[JackSparrow13]

To be frank, this fall does not worry me. Even if it goes down to 10, i really would not be worried. This share has a pretty good chance to be a good dividend play in future, if Mediamints earnings are used to increase dividend payout. I have barely written anything about growth.
Obviously, my investment in this share is less than 5% of portfolio, so i can digest the volatility.
What this share has done to me, is given me confidence, that if i hold my shares long enough, i can enjoy 10-20 baggers (and one does not have to be super investor always to have a 10 bagger). This confidence will ultimately help my overall portfolio, and for it Brightcom has my vote of thanks.

Lets sail through this round of volatility folks, who knows Brightcom might show us 50-100-1000 baggers in future!

[hw_tw]

Last couple of weeks was a eventful period for BCG … Summarising some of the updates which I could recall

Investor updates

– Around 15 lakh shares added by Fund houses in last one week … Morning Star shows count of 1.32 Cr compared to 1.17 crore shares last week

– BCG is added to the NSE Indexes

Nifty 500
Nifty smallcap 250
Nifty smallcap 100
Nifty midsmallcap 400
Nifty Total Market

effective from March 31 (Src: NSE) … This would increase the coverage from Analysts, Media and also would mark entry of new MFs in near future

– BCG is added to FTSE Global All Cap Index effective from March 16th … I couldn’t find public info about this, if anyone has please do share a link … If true, Vangaurd ETF would be adding this stock around these dates

– As per Economic Times, Rakesh Jhunjhunwala has invested in BCG … some tweets were put across to ET to confirm or correct the news … they haven’t done both even after 5 days … So please take this news according to your own study

https://economictimes.indiatimes.com/markets/stocks/news/irctc-affle-among-6-cos-whose-sales-profit-doubled-in-q3-should-you-invest/articleshow/89714975.cms

– Record date for bonus issue is set to March 16th … expecting Mr. SS do a conversion by paying the remaining 75% amount before this date

– e-voting for Bonus has ended on 27th … Results announcement expected today

– BCG is covered in CNBC TV 18 channel … SKR appeared in a news channel after many years … hoping to see more media coverage in coming months

– BCG is also covered in couple of Groww YouTube videos

– BCG ranked 21st in Dalal Street Investment journal’s list of Super 50 stocks … This is based on Growth, Effeciency, Safety and Wealth creation parameters … BCG is just behind Infosys and Persistent Systems which are ranked at 19 and 20 respectively

Business / Operations updates

– BCG has launched a new product named B-Finance with well known publishers like Motley Fool … this is a good move considering the audiance of these sites are highly focused and are willing to pay to earn … the conversion rates will be high and thus CPM rates too

– Brightcom Israel has closed couple of positions for their Brightcom Video player division including Head of Video product … hopefully we will soon get some business updates on this product

– Brightcom Israel has 4 positions open (Src: LinkedIn) … 1 new position for India added in this week … Once closed we might see some increased revenue from India

– MediMint has 15 total positions open … 3 new positions added in this week including one position in US (Src: LinkedIn)

Attachments:

1. 

   Screenshot_2022_0226_050316.png
   

[myainvest]

That’s my observation too Logan on price movements. I even said the same earlier here. They are doing the same since 170 levels! I also agree with what you have said on ESOPs earlier that FPI investors may not like their money to be spent on ESOPs. At the same time I believe that too much price fall should also be arrested and which, obviously everyone, including FPI investors will be interested in. Buying 5-10L shares would come only around may be c.15Crs! For many retail it is a big money, however I believe company can afford it is my view! If company, have some other cards in their pocket other than esops right now to arrest price fall, it’s good. Else I don’t know what else will be the quick way to change the sentiment. From tomorrow included in Nifty Indices! Great volume for the past two days. Hoping for a strong green candle tomorrow!!

Retail panic started only after price came below 140, until then I guess most where ok with the fall from 200.

[NIRAJ1]

SEBI has ordered forensic audit for BRIGHTCOM GROUP from 2014-2015 to 2019-20. I am surprised by this action of SEBI. but it will prove that all Figure of sales and profit are true. DELOITEE IS AUDITOR for same.

what to do now?
This will definately create negative entiment in retail investors.
Advice to hold and wait for news.
SKR has to appoint E&Y for whole company to audit as suggested last time–15 days back.

