General Discussion

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    Registered Boarder

    Email sent to BCG Management for action.

    Dear sir/madam,
    Please send my message to Management. I am an investor who invested IN BCG for the last 7 yrs.
    1) To give Bonus to attract new realtor investors is not successful 2nd time within 1 yr. Please cancel this strategy to recover the price of the company.
    2) E&Y is auditing 40-50% of income till today and other by local auditors. Now BCG is large cap company. To increase trustability of the Audited figure of BCG, Please appoint E&Y for the whole company which is the demand of time and also by retail investors. Few people increase doubt due to this point and create negativity and create havoc as you have seen this time in price.
    3) For acquisition you need money. Either you take a LOC of 150$ million -loan or consolidate subsidies at USA level and sell some stake. You require an authentic audited figure to work it out.
    Please consider these points sincerely for BCG’s progress.

    Registered Boarder

    @whyshares, I think preferential holders will have lock-in period for bonus shares as well. Some PW holders were allotted shares before bonus shares were issued and they still have lock-in periods.

    One example – when BCG released SHP on 1st July-21, PANKTI COMMOSALES LLP had 1cr shares (pre-bonus) locked-in and now they have 1.25crs shares locked-in.

    Registered Boarder

    Dear Logan,
    we agree that BCG has doubled its business from last 2 quarters. Now company needs money for payment. Earlier SKR said that we dont take Business due to liqudity crunch. Due to preferential allotment of shares, company got money and BCG took extra business and quarter result are showing great result. so lot money used to bring new business. Your calcualtion is right for incoming money but it is used for expanding business.
    New allotmetn of FPI more than 10crs shares brings around 330cr which is used for mediamint acquastion.
    Now Audio company acqusion BCG needs money. She willl have 500crs by 1st quarter of 23 and i agree it but what about additional payment? I think there will be short of 300crs. This is my thought procees.Coreect me if you find any mistake of my calculation.

    Registered Boarder

    @Niraj1, the CEO said in one of the calls that the main reason for issuing the warrants was to use that money for acquisitions. They may use it for business operations too but I don’t think they’ll use all that money. By the end of September quarter they had cash and cash equivalents of 227crs.

    The total money raised from preferential issue will be 529crs (37.77*14,01,50,000). I think majority of them have paid and also Mr.Shankar Sharma has paid 25% of the warrant amount which is little over 14crs. If we add these with the cash that the company already has then the total is 750crs+. If Mr.Sharma pays the remaining amount then the total will be 800crs.

    For MediaMint acquisition, they have to pay 360crs in cash immediately and 36crs later. For the audio ad acquisition, they need 715-720crs. Including the 36crs they need 1120crs and excluding it, they need 1080crs. If they generate FCF of 500crs (250+250) by Q1 then total cash will be 1300crs. If they keep 150-200crs for business or for liquidity reasons then they’ll still have the required amount.

    I don’t mind if they dilute a little to raise 100-250crs at this price. I don’t want them to sell any stake in any sub (especially OMS). It’s always better to have 100% holding in all the subs. For LOC or any loan, with inflation rising, the interest rates will be very high (maybe more than 10% interest for receivable as collateral).

    Registered Boarder

    FII share holding now 11.5% campared to almost NIL one year ago
    Very soon FII will corner more shares and there will remain very few floating shares – a recipe for astronomical rise in share price

    Registered Boarder

    A wonderful discussion with Aditya Vuchi on his MediaMint’s journey and the lessons learnt in building a 1500 people / India’s the largest Digital Marketing agency (did he said that ..๐Ÿ˜‰

    Lot of insights to learn from, whether you are a startup person or a investor especially a BCG investor … I really liked the clarity of thought he has

    Request everyone to please watch it and also share it

    Teaser … He talks about US vs India business, Services vs Product business, Market size, Profitability, People, Strategy etc;

    Registered Boarder

    Set of events from BCG in next two months

    In next one month
    – Closure of MediaMint acquisition post cash payment

    – Bonus record date announcement

    – Mr. Shankar Sharma’s balance 75% payment for warrants before the bonus record date

    – Investors presentation from SKR as stated in the concall

    – Earnings, FCF, ROE guidance figures from SKR for the next FY

    In next two months
    – Announcement of Audio AdTech company acquisition post closure of legal, financial due diligence

    We might hear some more news items like BCG inclusion in different other BSE, NSE indexes, FIIs / MFs additions, MF research reports, Leadership hiring, Product updates etc;

    Registered Boarder

    A pathetic display of unprofessional interviewing by CNBC-TV18.
    Discourteous and with no understanding of the nature of the industry that BCG operates in.
    The apparent objective was to undermine every statement and explanation being provided by Mr Reddy without any attempt to even understand the content of the answers.
    To say that I am disgusted with the behaviour and approach of the ill informed interviewers will be an understatement.

