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

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Day: September 27, 2011

Anil Ambani tries to lift Shareholder Spirits…and maybe Share Price too ?! at the Reliance Cap AGM Today

Anil Ambani tries to lift Shareholder Spirits…and maybe Share Price too ?!  at the Reliance Cap AGM Today

Bonus and Banking & Insurance Business Stake Sale…that’s what Anil Ambani stated today at the AGM to enthuse all who yet beleive he can surge back to Glory

He’s not really treading any new Path here….Two years ago he said more or less the same at the AGM

A subdued looking Anil Ambani addresses ‘Share Owners’ at the Reliance Capital AGM this morning

Tuesday, July 21st, 2009 

Bonus ?…What diff will this make ?…Equity is Rs 246 crs..Reserves a shade under Rs 8000 crs…Debt is just over Rs 20000 crs….Earnings have been declining…Share Price is under 1.5 Book

In 2009 the Market Cap was more than double of the Rs 10000 crs it is now with Reliance Cap at Rs 900 levels from the current Rs 400

Methinks like methought in 2009 that Anil Ambani can greatly redeem himself by coming out with a Reliance Insurance IPO at Par Rs 10

Cheers !

PG Electroplast IPO at Rs 210 sizzles on listing yesterday and hits upper circuit at Rs 493 today !….don’t get seduced by this Item Girl !

PG Electroplast IPO at Rs 210 sizzles on listing yesterday and hits upper circuit at Rs 493 today !….don’t get seduced by this Item Girl !….If in,get out before the Dance ends !…don’t be so enamoured as to consider marriage !

I’m really worried that the same old IPO Game is allowed to play out on our Stock Exchanges again and again and again !

Just yesterday PG Electroplast made an impressive listing debut and today hit and closed at upper circuit at Rs 493.95 on BSE with near 7.4 million shares being transacted…IPO was for 5.74 million shares

The Nature and Quantum of Bulk Deals confirmed my suspicion that this was an orchestrated IPO from Start and has yet to Finish!

The Company’s fundas do not hold up this sort of Market Price Acrobatics !

  • PGEL was promoted by Promod Gupta in 2002 to manufacture plastic injection moulding.It later began Electronic Manufacturing Services for Original Equipment Manufacturers
  • The Facilities are at four places in three States…two at  Greater Noida in UP and one each at Roorkee in Uttrakhand and Ahmednagar in Maharashtra 
  • Post IPO Equity  of FV Rs 10 Share is Rs 16.41 crs with 65% held by Promoters
  • FY 11 PAT is Rs 17.90 crs giving an EPS of Rs 10.90 on Post Issue Equity
  • P/E at IPO Pricing of Rs 210 is 19…while at Rs 493.95 it zooms to 45!
  • The Company will find it difficult to grow and probably even sustain profitability as it has lost ISI certification + repeat orders for 14″ CTV from the Electronic Corporation of Tamil Nadu are not forthcoming.CTVs contributed 77% of FY 11 Sales of  Rs 424 crs
  • Over half of Sales are to related Parties and Debtors form over half of Sales
  • IPO Proceeds of Rs 121 crs are earmarked for Phase II expansion at two units of Rs 14 crs and Rs 37 crs each and repaying loans of Rs 24 crs and Rs 15 crs for Long Term Working Cap + others
  • Product Expansion Plans include manufacture of Components for refrigerators,washing machines and microwaves,automotive components,Water Purifiers and LCD TVs
  • A Subsidiary Diamond Mattress Company Pvt Ltd manufactures and sells coir foam products and matteress 

The IPO Allotments were Firm in all categories

Sr. No. Category No. of Applications Received No. of Equity Shares No. of times subscribed
A Retail Individual Bidders 4,188 32,25,510 1.6041
B Non Institutional Bidders 28 15,72,990 1.8253
C Qualified Institutional Bidders 6 28,22,550 0.9826
  Total 4,222 76,21,050 1.3265

 

My Experience tells me that PGEL will not hold up unless held up !

For me it’s a Price v/s Value Argument….and an orchestrated Informed or Insider Play

Exchanges and Regulators need to have a closer look at what’s happened here

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