- While the ‘King of Good Times’ bounces around in South Africa with his Cheerleaders cheering his ‘Royal Challengers’ in the IPL,his Kingfisher Airlines Cheques are bouncing here in India as the Airline faces more severe Royal Challenges that surely should be of a higher Priority
- Have a look at the Times of India’s Mumbai Edition this morning…The’ve got Singer,Adnan Sami and his woes in three full blown reporting pieces on Page 1,3 and even 4 !…If you put them all together,it’s nearly a full page of Times Reporting on Adnan Sami !…They don’t even cover our PM like this ! Hey Guys ! You too have caught the ‘Bug’ Adnan Bug like his wife has !….It’s rather amusing that neither Adnan,nor his estranged wife are Indian Citizens…yet to settle their internal disputes and woes the’re using our Indian Police and Courts !…This is the beauty and graciousness of our Indian Democracy…welcoming one and all to come and use it’s facilities !….Just deport both to their own lands and see how their disputes will either be solved overnight or die a natural death quickly !…Hey ! Sami ! maybe crooning your hit song ‘Lift Kara De’ may be your prayer from out of all these woes !
- Tata’s need to repay a bridge loan in June 2009 that was taken to part fund their purchase of Jaguar….Sigh !…yet again they have resorted to selling of part of their crown jewels !…Tata Sons have sold off 10 million shares of TCS today at Rs 627.25 to 15 different Institutions to raise Rs 627 crs…In fact in calender year 2008,TCS’s share price dropped by 44% ,twice the size of drop of competitor, Infosys….the reason was this very issue of selling pressure of TCS shares by Tata Sons in 2008
- Sensex is now 12000 and waiting for buying suckers…expect correction…the speed and scale of this 45% rise inside two months begs for it !
Kingfisher Mallya the King of Good Times and his CA~LENDERS this year !
This is the Reality from the Prediction a few years ago ! ~ a forced change in focus ~ from swelte and sexy bikini clad models hand picked from hundreds, that Loyal Photographer Atul Kasbekar clicked for the Annual Kingfisher CALENDAR to a survival business model being thrashed out with CAs and LENDERS for Kingfisher Airlines whose license has just been suspended !
In the past few years Blogged a few times on Kingfisher Airlines and it’s financials,right from the time I highlighted the risk of the Brand being valued for leveraging debt on this Intangible ! ~ use search on the blog to locate these
Mallya is a true role model for my blog’s tagline “In India,Companies may fall sick but Promoters rarely do!”
In a Sense I do sympathise with him ~ and in the same Sense I don’t ! ~ a few good reasons for this ! ~ his UB group and him hold 28.98cr shares FV Rs 10 or 35.83% of KFA’s Equity ~ all pledged
In a Sense I do sympathise even with the Lenders ~ and in the same Sense I don’t ! ~ a few good reasons too for this !~ SBI,IDBI Bank,ICICI Bank and Bank of India have converted some part of loan to shares at I think @ Rs 60 ! ~ they collectively own 7.1 cr shares of FV Rs 10 or 8.78% of KFA’s Equity as at September 30,2012
In a Sense I do sympathise with the 214000+ Shareholders of KFA ~ and in the same Sense I don’t ~you guys took a flying risk despite clear indications of heavy turbulence during Flight !
Where I do really sympathise is with the Employees ! ~ try living without salaries for even a month ! ~ and when Mallya last met them I was stunned by his attitude ~ literally chiding them for holding flyers to ransom by resorting to go slow,strikes and no shows ~ did they have any other Choice except to resign and leave and probably say goodbye to their dues too ! ~ Mallya has not kept his word to them in the recent past and even this oral offer of paying three months salaries for the seven months due before Diwali is not in writing ~ and when he had crucial meetings with lenders he was seen in the Control Room of the Formula I Singapore Grand Prix monitoring his Force India Cars !
Meanwhile KFA valiantly struggles to remain above par at Rs 10 on ground BSE and NSE despite none of it’s Planes in the Air currently ! ~ In fact The Planes have been bolted in the Hangars by AAI till dues are cleared and those who own them and had leased them or sold them on instalments to KFA have been unable to recover possession of the planes
It was quite an interactive Saturday at the Full House Fundamental Equity Value Vs Price Mumbai MasterClass on Compounding & Capital Protection
We began in earnest at 9.30 am right through to 8 pm~ so much debated from current unnerving market meltdowns & what should be mindsets & strategies in such times that suddenly overcast us in September ~ of Courage & Conviction & Cash ~ what if one is fully Invested ? should one average? should one exit ? why in panic one tends to always sell off the winners to realise whatever profit in hand & let’ losers drag? ….lot’s of questions that were addressed with a confidence culled from such experiences in the past thirty years
They came from all around ~ rookies to veterans ~ small to High Net Worth ~ from Broking Houses,J P Morgan,Accenture,Abu Dhabi Commercial Bank,Cap Gemini,Reliance,Moneycontrol etc
We covered Time Value,Volatility,Valuation & Asset Allocation with Illustrations of over 25 companies with few of them in detailed Valuation over Earnings & Assets & Challenges faced…went through a few Annual Reports & Interim Results & Exchange Notifications & Developments through News in the Media…checked price trends in the short term & even over last ten years to assess Risk & Reward & Mispricing Opportunities
How the discipline of Valuation & Asset Allocation is your Weapon for Survival & Wealth Protection while growing it & to stay away from Noise & Insider trading & from those who know nothing or even more dangerous from those who don’t know they know nothing !
