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Larsen & Toubro

TAP GAP Equity Poser 6/11……Which Industrialist and his or her Company will be a huge Wealth Creator in the next Five Years ?

TAP GAP….. Equity Poser 6/11……Respond by June 15,2011

I love you Guys !…Just look at the varied responses…Till just before Midnight Tuesday, June 7,2011,14 of you have responded with 25 choices,adjusting for overlaps but including unlisted Godrej Agrovet…..In absolute terms the Choice with the Lowest Price being Rs 50 Gujarat NRE Coke and the highest being Titan Industries at Rs 4375 !…..Wow !…Imagine Titan being a 5 bagger in 5 Years and crossing Rs 20000 or even a 10 bagger and crossing Rs 40000 !…. I’ve listed the choices in the addenda below for easy reference….Come on Others !…am sure you can inspire many with your Choice and Reasoning for it !…remember respond by Wednesday midnight IST June 15,2011…It’s going to be fun,but tough too, to decide the winner of the gauravblog hamper

Winning Response wins the gauravblog hamper that includes a gauravblog Collared T Shirt above….Six Hampers have already been won in earlier Equity Posers.You can check out the Winners Scroll and their comments after they were delivered the hamper

Equity Poser

Which Industrialist and his or her Company will be a huge Wealth Creator for Shareholders in the next Five Years ,just like Ambanis of Reliance, Murthy & his Group of Infosys and Sunil Mittal of  Bharti Airtel and many others like Matrix Labs and Mercator Lines did for you in the past ?


Addendum 1

Would appreciate if responses are a bit more detailed than just one word or two….preferably with some reasoning and share price targets for the choice… would be easier to first prepare your response on a Word document and then copy paste it to the response box on this blog post….Simultaneously,if you wish,you can also  forward it directly to my email [email protected] or [email protected]  

All the best….Amit has responded first with his choice being the Jindal Group…I’m assuming it is Sajjan Jindal and not Naveen Jindal….have asked him to clarify though

And when I state Wealth Creation,I mean Wealth Creation !…..huge multibagger …over 1000% perhaps…..but surely atleast 500% in the next Five Years !….so you can retire early in life !

Cheers !  

Addendum 2

Wow! Really Interesting and Inspiring Response Choices till date Near 6 pm Friday,June 3,2011

Amit….Sajjan Jindal Group : JSW and Saw Pipes

Amit Gupta……Anand Mahindra Group :Mahindra & Mahindra read more

Sensex up 376 Points at 20445….Pre Diwali Fireworks fuelled by Coal and Wholesale Buying by FIIs….. while we Retail Indians await Diwali !

Sensex continues to seduce….is up 376 points today at 20445…Pre Diwali Fireworks fuelled by Coal perhaps !….a not so subtle reference to the Mega IPO of Coal India that opens on October 18….sentiment has to be kept sizzling

….and FIIs have already started celebrating Diwali a month or two early by intensifying wholesale buying of ‘Phatakas’ (stocks) and torching the Sensex past 20000 !…..while we Retail Indians yet await Diwali

….just think the Indian Sensex Torch has been carried by the FIIs in the relay past 20000…while most Indians have hardly participated in the Run and have just been cynical and wary spectators!….we are allowing the FIIs to ‘carpetbag’ us !

….hope you guys have got into IDBI Bank (blogged a few days ago)…it’s up smartly to Rs 158 today….and yes,IFCI too has surged past Rs 66 today

…..last Diwali I had  given just Two Safe Buys…to play a Safe Diwali…Larsen & Toubro and Gold…Both have been shining throught the year …Wonder what I’ll give this Diwali !

Cheers !

Larsen & Toubro brilliantly positioned to Lead India into the next level of Dynamic Growth…but who will Lead Larsen itself after Mr Naik !?

We all Love Larsen & Toubro and have capitalised superbly on it’s brilliant run on the bourses in the past years…and with India positioned to emerge as a World Economic Superpower in the years to come,Larsen has it’s best Days up ahead !…It simply has to occupy significant space in your Core Portfolio

Larsen is positioned to Lead India into the next Level of Dynamic Growth in the Years ahead….but who will Lead Larsen itself after Mr Naik !?

This Larsen Leadership Heir Question has been asked before…a latest take on this is by Forbes India…it’s  gives an elaborate take on this in their March 5,2010 Issue…you can access the article on the web too

The article refers to GE and Siemens capturing the opportunities in USA and Europe in the past decades to make them behemoths…Larsen is on a similar threshold in India…and interestingly,GE and Siemens are looking towards India as their Saviour on the back of the Global Financial and Economic Crisis epicentered in the West !

My take on this Larsen Leadership Heir is a little ‘hatke’….It does not really matter who really leads Larsen after Mr Naik…The Momentum is so strong for the next level of Dynamic Growth in the years ahead,that Larsen will move ahead regardless who’s heading it, and continue to scale up and  capture and leverage the giant opportunities that are arising……something like our FM’s Position…does not really matter who’s our FM….India is on a long term Dynamic growth path ahead…Infrastructure and Domestic Consuption being the Two major Drivers…..the Momentum itself will drive our Economy

Extrapolate this to our Stock Markets…anyone who Invests in Equity will make good and even great Money over the Years to Come…..and Larsen & Toubro must be your Core Investment for the Long Term !


