Kingfisher Airlines @ Rs 11.75 gasping for Breath !

Kingfisher Airlines @ Rs 11.75 gasping for Breath !

Have blogged several times on KFA right from 2008 cautioning Investors on the risks ~ Search Engine will throw up all these posts

Kingfisher Airlines (KFA) bleeds some more~wonder how it’s yet holding above par at Rs 11.75 ! thus being Valued by the Market at just under Rs 1000 crs ! though Debt and Accumulated Loss is at Rs 10000 crs !

Yet the Financial Statements have been prepared as a GOING CONCERN 

 Need a Miracle for KFA to fly again ! ~ Who would like to take over KFA ! ? ~ it has now just a few planes to fly ~ but no permit to fly~ Debt and Loss of Rs 10000 crs !~ Even with FDI being allowed in Aviation ,it would be simpler and easier for a new Entrant to simply start a New Airline than to try to revive KFA

 Am intrigued that yet 230000 + Shareholders have the conviction to hold KFA Shares ~ there is yet an opportunity to exit at Rs 11.75 ~ unless of course they insist to hold an aggressive appetite and love Kingfisher ~ the Man ~ His Beer ~ and his Airline ! ~ as long as they are aware of the Risks involved in holding this Conviction ! ~ Remember Global Trust Bank (GTB) Fiasco ~ allowed to trade on BSE and NSE despite it being a lost cause ~ then one fine day trading was stopped and one’s holding was simply obliterated overnight from one’s demat account as the bank ceased to exist ! with RBI intervening and allowing Oriental Bank of Commerce to take over only it’s assets

KFA Shareholders be warned that KFA may just go the GTB way !  

Ask yourself this ~ Did it really matter to me here in India who won the USA Presidency ? ~ am I better or worse off!?

Ask yourself this ~ Did it really matter to me here in India who won the USA Presidency ? ~ am I better or worse off !? ~does it affect my health,my family,my job or business,my wealth….my stocks ! ? ~ am I really going to advice to get out of Indian IT Space !?

On US Foreign Political or Economic Policy Issues,neither Obama nor Mitt Romney would dare to effect any changes that will affect US Interests

Happy for Obama that he won as incumbent…..and his anti India IT outsourcing stance ,am told by Indian IT Insiders is only a local  appeasement tactic to protect American Jobs,as they really have little choice in the matter as of date ~ call it Catch 22 ~ they want to protect American Jobs but in a leveraged economy and a recessionary environment the economics simply don’t work out  not to outsource ~ having said this the cap on H-1B Visa for highly skilled foreign workers has been dropped by USA from 195000 in 2001 to just 85000 this year ~ Indian IT Companies get round this hurdle by rationalising the team numbers on a project,local US Hiring and doing more work on the Project out of India…of course they have been accused of other ways too !

David Bier,an US immigration policy analyst,wrote in Forbes earlier this Year that Foreign Highly Skilled workers on H -1B Visas create jobs not take them ~ in support,he quoted a 2009 finding by the National Foundation for  American Policy that for every H-1B Visa request it co-related with five new jobs at major firms and more than seven new jobs at firms with less than 5000 employees   !

Though  Indian IT may not be a great Investment Theme that it was in the 1990s and earlier part of the 21st Century when all IT majors,except for  Satyam, were simply great multi bagger pickings !, the IT Story is far from ebbing and I’m not going to advice Clients to move out of this space totally ~or even switch from TCS to Infosys like CLSA thinks should be done !

Make no Mistake,Obama will continue to bully India on both fronts and,I daresay, we shall continue to acquiesce quickly without serious debate justifying US entry on grounds of aiding GDP Growth and creating millions of jobs  and upgrading our Infrastructure with latest technology !  ~ We need to be cautious that while USA promotes their Interests aggressively,they will as they need to survive and recover from a faltering and highly leveraged economy,we need to safeguard our interests ~ I genuinely fear this is not happening  ~ we are opening out more US exposure in Insurance,Retail,Defence,Aviation,Agriculture,Banking,Higher Education,Automobiles and allied sectors without the rigors of  an intelligent debate without premediated bias or prejudice on the long term implications of this read more

Kingfisher Mallya the King of Good Times and his CA~LENDERS this year !

Kingfisher Mallya the King of Good Times and his CA~LENDERS this year !

This is the Reality from the Prediction a few years ago ! ~ a forced change in focus ~ from swelte and sexy bikini clad models hand picked from hundreds, that Loyal Photographer Atul Kasbekar clicked for the Annual Kingfisher CALENDAR to a survival business model being thrashed out with CAs and LENDERS for Kingfisher Airlines whose license has just been suspended !

