Kotak Group again enters beleaguered Diamond Power Infra at Rs 23.65 ~ Why?

Kotak Group enters beleaguered Diamond Power Infra at Rs 23.65 ~ Why? ~ their Mutual Fund  had been selling since August 2015 !

On March 30,2016 Kotak Mahindra (International) Ltd a FPI & a subsidiary of Kotak Mahindra Bank picked up 3868606 (6.787%) stake in Diamond Power Infrastructure at Rs 23.65 from Macquarie Bank.Deal Size thus was Rs 9.14 cr with Macquarie exiting fully

Why did Kotak buy in ! ~ as just a month ago the Trustee of Kotak Growth Fund II & PAC had notified the Exchanges that from August 2015 to March 2016 the Fund had sold 1215382 shares ( 2.13% stake) from the 3002946 shares held (5.27% stake).Over 2% had changed hands on March 2,2016 …unless these were inter scheme or within group transfers by the Mutual Fund

The above Notifications already were on the Exchanges websites but only today has the Counter seen a smart rise by over 15% to register a days’s high till now of Rs 27.95.At 12.40 pm it’s trading higher at 12% at Rs 26.60. Trading Volumes have been below One lakh most days in the Year but till now they have crossed 4 lakh on BSE and 18 lakhs on NSE

Diamond Power Infra is an interesting & intriguing case study.It’s been a rapid Wealth Destroyer of 75%  inside five months from Rs 143 levels in November 2014 to Rs 37 in March 2015 …it never was a 24 Carat Diamond ! but you can say it had all but lost whatever Carats it was ! 

Over 10 years ago  in 2005 Diamond Cables (IPO at Rs 10 par way back in August 1993),the earlier name of Diamond Power Infra, was trading low at @ Rs 17 and I spotted a turnaround when it  notified the BSE that they had the second largest cable capacity after Sterlite but were functioning at just @ 15 % capacity due to a working capital crunch.It was negotiating to receive both loan & equity support from Clearwater Capital Partners.The Deal for Zero Interest FCDs & Warrants was announced a year later in August 2006 when Price levels had shot up to Rs 60 and CCP would be getting the shares at Rs 95 on conversion…Then the Share Price simply went into 10 Bagger space inside two years recording highs of Rs 589 in 2007 & Rs 599 in 2008…. I had not waited for these record highs……. so the real wealth Destruction has been immense at the extreme of 96% from Rs 599 to Rs 22 !….even adjusting for 1: 3 Bonus in August 2013,the destruction is 95%!….CCP brought some more at fallen levels of Rs 160 levels 2010.It exited at a Loss in  June 2014 at Rs 90  & just a few months ago at a bigger Loss in December 2015 at Rs 42.68

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Essar Oil Delisting is Over or is It !? ~ Glitch or Golmaal !?

Essar Oil Delisting is Over or is It !? ~ Glitch or Golmaal !? 

Yesterday at 3.30 pm was the cut off time for all shares to be tendered in the Essar Oil reverse book building on BSE & NSE

The First criteria for the delisting endeavour to be considered successfull is that  at least a minimum number of 92,569,408 Shares be tendered  in valid bids from the 142489858 Equity Shares being 28.54% of the public shareholding that could

At  Closing 3.30 pm on Monday,December 21,2015  BSE & NSE showed aggregate cumulative bids for 101143045 shares

So then what’s the problem !?

1,98,99,305 shares from 8 bids all at Rs 262.80 are yet showing unconfirmed on the BSE Screen !

Seems there is a Glitch ! or was it a Golmaal !?….if so for what purpose ? …to derail the delisting effort !? If so ,why!?

Seems Ruias of Essar court controversy regularly….either they  follow it or it like a guided missile follows them !  

 The 8 Unconfirmed Bids for Rs 262.80 for 1,98,99,305 shares apparently is from the LIC Holdings of Essar Oil in their various portfolios

If you remove these unconfirmed bids then the valid bids aggregate just 81243740 shares which is short of the 92,569,408 shares requisite

BSE has referred the matter to SEBI for guidance as to whether they should accept the LIC Bids as confirmed and therefore valid….if they say ‘Yes’ and that it was a genuine issue by Stockholding who were unable to upload the bid as confirmed in time by 3.30 pm for LIC then we have the Discovered Price or Exit Price of Rs 262.80 provided this price is accepted by Oil Bidco( Mauritius ) Limited the Acquirer….they can of course offer an even higher price than this to garner more shares

Essar Oil has got to be extremely anxious for delisting….in 2014 I had raised a stink when they set a floor price of just Rs 108….SEBI had to stop the effort…..however they allowed it this time around  with a higher floor price of Rs 146.05….in my view they should not have until the Rosneft Deal price for acquiring 49% stake in Essar Oil which is being negotiated was announced

Essar Oil is anxious that the delisting takes place before the Rosneft deal as otherwise that would have triggered of an Open Offer by Rosneft and would have disturbed the Equity Stake Holdings by Essar Oil Promoters & Rosneft leaving Essar Oil Promoters vulnerable

