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A Lion’s eye on the Bulls and Bears

“In India, companies may fall sick, but promoters rarely do!”

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February 2, 2009

Need to be Educated on Educomp !…What’s Brewing !?

I had blogged on Educomp a few days ago and now twice today.

What is Brewing ! ? Obviously something we don’t know but the worrying and critical and significant difference between the Lower Futures and the Higher Spot flags up

On the NSE the Feb 26,2009 Futures with the Market Lot Size of 75 shares closed at Rs 1416 with a volume of 17411 contracts traded and the March 26,2009 Futures with the new Market Lot Size of 150 Shares,closed at Rs 1332 with a Volume of 172 contracts traded.The underlying is Rs 1657…That’s a clear 20% or Rs 325 differential on the March Contract

Those who hold the Stock,should clearly not sit tight…They can pick from two options

  • If truly worried,with this Significant Differential between Lower Futures and Higher Spot,they should exit from this Stock.Protected Put Option at a Strike of Rs 1710 has a high Premium of over Rs 300 and moreover is not a very liquid counter…so it is not possible to adopt this alternative.Also a Covered Call Strategy may involve getting the premium by selling a Call Option at an ‘At the Money’ Strike Price near underlying Value and thus immediately reducing the holding cost …but the premium does not cover the full differential betwenn underlying and Futures
  • If they yet hold the conviction,like a lot of FIIs do ,in this Company,they should take this opportunity to reduce their holding cost by this Differential by selling in Spot and covering immediately in Futures   

Something is clearly Brewing…Something not so Good

Sell Educomp at Rs 1725 in Spot if you hold shares and cover immediately at Rs 1375 in Futures…great opportunity to reduce holding cost ! Those worried should simply exit the stock !

Something Bad is indicated in Educomp…The Futures show it now under Rs 1400 while the Spot Market prices it at Rs 1725….Those who hold the share should quickly sellin Spot and buy back in the Futures to reduce their holding cost by over Rs 300

Ofcourse,those who hold the shares and are really worried should sell off immediately in Spot as the difference between Spot and Futures indicates something unfavourable brewing that some know well before the rest of us do !  

Not surprised to hear shocking views of JR Varma on ‘Open Offer’ in context of Buy-out in this continuing Satyam Saga

I for one,was not surprised to hear the shocking views on revising the ‘ Open Offer’ Pricing guidelines of JR Varma…He is an ex-SEBI Member and had also headed their Corporate Governance Committee…..He is clearly building up the ground for the Government to direct SEBI to do exactly just this to facilitate Larsen

Mr Varma,was quite forceful in stating on CNBC 18 today that the  current pricing parameters for the mandatory ‘ Open Offer’ to remaining shareholders by the acquirer,once he buys 15% of the company’s equity should be revised….It is unfair,he states, that the acquirer has to pay the average of the last 26 weeks share prices…This parameter was created to protect Minority Shareholders and also that there was some level of distrust on the fairness and authencity of pricing in Share Markets…but for liquid shares,like Satyam,Mr Varma,is of the opinion that the Current Prevailing Market Price can serve as the basis

Mr Varma,you are clearly and perhaps deliberately missing the point here…Larsen made a mistake and then averaged Satyam…Mr Naik of Larsen has been openly canvassing for political,bureacratic and institutional support  in buying out Satyam as also tweaking the SEBI ‘Open Offer’ pricing parameters…Clearly ,Mr Varma,you are supporting this move….Are you being Led here ? or do you heart of hearts believe that SEBI Takeover Norms should be revised !?

The Point also here is ‘Insider Trading’…was Larsen Privy to some clear assurances from the government on both,issues of Legal protection from class action lawsuits in USA against Satyam and dilution of ‘Open Offer’ Pricing Formula ?….after which Larsen went ahead on January 23,2009,exactly just a month after it had began it’s disastrous 3.95% buying of Satyam shares at @ Rs 175,and picked up another 8% stake at Rs 40+…it now holds just above 12% in Satyam at an average of @ Rs 80 and is awaiting SEBI to dilute a key pricing parameter for the ‘Open Offer’ before it goes ahead and buys another 3% to trigger the ‘Open Offer’

Corporate Governance dictates that there should be full Transperancy  and a level Playing Field for all Investors…..Clearly some know more than the rest of us and are acting on it !

Many are making a mockery of many Issues here and taking a high Moral Ground….Trying to  shove a deliberately planned tweaking of the ‘Open Offer’ guidelines down our throats will only add to further distrust and disillusionment in the ‘Powers’ that are….It will be reverting back to a short sighted vision read more

Entertaining Interlude between Cricket Commentators,Arun Lal and Gavaskar

India and Sri Lanka were battling out there in the field in the second ODI this Saturday and in the Commentary Box we had Arun Lal battling the chuckles of Gavaskar !

