Vedanta de-listing offer price Rs 87.50~Come on Mr Anil Agarwal !

Vedanta de-listing offer price Rs 87.50~Come on Mr Anil Agarwal !

Promoter Group of  Vedanta Ltd has proposed a voluntary de-listing at an indicative offer price of Rs 87.50~are the over 7.3 lakh minority shareholders from Alibag !? …apologies to the people of Alibag

Some would term this as De-listing Duplicity ~ but I would not go that far for you’re a Promoter taking advantage of this Covid-19 crisis caused plunge in Share Prices to de-list at a low price while complying with the SEBI Pricing Formula

Promoter Group Company Vedanta Resources Ltd,London has conveyed to listed Vedanta Ltd that the Promoters  want to buy out minority shareholders of Vedanta Ltd at an indicative price of Rs 87.50 !

Even the Book Value of Vedanta Ltd was Rs 167 at March 31,2019 on a consolidated networth of Rs 62297 crs and Equity of Rs 372 crs of Face Value Rs 1  and rose to Rs 188 on a networth of @ Rs 70000 crs as on December 31,2019

But’s there’s more to this as you move through this blogpost to sense that this is not the first time that the Promoter Family of Brothers Anil & Navin Agarwal  have short changed the minority shareholders in their group companies or for that matter even have other Industrial Groups in their listed companies at the time of de-merger or de-listing

Look at the speed !

  • Tuesday May 12,2020 ~ Vedanta Ltd notifies the BSE & NSE that the Board of Vedanta Ltd has scheduled a Meeting on Monday,May 18,2020 to consider a voluntary de-listing Proposal as they have received a letter from Vedanta Resources Ltd,London offering that the Promoter Group will buy out all the Public Shareholders who hold 169,10,90,351 Equity Shares aggregating to 48.94% of the paid-up equity share capital of the Company. This includes Equity Shares held by the Employee Trust but excludes 6,54,45,052 American Depository Shares against 26,17,80,208 number of underlying Equity Shares. Other than 2,48,23,177 ADS representing 9,92,92,708 equity shares which are held by one of the members of the Promoter Group, the remaining ADS are held by persons who would be considered to be Public Shareholders in the event they chose to convert the ADS into Equity Shares American Depository Shares  issued by the Company. Indicative Price given by them is Rs 87.50 per share.. Should all the outstanding ADS be converted into Equity Shares, the shareholding of the the Promoter Group will be 186,36,18,788 Equity Shares aggregating to 50.14% of the paid-up equity share capital of the Company Public Shareholders will be 185,35,77,851 Equity Shares aggregating to 49.86% of the paid-up equity share capital of the Company. The Meeting will take on record and review the due diligence report of the Merchant Banker in terms of Regulations 8(1A)(ii) and 8(1E) of the Delisting Regulations to approve/ reject the Delisting Proposal after taking into account various factors and the
    Merchant Banker’s due diligence report
  • Wednesday,May 13,2020 ~ Vedanta Ltd notifies the BSE & NSE of the appointment of SBI Capital Markets as the  Merchant Banker to do the due Diligence for the voluntary de-listing proposal    
  • Monday,May 18,2020 ~ Vedanta Ltd’s Board of Directors Meeting to take on record and review SBI Capital Markets due diligence report and accept or reject the voluntary de-listing proposal

What Haste ! ~ stinks of a foregone favourable conclusion in favor of promoters ! ~ this would mean SBI Capital Markets will have to submit it’s due diligence report inside just  five days for the Board to consider on Monday,May 18,2020 !~ Ridiculous ! ~given the constraints of the Covid-19 crisis lockdown how will they accomplish this given the restrictions ~ due diligence goes beyond reviewing just the documentation handed  by the company to them or whats’s available in the public domain ~ reminds me of the time the Deputy Director of the Company Law Board (CLB) had scathingly remarked at a CLB Hearing  in the Satyam & Maytas Properties  Scandal of a decade ago as to how could the leading audit firm E & Y could have done the Property Valuation of Rs 6523 crs in just one day !  You can read this amusing 2009 blogpost of mine here

Why is Rs 87.50 a ridiculously low indicative price to de-list

There are numerous arguments for this but what is most compelling and which amounts to significantly short changing the minority shareholders is the value of  Vedanta Ltd’s holding in listed Hindustan Zinc :