Whatever ! ~ even if this delisting is allowed with LIC’s bid being accepted at Rs 262.80 the shareholders who bid below this price or the exit price to be announced by Oil Bidco  will also get the Discovered  Price which will now be established at a minimum of Rs 262.80. Oil Bidco can accept this Price or announce a higher one as the Exit Price .It of course can reject it and the delisting would then not have succeeded

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A Weak Week Gone by …Sensex shakes down 5% as Scams Surface and CBI makes ‘Listed’ arrests…have Selective Conviction

It’s been quite a weak week gone by….the Sensex shook 5% opening at 19841 last Monday but shaking in some shock down to 18955 on Friday…it has recovered to 19400 close as this week opens…..Looking beyond the Sensex shows that the shakedown has been more intense in the Mid cap and Low Cap Areas

IFCI has dropped to Rs 57 levels and IDBI Bank from Rs 200 ! to below Rs 160…both nearer Consolidated Book Value for this year….these price points offer lower risk Opportunities unless ofcourse scams unfold here too !

….what is also spooking the markets,apart from Korean War fears, is the CBI confirming a sense,long suspected by all of us really, that there have been huge sinster gameplans at work on the Exchanges…..collusions between Promoters,Bankers,Merchant Bankers,Politicians,Brokers,Fund Managers and  sadly even certain Print and Broadcasting Media…..to hype Companies and  rig up share prices to facilitate QIPs at high Prices with Fund Managers being paid off for participating in the QIPs…..it is alleged that even Exit Prices and Time Periods for this were pre decided….this would necessarily involve the need for Market Price manipulation…..where Loan has to be arranged it would involve Corruption…bribing those who can make decisions to deploy their Employers Huge Funds

CBI has made high level ‘Listed’ arrests…CEO of LIC Housing Finance….DGM of Bank of India and Independent Director of Central Bank of India,DGM of Punjab National Bank,Secretary (Investments) of LIC,CMD of listed Finance Intermediary, Money Matters Financial Services Ltd….the stink of corruption is polluting the markets….bribes being paid to Finance Heads of Listed Institutions through a Listed Financial Intermediary to faciliate Loans and QIP of Equity of hundreds of crores to Listed Corporates,especially Real Estate Companies….being ‘Listed’ seems to be the key….often manipulating the share price pays for the Corruption……..who suffers here ?….those primary market institutions and those secondary market  suckers who unknowing of this gameplan invested in the Share at an inflated price….if the situation is that of Loan Outstanding…it will probably remain outstanding till declared Non Perfoming and quietly written off after a few years !…and civil court cases takes years ! 

Maybe SEBI should report to the CBI !……..Because more often than not even this IPO High Obscene and Vulgar Pricing is a Scam of Sorts…though SEBI may argue it’s not their job to comment on Valuation and Pricing…and market forces will decide the success of the IPO…..but the truth is that most Investors are not educated enough to understand the Difference between Value and Price…and with no Protection now that the CCI Formula for Pricing the Premium gave the Promoters and Merchant Bankers will create Hype and milk Investors…we all know the Reliance Power IPO Debacle…probably only Mukesh Ambani did not invest in this !…Kishore Biyani’s Future Capital,Tanti’s Suzlon were nothing but IPO Loot Pricing….Adani Group is simply another story ! …of Satyam is now well known !

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SEBI bans Austral Coke from raising Capital…was it sleeping when it allowed it to raise Capital through an IPO last year !?

It can’t be just a coincidence that this is my Blog Post No 420 !

Austral Coke came out with it’s controversial IPO in August 2008 in the price band Rs 164-Rs 196 for a FV Rs 10 share…The price was fixed at Rs 196 and it got listed on BSE on September 4,2008 rising to Rs 309,before closing at Rs 225…On October 28,2008 it dived below Rs 60 and since then has recovered to touch a high of Rs 570 last month before reacting ex split and post SEBI ban to Rs 48 today

The Company recently sub-divided the share into FV Rs 1 and it closed at Rs 48 today after SEBI banned it from raising capital…following disclosure by the Income Tax Authorities of Fradulent transactions of over Rs 1000 crs !

SEBI should have investigated it more last year before permitting the Company to raise Capital through an IPO.I had blogged this controversial IPO on August 8,2008 commenting that SEBI should have then itself verified claims of the Company on it’s capacities that were contested by Gujarat NRE Coke

Austral Coke went on to raise Capital in the IPO and it has now been also accused of diverting the proceeds too.