Attachments:

1. brrightcom-group-notice-for-forensic-audit.pdf

[pradeep]

The Letter of SEBI is dtd. 16.09.2021. The question is why this information is disseminated on February 28, 2022. Is it an error on the part of the Exchange or the Company did not inform of this matter? In any situation, the purported audit should have been completed by now. Waiting for a clarification from the Company on the matter.

[odysee]

I am surprised that there is no covering letter addressed to the Exchanges , or to the shareholders via the Exchanges.
This is dated 16.9.2021, a good 24 weeks ago. Has this been sent by the Company or by SEBI to the Exchanges?
And there is no information as to whether the forensic audit has been completed or ongoing, and what the outcome has been.
SEBI has been granting approvals during this entire period for allotment of shares on a preferential basis to various entities, convertible warrants to Shankar Sharma, as well as the allotment for the MediaMint acquisition.
Would be grateful if someone on this forum can shed some light on this matter.

[NIRAJ1]

Dear friend odysee,
I show this notice on screener.com as BCG is always under my watch. I got news and inform to all our friends. It is old one but notice given today which is very suprising to me also.
Have a faith in bcg MANAGMENT…
This is all about impairment done of almost 800cr in 2019-20 year following 5TH Auditor of USA as you remembered. They suggest for impairment of Asset. Following which BCG did 800crs impariment in ASSET.
such type of impariment is done routely in all IT COMPANIES. Even Goggle do the same thing every year. I did check therir balacesheet 2 years back… i hope this will calm you and other friends..

[Logan]

The forensic audit is mainly for the impairment of assets and this is common in product based companies.

The problem is with the company not reporting it to the shareholders and the market. Whether it is serious or not, they should report/inform the market about these things.

We should all write mail to the company asking them to explain this.

[Abhishek]

For me, looks like company missed to inform earlier and informing to shareholders now and at the same time, posted the results of Postal Ballot to not only calm down investors but also to give message that there is nothing wrong else SEBI would not have granted all approvals since Sep-2021. The problem is few people might take advantage of this to spread rumor and negativity and so SKR/team must provide clarification along with status update on this matter.

[Brightspot]

As per my understanding forensic audit already completed, no doubt company will clarify to investors , its good that news was not out in the September 21, investors of brightcom react to it very badly and unnecessarily create panic to bring down the price..SKR was able to bring in sebi registered F!! , that wouldn’t have happened if they find something wrong in the audit..also if they find something in the audit SKR wouldn’t have come to NDTV for clarifying investors ..here we have to notice one thing that company secretary resigned in the month of OCT, do you think he missed to upload on exchange website? just curious to know

[myainvest]

Expecting a clarification soon from company on the status of forensic audit and why there was a delay in announcing it earlier. Sebi added this share into Nifty indices from March end and gave approvals for bonus etc, – so “sincerely hoping” this isn’t big issue. But I see bunch of big guys in entire social media rejoicing in happiness saying ‘I said so already’!!. So much euphoria for all of them in knowing lot of retail in BCG will suffer if this turns real bad!! Really?? – how cruel these people must be, celebrating/rejoicing downfalls of others!

[vgsatwork]

The timing of this disclosure is puzzling to say the least, Given that currently the institutional holding is 11.56% (based on SHP of 25th Jan 2022), which includes the FPI’s who got preferential allotment @37.7 rupees along with Mr Shankar Sharma who has got preferential warrants. These FPI’s had paid up their preferential allotment money and got their shares recently and would not take any lapse in corporate governance lightly (as it used to happen before 2020 when only retail investors were there).

Having said this, this update about Forensic audit order by SEBI from 16th Sep 2021. It is the same date when BCG had a board meeting in which the preferential allotment to the FPI’s & Preferential warrant issue to Shankar Sharma were approved.

Connecting these two points, I would tend to think that this move is a calculated maneuver to edge out the retail investors in panic and let the institutional investors jump in bulk (Recent developments w.r.t inclusion of BCG in the indexes tracked by FII’s and Nifty indexes is a clear indication of enabling Institutional purchase in this counter) over the next few months with the bonus price adjustment of 40% drop is also due in another 2 weeks.

So, my reading is that this may not be a concerning update, but a calculated move to nudge the retail investors to move away from this counter. Otherwise, the FPI’s who paid 500 odd crore to purchase 11.56% shares would take the management and the board to task.