  • Vedanta Ltd   holds 64.92 %  or 274.31 cr shares of the Equity in the listed Hindustan Zinc in which the Government of India holds 29.58% stake
  • Hindustan Zinc closed at @ Rs 193 on BSE today at which Price the Market Capitalisation is @ Rs 81500 crs
  • Thus Vedanta Ltd’s share of this Market Cap is @ Rs 53000 crs which works out to Rs 142 per share of Vedanta Ltd’s Equity of Rs 372 crs of FV Rs 1
  • The Promoter Group holds around half of Vedanta Ltd and thus minority shareholders are entitled to half of Rs 53000 crs that’s Rs 26500  crs
  • By delisting at Rs 87.50  the Promoter Group would be expending just @ Rs 16500 crs for buying out the public shareholding that holds half of Vedanta Ltd
  • Imagine this scenario where they buy out shareholders of Vedanta at Rs 16500 crs and thus own 100% of Vedanta Ltd and thus are full ‘malik’ of the 64.92 % stake held by Vedanta Ltd in Hindustan Zinc that’s worth Rs 53000 Crs of which Rs 26500 crs would have actually belonged to the minority shareholders of Vedanta Ltd ! ~ this is thus a squeeze of Rs 10000  crs
  • Don’t give me this hogwash of holding company haircuts now  because when Promoter is planning to de-list they you need to give the full benefit as per market value too to the minority shareholders.This Rs 53000 crs share of Market Share in Hindustan Zinc works out to Rs 142 per share of Vedanta Ltd  
  • Hindustan Zinc has also just announced an interim dividend of Rs 16.50 per share for FY 20 that’s gone by which would mean Rs 4526 crs will be received by Vedanta Ltd for the 64.92 % stake or 274.31 cr shares it holds in Hindustan Zinc

Segment Performance of Vedanta Ltd for the nine months at December 31,2019 read more

Wealth Destroyers as Potential Multibaggers~ Mumbai Equity Workshop Sat June 17 2017

Wealth Destroyers as Potential Multibaggers~ Announcing a Full Day Mumbai Fundamental Equity Workshop on Saturday, June 17 2017 

🙂 This time in this Stock Selection ~Value Vs Price Workshop have kept an exciting Theme :

WEALTH DESTROYERS : POTENTIAL MULTIGAGGERS

As Limited Seats would advice to Book Your Seat right away here => http://www.jsalphaa.com/register.php

Plan to cover over 25 Wealth Destroyers to assess any Turnaround Value vs Price & thus a chance to redeem themselves and become Wealth Creators from here… or should just one move on in many of such Wealth Destroyers that are now beyond redemption

Here’s what some participants said of the December 2016 Mumbai Fundamental Workshop on Stock Selection : Value Vs Price…and this was before IB Ventures zoomed 7 x in months from Rs 20 to Rs 140 & HOV doubled in the same time to cross Rs 300… we had covered both these & more in Earnings & Asset Basis Valuation exercises

“Amazing… Awesome Session about Fundamental Stock Selection & Wealth Creation ”

“Full of Inspiration, filled with wisdom…. am really proud to be a part of this wonderful session”

 & from a repeat participant “recreated the same old magic of Bangalore in Mumbai… great Saturday”  

Would love to interact with you ~ So do invest one Saturday ,June 17, 2017 with me in my Mumbai Fort Office near BSE and above Starbucks & Croma

Register here => http://www.jsalphaa.com/register.php

Here’s the Detailed Template of this Workshop if you want more details on coverage

gap-master-class-mumbai-17june2017

🙂 See you Saturday, June 17, 2017 at my Mumbai Fort Office Conference Room… we’ll figure out if Suzlon will continue to be ZZZZZlon!  & dissect many such Wealth Destroyers!

Cheers !

Adani Group Demerging and the Australian Mine Controversy continues

An interesting and absorbing and explosive article on the Adani Group by Lisa Cox has appeared  on February 7,2015 in  The Sydney Morning Herald    

Tax Havens,Criminal Investigation,Secret Ownership,Murky Money Trails…..the article does state that the Indian Media has reported that Company Officials counter these allegations as being “politically motivated” and a bid to resurrect old cases

Wonder if any Indian Media will have the courage to follow up on this SMH post and whether the BSE & NSE will, at least for the record because they simply accept any clarification and post it on their websites and file it and think their job is done for investor awareness and protection!, seek clarification from the Adani Group for all of this …..the article covers quotes from Australian relevant experts of  deliberate Non Disclosures and Dubious Accounting in Annual Reports of AEL and the role and pedigree and emergence of Gautam Adani’s brother,Vinod Shantilal Adani as the pivotal shareholder and sole director in newly created Singapore & Cayman Island Companies that control the Australian Coal Developments  of the Adani Group

