Vikram Garg…..this blog on Kale Consultants is in response to your request
In short,my sense is that the Share Price of Kale Consultants will rise from Rs 143 in the years to come….though I’m not so gung ho on the way the Promoters have exercised Corporate Governance…..However It’s domain expertise in providing software products and services to the Travel and Transportation Sector is not in question…though in 25 years of it’s existence in serving this niche market of the Aviation Sector it has not managed to scale up business
After asserting in the Annual Report that the future is promising,It seems a bit curious that this full 35.61% diluted Equity Stake sell off by Promoters is taking place now….. when the Company celebrates it’s 25 years of existence and when the Networth has crossed Rs 100 crs !….now Promoters Networth also should cross Rs 100 crs once they sell off……..
5669478 Equity shares of FV Rs 10 held by the Promoters of Kale Consultants will shortly be sold off to Barcelona based,Accelya Holding World SL at Rs 172 as agreed….Kale Consultants share Price is Rs 143 and near it’s 52 week high of Rs 150….This deal should trigger an open offer at atleast Rs 172
Promoters have been allotted a fair number of shares at Rs 44.01 just earlier this year on March 30,2010 and June 11,2010 on conversion of preferential warrants…also in July 2010,the Company had informed BSE and NSE that there were no truth to the fact that the Promoters were looking to exit and were in talks with Wipro,NTT and Verizon for this
Then just two days ago,and one day after media broke the story of the sale,the Company informed the Stock Exchanges that they have received notice from the Promoters of their planning to sell of their full holding as above….these include the shares allotted just a few months ago at Rs 44.01
….so that would mean gains of over 290% inside months to the Promoters on these new shares…Wow !….so should shareholders grudge Promoters Chairman Narendra Kale,Nanda Kale and MD,Vipul Jain these preferential allotment gains ?…..
How have shareholders been rewarded ?….just under 17% dividend payout…..Earning Rs 19 crs in FY 10 and notching up a diluted EPS of over Rs 13.50 on a year end equity of Rs 13.8 crs,Kale Consultants has declared a dividend of Rs 2….this will mean a net outflow of Rs 3.2 crs inclusive of Dividend Distribution Tax