Superstar Amitabh Bacchan invests a Million Dollars in Nitin Fire at Rs 42.99 !

Wow ! Superstar Amitabh Bacchan has invested nearly a Million Dollars in a Bulk Deal on NSE on August 14,2015 by purchasing 1.5 Million Shares of Nitin Fire Protection Industries at Rs 42.99 !

Consequently Nitin Fire has fired up today 10 % and was on  on upper circuit at Rs 47.05 on BSE and Rs 47.15 on NSE in the morning before opening again only to get back on circuit

Remember how Amitabh had stampeded by buying Two Lakh Shares into BSE Listed Stampede Capital at Rs 88 & Rs 110 levels in December 2013 and see where Stampede is today within a year and a half with long term gains exempt! => Rs 650 levels after crossing Rs 700 recently …that’s a five bagger !

So whats fired up Amitabh Bacchan ! …or is it payment in lieu of Advertising for Nitin Fire just as he took shares of Just Dial at par before IPO and made a killing !

And who’s sold to him ? as it’s a bulk deal in NSE and not a fresh allotment

Nitin Fire Products Industries is a FV Rs 2 Share with a FY 15 Consolidated Book of Rs 15 (moved up in June Q 1FY 16 to Rs 15.67) and an EPS of  Rs 2.3   …Networth is Rs 458 crs as on June 30,2015 with Equity at Rs 58.45 crs

Relative Valuations at Rs 47  work out to PBV of 3 and PE of 20 with Capital Employed of Rs 980 crs as on June 30,2015 spread Rs 343 crs in India and Rs 637 crs overseas

Finance Charges were Rs 41 crs in FY 15 and Rs 10 crs in Q 1 FY 16 but most of the Rs 400 cr Debt is actually short  term and therefore not reflected in Fixed Assets but in Current Assets

FY 15 Consolidated Topline & Bottomline were Rs 1150 crs & Rs 67 crs respectively.Overseas Sales contribute over half.The Company operates two plants at Navi Mumbai & Andhra Pradesh and has operations in Jebel Ali,Dubai and Singapore

They have an enabling provision to raise US $100 m in Equity and in FY 14 saw  a successful buy back of 13.47 lakh shares at Rs 57 average involving Rs 7.7 crs  too.Share was split in 2010 from Rs 10 to Rs 2 after raising Rs 64 crs in a 2007 IPO at Rs 190.Two Bonus Issues ,one liberal 5:2 in 2011 and one of 1:3 in 2014 have been given  to shareholders

Auditors Haribhakti & Co,LLP have qualified their Report for two non provisions being Rs 5 crs for a Derivative Contract Loss disputed with a Bank and Rs 45.76  crs Investment in Worthington Nitin Cylinders Pvt Ltd where the Company has relied on a Valuation Report to recover their Investment but Auditors are unable to comment on any potential Impairment as a Fair Valuation Report as required by Accounting Standard 13 is not available

Promoters Nitin Shah and his two sons 37 year old Rahul and 30 year old Kunal run the Show and hold 71% of the Equity.

Their Topline Target is a Billion Dollars by 2020.The CAGR for this to be achieved is an ambitious 40% .However they have stated earlier this year that they expect to grow at 20% to 25% CAGR for the next few years….Inorganic Growth is on the anvil as is entering the Defence Sector with their Products & Services

CAGR from Rs 190 (FV Rs 10) IPO Pricing in 2007 to current Rs 47 (FV Rs 2) after considering Split & Two Bonus Issues works out to 477% Absolute gains and 24.5% CAGR over 8 years without considering dividend returns and any fractional value of the bonus issues

Going Forward what should be the CAGR over next 3 years or do you think “Nah!”

Disclaimer : Have an Interest in the Company

 

 

 

 

5 thoughts on “Superstar Amitabh Bacchan invests a Million Dollars in Nitin Fire at Rs 42.99 !

  1. Sir Do not start with Wow. Amitabh Bacchan is multi hybrid of Gaurav and Narayan put togeher. He invests in companies and promoters he new well that is in Mumbai. He invested in a company called FINEOTEX CHEMICAL in way back in 2011. This company whose Market cap is 25 cr in 2014 become a 20 bagger with 500cr mc in Jul2015. No body suspects the fundamentals. The maxim is Multi skill of fighting dancing singing investing makes one Super star

    1. Hey Appasamy…”Wow!” is not just a figure of Speech when one invests a Million Dollars in a conviction 🙂 …. whether such selections are backed by developing fundamentals or just market play is for you to assess…Though I quite like your visualising fighting,singing dancing and investing to become a SuperStar 🙂 … Oh! and our six month flirting in the second half of 2011 to combine his Technicals & my Fundamentals Advisory did not work out with Narayan and me ….Best Each to his own Counsel & Approach 🙂 … Cheers !

    1. Hey Amir,Nitin Fire fired the wrong way & how! as many of the risks outlined above & more played up casting a doubt on even their Current Consolidated Networth of Rs 554 crs on March 31,2017…they have not provided for a lot of asset impairment & doubtful receivables & auditors have again qualified…infact joint auditor Deloitte resigned a few months ago…fortunately my interest in it did not cost me the disaster it would have if held on to this over 90% price decimation inside a year…the loss though was a good lesson on when not to take exposure with such enormous standing risks even if Big B did !…in fact such risks situations cast a doubt even on the genuineness of such Investments & Sales…a lesson well learnt…it should become mandatory for resigning auditors to explicitly state the real reasons for their resignation…they surely must know a lot more than we do on the state of affairs

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