The AEL Auditor,Ahmedabad based Dharmesh Parikh & Co has given a clean Limited Review Report of the latest standalone AEL Results 

Just over a week ago  on January 30,2015 the flagship Adani Enterprises Ltd (AEL) announced that the Board has approved the demerger of diversified businesses of the Company  and the merger of one unlisted mining company into AEL 

AEL has been recording 52 Week Highs and closed the week at Rs 627 (FV Rs 1)

Adani Ports & Special Economic Zone Ltd (APSEZL) closed at Rs 300(FV Rs 2)

Adani Power Ltd(APL) closed at Rs 47 (FV Rs 10)

You can observe that the Face Value of  the Equity Share of each listed Adani Company is different which sure comes in handy to obscure valuations efforts by many !

Scheme of Arrangement  to be effective April 1,2015 and process completed by December 31,2015 and approved by all the relevant Adani Group Companies Boards is as below :

  1. Demergers ~ There will be three of them 
  • AEL transferring Belekeri Port Operations and it’s Investment in APSEZL to APSEZL and the latter issuing 14123 Shares to AEL Shareholders for every 10000 shares owned by them and the shares allotted to AEL for it’s 74.99% holding in APSEZL be subsequently cancelled
  • AEL transferring 40MW Solar Power Project at Bitta Village in the Kutch District of Gujarat and it’s Investment in APL to APL and the latter issuing 18596 shares to AEL  Shareholders for every 10000 shares owned by them and the shares allotted to AEL for it’s 68.99% holding in APL be subsequently cancelled
  • AEL transferring Mundra-Zedra transmission line and the investment of AEL in  wholly owned subsidiary Adani Transmissions Ltd(ATL) to ATL with the latter issuing 1 share to Equity Shareholders of AEL for every 1 shares held by them in AEL.The Equity shares held by AEL in ATL will be cancelled.ATL will be listed on BSE & NSE 
        2. Merger ~ AEL’s Wholly Owned  Subsidiary Adani Mining Private Ltd (AMPL) will be merged into it

As far as Coal Mine Operations the viability of  developing the Carmichael Coal Mine in the Galilee Basin in Queensland is being questioned as Coal prices have dropped and there are Environmental & Real Employment Issues being raised.State Bank of India has controversially announced that it would lend support of US $ One Billion to the Adani Group to develop the Australian Mine

Also with India now reallocating Coal Mines in a transparent manner  after the Scandal on the allocation under the UPA Government had set back Coal Mine Development in India for several years there would not be a scenario of India having to import Coal in the years ahead read more

Super ! 23 Participants with 40 Stock Selections for 2015 in the TAP GAP Poser

Super ! 23 Participants with 40 Stock Selections for 2015 in the TAP GAP Poser

TAP GAP Poser End 2014 ~Which Indian Company Will Be A Big Share Price Winner In 2015?
December 15th, 2014

I shall shortly pick a gauravblog hamper Winner or maybe two where I see maximum gain potential in 2015 from the following

