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February 2016

Tumbling Top 10 PSU Banks ~ Govt & MOF & RBI & Banks all to Blame

Last Few Years I have consciously stayed away from PSU Banks,Oil  & Steel & Power Companies

Now you’ll know why !

There has been serious wealth destruction for those who had invested in them

So it was always with some degree of amusement I observed many analysts and fund managers and stock market experts recommend these over the years and justify their call even when it was obvious these companies were bleeding profusely

This Post is about  PSU Banks

Who is to Blame for this Wealth Destruction ?

I squarely lay the Collective Blame on the various Central & State Governments that ruled  & rule,Ministry of Finance Bureaucrats &  Finance Ministers,the Board of Directors of all these Banks led by the Chairman & MDs & even the RBI Boards led by the various Governors & their deputies in these last few years….they preach Corporate Governance but do not practice it….how else will vested interests be served

They have deliberately let this come to past throwing caution to the winds when Lending and then not providing adequately and in time for the NPAs many of which were not even identified as such ….and their delay in declaring many defaulters as wilful…Supreme Court has been seized of this danger and have directed RBI to provide to it within six weeks  in a sealed cover the list of all defaulters over Rs 500 crs.One Bank Chairman in the analyst meet for Q 3 FY 16 results recently  refused to identify the Big Defaulter for which the Provision was made !   

If it was not for the aggressive stand taken by the present Governor,Mr Raghuram Rajan and the Asset Quality Review in the second half of 2015,the Banks would have continued under providing for NPAs & even not identifying them in their entirety…the role of statutory auditors too comes under scrutiny here

The result has been a damaging Q 3 FY 16 for the PSU Banks as they have been forced by RBI to provide properly based on the AQR conducted

It is in this context I am astonished at the recent lament by none other than Mr Deepak Parekh who says that if the Banks have to undergo one more quarter of provisioning for NPAs like Q 3 it would tantamount to an Anesthesia  overdose & Banks would become comatose !…Come On Mr Parekh !

RBI has asked the Banks to clean up by March 2017

My worry is that NPA Levels may increase on better & proper identification & classification and there will be more pain for these Banks.This would mean higher Provisions for the next few quarters read more

JBF Ind ~ From Rs 300 to Rs 169 ~ KKR Investment destroyed 44% inside two months

JBF Ind ~ From Rs 300 to Rs 169 ~ KKR Investment destroyed 44% inside two months

In July 2015,it was decided that KKR Private Equity led by Sanjay Nayyar,ex Citi Head would infuse @ US $ 150 m  in the JBF Group through a preferential allotment

On Cue on July 31,2015 the 52 Week High of Rs 318 was recorded

It’s been downhill since &  is currently at 52 week lows of Rs 169

The Preferential allotment took place in end December 2015 with KKR Jupiter Investors Pte Ltd as below & when the Market Price was yet respectable at Rs 245  :

  1. Rs 491.23 crs Invested in listed JBF Industries through 16374370 shares at Rs 300(Rs 10 FV + Premium Rs 290) to acquire a 20% stake of post allotment Equity of Rs 81.87 crs
  2. Rs 500.65 crs Invested in JBF Global Pte Ltd,a wholly owned subsidiary of listed JBF Industries,through 12210527 Compulsory Convertible Preference Shares equivalent to US $ 75649902

KKR nominated Nikhil Srivastava on the Board….would be interesting to be a fly on the wall during Board Meetings now!

JBF Industries also has six step down subsidiaries through it’s  wholly owned subsidiary,JBF Global Pte Ltd based in Singapore

Through one of its step down subsidiary, JBF Petrochemicals Ltd, it is implementing a 1.25 m tpa greenfield PTA Project at Mangalore which should be completed in six months although it was expected to be completed in FY 16 as expressed in the FY 15 Annual Report

So what do you think ?

Did KKR pay an inexcusably high Rs 300 per share for it’s 20% stake ?

Do you sense an Opportunity at Rs 169?

Bumped into the Guy whose firm advised on this Placement at Rs 300 & I asked  him how did they manage to make a sucker of KKR !

He said it’s a “No Brainer” !

🙂 Wonder if he meant it’s easy to make a sucker of KKR or that it’s a great opportunity to buy now in the secondary markets !

KKR ,you guys should have touched base with me before deciding on this Investment !

Don’t tell me you don’t know who played this Scrip in 2015!