[vgsatwork]

Incidentally the Board meeting outcome update of 16th Sep 2021 wherein the preferential allotment to FPI’s were decided at 37.7 was signed by Manohar Mollama. This forensic audit letter from SEBI dated 16th Sep was addressed to Manohar Mollama. So, there is no way the company would have gone ahead and issued the preferential shares/warrants, if they had anything to be worried/feared about from the perspective of forensic audit outcome. Because any negligence on their part would invite pure wrath from these FPI’s in the form of legal actions…

[Logan]

At this point it’s all speculation and guesses and only the company or sebi can give any clarification. Doubt that sebi will do such things so it’s the company that has to inform the market/investors about this.

In the notification section in NSE, it is mentioned as “Brightcom Group Limited has informed the Exchange about Forensic Audit Assignment” so going by this it’s the company that has shared this information but if we refer BSE notification then it looks like BSE has shared this.

[Raja]

Dear friends,
Many thanks for excellent information / crystal clear clarifications by well informed members, I once again thank the admin in creating this valuable and informative group.
I read in ET few days back that RJ has entered this script and might be accumulating…with appropriate manipulation (maybe done today with some corrupt individuals in the system) THEY tried, but a timely professional reply from SR has to be appreciated.
On the lighter note…when RJ enters we can see 10x from here…maybe we deserve that valuation for our global company.
Beat wishes

[Brightspot]

There are some points to be confirmed to the investors, as per clarification by management it appears to be like auditing already started in sept itself as sKR mentioned they are cooperating with sebi in all respect since sept 20..and now they are going to initiate audit with respect to impairment of 800CR ..can someone email to IR to clarify these things? or probably SKR can arrange special conf call to investors to avoid any unnecessary panic in the market..

[hw_tw]

@Brightspot – Actual Auditing will be starting only after the Feb 25th letter from SEBI.

The initial letter was only a intimation to the company … All these days BCG was contending the matter that the audit was not required as this impairment is because of GDPR compliance and is a common practice for internet companies.

Ii is only in the abot context, the company has shared some documents to both SEBI and Deliotte. Just because it started sharing information doesn’t mean that Audit has started.

There was no need to inform exchanges on Sept 11th as the matter was not finalized and only talks were happening

Please read the Original text again
“The company represented to SEBI that the said audit was unnecessary because several internet
companies had to take such charges globally, owing to the GDPR norms.

Since September 2021, the company has extensively cooperated with SEBI and the Auditor, in
this regard, by supplying volumes of data, such as below:”

This confusion is because the company has shared only the Sept 16th letter and not the Feb 25th one … I am not sure for the reason behind it … Probably the final intimation was in the form of mail chain with some other information which is not relevant for investors and BCG might be waiting to receive physical copy to be shared to exchanges

[Logan]

Asset impairment is common in product based companies and I’m sure Deloitte will understand that. Even Tata Steel, Tata Motors impaired assets worth tens of thousands of crores.

Being a holding company that has many subsidiaries, there’ll be more related party transactions and some will see it as a negative which really isn’t if people understand the structure of the company. All the bank debts were paid by the company which it received from the subsidiaries which were taken as unsecured loans. The other alternative is that the subs pay dividend to the parent company which will be taxed. Most of the companies take loans from their subs or subs take loans from their parent company.

The problem with these type of audits is that we’ll not know the duration of it. Suzlon had a forensic audit last year but the price was in single digit so that didn’t have much impact. Sun Pharma also had a forensic audit done. These things won’t matter to large cap stocks whereas for small caps we can’t know the impact. Some company named Binny Limited also had a forensic audit intimation by sebi in November and it didn’t have much impact on the stock.

The management should be more proactive and should engage with the shareholders regularly and allay concerns. Maybe as @brightspot mentioned, they should arrange a conference call or the CEO should go on live TV and clear confusions.

[Brightspot]

Message from MMB Brightcom Investors group: Since you have an ongoing relationship with SKR for the conf calls, you should take the lead in arranging one now rather than everone emailing him or tweeting. Please add the following questions to what you also may be planning. 1) What date did you reply to SEBI. 2) What date did you start sending data to the auditor 3) Have they audited the accounts of the subsidiaries. 4) Is the audit completed, if at all someone intend to contact SKR please add these questions..

[Brightspot]

Suzlon also got notification for audit last year, but we as investors didnt give attention to that notification, trading was normal on that day..like Logan pointed out, in penny stocks people tend to overreact so it would be nice SKR arrange conf call , we know company is not doing anything wrong but this conf will be for those naysayers

[Author]

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