Participant wise

Sr No

Participant

Recommendation

Date of Recommendation

Price in Rs when recommended

1

Sumit Khanna

Subros

15.12.2014

67.85

PTC India Financial Services Ltd

17.12.2014

56.4

2

Jigam Gandhi

Wendt India

15.12.2014

2000

3

Sandeep Gahandule

Nathbiogene

16.12.2014

130.55

Prima Plastic

17.12.2014

56

JM Financial

18.12.2014

47.6

4

Bhaskar

IPCA Labs

16.12.2014

723.55

5

Nitin

Ajanta Pharma

16.12.2014

2528.65

Atul Auto

16.12.2014

601

6

Anand

Raj Rayon

17.12.2014

0.66

Jubilant Life Sciences

30.12.2014

119.95

7

Prasad

Nbcc

18.12.2014

792.05

Capital First

30.12.2014

353.4

TV Today

30.12.2014

215.2

8

Rohit

 Adani Enterprises

20.12.2014

452.05

9

Prasad Shetty

Multibase

21.12.2014

227.9

10

Kushal Shah

MCX

22.12.2014

838.95

Jet Airways

22.12.2014

389.7

11

Rajan

Motherson Sumi Systems

22.12.2014

440.2

12

Hemant

NETWORK 18

22.12.2014

66

Intellect Design

22.12.2014

75.6

Pipavav Defence

22.12.2014

39.75

13

Raj

Odyssey Technologies

22.12.2014

33.65

14

Shiva

Granules India

23.12.2014

777

Mayur Uniquoters

23.12.2014

415.4

SpiceJet

23.12.2014

19.3

15

Abhay Tewari

Suzlon Energy

23.12.2014

13.45

16

Pushkar Prasad

Freshtrop Fruits

24.12.2014

115.9

17

Dhiren

Tata Sponge

26.12.2014

680

18

N Sri

Deccan Gold Mine

28.12.2014

42.95

19

Sameer

Spicejet

30.12.2014

17.95

Deccan Gold Mine

30.12.2014

44

Muthoot Capital Services

30.12.2014

207.15

20

Shahzad V

Engineers India Ltd

31.12.2014

229.75

AkzoNobel

31.12.2014

1384.1

Aries Agro

31.12.2014

117.4

21

Kiran

Vidhi Dyestuffs

31.12.2014

17.16

22

Vishal Kejriwal

CCL Products

1.1.2015

170.95

Oriental Carbon Chemical Ltd

1.1.2015

361.55

Hinduja Global Solutions Ltd

1.1.2015

631.75

23

Rudra Tandan

Ram Ratna Wires

2.1.2015

48

Foseco

2.1.2015

1227.55

Alphabetical Scripwise

Sr No. Scrip Recommended for 2015 Price in Rs when recommended Participant
1 Adani Enterprise 452.05 Rohit
2 Ajanta Pharma 2528.65 Nitin
3 Akzo Nobel 1384.1 Shahzad V
4 Aries Agro 117.4 Shahzad V
5 Atul Auto 601 Nitin
6 CCL Products 170.95 Vishal Kejriwal
7 Capital First 353.4 Prasad
8 Deccan Gold 42.95 N Sri
9 Deccan Gold 44 Sameer
10 Engineers Ind 229.75 Shahzad V
11 Foseco India 1227.55 Rudra Tandan
12 Freshtrop Fruit 115.9 Pushkar Prasad
13 Granules India 777 Shiva
14 Hinduja Global 631.75 Vishal Kejriwal
15 Intellect Design Arena 75.6 Hemant
16 Ipca Labs 723.55 Bhaskar
17 JM Financial 47.6 Sandeep Gahandule
18 Jet Airways 389.7 Kushal Shah
19 Jubilant Life 119.95 Anand
20 MCX India 838.95 Kushal Shah
21 Mayur Uniquoter 415.4 Shiva
22 Motherson Sumi 440.2 Rajan
23 Multibase India 227.9 Prasad Shetty
24 Muthoot Cap 207.15 Sameer
25 NBCC 792.05 Prasad
26 Nath Bio-Genes 130.55 Sandeep Gahandule
27 Network 18 66 Hemant
28 Odyssey Technologies 33.65 Raj
29 Oriental Carbon 361.55 Vishal Kejriwal
30 PTC India Financial Services 56.4 Sumit Khanna
31 Pipavav Defence 39.75 Hemant
32 Prima Plastics 56 Sandeep Gahandule
33 Raj Rayon Ind 0.66 Anand
34 Ram Ratna Wires 48 Rudra Tandan
35 SpiceJet 17.95 Sameer
36 SpiceJet 19.3 Shiva
37 Subros 67.85 Sumit Khanna
38 Suzlon Energy 13.45 Abhay Tewari
39 TV TodayNetwork 215.2 Prasad
40 Tata Sponge 680 Dhiren
41 Vidhi Dyestuffs 17.16 Kiran
42 Wendt 2000 Jigam Gandhi

Note :

  1. Sandeep Gahandule who just won the hamper for Alphageo’s spectacular 720% run in 2014 has contributed three selections for 2015 this time too
  2. Anand,who ran neck to neck with Sandeep till November 2014,when his low priced Rs 7 YBrant  was up against Alphageo has yet again given one really low priced selection Raj Rayon of just 66 paise !
  3. Deccan Gold & Spicejet occur twice as they constitute selections from two different participants
  4. Prices at which Recommended have either been provided by the Participant when making the Reco and reflect the current market price at the time or where they have not stated the price,the last price when they made the reco has been sourced from the BSE & NSE
  5. Most have not given targets for 2015 Selections but the four selections that have been given targets and all are  over 100% + except one,are as follows : Freshtop Fruits Rs 250,PTC India Financial Services Rs 90,Subros Rs 150 and Tata Sponge Rs 1500+
  6. Adani Group finds representation but none from the Ambani Groups ~ perhaps realisation that Reliance Ind has been a losing 5 year Investment thus far and ADAG Companies have struggled
  7. Tata Sponge is the lone entry from the Tata Group.
  8. Media and Aviation have two each in Network 18 and TV Today and Jet Airways & Spicejet respectively
  9. Pharma & Auto Ancilliaries & NBFCs &  IT  & Speciality & Commodity Chemical Sectors are well represented
  10. Can see a few potential turnaround selections as well as a few that have already run up huge in 2014
  11. Tea & Coffee Beverages & Renewable Energy & Defence are represented but none from direct Power,Telecom or Real Estate or Retail
  12. No Bank & no Oil & Gas Major  & No visible Large Cap ! but Three Selections are also traded in the Derivatives Segment,namely,Adani Enterprise,Engineers India & Motherson Sumi