In the past few years Blogged a few times on Kingfisher Airlines and it’s financials,right from the time I highlighted the risk of the Brand being valued for leveraging debt on this Intangible ! ~ use search on the blog to locate these

Mallya is a true role model for my blog’s tagline “In India,Companies may fall sick but Promoters rarely do!”

In a Sense I do sympathise with him ~ and in the same Sense I don’t ! ~ a few good reasons for this ! ~ his UB group and him hold 28.98cr shares FV Rs 10 or 35.83% of KFA’s Equity ~ all pledged

In a Sense I do sympathise even with the Lenders ~ and in the same Sense I don’t ! ~ a few good reasons too for this !~ SBI,IDBI Bank,ICICI Bank and Bank of India have converted some part of loan to shares at I think @ Rs 60 ! ~ they collectively own 7.1 cr shares of FV Rs 10 or 8.78% of KFA’s Equity as at September 30,2012

In a Sense I do sympathise with the 214000+ Shareholders of KFA ~ and in the same Sense I don’t ~you guys took a flying risk despite clear indications of  heavy turbulence during Flight !

Where I do really sympathise is with the Employees ! ~ try living without salaries for even a month ! ~ and when Mallya last met them I was stunned by his attitude ~ literally chiding them for holding flyers to ransom by resorting to go slow,strikes and no shows ~ did they have any other Choice except to resign and leave and probably say goodbye to their dues too ! ~ Mallya has not kept his word to them in the recent past and even this oral offer of paying  three months salaries for the seven months due before Diwali is not in writing ~ and when he had crucial meetings with lenders he was seen in the Control Room of the Formula I Singapore Grand Prix monitoring his Force India  Cars !

Meanwhile KFA valiantly struggles to remain above par at Rs 10 on ground BSE and NSE despite none of it’s Planes in the Air currently ! ~ In fact The Planes have been bolted in the Hangars by AAI till dues are cleared and those who own them and had leased them or sold them on instalments to KFA have been unable to recover possession of the planes read more

Congress led UPA plays their Final Ace ! ~ Announces at one Shot pending FDI reforms !

Congress led UPA has just played their Final Ace ! ~ Announcing this evening at one Shot pending FDI reforms and Specific Disinvestments in PSUs ! 

Clearly the Government was on a long back foot on Corruption Accusations on an unprecedented scale on Coalgate and 2 G

The PM courageously asserting that if they have to go down they will go down Fighting !

It had  played all it’s cards but one ~ FDI Reforms ,especially to open out to a 51% in Multi Brand Retail ,were kept Pending because of huge opposition by Congress allies in the UPA itself

Yesterday evening Government announced Rs 5 hike in Diesel Prices and a LPG Cylinder Subsidy Cap at Six Cylinders per annum per family ~ this is to reign in Oil Subsidies that have been  a major reason for huge fiscal deficits year after year

This bold move,predictably and vehemently opposed by Opposition Parties and so expect a Nationwide Bandh called by BJP and the Left,came quickly after positive and stock uplifting announcements on September 12 by the German Court holding the European Stability Mechanism as constitutional and allowing Germany to financially support it and on September 13,US Fed Governor ushering in QE 3 by announcing a further buying of mortgage backed securities to the tune of US $ 40 Billion a month aggregating to US $ 480 Billion a year

And buoyed by  Stocks rallying,this evening the Indian Government finally played it’s last Ace in my view by announcing at one go a slew of Pending Economic reforms of which major ones are

  1. Allowing 51% FDI in Multi Brand Retail
  2. Allowing 49% FDI in Aviation
  3. Disinvestment of 9% to 12% in Five PSUs ~ four are already listed ~ Oil India,MMTC,Hindustan Copper and National Aluminium ~ while unlisted RITES will make an IPO
Here’s the Disinvestment Table I’ve worked out for you ~ Government could raise  @ Rs 14500 crs from this Disinvestment Exercise ~ They may actually raise less ,probably @ Rs 13000 crs if a reasonable haircut of 10% is applied to current market prices to reward Retail Investors with maximum allotment at reasonable pricing ~ On the other hand the government may,as has been their greedy mindset,look to auction to get a premium !

Planned PSU Disinvestment announced by Government on September 14,2012

PSU

Share Price in Rs

Market Cap in Rs Crs

Govt  % Stake  pre sale

% Sale

Planned

Govt % Stake Post Sale

Potential Disinvestment Proceeds in Rs

Oil India

486

29236

78.43

10

68.43

2923

MMTC

778

77790

99.33

9.33

90

7258

Nalco

54

13942

87.15

12.15

75

1743

H Copper

269

24920

99.59

9.59

90

2390

RITES unlisted

*400

*1600

100

10

90

160

14474

*RITES has made Rs 164 crs PAT on Revenues of Rs 934 crs giving an EPS of @ Rs 40 with Equity at Rs 40 crs (FV Rs 10) and a Networth of Rs1008 crs at March 31,2012 giving a Book of Rs 252 ~ Thus have taken a hypothetical share price of Rs 400 at 10 times Earnings and @ 1.5 times Book ~ Thus Market Cap is Rs 1600 crs

Die Hard Pessimists in the US especially are now warning that the Markets were ahead of the QE 3 announcement in that they had risen already factoring in such an announcement ! ~ what they are warning is about a U Turn from here with the Dow at 5 years high of 13500 + and the Nasdaq at a 10 year high of 3200 !

