General Discussion

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  • #13832
    Logan
    Registered Boarder

    There’s an article on BCG in the morning context website. In that they’ve given some details about the forensic audit and why it was initiated by sebi. I read it today and will share the article by this evening or tomorrow or by the weekend. To read it you’ll have to subscribe to it (399 per month which is a total waste of money). It was actually published in March but I came across it only yesterday. I’ll copy paste it when I get time (as I’m too busy now) and will share it with everyone.

    #13834
    hw_tw
    Registered Boarder

    My views on recent March SHP

    Negative
    – Promoter reduced stake by around 1.5% overall … this is not a good sign

    Positives
    – Pledge percentage decreased
    – FII / FPI percentage Increased

    Future Hope
    Similar to the recent event of SKR becoming partner of 4 LLPs there are chances of he becoming partner in other LLPs too and eventually increase promoter percentage … this is just a guess, we need to be careful till that time

    #13835
    Brightspot
    Registered Boarder

    @hw_tw, do you mean to say, promoter sold without disclosing to exchanges? where is the disclosure?

    5+
    #13836
    chris
    Registered Boarder

    Some confusion regarding the SHP, actual shares of both SKR and Vijay Kancharla have been reduced to a fraction.
    Waiting for a clarification from the exchanges or company regarding the same.

    5+
    #13837
    Logan
    Registered Boarder

    These type of actions by the company/management is the reason investors give complaints to sebi. The management/promoters are negligent or careless or too lazy.

    In the conference call and even on live TV the CEO said that the promoters haven’t sold a single share but in the SHP it’s looks like that’s not the case. Individual shareholders’ holdings have also increased.

    This is really bad governance.

    #13838
    Brightspot
    Registered Boarder

    What about LLP acquisition? is it reflecting in the shareholding or it will reflect in next SHP

    2+
    #13840
    odysee
    Registered Boarder

    All the good work done by the management over the last many months that changed the perception of the investing community in such a huge positive manner can be undermined by one perceived careless or sloppy mistake by that same management.
    Having said that, I still believe that this was an ‘unforced error’ and a perfectly reasonable explanation and rectification should be forthcoming shortly.
    All the more reason that the two important vacancies of CFO and CS be filled up expeditiously.

    #13841
    Logan
    Registered Boarder

    As someone pointed out in MMB, the total traded shares from Jan 25th till March 31 was some 10-12cr (rough estimate). In the SHP promoters holding has come down by 18cr shares. Even if we take till this Thursday the total traded shares won’t be more than 18crs.

    All the shares traded from that period can’t be of promoters because we had the forensic audit news also because of which many people sold shares. Maybe the reduction is because of off market transfer or an error from the company’s side.

    The company is no longer a micro or a smallcap and the management people have to take things seriously. Sometimes it seems like they have a careless attitude towards the market/shareholders.

    #13842
    Brightspot
    Registered Boarder

    Logon, when you have time please copy paste the content from morning context website. so we the details about the forensic audit and why it was initiated by sebi, thanks for your time

    #13843
    vgsatwork
    Registered Boarder

    Follow up to my earlier post #13816

    As I had mentioned, the increase in total number of shares held by promoters by only about 3.9 lakh shares despite the 4 llp’s now being listed as promoters.

    Latest share holding pattern raises more questions than providing the required clarity.

    1. I do not see Vijay Kumar Kancharla’s share holding being classified as non promoter or public. In that case, what happened to his shareholding? Has he sold them in open market? If that is the case, where is the update to the exchange with respect to the sale of shares by promoter group? This would be an unforgivable lapse in terms of corporate governance. This could potentially damage all the good will that the company has earned in the last 1 year or so. The shortfall is not a small number. It is some 18 crore shares and given that the market price of the share was around 100 rupees or so. That’s 1800 crore – give or take few hundred crores. Sale of such magnitude not getting reported to the exchange would put the promoters in deep soup with the regulators.
    2. An explanatory update should have been included by the company highlighting the changes and the background for the same. Absence of which makes this entire transaction a shady one.
    3. Also, there is no indication as to when the purported sale of 18 crore shares took place as there have been a price sensitive update w.r.t forensic audit was announced to the exchanges by late February by the company and the last published SHP of the company was on 25th Jan before this update. So, purported sale is potentially an insider trading activity while there is a price sensitive information (forensic audit) was not updated to the shareholders, but was known to the management.