Going to be an interesting few days filtering all the above

Union Budget 2014 ~ Will Sensex continue to Humour as Jaitley does not!

Have a look at our first impression posted  after our FM ‘s Union Budget Address and during market hours

Union Budget 2014 ~ Will Sensex continue to Humour as Jaitley does not!

Think he missed a great opportunity to provide us with the ‘Naya Soch’ of the new NDA Government

His Speech stated quite a few challenges and objectives like tackling Black Monies,raising Tax to GDP ratio,lowering Inflation and Fiscal Deficit % but stopped short of spelling out the specifics of solving these

Having just 45 days after NDA was elected he has opted for the easier option of simply following the UPA budget process and numbers too that the UPA FM Mr Chidambaram laid out in his Interim Budget in February 2014….whether it be Disinvestment or Tax Receipts or Fiscal Deficit Control Targets…made right noises but was tokenism in a few areas like social expenditure…thankfully nothing really adverse or anti poor though direct tax incentives are not really cause for any celebration

Sensex had quite a roller coaster ride today as to be expected….opening stable & pre budget speech at 25514 in the morning then sliding before noon over 300 points to 25117 from yesterday closing of 25445 during the budget speech before strongly racing away by over 700 points to 25920 …over 400 points previous day closing post budget speech only to reverse all the gains and close at 25373,down 72 points  from previous day closing

Will the Sensex continue to Humor us in the near term despite not an iota of Humor in the FM’s Speech !? …sense is that any correction will be a hiccup on the onward march towards 30000 on the back of increased FII Net Infows & Big Corporate Infra spending  

I see some clear big winners in the Infrastructure Space across the Board from Shipping to Power to SEZs to Real Estate to Highway Road Construction Companies and Pipeline Companies

 

 

Typical ~ Equity Investors are piling on at these Highs ~ they need to be cautious

Sensex has crossed a record 26000 & Nifty is now ahead of 7700

Typical ~ Equity Investors are piling on at these Highs  ~ they need to be cautious ~ especially those who are returning or initiating fresh exposure now not having done so in 2013 or earlier in 2014 ~ advisable to await the post budget scenario as there is a high probability that once euphoria abates the Sensex and Bellwether Scrips may correct 10% or more…the real danger though are the small caps and midcaps that have run up crazy,some over 100% in months…they may correct 25% to 50%…yes that high !  

At June 30,2014 ,Equity mutual funds saw record absolute rise in average AUM in the quarter, up by Rs 33000 crore or 16% to Rs 2,36,000 crore led by mark to market gains and inflows. The equity funds’ contribution to the gains in the industry assets was the highest among all categories

While this is to be expected on the back of the resounding BJP Victory and Narendra Modi assuming Prime Ministership there needs to some caution that should be exercised especially by those seeking instant profits and gratification as Sensex has crossed 26000 levels and seems to be running a little ahead of fundamentals for the near term on the back of  BJP & Narendra Modi sweeping the elections,FII Net Inflows exceeding US $ 8 Billion in 2014 till date and Great Expectations from the Budget in particular and the Government in general going forward

Great Expectations from the Union Budget this Thursday are countered by great challenges that continue to confront us on the economic and geo political front…Iraq & Ukraine Tension can escalate further causing Oil Price to surge even further past US 120/barrel and putting pressure on the Rupee…though a lot of the pressure has been taken off by record FII Net Inflows into India this year into both Debt & Equity

The Budget Backdrop is :

High ~ Inflation,Deficits & Debts

Low ~ Economic Growth with Manufacturing sector that needs urgent revival

45% + of the Projected FY 15 Fiscal Deficit has been reached in the first two months April & May  of FY 14 itself 

There is little room to lower Interest Rates immediately….so manufacturing thrust can be provided through diluting the Land Acquisition Act and opening out or increasing FDI cap in many sectors

It is commonly expected that the Budget will be kind to the Infrastructure,Housing Finance,Power & Banking Sector….a major beneficiary of this should also be the Cement Sector read more