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June 2016

TAP GAP 2016 Performance of 101 Scrips in the Half Year at June 30

At Half Year June 30,2016,here’s the performance of all the 101 scrips recommended for TAP GAP 2016

Kaveri Seeds (Pushkar Singh Rana) that was awarded the Winner’s Hamper by me is up 37% & in the Top 10 % Gainers  but has a few ahead of it with even one near doubler ,Stylam Industries (well done Shailendra) !…Dave’s Subex is showing an upward momentum…My last blog was quite an elaborate one on it & evoked a response from him .Even the only Large Cap,Larsen & Toubro has gained 35% …Vishal’s Kisan & Livi’s MRSS too are rocking !

There are some huge disappointments too that have knocked off half the wealth and more with Ricoh bringing up the rear on major issues that rocked this Japanese MNC in India  !

The Sensex opened 2016 at 26101 & closed today @ 27000,up 3.4% in the year thus far

Please do point out if there are any errors on account of Investment Price adjustments for any Splits,Bonus,Rights etc

 

TAP GAP 2016
Scrip Name June 30 Price Inv. Price Overall Gain Overall Gain(%)
STYLAMIND 365.15 188.2 176.95 94.02
KISAN 35.9 21.3 14.6 68.54
MRSS 120.5 76.3 44.2 57.93
TRIGYN 122.7 81.4 41.3 50.74
CAPF 567.15 381.55 185.6 48.64
INDIANACRY 15.61 10.54 5.07 48.1
UFLEX 229.95 156.05 73.9 47.36
VIRINCHI 65.8 44.9 20.9 46.55
SSPDL 80.3 58.45 21.85 37.38
AVANTI 525.95 383.5 142.45 37.14
KSCL 445.2 324.75 120.45 37.09
DECNGOLD (2) 48.6 35.5 26.2 36.9
LAKSHMIO 23.35 17.1 6.25 36.55
KAMAHOLD 1821.75 1345.75 476 35.37
LT 1496.2 1106 390.2 35.28
FSL 46.4 35 11.4 32.57
VINATIORGA 544.35 421.2 123.15 29.24
APTECHT 79.4 61.5 17.9 29.11
HITACHIHOM 1393.65 1087.2 306.45 28.19
NIRLON 226.9 177.4 49.5 27.9
REPCOHOME 768.35 606.15 162.2 26.76
ISFT 412.55 327.4 85.15 26.01
JKPAPER 57.1 45.95 11.15 24.27
MANPASAND 553 448.5 104.5 23.3
GUJBOROS 86.75 70.85 15.9 22.44
UJAAS 25.8 21.3 4.5 21.13
MCX 1002.4 832.05 170.35 20.47
MULTIBASE 270.95 228.3 42.65 18.68
SUBEX 12.15 10.3 1.85 17.96
NCLIND 140.65 120 20.65 17.21
JAGRAN 180.45 155.25 25.2 16.23
UDAICEMENT 13.32 11.51 1.81 15.73
FORCEMOT 3044.75 2658 386.75 14.55
HANSUGAR 1.38 1.21 0.17 14.05
VAKRANGEE 188.4 165.5 22.9 13.84
REVATHI 775 684.5 90.5 13.22
KOTAKBANK 763.05 675.95 87.1 12.89
ODYSSEY 46.1 41.05 5.05 12.3
MFSL 533.5 476 57.5 12.08
IVP 114.15 102.5 11.65 11.37
WATERBASE 93.75 84.25 9.5 11.28
TIIL 235 212.8 22.2 10.43
TV18BRDCST 44.9 41.15 3.75 9.11
BATLIBOI 25.9 24 1.9 7.92
FCEL 23.5 21.8 1.7 7.8
RTNPOWER 11.36 10.57 0.79 7.47
SRIPIPES 256.9 239.2 17.7 7.4
ROSSELLIND 123.7 116.8 6.9 5.91
IONEXCHANG 328.9 311.6 17.3 5.55
DAAWAT 250.2 238.1 12.1 5.08
ALICON 313.75 302.4 11.35 3.75
BAMBINO 130.7 127 7.4 2.91
KWALITY 110.9 108.4 2.5 2.31
DONEAR 29.45 28.9 0.55 1.9
RPOWER 51.35 51.05 0.3 0.59
COFFEEDAY 254.8 254.3 0.5 0.2
ZYDUSWELL 799.7 800.45 -0.75 -0.09
MPSLTD 714 716 -2 -0.28
AMBIKCO 812.2 816.25 -4.05 -0.5
HERITGFOOD 516 526.5 -10.5 -1.99
BINNY 98.15 101 -2.85 -2.82
BIOPAC 17.25 17.85 -0.6 -3.36
HFCL 18.25 19.1 -0.85 -4.45
IL&FSTRANS 73.9 80.05 -6.15 -7.68
TANAA 57.05 62.45 -5.4 -8.65
AUROPHARMA 743.4 814.75 -71.35 -8.76
KITEX 527.2 583.2 -56 -9.6
TARAJEWELS 39.3 43.65 -4.35 -9.97
ARROWTEX 44.5 49.5 -5 -10.1
SURANASOL 24.65 27.8 -3.15 -11.33
TIDEWATER 5597.4 6341.25 -743.85 -11.73
ZENTEC 83.2 94.8 -11.6 -12.24
SUNLOC 98.6 112.8 -14.2 -12.59
BHANDHOS 4.1 4.77 -0.67 -14.05
MOREPENLAB 24.2 28.2 -4 -14.18
KAYA 877 1041.75 -164.75 -15.81
BIOFILCHEM 9.4 11.35 -1.95 -17.18
ESTER 53.9 65.25 -11.35 -17.39
BHILSPIN 11.5 14.6 -3.1 -21.23
SYNCOM 8.4 10.72 -2.32 -21.64
ASALCBR 71.15 91.65 -20.5 -22.37
LITL 4.8 6.25 -1.45 -23.2
MIC 15.45 20.45 -5 -24.45
INOXWIND 238.05 317.7 -79.65 -25.07
NATCAPSUQ 99 133.2 -34.2 -25.68
ARROWGREEN 507.9 683.75 -175.85 -25.72
CGCL 129 183 -54 -29.51
BUTTERFLY 165.5 241.1 -75.6 -31.36
MELSTAR 5.56 8.14 -2.58 -31.7
ABFRL 142.35 212.2 -69.85 -32.92
UVBOARDS 14.65 21.9 -7.25 -33.11
PINCON 76.5 114.4 -37.9 -33.13
LINCOPH 149.6 223.9 -74.3 -33.18
JSHL 10.2 15.99 -5.79 -36.21
RADIXIND 122 205 -83 -40.49
REIAGROLTD 0.39 0.66 -0.27 -40.91
SANKHYAIN 19.8 37.9 -18.1 -47.76
SANJIVIN 28.7 57 -28.3 -49.65
TRILOGIC 13.25 27.4 -14.15 -51.64
SKMEGGPROD 66.15 150 -83.85 -55.9
RICOHQ 208.55 693 -484.45 -69.91

