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Clearwater Capital Partners

Kotak Group again enters beleaguered Diamond Power Infra at Rs 23.65 ~ Why?

7 Comments / Chuckle !, Controversies, Corporate Governance, Electrical Equipment, Foreign Institutional Investors, Infrastructure, Insider Trading, Interesting News Sightings, Investing Approaches, Investing Themes, INVESTOR MISTAKES, IPOs, Power, Power Ancilliary, Reflections, Restructuring Companies, SEBI, Sectors, STOCKS, VALUATION / By

Kotak Group enters beleaguered Diamond Power Infra at Rs 23.65 ~ Why? ~ their Mutual Fund  had been selling since August 2015 !

On March 30,2016 Kotak Mahindra (International) Ltd a FPI & a subsidiary of Kotak Mahindra Bank picked up 3868606 (6.787%) stake in Diamond Power Infrastructure at Rs 23.65 from Macquarie Bank.Deal Size thus was Rs 9.14 cr with Macquarie exiting fully

Why did Kotak buy in ! ~ as just a month ago the Trustee of Kotak Growth Fund II & PAC had notified the Exchanges that from August 2015 to March 2016 the Fund had sold 1215382 shares ( 2.13% stake) from the 3002946 shares held (5.27% stake).Over 2% had changed hands on March 2,2016 …unless these were inter scheme or within group transfers by the Mutual Fund

The above Notifications already were on the Exchanges websites but only today has the Counter seen a smart rise by over 15% to register a days’s high till now of Rs 27.95.At 12.40 pm it’s trading higher at 12% at Rs 26.60. Trading Volumes have been below One lakh most days in the Year but till now they have crossed 4 lakh on BSE and 18 lakhs on NSE

Diamond Power Infra is an interesting & intriguing case study.It’s been a rapid Wealth Destroyer of 75%  inside five months from Rs 143 levels in November 2014 to Rs 37 in March 2015 …it never was a 24 Carat Diamond ! but you can say it had all but lost whatever Carats it was ! 

Over 10 years ago  in 2005 Diamond Cables (IPO at Rs 10 par way back in August 1993),the earlier name of Diamond Power Infra, was trading low at @ Rs 17 and I spotted a turnaround when it  notified the BSE that they had the second largest cable capacity after Sterlite but were functioning at just @ 15 % capacity due to a working capital crunch.It was negotiating to receive both loan & equity support from Clearwater Capital Partners.The Deal for Zero Interest FCDs & Warrants was announced a year later in August 2006 when Price levels had shot up to Rs 60 and CCP would be getting the shares at Rs 95 on conversion…Then the Share Price simply went into 10 Bagger space inside two years recording highs of Rs 589 in 2007 & Rs 599 in 2008…. I had not waited for these record highs……. so the real wealth Destruction has been immense at the extreme of 96% from Rs 599 to Rs 22 !….even adjusting for 1: 3 Bonus in August 2013,the destruction is 95%!….CCP brought some more at fallen levels of Rs 160 levels 2010.It exited at a Loss in  June 2014 at Rs 90  & just a few months ago at a bigger Loss in December 2015 at Rs 42.68 read more

Sabero Organics up but FII,Clearwater Capital seen exiting ! Why ?

2 Comments / Controversies, Corporate Governance, Insider Trading, Interesting News Sightings, Investing Themes, INVESTOR MISTAKES, Reflections, STOCKS, VALUATION / By

On August 6,2008,just under thirteen months ago I had blogged that Sabero Organics looks good at Rs 24..Click on https://www.gauravblog.com/?p=93

It had then dropped to Rs 12 in the market meltdown and since then has shot up to near Rs 40…Today it’s Rs 35 and has given an excellent June quarter performance…PAT is Rs 11.20 crs on Sales of Rs 121 crs,of which Exports are Rs 80.49 crs or a healthy 66%.Operating margins have surged from 14% to 18% levels 

It’s book value was Rs 25 at March 31,2009 and should be close to Rs 35 by end FY 10 with networth crossing Rs 100 crs…So Forward FY 10 P/B is 1….. Earnings Multiples too look great…EPS for FY 09 was Rs 7+ and for this year should be Rs 12+…so you’re getting the scrip at a Forward FY 10 P/E of just 3…The Current Market Cap is just Rs 103 crs,that’s just 20% of FY 10 projected sales of over Rs 500 crs…The Debt situation should ease with the increasing profitability

The Company’s expanded capacities went on stream earlier this year and from Rs 366 crs sales in FY 09 it has an ambitious plan to cross Rs 1000 crs sales inside three years

The current Equity base of Rs 29.19 crs (FV Rs 10) is expected to dilute to Rs 34 crs in 2010 or early 2011 on conversion of warrants alloted to the Promoter group of Chuganees

The Company should give dividend for FY 10..It skipped it for FY09 despite a great turnaround perfromance and an EPS of Rs 7.47

With such current and potential perfromance,the share price can only be expected to move northwards to cross Rs 50 first and then the three figure mark

THEN WHY IS THE FII, CLEARWATER CAPITAL PARTNERS (CYPRUS) EXITING THIS COMPANY !?

On March 31,2009,the shareholding pattern showed  CLEARWATER holding a 11.42 % stake in Sabero with 33.34 lakh shares…On June 30,2009,the shareholding pattern showed CLEARWATER with only a 5.09% stake…since then too,the selling has been happening and as per last records as of July 24,2009 on BSE,the shareholding has further dwindled to just 3.03%…that’s 883583 shares…so 25 lakh shares have been offloaded by CLEARWATER since April 1,2009 and records show that sales have been at prices of Rs 23 thereabouts,much lower than the current Rs 35

Infact the more CLEARWATER kept on selling,the higher the Price went !…someone has been absorbing this sale….raises valid questions as to whether was CLEARWATER merely warehousing or fronting these shares all these years…why would they sell off now that the company has got a brighter future than at anytime in the past ! ? Do they know something we don’t ?…then it would amount to Insider Trading !…or are they selling because they need funds desperately or that such a small holding (under US $ 2 million or Rs 10 crs) does not now fit in or make sense in their Indian Operations ? read more

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