 

21 IPO Listings in FY 2016 ~ A Mixed Bag Performance

Of the 21 Companies that got listed in FY 16 thus far,it’s been a mixed bag with 12 yet in the green,some handsomely from their Offer Price and  9 in the red,a few quite intensely

Quick Heal  listed today as Quick Kneel ! free falling over 20% from Offer Price of Rs 321 to close at Rs 254.Coffee Day,UFO Moviez & MEP Infra continue to languish well below their IPO Price

Shree Pushkar leads the Gainers at 70% over IPO Price & Dr Lal Pathlabs  that listed under two months ago too remains a strong gainer and even today is not too far below the High it recorded  as too is PNC Infratech.However Indigo which was a huge gainer just about now remains in the green after suffering  a stunning and quite shocking tumble recently on huge selloff .Teamlease has listed well last week while S H Kelkar is relatively quite steady

In the current ongoing Correction ,that many expect has yet to run it’s course as globally the indicators yet remain ominous, many of those below look interesting to investigate further

Nifty closed today,Thursday,February 18,2016, at 7192 and the Sensex at 23649

Prices have been rounded off below

Company IPO Price (Rs) Listing (Rs) High

(Rs)

Low

(Rs)

Closing 18/2/2016 (Rs) % from IPO Price
Shree Pushkar Chemicals 65 60 130 59 111 70
VRL Logistics 205 288 479 261 319 56
Dr Lal Pathlabs 550 717 908 697 853 55
Syngene International 250 295 436 295 382 53
Manpasand Beverages 320 291 526 286 457 43
PNC Infratech 378 381 558 346 515 36
Team Lease Services 850 860 1208 806 1122 32
S H Kelkar & Company 180 222 276 200 232 29
Alkem Labs 1050 1380 1589 1251 1308 25
Narayana Hrudaya 250 291 360 282 290 16
Indigo 765 856 1396 702 850 11
Navkar Corporation 155 152 221 151 160 3
Power Mech Projects 640 600 701 538 572 -11
Prabhat Dairy 115 115 168 93 99 -14
Precision Camshfafts 186 163 185 153 154 -17
Pennar Engineering 178 150 178 127 145 -19
Sadbhav Infra 103 111 112 66 82 -21
Quick Heal Technologies 321 305 330 246 254 -21
UFO Moviez 625 600 643 441 463 -26
Coffee Day Enterprises 328 313 318 221 225 -31
MEP Infrastructure 63 63 67 34 42 -33

Freedom251 ! A 3G Phone for just Rs 251 ! ~ Charity or Con!?

Got up this morning to see Freedom251 splashed across the cover of Times of India & it’s sister Mumbai Mirror

It’s a 3G  GSM Phone for Rs 251 for which the Registration & Booking begins today till Sunday February 21,2016 with deliveries in four months

Times also run a news article on the controversial launch

It’s planned to be made by Ringing Bells Pvt Ltd promoted by one Goel Family in Noida with parts from Taiwan

Charity or Con!?….that’s because it’s less than half the price of a subsidised Gas Cylinder & the Company says it’s not receiving any government subsidies   

Company should upfront receive Rs 251 + Rs 40 for delivery=Rs 291 for each phone.That’s Rs 29.1 crs for One Million Orders & 291 crs for 10 Million and 2910 crs for 100 Million !….and it can deliver by June 30!?…they should have names it Rabbit Bells !

It also has not received the time consuming BIS approval…wonder if they have applied!

When you do try to register & pay  it throws you back to the first page….that’s ominous at the start itself !

Its Human Nature to be seduced like this & apply & hope it’s not a Con!

🙂  And I’m a sucker for seduction ~ Stock Market has been a great teacher ! ~ So I’m going to sacrifice my Happy Hours Pizza this afternoon and apply if I get through !

Equity Meltdown~Pulling out or Putting In!?

Equity Meltdown~Pulling out or Putting In!?

Answer this to define yourself ~ your Investment Mindset now &  your Risk Profile in general  ?

The Question should be surely in your Mind right Now as continuing Global Meltdown forces India Meltdown too with the Nifty & Sensex sinking over 3.3% today to go sub 7000 & 23000 respectively ~ down 23% in 11 months from the highs of  9119 & 30025  in the first week of  March 4,2015

Had warned you’ll in December 2014 that 2015 will be Volatile & Vulnerable and reiterated it several times in 2015….stated that 2016 looks more ominous

Worth reproducing this blogpost of mine of September 4,2015

Hoping for A Merciless Market for Higher Gains at Lower Risk !

