General Discussion

Viewing 20 posts - 2,321 through 2,340 (of 5,388 total)
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  • #9672
    Logan
    Registered Boarder

    @Sumeshnair2005, why would they give 65crs to the company if they don’t convert warrants to equity?

    If they aren’t going to convert the warrants later then they can buy shares worth 65crs from the open market now itself right? At this valuation with 65crs, they can easily get close to 25% of the company.

    Still the management team hasn’t told us why they want to dilute the company by this much. Instead of diluting, they could’ve easily gone for loans and pay interest.

    7+
    #9673
    vgsatwork
    Registered Boarder

    @Logan Intresting question. For the subscribers of preferential warrant, they would not stand to lose irrespective of whether the price drops or raises. As long as the price is falling more than 25% from their warrant price, they can buy from the market and forego the initial 25% paid by them and take the same stake for same cost consideration. If the price rises by more than 13, it would be about 70% gain from their warrant price and even if they wanted to sell out and move on, they would still make a 25%+ return on their investment post their finance cost and short term capital gains charges. Only scenario, where I see they would be worse off (after making 65 crore investment) is if the share price hovers between 5.5 and 9.5 for the next two years. Hence, from their perspective, they would be hoping for the price to go up over the next 18 months in order to NOT to lose money on their investment.

    From promoter stand point though, they are risking everything(Losing their control and willing to cede the control for 260 crores)

    From retail investor stand point, we would stand to gain if price rises, but long term prospect would be doubtful if the promoter CEO loses control of the company

    #9674
    whity3187
    Registered Boarder

    This looks like a classic pump and dump event to me. Good news could be that the stock prices could soar within next 18 months, where these people will exit the stock in tranches. But the issue is that the warrants price is only 7.7, so not expecting much big targets in this. At last, retailers will be trapped as usual. Never heard of corporate bodies being given such a huge stake. These people could be SKR’s benamis also.

    9+
    #9675
    whity3187
    Registered Boarder

    Today 98L shares were traded highest after 5th Oct.

    2+
    #9677
    odysee
    Registered Boarder

    @Logan, I doubt if one will get an answer to that question of why this enormous dilution.
    We all were under the impression that logically the promoters would try and increase their stake to have a better grip and control over the company especially after the previous dilution.
    Now their holding drops to 22% odd, which is a dramatic reduction from the original 39 plus percent.
    I cannot for the life of me fathom as to why any promoter with such a bullish outlook on his field of business reduce his overall holding percentage. And this is after SKR has suggested time and again that the stock is grossly underpriced.
    All this talk of the LOC and the ‘imminent’ receipt of the first tranche sounds ludicrous now.
    This warrants business must have been in planning for a few months now, including this massive dilution; and all along we were hungrily waiting for the LOC announcement to settle Axis and Daum.
    Have we been led by the nose? I would think so!
    So, what is the strategy and objective of the management and promoters behind these extraordinary decisions, and how will the long term retail investors be impacted by all this?
    The equity capital will exceed 170 crore in a few months , with a huge amount of floating stock.
    I wonder if some of these questions will get addressed at the AGM or the next conference call.

    #9678
    Sumeshnair2005
    Registered Boarder

    @logan wht i meant is if there is too much shorting now before price rises thn thy may buy around 20 to 30 crs shares before price reaches 7-8 thn thy need not convert warants thy can sell a tiny percent of shares after a year whn we are exp price to reach 50 and recover these 65 crores easily.. i feel these warants are like a security by promoters to thm with deal of thm buying up shares to suppress the long term shorting happing in the stock

    4+
    #9679
    Optimus Prime 06
    Registered Boarder

    i think we may expect axis bank and daumn closure anytime… may be 1st installment loc may receive before agm i think..what may be the loc amount as per fundamentals and book value..any guess?
    preferrential warrants issued to his close relatives and friends..this shares will come to existence after 18 months..they will not invest for 1x, 2x returns..
    i wait for another 18 months…what may be the result..i am ready to face..
    why means..i have seen more negativity from retailers..after this preferrential warrants issue..what about todays market…look at the volume and delivery today…
    lets see what happens

    4+
    #9680
    rahul
    Registered Boarder

    This is probably me finding the reason to stay invested in the stock. So take it with a pinch of salt.
    I was able to find a few connections (with SKR) to whom warrants are being issued.