 

Exciting iPSC Stem Cell Technology~Autologous & Allogeneic

This Morning  this brief news release on breakthroughs in Stem Cell Research caught my attention

It also added two words to my vocabulary ~ Autologous & Allogeneic in this regenerative medicine space

The Japanese Shinya Yamanaka who won the 2012 Nobel Prize for his research on stem cells has created a new exciting approach termed as iPSC Technology…that’s induced Pluripotent Stem Cells

Any human cell can be genetically reprogrammed to an embryonic state

In US there have been ethical concerns on the use of embryonic stem cells .However,Yamanaka’s research allows for the use of adult cells 

Here are some interesting extracts :

“The use is now autologous: meaning the cells were taken from the patient, engineered then returned into the same person. The company is working on allogeneic cells – that do not depend on using the same patient’s cells—so that some day these products could be bought off-the-shelf.”

“We can regenerate using a 70-year-old’s skin cells and make them iPS cells that are virtually zero years old. What we thought of as science fiction is now becoming a reality.”

“has the potential of setting off a medical and industrial revolution,”

Leading Pharmaceutical companies,most of them globally listed, are now adopting iPSC cells along with the traditional animal model for research & clinical tests for drug development & trying different therapies for those “afflicted with everything from Parkinson’s Disease and diabetes to spinal cord injuries and heart disease.”

