on Shyam Telecom just two years ago in October 2013 when it had rocketed from Rs 16 to Rs 46 then…link is below

Shyam Telecom continues to Fly into a different Orbit ! From Rs 16 in August to Rs 46 upper circuit now !

Saturday, October 12th, 2013

Today Shyam Telecom hit an upper circuit of Rs 51.55 in the morning on NSE and also Rs 50.65 on BSE and has now opened out

The rise today is not really justified

Shyam Telecom owns just 380307 Equity Shares of FV Rs 10 of SSTL….That’s a paltry 0.01% of SSTL…If it thus opts to exchange these shares for RCom shares post deal it would get barely just over 25000 shares that’s worth just over Rs 20 lakhs

Market probably is under impression Shyam Telecom owns 24% of  SSTL while  it’s actually the Shyam Telecom Promoter Group of Rajiv Mehrotra that does own 22.65% of the SSTL Equity

SSTL has an Equity of Rs 3193.82 crs of which Russian Parent Sistema holds 56.68%,Russian Government owns 17.14% aggregating  a Russian Interest of 73.82% .The Shyam Telecom Group of Rajiv Mehrotra owns 22.65% with 3.53 % owned by over 18000 non promoter group shareholders

The Shyam Telecom Group that owns 22.65% comprises of Mehrotra owned entities of Intell Invofin,AT Invofin,Cellphone Credit & Securities and others

Each of these three Mehrotra Entities of the Shyam Telecom Group are common Investors in Shyam Telecom & SSTL and own 15.065%,7.186% & 6.745% in listed Shyam Telecom  and 10.95%,5.48% & 5.48% respectively in unlisted SSTL…..so it is these three Mehrotra Companies that will get under 6 cr shares of RCom valued under  Rs 500 crs currently should they opt for them in exchange of their SSTL holding

Shyam Telecom should continue to languish unless Rajiv Mehrotra decides to turn it around with fresh infusion of funds and new Business….now that’s a possibility and any share price rice will have to be assuming this and not the immediate Value benefit of RCom shares that the Company would be entitled too !

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Wow! A Full House NSE Training Fundamental Workshop !

Wow! A Full House NSE Training Fundamental Workshop yesterday !

Seems to get bigger & better every time !

Did the first one on August 8,2015 and had blogged on it  as linked below

Interesting Interaction at the NSE Equity Fundamental Training Workshop

Sunday, August 16th, 2015

Did this one too on “Interpretation of Financial Statements for Stock Analysis” under NSE’s Rapid Series at their NSE BKC Complex

@ 30 Participants,both genders aged 22 to 58 from leading Broking Firms,Corporates,Banks and even Individuals who had come on dot and stayed till 8 pm ! expecting to learn how to read financial statements and  market dynamics to assess risks and opportunities in Indian Equities

Common Question right from Manish Shah,who introduced himself  to me in the lift going up to the Class ” How are the Markets Looking “? ~ “Where will the Sensex & Nifty head in the short term”?

Had taken a Bull along ! really !…a smaller version of the Wall Street one….told the class I love four animals…Elephants (Lord Ganesha),Lions (My Zodiac Sign),Tortoise(Good Luck & of course Bulls (I’m always one!)….and you’ll always find them on my office desk !…in fact four bulls of various sizes !…and clients know my market view on simply seeing how the bulls are placed !…if facing them straight up  (↑)  as they sit across me,I’m very bullish…if slanted ( ⁄ )towards them,I’m bullish…slant inclination reveals how much !….if a horizontal view (↔ ) then indicates market will remain flat to rangebound and if the bulls face me vertically (↓ ) I’m bearish !….and slant facing me shows intensity of being bearish !

That got a few knowing laughs from the participants and set off the mood for the Workshop with humour being interspersed right through

Interacted on the Sensex Dynamics right from base year 1978 and in the last 20 years from November 1,1995 to October 30,2015 when despite nearly half of the @ 4850 trading days saw the Sensex close negatively the Sensex ran up over 650% !…but is that enough!…..the Opportunities & Threats that were clearly visible during the years right from 1991 when Modern Reforms set in to 2001 when Markets had bottomed  out on the ICE Age Melting to the Sharp drop in Interest rates from 14% to 7% in and around 2004 to post Lehman 2008 levels of 8000 in October 2008 and March 2009….showed them from current Sensex of 26657 how to assess fundamentally where we could be heading and the risks associated….discussed Passive Index Investing vs Active Investing and therefore the need for Fundamental Analysis and therefore the need to Interpret Financials & therefore the need to assess Value vs Price  & therefore this Workshop  !

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Sterlite Tech upwardly mobile @ Rs 104+ on the Digital India & Demerging Power Story

Sterlite Tech closed strongly upwardly mobile @ Rs 104+

It clearly continues to benefit from Government’s scaling up the National Optical Fiber Network (NOFN) Initiative and the ‘Digital India’ Story unfolding

However an interesting development announced in May was the demerging of it’s capital intensive and yet to contribute to profits Power Segment

The Power Segment is being demerged as of April 15,2015 into a separate company Sterlite Power Transmission Ltd which will remain unlisted

Each Shareholder will get an option to remain invested also in the Power Co or exit it.For every 5 shares held in Sterlite Tech,the Shareholder will get the options of 1 share valued at Rs 112.30 (FV Rs 2) or 1 redeemable preference share for the same value which will be redeemed within 30 days.

The demerged entity will be worth Rs 885 crs after considering debt allocation.This would compute to a Value of Rs 22.46 per Share of Sterlite Tech

Chairman Anil Agarwal states that Sterlite Technologies is at a unique inflection point

When I did the Segment Analysis ,observed that while the FY 15 Topline of @ Rs 3000 crs is more or less evenly split between Telecom & Power,76% of the Segment EBITA of Rs 327 crs comes from Telecom (Rs 249 crs)

Importantly after the demerger of the Power Segnent ,Sterlite Tech will retain just Rs 674 crs  consolidated net debt from the pre-re-structuring consolidated net debt of Rs 4881 crs

With Equity at Rs 79 crs (FV Rs 2) and with the capacity expansion plans one should expect surge in profitability which was being dragged down in the near term by the Power Segment …EBITA over Rs 300 crs for the Telecom Business in FY 16 is on the cards

There is an enabling resolution proposed for Borrowings up to Rs 1000 crs

At Rs 104,the ex demerger price works out to under Rs 82 if opting for exiting the Power business though there’s a few months to go before the demerger is effected

My sense is that whenever the record date is announced in FY 16 for the demerger  and trading switches to an ex demerger  basis just a few days prior,the ex demerger share price will quickly climb back to the cum demerger share price

Though I have had serious reservations on Corporate Governance issues with the Vedanta Group  whenever they have restructured through merging group entitities ,I quite agree with the Chairman,Anil Agarwal that Sterlite Technologies is at an inflection point …and ironically it involves not a merger but a demerger situation !

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