It actually all began when Ajantha Mendis tore his shoe from one of the Spikes area…the camera panned on the huge sole of Mendis prompting Arun Lal to comment that Mendis had large feet,just like some Bird (he took some name)that he had spotted at a Game Lodge

A few minutes later,the camera panned on the very pretty Amrita Rao,our Bollywood Actress She was part of the ‘Victory’ Movie entourage that had gone to Sri Lanka for the premiere there…Movie is about Cricketing Aspirations…..this prompted Arun Lal to comment that he was told that this is Amrita Rao…Gavaskar began chuckling and Arun Lal inquired why…Gavaskar stated he was amused at the way Arun Lal had put it “I’ have been told that this is Amrita Rao….!” Gavaskar wondered how Arun Lal knew Birds of one kind and not one’s of another !

It did not end there…Arun Lal recognised actor Gulshan Grover next to Amrita Rao but when the cameras repeatedly focussed on Harman,the Hero of the Movie ‘Victory’,both our commentators were quiet,not knowing who this Hritik Roshan look-alike guy was perhaps !….and it was hilarious that the cameras were frantically trying to cue the commentators on this ‘Hero’ by panning their cameras to the advertising Board of Hero Honda,focussing on the Word ‘Hero’ !

Cricket Commentary can be great Fun !…and Gavaskar is well known never to miss a chance to pull a leg ! 

By the Way,India won this second ODI to take a 2-0 lead…’Victory’ has apparently flopped…both Cricket teams,who were scheduled to attend the Movie ‘premiere’ in Colombo,gave it a miss

Rousing Welcome to our Indian Tennis Champions returning from the Australian Open

It was truly Inspiring,joyous and heart warming to see India give a rousing welcome this morning to Yuki Bhambri.our Junior Australian Open Tennis Champion, at the New Delhi Airport and Sania Mirza and Mahesh Bhupathi,our Mixed Doubles Tennis Champions at the Australian Open,at the Mumbai Airport

Yuki Bhambri is the  first Indian to win the Australian Open Junior Championship…Sania is coming back after a few months of Injury layoff and is ‘living the moment’ after winning her first Grand Slam Championship…Mahesh is ofcourse a veteran at winning Grand Slam Doubles Titles 

Thousands of Indian Youth will surely be inspired and motivated to take up Tennis seriously..and I hope Sponsorship and Enhancement of Tennis Facilities will come forth smoothy from the Corporate Sector and the Government

B.A.G. Films and Media Ltd back to under Rs 13 from just under Rs 105…It had never deserved to shoot up like this!

Just saw the mandatory detailed Q 3 Results of B.A.G Films and Media Ltd given by the Company in the Sunday Edition of Business Standard

It has earned just Rs 16 lakhs in Q 3 in the three months to December 31,2008 but has capital deployed of Rs 185 crs….with Rs 29 crs in Audio Visual Production and Rs 5 crs in Movies and the bulk of Rs 75 crs shown deployed in Leasing and Rs 76 crs shown as unallocated

As is required the results also show the Funds Utilisation of the various Preferential Issues.

One of the Preferential Issues was of Rs 26.33 crs raised by the allotment of 20250000 Equity Shares(17.95% stake) of FV Rs 2 at a Premium of Rs 11 to Sameer Gehlaut…He  is one of the promoters of IndiaBulls

Now this rung a strong bell.

This Issue in 2007 had raised the spectrum and strong suspicion of Insider Trading by the Husband & Wife Promoter Couple of B.A.G.Films,Rajiv Shukla and Anurradha Prasad…Mr Shukla is on media channels virtually every other day giving some sound byte or the other,either in his capacity as a leading functionary of the BCCI (India’s Cricketing Body) or of the Congress 

This is what had transpired two years ago in January 2007 and there has been no Investigation or clarification,either by BSE or by SEBI,despite their awareness.

Promoters,Chairperson & Managing Director,Anurradha Prasad and Director, Rajiv Shukla purchased shares of BAG Films on Jan 3,8 and 9,2007 before the Board Meeting on Jan 15,2007 to consider preferential allotment at Rs 13 to Sameer Gehlaut (promoter of IndiaBulls).Aggregate of 611283 shares were picked up,with the bulk of 567583 done so by Mr Shukla.These shares had been picked up from secondary market purchases between Rs 9.16 and Rs 12.45

On Jan 17,2007, BSE uploads their notice for the preferential allotment on the website

Price on Jan 17,2007 crossed Rs 20 and closed around Rs 19  …Price had doubled inside two weeks and volumes exploded.From the January 2007 high of Rs 23,the share price zoomed to a high of Rs 104.90 in the same year in November 2007

Those who suffered are the poor sellers in the first ten days of January 2007 at these prices of Rs 9.16 to Rs 12.45 as they were unaware of  what was unfolding!

 Ironically the company had send BSE notices for the promoter acquisition under  Regulation 13 (6) of SEBI (Prohibition of Insider Trading) Regulations, 1992  and BSE site shows these uploaded on Jan 10 and Jan 15,2007

The share price has now touched a 52 week low of just under Rs 13 from a 52 Week High of Rs 61….What goes round must come round !  read more

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