TVS Motors @ Rs 255 ~ DIIs Sell Cheap for FIIs to Reap!? Orchestrated Sell Off !?

Check this latest interesting situation posted in the SCRIP STANDPOINT Module on  my company’s website

TVS Motors @ Rs 255 ~ DIIs Sell Cheap for FIIs to Reap!? Why !? 

Sundaram Clayton Promoted ,TVS Motors caught our Eye as it has been recording Highs since the beginning of 2014 !

Wanted to conclude whether this has been a superb Fundamental Run that can sustain into 2015 ~It’s given a 300+% return moving up from a Low of Rs 64 in January 2014 to a High in the Week of Rs 264 

But what was revealed is worrying  and has raised Corporate Governance & Insider Trading Questions that need to be addressed !

Non Promoter Indian Institutions & Mutual Funds have been selling and FIIs have been buying !

….the former sold Cheap for the latter to Reap !

So here’s the Obvious Question !

Why were the Fund Managers of Indian Biggies,Reliance & ICICI MFs and LIC selling Huge and Cheap at Rs 75 levels from January 2014 !?….when the Share Price has more than tripled in the year till date ! ?

Was this  just one of those things that happen and just an error in fundamental judgement ! ? or an orchestrated play !?

Don’t you think that when huge quantities of  a well known company are offloaded there has to be a strong fundamental justification to do so…was there !?  

From 46 FIIs at December 31,2013 the number jumped to 64,84 and 95 at the end of March,June & September 2014 respectively…FII HSBC Bank Mauritius now emerges in the 1% and over Equity Stake Shareholder Group and is the largest FII shareholder   

(in %) Sep-14 Jun-14 Mar-14
Promoter 57.4 57.4 57.4
FII 11.64 8.77 5.3
DII 11.83 14.48 16.86
Others 19.13 19.35 20.44
Total 100 100 100

Have a Look 

Major Non Promoters holding above 1% stake in the company

                                                             Mar-14

                            Jun-14                   Sep-14
Name No. Of Shares % Stake No. Of Shares % Stake No. Of Shares % Stake
Reliance Capital Trustee Company Ltd

41198970

8.67

36274885

7.64

30254679

6.37

Life Insurance
Corporation of India

18440769

3.88

12240478

2.58

8437121

1.78

TVS Motor Harita Employees Welfare Foundation Pvt Ltd in trust for TVS Motor Foundation

9433000

1.99

9433000

1.99

9433000

1.99

Tree Line Asia 
Master Fund (Singapore)

6000000

1.26

6000000

1.26

6000000

1.26

ICICI Prudential 
Life Insurance Company Ltd

5120655

1.08

HSBC Bank 
(Mauritius Ltd)

8264519

1.74

Total

80193394

16.88

63948363

13.46

62389319

13.13

 

Small Investors need to be protected either directly or through their trust in Mutual Fund Schemes that invest on their behalf…they cannot be shorted by a Fund selling off an asset holding for far less than it turns out to be for in the same year as it affects the NAV of the Fund…and if this happens repeatedly then there is certainly more than meets the eye !…question is was this an orchestrated sell off  and therefore deliberate and vested ?

Not not gone too deep into fundamentally valuing TVS Motors but with Share Price at Rs 255 giving a PE Multiple of 45+ on an FY 14 EPS of Rs 5.5 on a FV Rs 1 Share, don’t nearly need to do this !

In my View the above that has played out in 2014 till date is beyond fundamentals !   

….and needs to be investigated by SEBI,IRDA and AMFI and even BSE & NSE  

What’s Integrity to an Opportunity !?   

It could be happening in many Other Scrips too

Is Investor Education & Protection merely Lip service and only for the Records ! ?  

2 thoughts on “TVS Motors @ Rs 255 ~ DIIs Sell Cheap for FIIs to Reap!? Orchestrated Sell Off !?

  1. Well…I am not that experienced in stock market as you are to comment on the malpractices of fund houses. But would like to suggest something on the valuation of the stock.

    1. The company has been constantly posting growth in sales numbers. You can checkout the monthly announcements on stock exchanges.

    2. The valuation has to be forward looking and should be based on FY15 and FY16 numbers and not on past basis as mentioned by you on FY14.

    3. In general there is a surge in auto company stocks due to expectations from new government delivering and improvement in economy.

    4. Pasting a link of a latest business standard article which talks about new product launches and market share of the company. http://iphone.business-standard.com/jsoncr/converter.php?url=http://ipad.business-standard.com/backend_new//convertor_newsurl.php?autono=114102801383

    Hope these pointers would help in some way.

    1. Hi Sadik,
      You have a point on Forward Valuation…I gave not gone deeper…However Instinct and Experience tells me there is more to this run up other than fundamental…Assuming FII Fund Managers are savvy to buy it for this run so should be the DII Fund Managers not to sell it…and that too so cheap

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