SEBI needs to get real serious about it’s prime objective of Investor Protection without fear or favour and probe Insider Trading more stringently

Expect the share price to fall further from Rs 48…if it does not then you know it’s being supported artificially by the company

If you hold the share,I would strongly advice you to sell as Promoters’ credibility continues to be suspect..and regulatory and tax authorities will continue to have Austral Coke under a heavy scanner…….and if you are an IPO allottee you’re already sitting on over 100% long term  gains….Take them

We need Long Term Structured Option Contracts…need to LEAP into LEAPS

I was just wondering…..Currently there is so much volatility in all markets,be it Equity or Commodities…due to earnings uncertainties,anxieties about health of global economy and Financial Systems

Most Experts are advising to think Long Term…Naturally…3 Years + atleast

Then why is it that we have Derivative Contracts structured only for a maximum of Three Months… for Long Term,we need to roll them over and over and over and over again ?

It’s time that we introduce Long Term Option Contracts…This will enable me to take a call on the Markets or a particular Stock or Commodity for a period of One Year and more by investing merely a fraction of what I would have to now in Spot

For example If I felt the Markets would improve in the next two years,I could buy a Nifty Call at Strike price of 2750 (Current Level) that expires in 2011 at a Premium of ,let’s say,Rs 225…Assuming Contract lot is 50,the contract Value is Rs 137500 and I would have to pay Rs 11250 as premium…That is my Cost….I now have the right,but no obligation, to exercise this Call

So if ,let’s say,Nifty moves up and is at 4000,somewhere in mid 2010,I can square of my contract and sell the Call,at a premium of let’s say,Rs 1025 and profit by Rs 800 which aggregates to Rs 40000 on the contract…a return of 356 % in a year or so !

The above is a hypothetical example and it can be argued that Option Premiums may quote at much higher % levels in this volatility…The Nifty Call of Strike 2750 may not be quoted at 225…but more at 500 perhaps or even more !…that’s an 18% premium !   

Chicago Board Options Exchange (CBOE) has a registered product on these lines and they have trademarked it as LEAPS.It stands for Long Term Equity Anticipation Securities…This product is available in the form of Calls and Puts for 450 common stocks and Ten Indices and the Expiration Date can extend upto 39 months…In fact CBOE even has the VIX or the Volatility Index Options which is the market estimate of expected volatility and is which is computed from realtime  S & P 500 Index Option Bid/Ask quotes  

I believe the SEBI Advisory Committee for Derivatives has already suggested the introduction of Long Term Derivative Contracts…Why the delay in the Suggestion being adopted for Implementation ? The Operations Framework by Exchanges is already in place for Futures and Options so this should facilitate the Introduction of Long Term Expiration Contracts fairly easily  

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Rolta Share Price being Raped and Company’s Promoter K K Singh did not know why !

Rolta was Rs 105 yesterday and this morning it fell suddenly by 7 % initially and then in a quick swoop sunk further to 50% of yesterday’s closing

Rolta Promoter,K K Singh, came first at around 2 pm on NDTV Profit and declared he had no clue why this fall has taken place…he squashed all rumours of UK Business Selloff,Resignation of Auditors,Selling by Lender of Shares Pledged by an associate Company,Manipulation of Accounts,Big Selling by FIIs ….Share Price recovered but was yet below Rs 75 and  35 % lower than yesterday’s closing of Rs 105..Then Mr Singh appeared on CNBC 18 and repeated yet again he was completely lost as to why this fall has taken place and blamed market fragility…He said that his inquiries had revealed that no major shareholder had sold…..yet the combines Volumes on BSE and NSE is 80% of the Free float with nearly Eight Crore Shares being traded Market reacted well on this and Rolta recovered to the Rs 85….It’s a clear indication that more Traders watch CNBC 18 than NDTV Profit !

So if you are a die hard addict of Intra-day trading then you must watch NDTV Profit first…any interesting trading opportunity may arise when Management or Promoter of the Company are chased to explain,deny or confirm company related developement or rumour..take this trading opportunity and then await the same person coming on later on CNBC to repeat what he or she has already said on NDTV Profit…sure way of making money !…..For example you could have purchased Rolta at Rs 72 to Rs 75 after K K Singh came on NDTV Profit at around 2 pm today and denied all rumours that were floating around to explain the Rolta Price crashing by over 40% to dive below Rs 60….Half and hour later,after he appeared on CNBC 18 and repeated himself,the share price of Rolta moved fast by 15% to Rs 85…you could have sold off,pocketing a cool Rs 10 per share atleast inside an hour of Intra Day Trading

Somebody is playing Big Games in Rolta on our Bourses and Rolta Promoter,K K Singh says he does not know !

SEBI has got to get to the bottom of this !..last Month’s Game Lever was Pyramid Saimira…Today’s is Rolta !

Our Markets are fast behaving like a ‘Matka’ Operation !….and in such sensitive and touchy markets,where one believes everything or nothing !,a Market Operator can initiate and float Rumours and get away with Raping the Share Price !

Exchange Authorities and SEBI needs to catch the Share Price Rapist or Gang Rapists fast to maintain market sanctity and credibility…They have been responsible for this combined turnover of over Rs 1000 crs in Rolta today in the Spot and Derivative Markets

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