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

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April 2015

Nepal Earthquake ~ Mankind be Warned as Earth gets really angry

What on Earth is Happening this last week !?

A Series of Earthquakes in the last three days across the Planet from New Zealand to USA and the most devastating one in Nepal yesterday !

Preceded by a  Volcano Eruption in Chile  ...a Volcano that has not erupted in four decades

I’ve been to Kathmandu more than once in the 1970’s and 1980’s and have fond memories of the place and am heartbroken to see this devastation and loss of lives 

Earth is real angry….Our Mother Nature is furious

India too has tragically witnessed loss of tens of thousands of lives in the last 15 years through the Bhuj Earthquake in 2001 and the Tsunami in 2004 and Flash Mountain Floods in Uttarakhand in 2013 

Mankind be Warned !

Volatile & Vulnerable ~ Can we think Beyond the Sensex Please ! ~ We should be aware and concerned more about real Techtonic Plate Shifts rather than Techtonic Economic Power Shifts 

Moments like these we sense how helplessly more Vulnerable we are than we think and sense that we are all in queue and praying the queue never moves ! 

Praying for Our Planet Earth to Calm Down and spare all of us

Just a Reliance Power Thought for Anil Ambani as he forgoes Personal LPG Subsidy

The leadership Team of Anil Ambani’s Reliance Group has opted to forego LPG Subsidy on the PM’s request for well to do people to do so to reduce the subsidy burden

This triggered  a thought without offence or malice for Anil Ambani to consider and addressed to him in first person :

Your Reliance Power Market Cap is Rs 16410 crs at Rs 58.50 with 75% held by you as Promoter and most at par.The Public hold just over 14% while the big guys FIIs and DIIs hold 11%

The Shares were allotted in a heavily record oversubscribed IPO to Retail Investors in January/February 2008  at Rs 427.50,after a 5% discount on IPO Price of  Rs 450 and within months of the IPO Listing company issued a 3:5 Bonus in May 2008 under pressure to reduce holding cost of  retail allottees to Rs 267.19 per share

I don’t know how many of the original allottees yet continue to retain faith and hope and  hold the share but your records can identify such

The Thought for what it’s worth :

Why don’t you,Mr Anil Ambani  emulate Richard Branson who bought back Virgin shares at cost from shareholders and went private again when the share price had tumbled  after listing ?

Branson committed 182.5 Million Pounds in 1988 for this and wrote about it in his inspiring book ” Screw it,Let’s Do It”

You,Mr Ambani ,have just committed thousands of crores by acquiring Pipavav Defence recently.

Can you commit some more for this =>Reliance Power Equity is @ Rs 2800 crs and Public(excluding FIIs & DIIs) hold only Rs 390 crs of it of which only a portion would be original allottees in your IPO  seven year ago in January 2008.Even assuming all are original allottees or you also wish to compensate those who sold out you would need Rs 10500 crs to to so at their cost of  Rs 267.19

Or you wish to quote your good friend Amitabh Bacchan’s father’s great quote  ” Joh Beeth Gayi woh Baat Gayi”   

No Offence and No Malice,Mr Ambani but in one stroke you would have redeemed for the Reliance Power fisaco

May not be a practical exercise but even voicing Intention can be a great step

Forbes put your latest 2015 real time networth at US  $ 3.7 B down considerably from the US $ 42 b in 2008 when Reliance Power IPO ‘hit’ the market

I’ve got a great feeling that committing US $ 1.5 B to play out this above thought in Reliance Power will catapult your worth in more ways than one in quick time….Reliance Power was willing to pay US $ 2 B for Power Plants of Jaiprakash Group in July 2014 in a deal that came apart….believe me that you will create a much higher value intangible asset immediately that will lead to higher tangible worth going forward if my thought is played out read more

BSE presents BIG cheque to PM for Swachh Bharat Kosh ~ How about a Swachh BSE Initiative!

Of course this is a symbolic BIG Cheque in Amount & Size but unsigned ! ?   🙂

Dr  S  Ramadorai, Chairman, BSE & Mr Ashishkumar Chauhan, MD & CEO, BSE presented a cheque of Rs 1.01 crs for Swachh Bharat Kosh to Prime Minister, Mr Narendra Modi on Wednesday, April 22, 2015

Now Dr Ramadorai & Mr Chauhan do start a ‘Swachh BSE ‘ Campaign….You may not need to or want to know but I can surely tell you with which listed company to start with at least on proper disclosures and quality notifications to the exchanges in the interest of Equity Investors who are Minority Shareholders  !

Willing to also come on Board to help you with this…Whatsay  BSE !?

Whoa ! HOV Services drops from 150 to 100 on U Turn on SourceHOV Stake Sale

Whoa ! HOV Services drops from 150 to 100 on U Turn on SourceHOV Stake Sale

Have blogged before on HOV and this will probably be my last on it ! What else can I say ! I have also tagged this post under “When the Heart explodes through the Helpless Mind!” 