Stem Cells already find autologous application in Skin & Cartilage replacement & Research is on to to address many diseases including Cancer & growing various organs,beginning with the liver using iPSC Technology

Regenerative Medicine has the Potential to be a US $ 120 b industry by 2030 & Japan has opened out regulations quicker than US in this space & it is where leading scientists & companies are heading.Japan feels this space will be one in which they can give the world another Innovative Industry & regain & maintain economic power

Re-engineered Stem Cells & their Application based on  iPSC Technology ~Interesting Investing Theme

Subex @ Rs 11 ~ Five Questions that come to Mind

Subex @ Rs 11  & thus available around par of FV Rs 10~ Five Questions that come to mind?

First a bit of background of Subex that got grounded bad from a high of Rs 887 in 2005 to a low of Rs 4 in 2013 before sputtering to show some life crossing Rs 18 in 2015 & again correcting sharply to below Rs 10….It’s showing some life again with Market Cap moving up to @ Rs 550 crs & huge Volumes .It’s in the Telecom Software Products space providing Business and Operations Support Systems (B/OSS) to Communication Service Providers (CSPs) across the Globe.

If you’re training with me you’d know how to look at it now….just listing in brief the five points I’m looking at :

  1. Management ~ Its now 48 year old Surjeet Singh ,ex CFO of Patni Computers managing Subex.He’s the CEO & MD & has a Cost to Subex Group Package of over Rs 5 crs.Till September 2012 it was the 1992 Founder Subhash Menon who ran the Show and even remained Director till 2015.Menon’s Rise & Fall Story has been covered in some interesting detail by Forbes in November 2012 .Do even read the Readers Feedback to the Forbes Article. The Board also has Sanjeev Aga,ex MD of Aditya Nuvo & Birla ATT (Idea) & Anil Singhvi of Ican & earlier known for his long tenure with Ambuja Cement.He also was an advisor for two years with the Reliance ADA Group & advised on the Enam Axis Bank Merger .The Promoter Category shows a few investors with a very low stake.In fact many  others especially FPIs have much larger stakes & a few were allegedly instrumental in Founder Menon’s ouster because of the Syndesis Acquisition debacle that crippled Subex.The suspicion was that there was more than meets the eye in this US $ 165 m acquisition & it’s funding by US $ 180 m FCCB 1(See below) ~ Question : What’s Surjeet Singh’s strategy going forward to address the challenges that yet remain & scale the Topline & Bottomline significantly ?       
  2. Networth Jump with FCCB Conversion~ Networth has jumped from Rs 209 crs at March 31,2015 to Rs 727 crs at March 31,2016 as Company revised FCCB III Conversion price downward yet again from Rs 22.79  to Rs 13 on May 14 2015.This attracted near full conversion of the FCCBs taking the Equity from Rs 182.92 crs to Rs 502.81 crs in FY 16….These FCCBs were the huge Debt overhang in the Balance Sheet.The Book Value thus became Rs 14.46 on March 31,2016 with the Balance Sheet showing very little Debt with just US $ 6.95 m o/s on all FCCBs I ,II & III .The FCCB Story commenced 10 years ago in 2006/7 when 2%  FCCB I for US $ 180 m was issued with Exchange rate fixed at Rs 44.08 & Conversion at Rs 656.20.In 2009/10 a restructuring proposal of FCCB 1 was offered at a 30% discount to Face Value.Those who held US $ 141 m face value FCCB I accepted & were issued 5% interest per annum, payable half yearly US $ 98.7 m FCCB II with exchange rate fixed at Rs 48.17  & Conversion at Rs 80.31.Redemption date was the same at March 9,2012 which RBI extended to July 9,2012.However another restructuring offer was made in June 2012 to FCCB I & II Holders & most (US $ 38m of the 39 m FCCB I o/s & US $ 53.4 m of the 54m FCCB II o/s) accepted it in July 2012 & were issued 5.7% interest per annum payable half yearly FCCB III for US $ 127.72 m with exchange rate fixed at Rs 56.0545 & Conversion Price at Rs 22.79 with maturity date of July  7,2017.On May 14,2015 the Conversion price was reset on these FCCB III to Rs 13  ~ Question : Though the FCCB Mess has been resolved where lies this High Networth & how is it going to be serviced?
  3. Goodwill on Consolidation ~ The Networth lies in the Carrying Values as on March 31,2016 of the Investments of Rs 647.39 crs made in Subex(UK) which contributes nearly all of topline & of Rs 124.96 crs(lower by Rs 54.90 crs) in Subex Americas Inc.Consolidated Accounts throws up these Investments in the Goodwill on Consolidation.Company has,and new auditors,S R Batliboi & Associates(Previous was Deloitte Haskins & Sells) have accepted the continuing Goodwill Value of Rs 670.36 crs for UK & the fresh assessed Rs 97.26 crs for Americas(down by Rs 88.70 crs from the Rs 186.06 crs carried till FY 15).Company views this as fair based on their assessment of operations  & cash flows going forward & even external valuations.~ Question : These are Intangible & carry risk of Impairment going forward & thus are they yet being overstated even now ?
  4. Topline ~ Sales continue to hover in the Rs 320 crs to Rs 360 crs range last four years despite regular annual report noises on the potential of  mobile telephony going forward.Bottomline remains relatively insignificant even as FY 16 generates Rs 50+ crs and an EPS of Rs 1…maybe enough to service stakeholders like Employees & Working Capital Lenders but what about Shareholders~ Question :Even assuming lower Interest Burden with the FCCB Conversions & less risk of Exchange Fluctuations how would such a flat growth topline generate enough bottomline to service the Equity of over Rs 500 crs now?
  5. Subsidiaries Outstandings set off sought from RBI ~ Standalone Financials as on March 31,2016 reveal Trade Receivables,net of Doubtful Debt) from Subsidiaries  at Rs 412.73 crs &  Payables at Rs 441.28 crs.Company plans to apply to RBI to allow them to set these off. No Accounting adjustment has been made for these & neither have Auditors qualified their Report on the Standalone Accounts though they have drawn attention to it as an Emphasis of Matter ~ Question : That these have grown so huge on either side over the years without being settled does it signal at least a part being accommodation entries?

