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Come on Guys !…Respond to TAP GAP 7/11 Equity Poser…Which Listed Scrip will be a huge wealth Destroyer in the next five years ?……closes midnight Friday July 15,2011…

Come on Guys !…Respond to TAP GAP 7/11 Equity Poser…Which Listed Scrip will be a huge wealth Destroyer in the next five years ?……closes midnight Friday July 15,2011…

Responses so far are quite interesting…..cover some market leaders too today !……range from Anil Ambani Group of Companies…Mukesh Ambani’s Reliance Industries…Hero Honda….Karuturi Global….Unitech…..Maruti Udyog…..anything starting with ESSAR……Future Ventures…Micro Tech…Kingfisher Airlines….Spice Mobile…PVR….Power generation companies like Reliance Power………

What’s Yours ?…there are over 6000 companies listed …so that’s 6000 mistakes one can make !….lot’s to choose from for TAP GAP 7/11 !….Don’t you think ?

A gauravblog winners hamper awaits you ! 

Sensex soars while the Aviation Sector continues Diving…Could open out opportunities

August 18,2009…Private Airlines,members of FIA,have just announced that will not operate nationwide services on this Day…only for the Day…but could even be indefinitely if there is no positive response from the government

This announcement comes on a day when the Sensex has reached the highest level in fourteen months …15670 

The Aviation Sector is facing a survival issue in India…says Naresh Goyal of Jet Airways all of us are bleeding…private sector or the public sector”

Vijay Mallya of Kingfisher Airlines cries “we lose money because we are taxed to death”

Jeh Wadia of Go Airways laments that the policy and tax structure continue to create inefficiencies“We are demanding a Transperant Tax Structure…Fuel as a % of Total Cost is 45% in India while everywhere in the world it is 26 %…this is because of higher taxes of @ 27% on ATF..This Tax on ATF should be given a ‘declared goods’ status to bring the taxes down”

The Heavy Depreciation of the Rupee in 2008/9 has also increased the cost of Operations and Maintenance of Airplanes.The Sector should reveal a Rs 10000 crs loss in 2008/9…that’s just over two billion dollars 

The government on the other hand feels that the woes of the Aviation Sector are largely due to the mindless expansion of the Airlines 

Methinks this could open out some opportunities for Investment in selective Aviation Sector scrips if they continue to dive and are avaliable at throwaway prices…on the assumption that a solution will have to be found to resolve critical issues that are threatening this sector and that this sector will not be allowed to crash land

Keeping an Eye on the Skies to grab opportunities if the Price is right…Spicejet,Jet Airways,Kingfisher Airlines…..   

Borrowing against Brands !…Interesting,but Risky area opening out !

For Years ,Brand Valuation has been part of my sessions on Valuation of Equity at BSE and Other Forums….so it was with great Interest that I read the Economic Times Front Page atricle today on ‘Cos flash brands to raise cash’

Strapped for cash,Kingfisher Airlines has managed to Borrow from State Bank of India against it’s Brand of ‘Kingfisher Airlines’ which has been valued at Rs 1900 crs,that’s US $ 391 Million at an Exchange Rate of US $ =Rs 48.50 

Interestingly,Kingfisher Airlines has actually included this Brand Value as an Asset in it’s Balance Sheet…If it had not,then the Debt/Equity ratio would have computed higher….However,It’s probably because the Brand  is shown in the Balance Sheet,that PSU Bank,State Bank of India has been convinced to lend against this Asset

‘Kingfisher Airlines’ is a seperate registered Brand than ‘Kingfisher’ for Beer and Wines…Just a thought…if the Airlines defaults ,then the bank could opt to make the Brand it’s property…It would need to monetise this to recover dues…so it will have to sell the Brand !…to a Competitor Airline or a new Airline maybe !?…does the Borrowing Agreement categorically state that this Brand also include all the licenses and permissions  etc ?…what’s the hairline % taken by the Bank for this Asset value when lending?

Now Brand Value,like Intellectual Property Rights and Goodwill is an Intangible Asset.It normally is never reflected in the Accounts,because no real consideration has been paid for it…Thus this makes this Asset Class,riskier to lend against…It may be difficult to liquidate or realise monies for it in case of default

Being an Intangible,Brand Valuation is one of the most subjective and controversial areas in Valuation…Valuing Tangible Assets is a more objective exercise

Will Banks lend against Brand Value even if it is not reflected in the Books as an Asset !?