Ironically HOV Services looks a Great Buy at Rs 100 levels even if the 44.82% Stake held by it in SourceHOV through it’s wholly owned subsidiary is not now being monetised…the deal was first alleged to be greatly undervalued at US $ 95 million perhaps because the Purchaser was Promoter related Entities themselves ! Company  Board even approved the Sale and later Minority Shareholders too did so.Even some of Minority Shareholders withdrew end January 2015 their Case filed before the Company Law Board for this undervaluation  to clear the way for the deal to happen before March 2015

It did not happen and now all that the Company did was send a curt and terse notification to BSE & NSE that was displayed on their websites on the evening of Monday,April 20,2015 and led to  two 20% lower circuits on both yesterday and today to take the price below Rs 100 before reviving…The Relevant Notification extract is reproduced below

“In regards to the proposed transaction for sale of Company’s investment through its US based wholly owned subsidiary, HOVS LLC, the Company has received communication from the purchaser informing the Company that they had decided not to proceed with the purchase of the investment.”

No Explanation given on this Deal U Turn ! after all sanctions to go ahead were in place !…Purchaser was Promoter Related Entities

Majority shareholder Rohatyn Group stake in SourceHOV too was ostensibly bought out by SourceHOV at same Company valuation and therefore they must have been paid off over US $ 250 m last year from the new line of credit arranged by Morgan Stanley for SourceHOV and which thus moved HOV Services stake of 26.1% in SourceHOV through it’s wholly owned subsidiary (pre merger and pre Rohatyn Group stake buyout) to the current 44.82%

HOV Services is available at Rs 130 crs Market Cap at Price Rs 104 and holds a 44.82% stake in one of the world’s largest Transaction Processing Services (TPS) Companies SourceHOV which after BancTec merged into it last year has sales of US $ 900 m,over 16000 Employees and operates from over 85 Centres round the world

Problem is does one wish to buy or remain invested in a Company where blatant disregard of Corporate Governance is visible read more

Woe-latile Equity Markets in 2015 ! ~ Look beyond 2015

As 2014 ended with Sensex at 27500 levels ,I had warned that 2015 will be a Volatile & Vulnerable Year though the underlying remains bullish.I reiterated this View a fortnight ago on March 31,2015 on ET Now in an 8 pm Interview on Market Hour

It was and is difficult to see 2015 replicating the 2014 upmove on the Sensex & Nifty Indices and even greater upmove across the board in Non Index Stocks on all the four legs of the Equity Table ~ Sentiment,Momentum,Liquidity and the most important,Valuation

FPI which hit a record US $ 46 b in FY 15 should ebb in FY 16 to an indicated half these levels or even lesser

Sensex did record an all time high of 30000+ only to pullback to sub 28000 and year end 2014 levels before once again crossing 29000.Today it reacted in the last half an hour to sub 29000

Q 4 FY 15 Corporate Earnings Announcement Season is beginning and expectations of 15% growth are now muted down to 5% though FY 16 & FY 17 should see 15%+ Earnings Growth as Interest Rates drop further and GDP growth moves past 7.5%….Earnings as a % of GDP should double from current 4% levels to 8% in each of the next two years

Market Cap to GDP Ratio is reasonably attractive at just over 0.8 and going forward even more reasonable at 0.7….it was  a heady 1.9 in 2007/8 after a spectacular 3 year Bull Run which saw Markets race ahead of Fundamentals on Great Expectations

However if you want to repeat  2014 Performance in 2015,you’ll have to play a tactical which would increase Risk of  Improper Selection as it would involve Concentration in a Few Stocks for the Short Term…..Your Conviction levels thus need to be very high when adopting such a strategy

Traders & Speculators may more than often find  that the Volatility Trend is not their Friend

🙂 Long Term beckons but Short Term wreck-ons !  😥

Look beyond 2015 when Investing in Equity and know why you’re doing what with a high level of conviction when it comes to Specific Stock Selections….they must have base & basis both….assess them in this order….Promoter Pedigree,Business Model,Financials and Valuation

As I said on ET Now the ‘I’ Theme beckons ~ Interest & Infrastructure and specific within

Cheers !

Suzlon or South Indian Bank? What is your Risk Profile?

🙂 Suzlon or South Indian Bank ? Both are in the Rs 25 to Rs 30 Share Price Range

What’s your Risk Profile ?

Suzlon Energy  (FV Rs 2) is a credible  turnaround idea with the entry of Dilip Shanghvi of Sun Pharma but yet has a negative networth and huge debt and losses…displaying a reviving momentum that has nearly trebled Market Cap to currently over Rs 10500 crs in just six months from a low of Rs 11 in late October 2014 to levels of Rs 28/29 today

South Indian Bank (FV Rs 1) is available @ Book at Rs 25 to Rs 27 range …steady with a Market Cap of just over Rs 3500 crs currently….many see it as a Value Idea

Would you consider them for your Equity Portfolio ?…and if Yes would you pick  both or  just one of the two ?

😀 And if you pick just one I’m betting even the Conservative Mindset may go for Suzlon over South Indian Bank !

Aha ! Equity is the place to be….spoilt for choices !

😆 For once I’m tempted to preach not to stay true to your risk Profile….known for being contrarion anyway !

Cheers !

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