However in my view Stocks,given these rapid fire recovery measures announced ~ RBI should join the Party on Monday by announcing a CRR Cut ~ and  enough evidence of growing  Investor Interest and Liquidity ,stocks are expected to sustain buoyancy in the Short term ~ At a macro level expect 5% to 10% returns in the Indices from current levels  in the next few months ~ Sensex and Nifty are up 2% already today at 18500 and 5500+ levels  ~At a micro level one can chase and make Alpha Returns much superior to Indices Movements with astute Stock Selections even though Macro Risks remain

Seems Diwali will be Brighter this Year in mid November ! By then,from indications, US President  Obama would have been elected (November 6 Presidential Elections) to serve a second term ! read more

IndiaBulls Group is BILKING INDIA say Veritas ! ~ There’s more than Meets the Eyes on both sides !

IndiaBulls Group is BILKING INDIA say Veritas ! ~ There’s more than Meets the Eyes on both sides ! 

Was prompted by an editor of a leading Media Financial Publication for my views on the controversial research reports generated by Veritas,Canada on Listed Indian Companies

Veritas is a Bear on IndiaBulls 

Veritas,Canada released a Damning Research Report dated August 1,2012 on the IndiaBulls Group controversially titled BILKING INDIA !  ~ specifically covering three Companies IndiaBulls Real Estate at Rs 55.85,IndiaBulls Power at Rs 12.80 and IndiaBulls Financial Services at Rs 227.30

BILKING is a strong word ~ Obtain or withold Money by deceit or without justification,cheat or defraud ~ obtain money fradulently

This is My Immediate Take on The Veritas Research Report Controversy on the Indiabulls Group

On Veritas Motives

  1. Why do they come up with only Sell Reports ? ~ and that too just a hand full of companies have been covered in the past year ! ~ Are these Reports generated to create Big Bonanza through F & O Short Selling Quickies ~Yes,Veritas and Mr Neeraj Monga ! Why are there no Buy Reports !? ~ Nothing Worth Buying in India !? or you want Clients to make Monies only by Selling Off or Short Selling or Saving them from making the Investment! ?
  2. In my view this is unfair and unethical especially to other Clients already on the rolls ~ by agreeing to delay the IndiaBulls Report by one day just to tempt Altima,London to sign on for US $ 50000 a year for Research Reports generated by you so that they can act on the Report before it is issued for wider viewership ~ a question that follows is this ~ if these reports are a paid service then what does Mr Monga mean that he will delay the issue of the Report by one day !? what is he implying ? will he be issuing or leaking the report free ! to a wide audience who are not paying clients? ~ wonder if this borders on insider Trading !

On IndiaBulls Strong Reaction

  1.  In initiating Criminal action,IndiaBulls is sending out a Strong Threatening & Menacing Message ~ “Don’t Mess with Us!”  ~ perhaps only IndiaBulls can do the Messing around !

Neeraj Monga and Nitin Mangal,the Veritas analysts who have damned the IndiaBulls Group are seen as fearless crusaders by many as also foolish by some and with vested interests by quite a few~ their Motives are under the microscope in writing such a Damning Report ~ Veritas charges Signing up Clients an Annual Fee of US $ 50000 to receive such Reports ~ So Far these guys have damned the Reliance Group especially Reliance Industries and Reliance Communications,DLF and KingFisher ~ Their latest target has been the IndiaBulls Group

If you follow my blog you will not have to pay a single Dollar ! ~I’ve exposed quite a few Companies,including KingFisher Airlines ~ use the Search Engine to locate such posts

Check the tagline of my blog  ” In India,Companies may fall sick but promoters rarely do!”