Valuation ! Valuation ! Valuation ! …how this leg of the equity table actually must be the most solid to hold the table together when the other leg of Liquidity props up the remaining two legs of Sentiment & Momentum ~ Impact & Quantum of FPI & DII Flows especially when they slow down or reverse
Put up Friday,September 28,2018 closing prices touchlines of over 200 scrips & even those separately in the Finance,Pharma & Realty Space showing the wealth destruction in them from their 52 week Highs….alarming yes,but is there value re-emerging in many? ~ Showcased a Core Scrips Valuation Grid too
In this continuing market meltdown across the board that has knocked off 50% & more in many that actually hold wealth creation potential & in many that simply were wealth destroyers in the making & should never have been married to ,who can one trust for relevant,reliable & timely information & unbiased & wise interpretation ? ~ Government,Exchanges & Regulatory authorities,Bankers, Auditors,Media,Brokers,Experts,Promoters & Fund Managers of PMS & MFs,Company Promoters & Management ? Who ?
It was a wonderful Saturday for all of us ~ a Full House ~Time just Flew!
The Mumbai Equity Workshop on Wealth Destroyers having the Potential to bounce back kicked off at 9.30 am stretched into 7 pm…began with a Tambola or Housie where they had to guess the Wealth Destroying company on the questions posed & strike off the name if it’s there on their Ticket…In fact each pulled out a question & posed it for all…Prizes for Jaldi 3 & Two Full Houses & a question Bank on 25 companies…like “Chor ! Chor!” & they got it ! ~ Kingfisher Airlines ! or Ethopian Counsel yet destroyed his Company & promptly the answer shot back “Karuturi”! Chocolates were given for each correct answer too while I spoke a minute or two on each company & how it was destroyed & whether it can revive
Covered Valuation,Sentiment,Momentum & Liquidity…the power of Compounding for Wealth Creation…FPI Flows Impact…Impact of Global & Domestic Economic & Geo-Political Head & Tail winds…the impact of three leading rates~inflation,interest & exchange….how to protect capital while growing it through the discipline of asset allocation & when to adopt tactical strategies & staying true to ones’ risk profile
…& if convinced on Equity & India…showed them why they should be…then should you go for passive index investing through Mutual Funds Schemes & be content with CAGRs of 10% to 15% over the years or should you go directly into Equity for specific selections for potential of higher gains…& why the latter should be your strategy…& why Fundamental rather than Technical Approach…& not to mistake luck for skills in such bullish markets
Tea & Coffee & a variety of Cold Beverages & Biscuits & Wafers were served through the day & we had to switch from a Copper Chimney Lunch Buffet arranged to a Soup,Salads,Sandwich & Desserts Buffet at Pizza By the Bay as the former’s kitchen had grappled with a fire the previous day & was closed on Saturday
Must Thank the Full House with Participants coming in specially from Dubai,Malaysia,Delhi,Cochin & Ichikaranji too…there were a few repeats from earlier workshops in Bangalore & Mumbai ~ take that as a thumbs up!…gratifying that within three to four days days of announcing this workshop end May 2017,it got full…surely Sensex at 31000+ and climbing has something to do with this ! 🙂
On December 6,2013 following on a blog reader Dinesh Sampat’s request I had posted the warning below with elaborate reasoning:
This Tuesday morning the Times of India edition carried a brief coverage of CBI arresting the Promoters of Nakoda for forging papers and manipulating accounts to avail of Bank Loans of over Rs 2000 crs which were siphoned off
The Share Price is 46 paise on BSE …yes it’s still quoted
Planning a Training Workshop that has a classic Theme for such low priced Wealth Destroyers & how & when to spot a turnaround & take the risk,if indicated ….should announce it shortly
Do not get seduced by low below par quotes & a mindset as “what could go wrong…the down side is limited !”….you’ve already been foolish in Global Trust Bank (vapourised) & Kingfisher Airlines(suspended but as good as vapourised) just to mention a few black sheep
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 :
- Eicher Motors-1992 => Rs 80 lakhs
- Asian Paints-1986 => Rs 90 lakhs
- HDFC -1990 => Rs One Crore
- Brittania – 1985 => Rs 1.06 crs
- MRF – 1985 => Rs 1.10 crs
- BOSCH -1985 => Rs 1.20 crs
- Amara Raja -1991 => Rs 1.25 crs
- Shree Cement -1990 => Rs 2.90 crs
- Infosys – 1993 => Rs 3 crs
- Dr Reddys -1986 => Rs 10 crs
- 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