[Brightspot]

This is to inform that pursuant to Regulation 42 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has fixed Friday, 20th August, 2021 as the Record Date, for the purpose of ascertaining the eligibility of shareholders entitled for issuance of Bonus Shares of the Company in proportion of 1:4 i.e., 1 (One) equity share of nominal value Rs.2/- (Rupees Two Only) each for every 4 (Four) equity shares of nominal value of Rs.2/- (Rupees Two Only) each held by Member(s), as approved by the Members through Extraordinary General Meeting (EGM) held on 5th August, 2021.

[Raja]

Hi vgs, brightspot has updated the record date as 20th… I am sure FPIs will not get bonus shares… simply because as of now they are not alloted the shares. Tomorrow onwards it might stabilize and possibly move forward. Results can be another event to be factored. Best wishes to all long term investors

[vgsatwork]

@Raja

Because all these FPI’s are SEBI registered, their due diligence would not take time and even 2 weeks should be sufficient to get the exchange approvals. Given that EGM approval of FPI was done on 5th, it is safe to assume that the company would have applied for approval from stock exchanges on that day itself. Now 4 days after the EGM they have announced the record date as 20th Aug 2021, which is 2 weeks from EGM date, my sense is that BCG has got feelers that the exchange approvals are expected well within 20th August and on 20th August if they allot the shares to preferential allottees, all of them would be eligible for bonus shares.

If you think about it, unless this was not factored in (that FPI’s would not be allotted bonus share), the entire time table in terms of date of announcement of preferential allotment to date of EGM to record date of bonus need not be lined up for this possibility.

Hence it is safe to assume that preferential allottees would get bonus share and that their effective allotment price would be 25.36/-. If market senses that it bent over backwards to accommodate preferential allottees to be eligible for getting bonus shares, the benchmark support price for the share would be around 25-26/- and not the current market price since it would be seen as BCG trying hard to please the preferential allottees.

[hw_tw]

@vgsatwork – Given that the new acquisition will be paid 20% in equity, what’s your view on these things

– will it be a fresh equity issued or ESOPs issued right away or ESOPs issued on yearly basis based on performance targets achieved

– do we assume this event is also lined up before 20th so that the management of the acquired company also gets bonus shares

[odysee]

@vgsatwork, from 56 to 26 would be a cruel turn of events for the retail investor, particularly for one who has waited for 6 to 7 years to get justice on market recognition and valuation.
The opportunity to sell around 50 was possibly lost because of fanciful short term targets being proclaimed on various investor group chats.
But the market, as mentioned earlier, is unforgiving and ruthless.
And the operator or operators will exploit the loss of momentum and sentiment to the fullest.
I expected better support from the promoter group and the larger stakeholders.
But the longer term prospects for BCG are still very encouraging, and if the implementation of various key objectives as outlined is done in a timely manner, then patience will be well rewarded.

[Raja]

Dear vgs, many thanks for your informative analysis, also your thoughts on hw tw queries …..

[vgsatwork]

@hw_tw
ESOP is purely for rewarding the employees and BCG has earmarked 5% of aggregate paid up capital + reserves for buying 2.6 cr shares from secondary market and they have mentioned the quantum of shares, amount of money to be loaned to the trust for purchasing from secondary market and maximum possible ESOP that would be allotted to any individual in a year clearly in the postal ballot notice. Hence this ESOP would not be used for paying the stock component of the acquired company.

In a separate post, I had given my guess in terms of how much BCG might pay for the acquisition (making some broad assumptions) and the figure I believe that would be paid would be in the range of 1000-1200 crores.20% of the same would be about 240 crores. Assuming the stock price to be about 40 rs, BCG might issue about 6 crore new shares from the approved list of 150 crore shares. (Given all PW & PI allottees are eligible for bonus, by 27th August, paid up capital would touch 115 crores, leaving scope for another 35 crore shares to be issued). Between 6-8 crore shares from this remaining 35 would be issued for acquisition and remaining 27-29 crore shares would be issued through QIB to raise 1500 crores (between 50-55 price range) is what I think would happen. But it is more of an educated guess than anything else.

I don’t think acquisition of India based digital marketing company would happen before 20th Aug. New issuance of shares would still require shareholders approval and voting, etc along with clearance from regulators. Hence the earliest it can happen is sometime in late September or early October

[Logan]

Check out the new investor presentation by BCG that was shared late night. (Not able to share because of the file size)

Don’t know if this presentation is for getting LOC or subsidiary dilution (last year also they shared similar ones) but one interesting thing to note is the Lycos acquisition payable in the balance sheet. All these years it used to be $16M but for 2021 it is just $7M. Does that mean BCG is paying less than half of $16M? Looks like a good deal to me.

