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

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Month: February 2017

Promoters rooting for Change of Infosys Chair~Seshasayee to Subrahmanyam?

The Infosys Situation is getting as explosive as the Tata Group’s did with  Promoters rooting for Change of Infosys Chair~Seshasayee to Subrahmanyam?

Corporate (Mis)Governance Issues~First Tatas & now Infosys !~Chairman & Board under Attack by Promoters

It’s been disruptive global times in many ways with Trump now US President and India re-gearing up Post Demonetisation & the Indian Corporate Big League crying out “Me Too” .

Headlines were hogged for months as first Promoter Family’s Ratan Tata led the unusually aggressive initiative  in the illustrious Tata Group to fire it’s Chairman, Cyrus Mistry & now Promoter N R Narayana Murthy has called to replace Infosys Chairman with Prof Marti Subrahmanyam .Ex Directors T V Mohandas Pai & V Balakrishnan support Murthy on this  & are calling for the Chairman’s resignation for serious misgovernance on issues of High Severance Packages,Hike in CEO Package ,Director Appointments,Inducements to bag Contracts,non disclosures among others that strike at the very core values Infosys was build on

Narayan Murthy has just asserted in an interview that the unusually high severance package to the ex CFO was just hush money cloaked & that he was concerned about falling standards in corporate governance

Whoa ! That’s a criminal charge in my view !

N R Narayana Murthy is rooting to replace Seshasayee with Prof Marti Subrahmanyam,Charles E Merrill Professor of Finance at the New York University Stern School of Business.The Professor has already served as an independent director on the Infosys Board for thirteen years till 2011

Four Years ago in January 2013 I had an opportunity to interact with Prof Marti Subrahmanyam when he delivered a paper at BSE on the  manipulation of Libor Rates.I had blogged on this then.I had asked him if the  Banks simply had to rig the rates to survive & if this was the case then the orders had to come from the top.Prof was taken aback a bit by the query & clearly reluctant to confirm this.Expected truthful answer should have been “Yes” as the question was rhetoric.Instead he had brushed it off abruptly & I got the impression of an intellectual arrogance at display.That view has stayed as I’ve not got another opportunity to interact to be able to change this view …He’s quickly thrown in the hat to become Infosys Chairman.Clearly Narayan Murthy has been in touch with him on this before putting up his name to replace Seshasayee,Murthy has always been straightforward and blunt like in yesterday’s interview calling the severance pay as hush money !.Can’t imagine Subrahmanyam to be as straightforward & I daresay will be Murthy’s ‘Voice’ just as Ratan Tata,in my arguable view,wanted a ‘Yes’ Man Chairman to head Tata & which Cyrus Mistry turned out to be not read more

Equity ~Life Changers or Life Maimers ?

Equity ~Life Changers or Life Maimers ?

This Thought was inspired by a Whatsapp Forward received this morning titled Power of Equity .It listed many Life Changing Wealth Creators that grew many fold from just Rs 10000 invested in each  & carried a concluding Message in Capitals ” INVEST WISELY WITH LOTS OF PATIENCE “

This was the List & I’m assuming the Years & CAGR Maths is correct with Dividends not being considered :

  1. Eicher Motors-1992 => Rs 80 lakhs
  2. Asian Paints-1986 => Rs 90 lakhs
  3. HDFC -1990 => Rs One Crore
  4. Brittania – 1985 => Rs 1.06 crs
  5. MRF – 1985 => Rs 1.10 crs
  6. BOSCH -1985 => Rs 1.20 crs
  7. Amara Raja -1991 => Rs 1.25 crs
  8. Shree Cement -1990 => Rs 2.90 crs
  9. Infosys – 1993 => Rs 3 crs
  10. Dr Reddys -1986 => Rs 10 crs
  11. WIPRO -1981 => Rs 400 crs

Cannot Argue with this Message for I’ve seen three of my Scrips,in even relatively quick time inside five years of investment too becoming over 100 Baggers ~Matrix Labs( early Millenium & now delisted as sold to Mylan),Mercator(early Millenium) & WIPRO ( from 1997 to  early 2001)

It is rare for most investors to live the Conviction & Temperament to hold for long & ride the Huge Life Changing Gains.Imagine if more than Rs 10000 had been invested in each of the above,especially WIPRO!

However my Thought is what about Wrong Convictions on the High Fliers that became Wealth Destroyers &  Life Maimers !

Here are a few of them ,most yet listed & struggling to revive & how much worth would your Rs 10000 invested in each of them be now ….most are Horror Stories of the past decade or a little more…sure you can contribute more…My Horror Stories  have been the Damania Group’s Damania Capital Markets to mention one.Bad Judgement Call that Cost!It was compulsory delisted in July 2004.

~Suzlon -2005=>Rs 842  &  2008=>Rs 348 ! => 92% to 97% wiped out after considering 10:2 Split in January 2008 when it reached an all time high of Rs 2300 before split.Current Price Rs 16.Promoter Tulsi Tanti is yet on board though Dilip Shanghvi of Sun Pharma Group has acquired a major stake in it @ Rs 18 in February 2015.Mandatory Open Offer at Rs 18 to other Shareholders in January 2016 met with no success.The Share Price had raced to Rs 30 from where it has halved & is below the Open Offer & Stake Price of Rs 18.Shareholders hold out Hope of Revival back to Glory Days in the years ahead under Dilip Shanghavi.So far it’s been a muted share price trading range in recent months.

~Unitech-2006 => Rs 505 => 95% wiped out after adjusting for 12:1 Bonus & 10:2 Split in June 2006 & 1:1 Bonus in Aug 2007.Reached a high of Rs 14800 in 2006 before Bonus & split .Current Price under Rs 6

~Kingfisher Airlines-2006/7 => 0 ! => 100% wiped out & scrip suspended for trading from 2012/2013 & restricted trading from June 2015 ~ reached a High of Rs 335 in 2007 read more

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