[profile inactive, exited bcg]

Found it, Rakesh Bansal mentions about operator activity in Brightcom, discussion at 48:30

[JRS]

Watch @ 48:30 on YouTube link shared above

[profile inactive, exited bcg]

Regarding share warrants, it really really looks like retailers are being robbed.
We could also speculate that either the promoters themselves (through benami) are getting the huge number of shares at dirt cheap price of Rs. 7.7; or the promoters are receiving money from behind the curtain from whomsoever the shares are being issued to.

[profile inactive, exited bcg]

@Logan
It is difficult to understand why the company needs money from warrants at this stage, when LoC is so close. And the promoters definitely don’t intend to communicate the reason for warrants issue to the shareholders.
Secondly, I don’t think the operator activity is happening without the knowledge of promoters. They could intentionally suppress the price for issue of share warrants. I feel that the promoters are totally aware, and are working together with the operator gang. Given the situation, it is very difficult to believe otherwise.

[Rathi_b]

@Logan I disagree with that speculation and this why. Last time they raised they did 100 million, historically its highest valuation was over 800 million. If I have to expect that they are raising anything in the form of LOC, both those factors would have been taken under consideration also keep in mind that valuation was pre Daum. If they now have to raise an LOC it would not be a minor amount, certainly it must have been done keeping atleast a few years of growth in mind, which should also include allocation for any acquisition along with provisioning of outstanding issues and general business transactions (payables and receivables). This game is being played because they know that this is the last time in its life that it would trade at such a low number. They know once issues are settled they will never get anything less than atleast 10-12 p/e. Please don’t mind calling me out on this one, I know I am being harsh( because I have immense respect and gratitude for this forum).

[Logan]

@dileepvn and @Rathi_b, I’m not denying the manipulation of prices but my point is why go through these legal processes if he doesn’t need that cash? If it is shares that he wanted he could’ve simply asked those people to buy it for him and later he would’ve got them.

If you remember in 2015-16, he wanted to buy MySMS for 100crs and he was ready to give them shares instead of cash. That time also he didn’t care about the valuation.

Warrants approval requires legal actions. There are many rules and regulations for that.

Also I don’t think he wants the LOC to come to the parent company. If you remember in one of the calls, he said the same to a caller.

[Logan]

And the last amount that they raised, it was equity not debt. Valuation matters more while raising money through equity sale than debt. With the LOC, he’s keeping the receivables as collateral so I don’t think they consider the valuation part of the company. If you see many mergers and acquisitions in the past (mostly in the US), many smaller companies have bought bigger companies maybe twice their size using debt (leverage). That time most of the banks will look at the size of the business more than the valuation.

Also You are not harsh at all. I don’t mind us having these discussions. It’s very important that we have these meaningful discussion so that we understand the situation well enough. If my views are wrong then I’ll change them in a second.

[profile inactive, exited bcg]

@Logan
I don’t think he will be able to buy those many shares from the open market.. if he tries that the share price will definitely shoot-up.
Long term investors like us are not going to sell our shares at these low valuations.
Also, I feel whatever volumes we are seeing in the market these days are only due to operator activity (with promoters knowledge).
I think the promoters are getting very greedy here.
Also, please remember even in AGM they did not mention of a single reason on why the funds are being raised right now. I think if they had a valid reason, they would have revealed it. They wanted to avoid that question. They very conveniently skipped the Q&A as well.

[profile inactive, exited bcg]

I feel that if these price manipulation continues, we will have to collectively make a move and register complaints through SCORES portal.
A single complaint would not make a difference. But if we do it collectively in an organized manner, it might have an impact.
{Pls read Qstn no 24 here: https://scores.gov.in/scores/Docs/FAQ-SCORES.pdf }
We can wait for a few more days and decide.
I hope all of us are on the same page that the price is definitely manipulated by operators.

[Logan]

@dileepvn, you are 100% right.

My observation was about what he’ll do with the PW cash. Obviously the price was manipulated and there’s no denying that.

What I observed was that he hinted that they are looking at acquiring companies like how they did in the past (once all the issues are resolved). Maybe he wanted cash to do that and maybe the first tranche from the LOC will not be sufficient.

Yes, the AGM was a total disappointment and he avoided all the important questions. The callers also didn’t ask him any important questions.

[profile inactive, exited bcg]

@logan
I am not at all convinced the PW cash. I feel if they had solid plans (other than plans for their own personal benefit), they would have clearly communicated it and we wouldn’t be left speculating.
It is not that callers didn’t ask him important questions, but they did not get an opportunity to. Anyone who attended the meeting would remember that there was no option to raise hands/ask questions during the AGM. The callers who asked questions, I feel, were pre-arranged.
Anyways, I am still hoping for the best outcome.
But if the price manipulation continues, we will have to consolidate and raise the issue with SCORES. After all, together we are now strong in numbers and strong in our collective holdings.