    This very serious lapse from the company and I am changing my long term stand on this stock and going to liquidate my holding first thing Monday morning

    7+
    #13844
    akkithegrt
    Registered Boarder

    hello vgsatwork,

    How can promoters sell shares when only 13 crores odd shares were traded in that period.18 crores shares cannot be sold in open market in that period right,if only 13 cr shares were traded.

    #13845
    vgsatwork
    Registered Boarder

    It could have been an off market transaction which would never get reported as sale in exchanges

    3+
    #13848
    akkithegrt
    Registered Boarder

    see from 2010 there have been some rules through off market as well,I think following should be noted-
    1)If promoters have sold through off market they would need big investor to purchase it,we are talking about 18 crore shares .The big investors who are purchasing share worth say at 100 are about 1800 crore transactions. I don’t think this is possible.
    2)Say in worst condition if promoters have done so,it is mandatory to inform exchanges.
    3)It would have better for promoters to sell in open market as the shares would have been easily absorbed due to demand.

    Off market is definitely ruled out..!

    #13850
    odysee
    Registered Boarder

    @vgsatwork, since you will be exiting the BCG stock on Monday, I presume you will be exiting this forum too.
    We will miss your comments.

    #13852
    pradeep
    Registered Boarder

    My guess, instead the promoters have removed the individual shareholding from promoter group and holding the same in public category

    3+
    #13853
    hw_tw
    Registered Boarder

    Listing out some questions which are running in my mind over the weekend and the answers I am getting at this point of time

    Q: Has the promoter REDUCED stake
    A: Yes

    Q: Has the promoter SOLD shares in open market
    A: Yes and No basis different theories floating around …

    When we look at whole 18 Crs shares this makes it impossible to sell them in open market where the total transacted shares itself is only around 12 Crs

    When we look at stakes separately of each Individuals / HUFs and other firms it could be that some transactions might have happened in open market and some in other routes like Share swap, Offline transactions or just moving out some existing promoter as non-promoter

    Q: Have they reduced stake from 22.4 to 18.47 as reported in Money control or it’s 19.74 to 18.47%

    A: It is actually from 19.74 to 18.47% … note that the reduction from 22.4 to 19.74% is due to increase in total no. of shares because of new preferential shares issuance to some LLPs along with Mr. SS plus MediaMint

    In total the reduction is 1.27% … this might be significant for some and not so for some

    Q: Why is this not reported to exchanges before … Can SEBI take some serious action on it
    A: Reporting has to be done indepently by the party who did it … It’s not the duty of SKR to report on behalf of other promoters

    SKR has reported it directly or indirectly (whichever way we take it) on Apr 5th while updating LLPs acquisition and further inclusion as promoters

    SEBI can put a penalty plus some fine basis the loss caused to investors … SEBI had penalised Redmond Investments before for not reporting their transactions

    https://www.sebi.gov.in/enforcement/orders/feb-2020/adjudication-order-in-respect-of-redmond-investments-limited-in-the-matter-of-ybrant-digital-limited_45987.html

    This also tells us that some of these Promoter group entities are totally not in control of SKR / VK and we can’t link their actions

    In this case too they might put some penalties if proven that they have not reported it irrespective of whichever way the transactions are done

    Q: Is this reduction in existing stake linked to their business … are the numbers going to be bad
    A: Largely No … SKR published this new presentation at this point of time to address this concern and let people know that business is as usual… given that this reconfirmation of 500Cr FCF came after Q4 we can be rest assured that Q4 revenues is in-line

    Q: Is this reduction linked to future earnings … are they expecting some drastic reduction
    A: No, in that case why would they increase the stake back and bring in the LLPs as promoters