    Registered Boarder

    Saddened to see this interview. Normally, Mangalam Maloo raises for the right, but this time he seems more interested in getting cheap publicity. I do understand paying no dividend can raise a red flag. But paying low dividend cannot be a issue. Why should a promoter with low promoter holding waste money in dividend (feeding minority shareholders and government). Buyback can be best, but brightcom will not be able to afford a buyback (capital needs to allocated to growth, as well as equity size is so huge, buyback proportion will seem a joke). Not everyone can be Messiah of Investors like suppose Dr.Vijay Mallik. Trying to make paint a company as criminal, because street perceives it to be, is being fundamentally dishonest to one’s job.
    Damn sure Brighcom’s rise will burn a few asses, and will be great fun, becoming rich and seeing naysayers needing tons of Burnol. May them be hit with Thousands of Thundering Typhoons, and suffer from Billions of blue blistering barnacles!
    …Sorry, got a bit carried away in emotions…

    Registered Boarder

    The CNBC interview with Mr. Suresh Reddy is out on YouTube

    Registered Boarder

    BCG’s last 12 month’s growth + EBITDA margins is way above > 40%.

    As per the Rule of 40 for SaaS companies, BCG’s valuation should be in the range of 13.8x to 15.8x EV

    BCG has clocked 4479 Cr sales in last twelve months (LTM) … Its valuation should be in the range of 61,810Cr to 70,768Cr

    Registered Boarder

    Shares are in strong grip of some operators who desperately want to pull down the share price. One can easily observe, that whenever share price rises, suddenly the operator will put big sell order for eg, 40K order at rs.145 – it comes to around 58 Lakhs approximately for 40K volume. And it will take some time to be observed by retail – not all retail can afford to buy it. Before it gets observed, they deliberately put another sell order at 143 for 20K for example. They repeat the same things till it get locked in LC. Once the share is in LC, more retail will panic and volume will increase. Operators are doing the same since 180+ and brought it now to 140. Not sure when this is going to stop. All big players percentage are still the same as per latest shp. Sometimes, I hate giving too much shares in the hands of retails – they don’t deserve to be rich.

    Registered Boarder

    Hi All,

    This is one of the most unprofessional interviews I have ever seen . It was like a Hollywood / Bollywood / tollywood movie where the interviewers assumed themselves to b some sort of CBI’s who wanted to expose one of the biggest scams, just by asking their interview questions (should backfire them soon) . They want to become world famous overnight and want to create that wow effect. Fools don’t understand the nature of business ..nor do they compare with peers on receivables .. I wish skr asked them back some stronger questions .. like ” do you really know how much dividend Google pays ?? ” ” Have u ever seen the receivables of other ad-tech companies ??? ” .. he was too polite to them .. should have fired back some strong questions .. it’s a matter of time before bcg bounces back even stronger


    Registered Boarder

    Just a contra question
    Could it be possible that the CNBC interview was deliberatly negative, with the agreement of all, to drive share price down? The aim: to create a buying oppertunity to vested interests

    Registered Boarder

    @whyshares that would definitely affect the overall sentiment thatโ€™s been built around the share (my opinion), if you are implying that the management has willingly agreed to this.

    My opinion NO because none of these questions were new, they have been answered again and again in a lot of con calls so many times that it is exhausting to even listen to the same question. A similar opinion was aired by an anchor in a Telugu news channel who invited SKR after the acquisition of mediamint and apologised publicly. The ignorance and arrogance of holding a Mike on a platform CNBC tv 18, isnโ€™t new.

    Registered Boarder

    When you have not done a detailed study of the company, its business model and the history … you will end up with questions with lot of ambiguity … and also you will not be in a position to understand the answers provided by the other party

    Regarding question related to BCG’S biggest clients …

    BCG directly and indirectly works with different parties … Like Publishers, Media Agencies, Digital Marketers, Brands etc;

    In this context, it becomes tricky to understand what the interviewer is exactly looking for … I mean, is the interviewer asking large clients in terms of a big names across these different types of clients or only from a particular type and is the question is about large client in terms of big brand name in general or a big brand name which the interviewer is aware of (like Google, FB, Unilever etc;) or large client in terms of revenues

    SKR has answered this question with the names of Media Agencies they are working with like MediaCom, Havas, Mindshare … But the interviewer could recall only names like Google, Yahoo, Unilever which they know

    Also some of the questions indicates that they were not prepared well … Or they have a pre-determined judgement … and were also rude by not allowing SKR to answer questions … Will discuss this further

    Registered Boarder

    The question related to high receivables of 1400 Cr is actually for Sep quarter

    Foor Dec quarter this number is around 2000 Cr … It indicates these things …

    – The questions were prepared long back, but at that time the sentiment was positive with price rising and they were waiting for the right time (price falling) to conduct this interview and ask these questions just to prove their point … Also clearly visible with their tone and rudeness

    – The interviewer hasn’t bothered to update the question or was just lazy and copying it from someone’s questions list

    – Interviewer also said “there are handful of other problems as well” … indicates their pre-determined view about the company

    Coming on to the receivable days, In the last conference call Mr. YSR, CFO of BCG has clearly mentioned that these receivables are largely pertaining to the latest Q3 quarter business …