[nitin_asce]

I agree with Logan that SKR is looking for a acquisition and a small hint was dropped in the agm.
Axis issue-i know how banks work. So money is only paid when final agreement is in place. Now we see that BCG paid 5.5 crore and axis lawyer avoided the question because he can’t give false information to court. He confirmed he did not get any information from axis whereas he might be fully aware of the issue. So its only matter of time before its sorted.
LOC and warrants- it feels very painful for such huge dilution of equity. But if we see the positive point company will get access to lot of cash. The other wild guess I have is maybe its kind of backup plan to LOC since there must be some time frame to pay for DAUM. Maybe rathi_b can clarify, I think in one of their meetings with SKR it was mentioned that dilution in equity will not be significant.
However in worst case even if dilution happens, company will have access to money. We might see axis and daum closure plus 30% revenue increase as mentioned in one of the concalls. So actually my forecast future return will be lower due to dilution but positive is I may get that return on stock much earlier.

Now coming to operators, they are making money. If we observe from video above it is confirmed financial is all right and only issue is operators. We also see steady increase in retailers entering the stock. So my own thinking is it may not last, when demand increases automatically operators will be out. However we don’t know when and it is testing our patience.

[Raj]

Dog fight is getting very intense on Mc forum.. 😂…

[Rathi_b]

We as the Hyderabad investors again reiterate that from the documents and meeting we were privy to and have attended, we expect one or many of the outstanding issues to be sorted before March. The last time we were there at the office LOC was in the final stages it looked like they could have got it operational by now. My only concern is that these warrants shouldn’t be the reason for everything to be delayed. They can do it again later in future when the issues are sorted out, but to keep us investors in a state of dismay and operated play is not right. I again reiterate the last time we concluded our meeting with SKR we expected the LOC to be operational by now. Just saying if this warrants issue is not approved we should not again be kept trapped like this in the near future. The management and other people in the organisation have enough money to raise their personal stake in many other different ways. But to keep us waiting until the warrants are approved is not fair.

[sac6310]

seriously i don’t understand why they always keep shareholders( who had invested in their business, not traders) in dark without informing what is going on like still they had not officially informed why these warrants had been issued. Hope they improved themselves in near future in regards to pass on information to their shareholders.

[buffet]

@rathi_b & team: any possibility of meeting SKR again? May be first/second week of February?

[nitin_asce]

Let me give you an example nobody from axis Bank can approve settlement if bank knows the company is raising money and can easily pay their whole loan amount. He will loose his job or maybe accused for taking bribes.

So some things have to be done sequentially and we as retail investors will be last to know.

[Rathi_b]

But Sir, the amount that has been raised early last year for this purpose specifically can be put forward to settle it. The new issue is for something we have no knowledge about. Yes we would like to plan for another meet with SKR but not before Valentine’s day. Let the next hearing of axis complete and let them have another 20-25 days to sort this out. But yes we will certainly plan for one sometime mid or end of next month. Right now we need to just pray to almighty that good sense prevails in human beings and that they will take steps for larger good and not just personal gain at the cost of small hand to mouth investors.

[Logan]

@nitin_asce, I think the original loan amount was 41crs or something and the ots was 24crs. Including interests, BCG maybe has paid more than 1.5x (60-80crs) the original loan amount. Will the judges consider this?

Out of 24crs, 8-9crs are pending and the date has expired. If they put some penalty it should not be more than 12-15crs right?

In one of the orders (the lengthy one) I guess it states that Axis wants that 41crs but in the December order it states Axis is asking BCG to pay the full ots amount. I maybe wrong in understanding this but what amount is BCG supposed to pay?

[tanv151]

What if the both Axis and BCG have agreed on a particular amount to close this case and SKR has the signed agreement? He would have learnt from his mistakes, I am sure.

If one agrees it is possible, then the obvious question would be ‘why did Axis’s lawyers not admit it in 18th Jan hearing? Instead they said, they haven’t received any instructions from their client i.e., Axis.’

Now put yourself in judges position, would you not ask for the agreement copy if both the parties said they have arrived at a settlement amount? BCG saying we have reached the solution and Axis lawyers saying they don’t have instructions could be a game plan to indirectly push the matter to another date, with the hope that warrants will get approved by then.

Just some food for thought… As much as I dislike the warrants issue, I want it to get approved asap, so the other issues can get resolved. Yes, the warrants are going to dilute the value largely, but even that diluted value is going to be in multiples of the current market price.

[Author]

Posts