Clearly,Corporates appear to be running out of Tangible Assets to pledge or offer as Collateral and therefore borrow against…….They are resorting to prop up their  Brand Values for actual Funds leverage

An interesting Valuation and IPO assignment I was involved in recently,threw up this demand from the Promoters when we were working to price the placement and the IPO…”Does not our Brand count for anything ?”…Of course it did…In fact it is one of India’s largest companies in it’s field and has been in existence for over a hundred years !….but potential buyers were reluctant to negotiate a higher valuation that included,both soft and  hard numbers read more

1 Very Fundamental & often Contrarion Guy !…About GAP…That’s Me!

Gaurav A Parikh
Gaurav A Parikh

🙂 This is me in brief & first person 

Live ~ Don’t just Exist ! ~ B+,that’s also my Blood Group ~ Began with Auditing,Accounting and Consulting with one of the Big 4 in India & Overseas before moving full time to Capital Markets ~Passionate about Equities ~ Fundamental  Equity Research & Training  in Capital Markets ~ Wealth of Mind & Wealth of Monies should Move in Tandem ~ Want to sense what’s happening on BSE & NSE and off it ! ? then connect with me or my blog www.gauravblog.com with the tagline ” In India,Companies may fall sick but Promoters rarely do !” ~Buoyant ~ Enjoy Life’s Journey making Friends and Travelling ~Been There ~Done That~and even Burnt the Toast ! ~ Connect with ‘Rock On’ and ‘Zindagi Ne Milegi Dobara’ ~ Lived and Living it! ~Endeavouring to add ethical and honest value to Family and Friends and Business Clients and Associates ~ Mentoring Today’s Youth without being Judgmental while embracing the inevitable social changes

Intensely Passionate about All matters ….Equity and my blog www.gauravblog.com...My Kids,they’ve grown up now..they’re my vital Vitamins !….Food …Swear that Cauliflower is ‘God’!…Films…Neil Diamond…Kishore Kumar…Maria Sharapova…Madhuri Dikshit….reading on philosophy…yes,I really do!….’Economist’…. Cricket…and yes also my wife !..she’s prompted me to say this!

 🙂 This is also me..well not in first person and not so brief 

Professional Profile of GAURAV A PARIKH

Here are few recent accolades for GAURAV A PARIKH

  1. May 2015 ~ Rated  One of  The Top 10 Experts on Economics & Investing in India by an Independent US Observer
  2. January 2015 ~ Featured by OUTLOOK BUSINESS as one of India’s Top Ten Stock Pickers in its special edition
  3. August 2015 onwards ~ NSE Fundamental Training Mentor Workshops
  4. December 2015 ~ Featured by OUTLOOK BUSINESS  yet  again as an ace Stock Picker as Shemaroo given as stock for 2015 in the previous year edition as above zoomed over 100% despite Sensitive Indices cracking over 5% in 2015  
  5. January 2017 ~ Third year in a row invited by Outlook Business for Stock Select for 2017 Special Edition as simply killed it in 2015 & 2016 with Shemaroo & Astec respectively and topped the ranking in both years among those invited …luck more than skills perhaps 🙂
  6. December 2017 ~ Featured in Outlook Business Special Annual Edition fourth year running 
  7. April 2019 ~Honoured to be featured for a record fifth year in a row in the Special Annual Edition of Outlook Business showcasing  some of India’s best stock pickers

 

GAURAV A PARIKH is the Co-Founder & Managing Director of Leading  SEBI Registered Mumbai based Fundamental Equity Research,Investment Advisory & Training Entity Jeena Scriptech Alpha Advisors Pvt Ltd .He is a Fundamental Force to reckon with in the Field of Direct Equity in Capital Markets.Based in Mumbai he can be contacted on 9820162597 or [email protected] or a visit to www.jsalphaa.com should you wish to explore an opportunity to seek quality equity portfolio advice & training in Capital Markets or invite him to address an audience or expound his views on discussion panels on matters related to Equity & Corporate Governance….to protect and grow wealth on portfolios…for corporate and financial  advisory on IPO Process & Pricing ,Restructuring,Valuations,Mergers and Acquisitions and Funds Mobilisation through Equity and Debt read more

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