[vgsatwork]

Follow up to #12326

I was going through two of the announcements from the company and it becomes clear that between the result announcement on 28th June when the bonus decision was announced and the EGM notice sent on 13th July, the amount of money earmarked for Bonus has increased by 5.98 crores

In the first document, Annexure A talks about post bonus equity share count (assuming all preferential warrant shareholders would be getting bonus shares) of 104.93 crore shares and the share premium required for implementing the bonus issue at 41.98 crores (for issuing 20.99 crore shares of face value of rs 2/- as bonus)

In the second document (EGM Notice – Page 17 para 2), the share premium required for implementing bonus issue is mentioned as 47.96 crores (for issuing 23.98 crore shares of face value of rs 2/- each).

Clearly between 28th June and 13th July, the number of bonus shares that BCG was planning to issue has increased by 2.99 crore shares, which is 25% of 11.96 crore shares of preferential allotment to FPI’s.

So, it is clear that FPI’s were meant to get the bonus and the timelines were arranged accordingly and they are effectively getting shares at the rate of 25.36 rupees (post bonus shares).

So, FPI’s getting bonus is not speculation, but something that has been accounted and planned for by BCG.

[myainvest]

Last lines on the recent update is interesting – “In the interest of full disclosure to our shareholders, we are sharing this presentation

as this will be presented to a few investors

in next few days.”

Who would be these few investors ? Hopefully some stable investors !

[vgsatwork]

related to #12333

I was checking to see if the consolidated balance sheet published as part of the FY20 results to see if there is any kind of correlation that could be seen between that balance sheet and the one shared in the investor presentation shared by BCG last night wherein Lycos Acquisition payable of $7Million is the ONLY long term/Non current liability and which has reduced from $24.4 Million to $7Million between FY20 and FY21.

I could not see any major differences in Neither the current liabilities or in Non current liabilities of the balance sheet published on 28th June as part of the results which could correlate to the reduction of non current liabilities of $8 Million that is shown in investor presentation.

[VALUEBUYER001]

Vgsatwork sir I think only pW are eligible for bonus not FPI

[Raja]

Dear all, logic says only investors having shares will be eligible for bonus shares.. can any one throw some clarity on vgs input. Also interesting to know only 7 million has to be paid for daum

[nitin_asce]

Let’s wait for another week and everything will be clear.

[hw_tw]

Someone posted in MC forum about some new BSE/ NSE rule which would affect BCG.

Found this ET article on this rule

https://m.economictimes.com/markets/stocks/news/bse-clampdown-on-price-gains-hits-small-mid-cap-stocks/articleshow/85228265.cms

As per this notification, any stock which has run up more than 6X times in last 6 months will have a weekly, monthly and quarterly limits too.

BCG seems to fall under this category but we need to note that it is only for those stocks which are listed only in BSE and not for both

I guess this is one of the reason for the fall in all midcap and small cap stocks across

Request everyone to please verify this news and don’t sell your stocks in panic … especially people will be spreading negative news that this rule also applies to BCG

[myainvest]

New BSE rule doesn’t make sense. And I wasn’t clear if the 6 months would be calculated from past or do they have cut-off date from when this would be applicable or will it count 6 months from the first day it was announced i.e, today ? I couldn’t get those details

If it is calculated 6 months from the past, then it is ridiculous, most of the small cap which ran in the last one year would then come under this bracket.

Other big questions are what will happen if the demand is still more for a particular stock even it touches the cap of BSE. Does the share gets stuck in same price in BSE and whereas in NSE it will increase, creating a big diff on prices between BSE and NSE ? Or would they make something like move the shares to ASM category if there is still demand for them ?

[hw_tw]

@myainvest – this rule applies only to the stocks which are listed exclusively in BSE and so there is no question of price difference. between the two exchanges.

It does apply to companies like Sportking which is listed only in BSE and has run up more than 10X times in recent period.

BCG is listed both in BSE and NSE and so this rule doesn’t apply to BCG.

[Brightspot]

Hope SKR would bring in stable investor to end this UC LC game, not sure why did he shared new presentation to exchanges , he also mentioned it would be prepared for some investors? who are they?

[hw_tw]

Clarification from BSE…the new rules is for Z and those companies below 1000 crs market cap.

Please note that this rule doesn’t apply to BCG.

https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20210811-6

[vgsatwork]

@VALUEBUYER001

There has not been any official communication about whether FPI’s are eligible for receiving bonus share or not. I don’t think the company would be obliged to clarify the same since the FPI allotment is still not done and it is approved in EGM and pending approval from Exchanges in order to complete the allotment. The moment the allotment happens (as long as it happens on or before the record date), they would be eligible for bonus and the fact that in the EGM notice that they have increased the provision for allocating bonus share by 5.98 Crore (Sufficient to allocate 1:4 bonus for the 11.96 crore shares under FPI allotment) seems to suggest that they are planning to allocate the bonus share (BCG is expecting preferential allotment for FPI to be approved by exchanges on or before 20th August) and have provisioned for the same.

[Author]

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