    1. Rajeev Saraf CEO Lepton (Same Batch as SKR IIT Karagpur)
    Lepton – 600,000
    Lepton software trading – 5,400,000
    Total warrants = 7,000,000
    2. Subrato Shah (Same Batch as SKR IIT Karagpur)
    warrants – 22,000,000

    This makes me think that warrants are not issued randomly but only to the friends of SKR. However only 2 connections I was able to make, so there are still many on warrant list.

    #9681
    ramganesh1982
    Registered Boarder

    For me this looks like a big smart temporary move (ethical or not is debatable) by company management. Stock will zoom to 9+ with high consumption of volumes till next big news (axis bank clearance) .. reason is that .. these 59 people now have a free grab of the stock below their allotment price and also for the reason that they might influence some of their known parties to consume a big stake so that they can propel the rocket 🚀 with some trigger.. market is emotional and in short term it’s more technical (doesn’t care for fundamentals) … Short term these r going to push the stock higher than how its valued currently .. we have to see how the market values in longer run

    2+
    #9682
    odysee
    Registered Boarder

    @rahul, I think it stands to reason that any allotment of this preferential nature would be to close associates and known parties.
    The second gentleman referred to by you for 22 million warrants is Mr Saha and not Shah.

    4+
    #9683
    bitran
    Registered Boarder

    Hi Rahul,

    Thanks for highlighting the Lepton CEO connection with SKR. I was sort of joking when I yesterday wrote if there are any other wealthier friends in his IIT batch. Subrato Saha is also Muskaan owner and he, raising stake via this PW is indeed very positive. We should consider all these as promoter stake only. Don’t know how many more like this but there should be definitely more.

    In one way, we should be glad that he is allotting the warrants to his close friends and associates. That means the promoter is confident of the company prospects and he really might have cash issue to subscribe himself. Maybe this time, the promoters can get the dividend and use that to buy some shares from the market. Not sure, if that is a priority for SKR or he has other important plans with the money. Only problem is some investors look for promoter stake in the company to invest and since that stake going down may not be appealing in that perspective.

    However for us, this gives a bit of confidence that he is genuinely trying to sort out things but his execution is very slow and so is transparency with investors. Some of those may not be intentional but it appears so to retail investors as many track the company with eagle eye and try to dissect each and every minute detail. Ex: why they did not upload the investor list together with the dilution notice? I don’t believe there is any hidden agenda there as there is nothing to hide in the list but it is casual omission or they did not feel it is important but that resulted in so many conspiracy theories even among us.

    Additionally, I would urge SKR to be transparent and honest with shareholders. If he has told earlier that, they might have to dilute the equity due to cashflow issues since LOC can delay, we would not have felt this cheated. I don’t think there was much of a burst out when the company gave preferential issue to Muskaan and others. Honesty is the best policy rather than trying to cover up things. He is a master in carefully worded answers and he could have easily convey such a possibility in a very subtle way.

    Now, what happens to LOC, Axis etc. Guess, we need to wait until AGM to know the status unless they report it to exchange before that. In the mean time, let us hope the share also catch up and give the investors some much needed reason to cheer…

    #9685
    rpm87
    Registered Boarder

    @Logan I think the BDO audit was not done since the consolidation of group companies were put on hold. Only the Israel subsidiary OMS was audited by EY, at least that is what I remember, I may be wrong.

    4+
    #9686
    ramganesh1982
    Registered Boarder

    I believe the next 4-8 months are going to be series of events for BCG as it will have one big news after another. It’s better for long time investors to accumulate now as we might see it reaching 52 week high very soon

    3+
    #9688
    JRS
    Registered Boarder

    @Rahul

    In that case he has now built an army of strong investors, now nobody can stop his dream of making BCG a global company.

    I think these investors are told to buy as much as they can from open market till the average makes below ₹7.7. so that they stop the operators who are shorting and keeping the share price low.(any how they are assured with Warrants @7.7₹).

    The G gang hardly have 15 crore shares I believe, if they try anything by shorting the new investors may buy.