    This means there are no bad receivables … In my view, this is absolutely fine considering the nature of the business … Anyway, this will be decreasing in coming quarters as their sales come down because of seasonality of the business

    Also as I mentioned before this is actually positive and advantageous to the company compared to their peers …as now that the company is able to overcome this high working capital and receivable days requirements and is able to generate FCF too

    If you are comparing this Working Capital and Receivable Days with a Software Services company … generally they get some upfront payment and some part payments based on milestones achieved

    For example, let’s say there is a 10 Cr order … the payment terms will be like 10% upfront, 20% on milestone 1, 30% on milestone 2 and final 40% on final delivery and acceptance … The acceptance period will be for 2 to 3 weeks, post that there will be around a month for the final payment … So in most cases they will be getting final payment in the same quarter of work completion … If you calculate the he receivable days it will be one or max two months

    Also in this case there is no other working capital need apart from employee salary expenses

    But, in case of BCG their business is different and works differently … they have to make an upfront payment to Publishers to purchase inventory / ad slots … They then sell (or rather agree to consume) this inventory to Media Agencies or Digital Marketers or directly sell it to brands … the payment periods would differ for each of these parties and is higher for Agencies as they have to in turn sell it and get their payment post the actual consumption of ad slots

    The sequence of events and their possible time frames are give below … (Disc: I am a s/w person and my knowledge in this business is limited … there could be some errors in my understandings)

    – BCG purchases bulk inventory / ad slots from FB … Day 0

    – BCG sells a portion of this inventory to Media Agency … Timeframe 1 to 7 days as they would have already purchased it basis prior inventory demand from Agencies and other customers

    – Agencies sells this inventory to Digital Marketers or Brands … Note that these transactions between BCG and MA, DM and Agencies are not actual sales, they are just agreements allowing brands to “consume” their inventory … Timeframe of 1 to 2 weeks

    – Brands / DMs run a campaign … Timeframe of two weeks to more than a month depending on type of campaign

    – Final result is evaluated in terms of actual consumption, quality … the real consumption is agreed between the parties … Timeframe of week or two

    – Invoice is raised at the end of campaign or for a set of campaigns at the end of month or quarter and the payment is received in few weeks to month post that

    Note that payments are received from Brands to DM first … Then DM to MA … Further from MA to BCG and again there is a time delay from invoice to actual payment between these parties

    As you can see above the time delay is because of multiple parties involved and the final payments are happening only after the actual consumption of the inventory and not on mere agreement of consuming it … All this also leading to high working capital as explained by SKR

    Hope we understand and agree why BCG has high working capital needs and high receivable days

    In other real world metaphor … Its like a Rice Miller getting paid after the end customer has actually consumed rice … ๐Ÿ™‚

    In more detailed explanation … Its like a Miller purchasing it from farmer at a discounted rate with upfront payment … Miller then sells it to wholesaler … who in turn sells it Retailers … who inturn sells it to end customers … and the customers pays back ONLY after Consuming rice at the end of the month provided feedback / quality is matching to initial promise by the retailer

    Imagine the amount of working capital requirement and receivable days of the Miller in this business scenario … ๐Ÿ™‚

    Registered Boarder

    Why there are no MF investments in your company?

    Are we looking for a validation that if MFs are investing then company is good otherwise it is bad?

    Please also ask yourself some other questions

    – Why foreign investors are investing and why Indian MFs haven’t yet entered in big way … are FIIs bad judges of stocks

    – Why ICICI Prudential has entered recently and why not before at lower price … Is ICICI a bad judge of stock picking and other MFs are good or vice versa

    – Why Mr. Shankar Sharma has invested and why not others

    – What about MFs who have invested in many wealth destroyers like Unitech, Suzlon, HFCL in 2000, Reliance Capital, Communication and all ADAG stocks in 2000s … there are many others which MFs have invested when the stock prices are in peak and with high valuations … One more example of all recent IPOs with abnormal valuations and heavy investments of MFs in these companies and in the process also luring lot of innocent investors who are relatively new to the market, initially in the form of IPO and later in the form SIPs … Who would take responsibility for this debacle

    “MFs are subject to Market Risk”

    There is no guarantee that MFs are risk free and would invest only in good companies … There are many funds which have destroyed wealth too, but no one talks much about that

    Same is the case with Marquee or FII investors too

    There is never a guarantee that investments by any of these parties means this company is good otherwise it is bad

    If you believe that MFs are zero risk and you want to invest only when they had invested please continue doing so and stay away till your event is triggered … but don’t assume and paint a picture that the company is bad just because someone has not yet invested

    Listen to everyone both negative, positive and balanced views from people like Logan, CI, Headstead and many others … But, in the end you have to make your own investment decisions … don’t live on a borrowed conviction

    Registered Boarder

    Clarification BCG has filed in the BSE website regarding the negative interview on CNBC TV18 two days ago

    Registered Boarder

    Excellent clarification. It clears all naysayers doubts.

    Extremely happy with BCG and faith in Mr Reddy is getting stronger and stronger.

Viewing 20 posts - 4,361 through 4,380 (of 4,589 total)
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