Friday, September 4th, 2015

At the time it was of concern that the Sensex had gone sub 25500 but I yet had declared it was not a Merciless Market yet!….that’s when you can get into serious wealth creation opportunities at lower risk for higher gain !

Here’s an extract from what we had communicated  privately in early September 2015

_______________________________________________________________

Hi,

We have been quiet for a few months now for a good reason. Those who are on our fundamental wavelength know what we stand for. .Too frequent communications then would have served little purpose other than the danger of generating ‘Noise’… !

What we did assess with conviction was that FPI Inflows will ebb or even reverse in 2015 from the record inflows in 2014…another reason that should mute markets…as this was played out it was ignored by a frenzied midcap space market that justified it being balanced out by increased retail participation and absorption by increased Mutual Funds Investments 

On ET Now Prime time on March 31,2015 I had aired my fundamental views for the new FY 16 that was dawning to a wider audience than just clients.I had stated that the markets were running ahead of fundamentals

Yet the Smallcaps & Midcaps had raced away in a frenzied climb last six months too & we were being questioned  why we were being relatively more conservative with dependence on Core Scrips weightage as per Risk Profiling and Asset Allocation as a discipline and  refusing to trade in and out of markets furiously especially in scrips that were touted on the street or in stock chats or in networks or on the air by experts on popular stock channels and stock portals….most were justifying the run up and urging and seducing for more participation to those especially  who thought were missing the boat…The Young were inheriting Earth !    read more

3 out of 4 from the 100 Entries in the Red inside a month in TAP GAP 2016

Phew ! Have gone through all 100 Entries as below for the TAP GAP end 2015 Contest as to  which  Company will be the Biggest Share Price Gainer in 2016

Had taken the lower of price recommended by participant & closing as on January 15,2016 on BSE (except SKM Egg’s NSE closing)

As of last evening & inside a month here is Price Trend of all the Entries

Look at the Price Trends inside the last month…nearly 3 in 4 are in the Red…quite a few over 15% down …Just Two, Ujaas & Vakrangee are up 20% + and a few more over 10%

The Volatility is quite unnerving & just be cautious you don’t get trapped in Scrips that are manipulated around…quite a few ,in my view,appear on the list below… the swings may take you to highs only to topple you

Today the Sensex is down @ 250 points and trying to keep it’s head above 24000

Now you know why it’s taking long to fundamentally  identify those with real winning potential that can sustain on the bourses in 2016 and beyond…will announce my choice shortly…review is on

 