    Q: Is this reduction in existing stake linked to FA … are they expecting some huge impact
    A: Probably and partially No … As we can see above that business is not impacted and most importantly the reporting mechanism is not going to change in future that would impact topline and bottom line numbers

    Also we need to recall Mr. SS’s full payment

    Q: Why have they reduced existing stake first and increased it back with new stakes from LLPs … What was the need to do this Rejig
    A: I guess this is the most important question everyone need to ask themselves and seek answer for

    I might be totally wrong in this … My guess is that SKR has done it to protect the company from any HOSTILE TAKEOVER by any third parties acquiring these LLPs and other new LLPs as well or by any other route … Since the cash required for it is huge, SKR and few other promoters might have taken this option to part away with their existing stake and get some cash and use it to acquire these LLPs (I guess Satyamite mentioned this too)

    Q: Is there a chance of increasing stake in future
    A: Probably Yes … basis Satyamite’s logic it can go around 24%

    The other option is to get into these fresh Preferential allottee LLPs assuming that they have enough funds left (atleast VK’s portion) to purchase this stake

    Or include some of these large Individual Investors as promoters … We all know that Mr. Subrato Saha ex director holds significant stake both individually and through his firm … Given their friendship isn’t it simple enough for SKR to make him as promoter … Even if not done he is still as good as promoter holding his stake … Similarly there will be some more other investors like Mr. Peshwa Acharya’s family who can be included in promoter group

    Or they could openly purchase from the market
    ———

    Selectively picking up and linking some events like Stake reduction, FA etc; might not give us correct picture, especially ignoring other events like Significant stake increase back through LLPs, MR. SS’s investment, Business intact, Acquisitions intact, Numbers, FCF intact, Possibility of future Stake increase etc;

    As small investors we might not get answers for some of these questions in future too and thus puts us as the most riskiest lot of investors … It is important that we listen to everyone’s point of view and try to ask more right questions and be open and take our investment decisions basis our individual risk appetite

    Note that these questions are important and these answers are just my views at this point of time basis what I am reading / understanding at this point of time and subject to change as things unfold and I might end up not even expressing it over here

    #13854
    vgsatwork
    Registered Boarder

    Yes. I will stay away from this forum once I liquidate my position

    1+
    #13855
    Brightspot
    Registered Boarder

    In the list of institutional investors, happy to see INTERNATIONAL MONETARY FUND (IMF) also lol.i would expect some big investor like Shankar sharma invest in BCG thats why new investors presentation was prepared and published last week , nowadays its mandatory for companies to publish the presentation to retailers (via exchange) which was created to share with institutional investors as per new sebi rule..expect fireworks in BCG soon

    #13856
    vgsatwork
    Registered Boarder

    SHP between 25th Jan & 31st mar shows the reduction in the number of shareholders by these people who are part of the promoter group
    1. SKR – Holding reduced by 8.37 crore shares. He had separately bought 4 LLP’s, but they are listed in the LLP name itself and hence the stake buy in LLP is included and 8.37 crore of his original share holding is gone
    2. Vijay Kumar Kancharla – 5.82 Crore shares reduced
    3. Redmond Investments – 3.09 Crore shares reduced.

    There should have been 3 update/notice respectively from SKR, VKK and Redmond investments w.r.t to their share sale as per the insider trading & SAST regulations, but we haven’t seen any. So, we do not know the date/mode of sale and also the consideration for which it was sold.

    This is my last post in this forum and I am signing off from this. Good luck to you all with your investments

    #13857
    Brightspot
    Registered Boarder

    New Delhi: Capital markets regulator Sebi has removed certain disclosure requirements for acquirers and promoters of companies. The Securities and Exchange Board of India (Sebi) has amended the takeover regulations because of the implementation of the System Driven Disclosures (SDD).

    Under the new rule, certain disclosure obligations for the acquirers/ promoters on acquisition or disposal of shares aggregating to 5 per cent and any change of 2 per cent thereafter, annual shareholding d ..

    Read more at:
    https://economictimes.indiatimes.com/markets/stocks/news/sebi-drops-certain-disclosure-requirements-for-promoters-upon-share-acquisition/articleshow/85413833.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

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