Happy Diwali & Prosperous New Samvat 2066 Year to all….Two SS 4 Selects this Diwali…Larsen & Toubro at Rs 1700 and GOLD

Wishing all of you a Happy Diwali and a Prosperous New Samvat 2066 Year…..with Safety,Surety and Solidity…and using the terminology of our SS Recommendations may you get many spectacular and sparkling winners in your Equity Portfolio….However keeping in the spirit of a Safe Diwali 

(SS 4 : Scriptech Shield)
Continue to GO for GOLD

Wish all of you a very Happy Samvat 2066….Muhurat Trading is from 6.15 pm to 7.15 pm today.Diwali is a Festival to wish safety,peace and prosperity and well being…Keeping with this spirit and philosophy of Well Being and feeling nice and warm and pure and happy and safe,my Diwali Recommendations are safe,sure and solid and will rebound even if they correct
Evergreen LARSEN & TOUBRO ,even at Rs 1700 and Gold



Reiterating again what we said in Feb 2009 and even earlier
Continue to GO for GOLD ! 
February 19th, 2009
I see the next Five Years as a great period for Indian Stocks and with the right selection and a good measure of patience and temperament you could well be in a position to retire rich before 2015 !….Don’t worry too much about where our Sensex is going from 17300 levels today…Think beyond the short term…and as I keep repeating,if our government can have Five Years Plans,why can’t you !…..Think 5 years
Cheers !

Look at the Satyam bids !…helps you gauge the risk Tech Mahindra may have taken !

The 2 pm media meet by the Board of Directors of Satyam threw up some interesting facts about the Satyam Bidding Process

  • Larsen & Toubro bid was Rs 45.90/share for Satyam
  • Wilbur Ross’s bid was even lower at Rs 20/share !
  • The winner,Tech Mahindra, bid Rs 58 through it’s 100% subsidiary….the bid spread clearly indicates the wide ranging Satyam risk and valuation perspectives
  • Tech Mahindra can take over the management of Satyam immediately after Monies come in and the Company Law Board approves the bid…they do not have to wait for the Open Offer
  • Restatement of Accounts for the past Six Years will take a few more months…Both Accountant Firms retained are working towards this
  • Employees are 51000 of which 45500 are Satyam standalone,rest are contracted and associates
  • Satyam owns 450 acres of Freehold and Leasehold land in equal ratio…125 acres are over two Campus in Hyderabad City,one in IT City and the other is Satyam Technology Centre…These have been independently valued at Rs 1700 crs by three different valuers and Rs 600 Bank Loan arrangements with two Banks have been made against these two campus
  • Loan Drawn so far is Rs 300 crs,which they will repay from the bid monies
  • Larsen & Toubro Shares have a lock in of six months…so,can we assume, they cannot be tendered in the Open Offer 
  • It is upto Tech Mahindra to decide to bring in another Equity Investor or merge Satyam with itself…They cannot strip Satyam of it’s assets…This,I can tell you is,one of the provisions of the SASTA or Substantial Acquisition and Takeover Act.It prohibits asset stripping for Two Years after the acquisition or takeover 
  • If Tech Mahindra does not deposit the monies of Rs 1756 crs in the Escrow account and in the Company,in the determined ratio, within four working days…that’s by coming Monday,as tomorrow’s a Holiday,the second highest bidder will not be invited to come in…However,the Chairman of Satyam,Mr Kiran Karnik does not feels that this situation could occur.
  • As far as retaining the name ‘Satyam’,the Board has not suggested anything to the Winning Bidder…it will be their decision 
  • The mandatory offer will be at Rs 58 and the open offer process will be followed which would have to seek SEBI approval…The Open Offer would probably be inside two months…that’s by June 2009   

winning bid for Satyam is Rs 58/share…Many Questions yet stand

The Satyam Drama continues

The winning bid for takeover of Satyam is just announced…Tech Mahindra has emerged as the winning bidder with a bid of Rs 58 share through it’s subsidiary Venturbay Consultants…No other bid comes close to 90% of this bid…Thus other competitive bidders like Larsen & Toubro have bid below Rs 52.20

Tech Mahindra will have to pay Rs 1757 crs ( US $ 351 Million) for acquiring 30.28 cr shares and a 31% stake It will have to make the mandatory open offer now to acquire another 20% from the Satyam Shareholders

Due to SEBI largesse on flexibility of the Open Offer Pricing,quite certainly due to pressures from the Government and the bidders,the Open Offer Pricing will be Rs 58 per share and not at Rs 150 +,which it otherwise would have been ….This would mean another Rs 1132 crs (US $ 226 million) to acquire this 20% if offered to take Tech Mahindra’s stake upto 51%

Major Questions yet remain

  • Larsen & Toubro,the losing bidder,holds a 12% stake,which has cost them an average of Rs 80 per share….what will be their strategy now ?
  • US Giant IBM,walked out of the Bidding because of Satyam’s USA Lawsuits….The Liabilities can be significant…Hundreds of Millions of Dollars…possibly even a Billion Plus…This would break Satyam,if they do materialize
  • Issues of Client and Employee Continuity Remain…Many clients have left…some even absorbing the Satyam Team on their project to ensure continuity
  • Why did Indian IT Giants,Infosys,TCS and Wipro stay away from Satyam ? Will they rue a missed chance to buy a Big Company at distress price or do they have some experience and a better sense of what devastating missiles these USA Lawsuits can hurl at Satyam ?
  • Tech Mahindra may have won the bid,but have they not exposed themselves to Satyam’s USA Lawsuits ?
  • read more

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