Scrip Name CMP Inv. Price Overall Gain/Loss Overall Gain/Loss (%)
ABFRL 176 212.2 -36.2 -17.06
ALICON 296 302.4 -6.4 -2.12
AMBIKCO 800 816.25 -16.25 -1.99
APTECHT 61.1 61.5 -0.4 -0.65
ARCPR 598 683.75 -85.75 -12.54
ARROWTEX 38.9 49.5 -10.6 -21.41
ASALCBR 183.3 183.3 0 0
AUROPHARMA 746.5 814.75 -68.25 -8.38
AVANTI 420 383.5 36.5 9.52
BAMBINO (2) 119 127 -16 -6.3
BATLIBOI 22.45 24 -1.55 -6.46
BHANDHOS 41.7 47.65 -5.95 -12.49
BHILSPIN 15 14.6 0.4 2.74
BINNY 91 101 -10 -9.9
BIOFILCHEM 8.48 11.35 -2.87 -25.29
BIOPAC 16.85 17.85 -1 -5.6
BUTTERFLY 249.1 241.1 8 3.32
CAPF 400.5 381.55 18.95 4.97
CGCL 168.1 183 -14.9 -8.14
COFFEEDAY 245.4 254.3 -8.9 -3.5
DAAWAT 220.8 238.1 -17.3 -7.27
DECNGOLD (2) 35.05 35.5 -0.9 -1.27
DONEAR 28.65 28.9 -0.25 -0.87
ESTER 58.8 65.25 -6.45 -9.89
FCEL 22 21.8 0.2 0.92
FORCEMOT 2,640.00 2,658.00 -18 -0.68
FSL 35 35 0 0
GUJBOROS 72.25 70.85 1.4 1.98
HANSUGAR 1.15 1.21 -0.06 -4.96
HERITGFOOD 526.6 526.5 0.1 0.02
HFCL 18.55 19.1 -0.55 -2.88
HITACHIHOM 1,189.55 1,087.20 102.35 9.41
IL&FSTRANS 75.25 80.05 -4.8 -6
INDIANACRY 11.62 10.54 1.08 10.25
INOXWIND 273.8 317.7 -43.9 -13.82
ISFT 321 327.4 -6.4 -1.95
IVP 101 102.5 -1.5 -1.46
JAGRAN 159 155.25 3.75 2.42
JKPAPER 46.8 45.95 0.85 1.85
JSHL 12.99 15.99 -3 -18.76
KAMAHOLD 1,340.00 1,345.75 -5.75 -0.43
KAYA 963 1,041.75 -78.75 -7.56
KISAN 20.5 21.3 -0.8 -3.76
KITEX 434.5 583.2 -148.7 -25.5
KOTAKBANK 673.15 675.95 -2.8 -0.41
KSCL 359.3 324.75 34.55 10.64
KWALITY 100.1 108.4 -8.3 -7.66
LAKSHMIO 17.05 17.1 -0.05 -0.29
LINCOPH 176.5 223.9 -47.4 -21.17
LITL 6.17 6.25 -0.08 -1.28
LT 1,130.25 1,106.00 24.25 2.19
MANPASAND 454 448.5 5.5 1.23
MAX 367 476 -109 -22.9
MCX 816 832.05 -16.05 -1.93
MELSTAR 7.41 8.14 -0.73 -8.97
MIC 22.6 20.45 2.15 10.51
MOREPENLAB 31.2 28.2 3 10.64
MPSLTD 680 716 -36 -5.03
MRSS 67.3 76.3 -9 -11.8
MULTIBASE 220.4 228.3 -7.9 -3.46
NATCAPSUQ 99.3 133.2 -33.9 -25.45
NCLIND 100.9 120 -19.1 -15.92
NIRLON 173 177.4 -4.4 -2.48
ODYSSEY 34.15 41.05 -6.9 -16.81
PINCON 120 114.4 5.6 4.9
RADIXIND 201 205 -4 -1.95
REIAGROLTD 0.6 0.66 -0.06 -9.09
REPCOHOME 634.45 606.15 28.3 4.67
REVATHI 625 684.5 -59.5 -8.69
RICOHQ 570.5 693 -122.5 -17.68
ROSSELLIND 113.5 116.8 -3.3 -2.83
RPOWER 46.75 51.05 -4.3 -8.42
RTNPOWER 10.24 10.57 -0.33 -3.12
SANJIVIN 49.3 57 -7.7 -13.51
SANKHYAIN 31.5 37.9 -6.4 -16.89
SKMEGGPROD 121.55 150 -28.45 -18.97
SRIPIPES 234.4 239.2 -4.8 -2.01
SSPDL 52 58.45 -6.45 -11.04
STYLAMIND 204.2 188.2 16 8.5
SUBEX 9.88 10.3 -0.42 -4.08
SUNLOC 119.3 112.8 6.5 5.76
SURANASOL 29.5 27.8 1.7 6.12
SYNCOM 8.68 10.72 -2.04 -19.03
TANAA 59.45 62.45 -3 -4.8
TARAJEWELS 44.8 43.65 1.15 2.63
TIDEWATER 23,282.00 25,365.00 -2,083.00 -8.21
TIIL 219 212.8 6.2 2.91
TRIGYN 71 81.4 -10.4 -12.78
TRILOGIC 26.5 27.4 -0.9 -3.28
TV18BRDCST 39.9 41.15 -1.25 -3.04
UDAICEMENT 10.56 11.51 -0.95 -8.25
UFLEX 161.85 156.05 5.8 3.72
UJAAS 25.6 21.3 4.3 20.19
UVBOARDS 15.1 21.9 -6.8 -31.05
VAKRANGEE 204.15 165.5 38.65 23.35
VINATIORGA 384.65 421.2 -36.55 -8.68
VIRNICHIQ 41.15 44.9 -3.75 -8.35
WATERBASE 77.6 84.25 -6.65 -7.89
ZENTEC 80.4 94.8 -14.4 -15.19
ZYDUSWELL 729.8 800.45 -70.65 -8.83
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