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Lok Housing at Rs 44!…down from Rs 400 in just six months!

Lok Housing has an EGM today to pass a resolution to raise funds upto US $ 200 million or Rs 840 crs…..If you had a look at the financials you’ll sell your wife and buy the shares!…PAT of Rs 113 crs on an Equity of just under Rs 43 crs for FY 08 March ending and an EPS of just over Rs 26…that’s a PE of under 2!…Interest burden too has dropped from Rs 52 crs in FY 07 to just above Rs 13 crores in FY 08

What’s happening ? With such a performance why has Lok Housing dropped from Rs 400 in Jan this year to Rs 44 today…is there a significant legal issue, inflated asset or liability non provision we don’t know about ? 

Amusingly the promoters have allotted themselves 35 lakh convertible warrants on May 22,2008 with future conversion of each warrant into one share at Rs 354 !…obviously if promoters exercise this conversion option…the conversion is not compulsory

There were strong rumours of a major group of shareholders dumping the stock…why?


5 thoughts on “Lok Housing at Rs 44!…down from Rs 400 in just six months!”

  1. hey
    even i’m interested in getting into this stock knowing it’s dead cheap price rt now. but i’m confused ‘cuz of lack of direction.

    what wud you advise?

  2. Gaurav Parikh

    Ram…just voice a two word prayer “Hey Ram!” and go ahead and begin buying into Lok Housing and also say a prayer for those who are trapped at Rs 400 !….if your prayer is answered you have a ten bagger on your hand from here !

    Its on upper circuit at Rs 46.80 today on BSE with over 1.2 million shares traded so you may have to stand in queue…Sensex is up 613 points at 13963 at 2.21 pm

    Lok Housing had an EGM two days ago and cleared a proposal to raise big funds…It will not benefit much if it raises Equity Funds at such low Prices as it would need to offer a larger Number of Shares at a Lower premium …and believe me this it will not do

  3. buy at current price of 50/- to make healthy profit promoter is playing with investor money and patience……Mr Lalit Gandhi should be ashamed of himself

  4. Hey Shankar….Lok Housing looks interesting..its locked on upper circuit of @5% today at Rs 47.75 on BSE….this is around it’s book value too….checked it out briefly…Networth is over Rs 200 crs after Promoters converted warrants in may this year….Debt position of Rs 54 crs at March end looks manageable with settlement with State Bank of India under way….but where will revenues come from?…it has a 49% stake in a company that has a bid submitted for C Ward Dev of 30 acres,to raze 362 old buildings and 8000 tenements and construct high rises in their place in kalbadevi/Chira Bazaar….and has land of nearly 3.3 lakh sq metres in Ambernath ,a Mumbai distant suburb which is now available for developement after the annulment of the Urban land Ceiling Act recently….It’s much maligned and criticised Promoter,Lalit Gandhi expired earlier this year in March…his son Darshan is in the Drivers seat now as MD….It’s carrying a hell of a lot of Inventory of Rs 337 crs at March end 2010…How much of this is really realisable/saleable and worth is the question…

    If memory serves me right,it owned huge tracts of land on which saltpans existed….the law did not allow developement of such land….the government was approached to change this stand and there was a lot of controversy,flip flopping over this…one needs to check that this Ambernath land they are talking of developing can really be developed…..some more caution…they are carrying Rs 174 crs Current Liabilities and Provisions at March end…this is more than matched by Inventories of Rs 337 crs…however these Inventories may not be readily realisable as the construction at ongoing projects Lok Mansarovar,Lok Prabhat and Lok Nirman are just satifactory
    It will surely need capital for these plans…it’s liquidity on the books is poor…..but if you recollect the Income Tax authorities had raided Lok Group and unearthed Hundreds of Crores of concealed Income…these would be flats sold for cash but not disclosed…The company was slapped with Tax and Penalties notices and even highlighted on the Tax Authorities website….The Directors Report in the Annual Report of 2010 makes no mention of what is the status of this case….The Corporate Governance Issues play up in such situations when the Group is facing or going through a crisis….but I sense the worst is behind them…will they regain their credibility is up to them…how they set in motion their revival with full transperancy and strong corporate governance….only then will all stakeholders really believe their is hope for this Group….that their Intentions are honourable and now just need the abilities to realise them

    For all these reasons I’ll keep Lok Housing on Stockwatch rather than StockSelect….Cheers !

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