When I wrote for leading Stock Publications in the past,for the benefit of Lakhs of Investors I have often exposed traunt listed companies and their unethical and fradulent  and manipulative operating and accounting practices~ Of course I’ve been threatened to be sued often until evidence is shown to the Companies and they back off ! ~ Scales and Stakes were in lakhs or a few Crores then unlike now where we are seeing hundreds and thousands of crores of rupees being raised in dubious ways and spend dubiously too ~ This Role of playing Watchdog  is the Responsibility of the Regulators and the Exchanges  ~ Let’s just say that only of late have they been bit by Conscience ! ~ otherwise only the small fry was fried ! ~ also the blatant and shameless rape of Investors by unscrupulous promoters and their network often has strong political patronage ~ and is supported by some in the mainstream  media,broking  and banking world Let me make it Clear though ! ~ I am not a Share Activist ! neither am I associated with any such Activism ! ~ the reason being the prime objective of any analysis I do of Companies in our Capital markets is to see if they merit Investment ~ my job is to make Monies for my Clients by investing in Winners and staying away from Losers or Controversial and Manipulated Companies ~ It’s nothing personal ~ I do not defame Companies ~ don’t really have to as many Promoters effect this Role well themselves ! But What I do do ! is caution readers of my blog on certain companies that I feel may strangle them ! ~ Karuturi Global @ 25 (now 4 ! and was touted by many as a multibagger on big stock channels as Company gave ads on these channels ) or Cranes Software @ 25  (god knows what it’s now)

What these Veritas Analysts are doing is nothing new ~They are Analysing and Interpreting Financial Statements and Disclosures questioning Controversial & Vulnerable Big Companies Motives and Gameplan in their Operations,especially in Corporate Restructuring Exercises that involve Valuations and Raising of Finance and the myraid structure of related entities involved that benefits from Inflated valuations that are even certified by renowned auditing firms ! ~ remember the infamous Maytas and Satyam Real Estate Valuation Report of Rs 6000+ crs by a Big Four Auditing Firm that was prepared in just one day to facilitate the merger of Maytas into Satyam to fill the hole of an equivalent amount !!! Check my many blogs on this in the category of ‘Satyam ~ The sordid Asatyam Saga’

Veritas Analysts are Tearing Up the way certain Revenues,Expenses,Assets and Liabilities are presented in the Financial Statements or simply not disclosed properly to reach conclusions that the Company is weaker or not as strong as the Statements Portrays read more

Kingfisher Airlines digging it’s own grave…. Mr Mallya, when you are in a Hole stop digging!

Mallya deserves the nasty tweets that are doing the rounds

  • Naresh Goyal of Jet and Mallya of Kingfisher Airlines should merge… their new Airline would be called GOL-MALL AIRLINES !….. GOyaL combines with MALLya
  • What’s the Difference between Vijay Mallya and Richard Branson ?… Branson’s Airline is Virgin while Mallya’s is F____d !
  • Mallya was to fly to New Delhi to explain to the Prime Minister about KFA woes but his flight got cancelled !

Kingfisher Airlines Bank Accounts have been frozen and All across India KFA Flights have been cancelled leaving passengers furiously stranded

Have been watching the heated arguments on this on  Arnab Goswami’s Times Now Debate on Why should the Government bail out Kingfisher…. and was getting increasingly furious at ad man and man around town, Suhel Seth and head of a leading Travel Agency, Ashwini Kacker aggressive monologues defending Mallya… these filibustering ‘I know it all’ egotists, who think only their View is the Only View, kept arguing, actually yelling aggressively…. Kacker used the term ‘bloody’ more than once when he argued that Mallya had pledged his ‘bloody’assets and even his ‘bloody’ life !…. I seriously doubt he has pledged all he has… Remember my tagline for this Blog… Companies may go sick but Promoters rarely do !… and if I recall correctly, a Fixed Deposit Ad by his United Group Company showed him as  Director with a USA Address… Suhel Seth said that the Bank will have to be patient as thousands of crs are involved and if the Airline closes down, they stand to lose all they have lend… it is different if they have lent just Rs 100… they will chase the borrower for life for this !… he sounded and makes it out as if it was the banks fault that they lend in the first place  to KFA !… you cannot blame Mallya for this ! says Seth

Arnab, get me on Times Now against condescending Suhel Seth on this issue…when he is championing conscience and morality causes I’m on his wavelength but when he defends the indefensible like this,he is just being turgid !

… And Kacker…Even if Mallya has pledged all, So what !… KFA is a private business and like any business that does not make money, he would be wise to exit, even at a loss rather than bleed all stakeholders to death… simply because I hold the view that he does not have the ability to turn around KFA… I have blogged several times on KFA woes and the dangerous precedent of State Bank of India lending heavily on the Brand Name… I have no personal axe to grind … am a King Club Member too…. and would love for KFA to revive… but for this miracle to happen,Mallya needs to stop digging first and even have the humilty to apologise for the state of affairs… instead his stooges, like Suhel Seth and Ashwini Kacker, simply pass the buck to the Aviation Industry Woes that have engulfed most Airlines…. Wanna bet ! even if he gets funding,Mallya will yet run his Airline to Ground yet again !… he needs to leave his ego aside and exit the sector read more