    But if G gang Is part of the SKR strategy, then I should recheck my views.

    6+
    #9689
    Sumeshnair2005
    Registered Boarder

    I think the dec shareholdings wil give as answers as it wil show how much the allotees hv brought from market if thy hv brought significant quauntity thn this move wil be a masterstroke from srk to suppress the shorters

    3+
    #9690
    bhalothia9
    Registered Boarder

    Some names are known , which is a good sign.
    Shree Puskar Chemicals and Fertilisers:
    GAUTAM GOPIKISHAN MAKHARIA PUNEET GOPIKISHAN MAKHARIA

    LEPTON SOFTWARE: https://leptonsoftware.com/

    I think we should find all allotees information like this and see if they all have connections with Suresh or if they all are IITians

    #9691
    drjaysee
    Registered Boarder

    Dear @Logan and Experts, I am sorry to ask about this.
    May I know from when the Pref warrants will be accountable? In this case, the market capital will be jumped to 440 Crs (for around 84.66 Crs qnty) considering today’s market price of Rs5.18. Do we expect any upward movement on the price before we get any good news of Axis settlement? I believe the current price level of 4.95 – 5.20 is being controlled by either SKR or any operator. Pls share your expert views. Thank you.

    5+
    #9692
    Logan
    Registered Boarder

    @drjaysee, the warrants will be accountable only after it is approved by the shareholders, exchanges. Remember PO allotment was approved by shareholders and BSE but NSE took more time.

    Regarding price movements, everyone has different theories. My theory is that it all depends on the basics of the stock market, which is supply and demand, optimism and pessimism, fear and confidence etc. Since BCG is a turnaround story (not the business but the price) everything depends on material developments.

    For there to be big changes in stock price, People need to be optimistic about the future of the company. When the price is this low and when the company is having few issues pending, everyone will be sceptical so only material developments will lift the price. If you check all the stocks that have gone up, all were battered before the rally and that rally sustained only when there was more optimism than pessimism.

    Many companies like Birla tyres, Alok industries, subex went up but the rally didn’t sustain because there weren’t material developments. Later subex went up because of a material development. Famous names like Reliance, Birla couldn’t stop stocks like Alok and Birla to fall more than 50-60%.

    Events like NCLT bring supply, fear and pessimism. Once that is done also we may not see demand, confidence and optimism because there is still Daum issue pending to be resolved.

    #9693
    Sumeshnair2005
    Registered Boarder

    Drajay the warants wil be included as equity only after its conversion that usually is 1 year to 18 months after its approved. Equity increase wil depend on how many warants are converted before expiry of warrants

    #9694
    jmathew
    Registered Boarder

    Even though the PO allocation is totally against my expectation I believe this is a very good calculated move by the promotors.
    1.Top 10 from the new list will get around 28 CR out of 34CR.
    2.Most of them will be close to promotors and may stay invested for a long
    3.They may also buy more now. (maybe holding good numbers already)
    4.I believe companies priority is to close all outstanding issues ASAP.
    5.Axis is a done deal.
    6.If LOC get approved in this month (as per last CC SKR is very confident of getting LOC in this month) then we can expect Daum closure in JAN-FEB 2021
    7.Worst case it will be closed with PO money and BCG will be debt-free
    8.Lycose book value and EPS will be added to BCG (I am not sure about it but may add rs 3 to 4 tp BV)
    9.Pledge shares will also be released along with the above
    10.EPS will come down to Rs. 5 range.
    11.If BCG can report 10 to 15 percent growth in Q3 and Q4 then the dilution is not a big deal at all. (I strongly believe we will see good growth in coming Quarters)
    12. If we see the shareholding pattern top 15 groups are holding around 73 percent of the shares and the top 2000 holds 90 % of the shares. Please refer to page no. 92
    13.Stock is under the full control of promotors and operates as they want to grab as much as possible at a lower rate but they are not able to do it as per the SHP 19 and 20
    14.It is a blind buy at this stage for the short-term target of Rs 7 to 8 (30 to 40 percent gain)
    15.I expect a huge move immediately after AGM.
    16.All the above is just my view and I may be wrong.

Viewing 20 posts - 2,321 through 2,340 (of 5,388 total)
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