Remember how I had analysed & exposed Geodesic in 2012/13 at @ Rs 10 & with huge FCCBs too when many were floating it as multi-bagger potential to cross Rs 100.It dropped to under Rs 2 & has since been suspended from trading         

Over 600 Employees yet believe that Subex will Turnaround under Surjeet Singh…Question is do you as a Potential Investor ….or is the risk a bit too adventurous for your profile….Subex has little long term debt & is showing a positive bottomline now ….well the FCCB Mess certainly has been cleared up but at the cost of FY 16 creating an additional 32 cr shares which already created a selling momentum after the conversion…some yet may have to be sold off.

This is anybody’s & everybody’s share now with insignificant Promoter Holding….There are many who jumped in excitedly at Rs 18 last year & saw their Investment halve in quick time on selling pressure created by additional 32 crs created from August 2015, earliest effective conversion date was in this month ,on the FCCB III.Remember these FCCB Holders had already faced 30% Face Value Loss on FCCB II issue  + Exchange Loss from original Rs 44 & then Rs 48 & then Rs 56 when current rate is @ Rs 67 ….and shares converted at Rs 13 would surely have been crying to sell at Rs 18 to recover some loss for the holders!…. Now there are many yet aggressively buying in at Rs 9.50 to Rs 11…Volumes & Price Trends are telling some story…Selling Pressure seems to be ebbing

🙂 Anybody interested in acquiring  majority stake in Subex ? will cost you under just US $ 45 m or under  Rs 300 crs (@ Rs 67 ex rate)  for a 51% stake & you’ll get a Rs 350 crs topline company with little debt & in profits & servicing  most of the leading Telecom Operators & Communication Service Providers worldwide…and the Book is near Rs 15 with very little equity dilution remaining on account of remaining FCCB conversion….you of course need to believe the carrying worth of Investments in Subex (UK) & Goodwill on Consolidation shown because of it…you would also need to believe in Surjeet Singh’s exclamation in his statement in the FY 15 Annual Report that it’s Inflection Point & all at Subex are very excited about the road ahead read more

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