[jmathew]

agm

[jmathew]

Merry Christmas to dear all. My prayerful wishes to you and your family.

Bamboo/OAK tree BCG is all set for a massive up move. Positively all the issues (including pledge share release) will be resolved before the Q4 result. We can expect a consolidated EPS of Rs.6 in 2020. I expect good growth from this quarter onwards. (don’t forget as per SKR 25 to 30 % growth after LOI). The average Industry pe is 28. So, BCG should move very fast towards its fair value. Expecting some good developments in AGM. Peshaw’s presence in this AGM will boost the investors’ confidence. Also, as per the latest research report, 5 years expected target is rs 187 (which itself is a massive gain, investors can blindly buy and hold), but I believe BCG can easily trade above Rs 200 plus by Q4, 2022.

[jmathew]

A few of my thoughts are below
1.Well planned entry of Peshwa, probably he is the mastermind behind the PO allotments.
2.PO allottees may pay the full amount once the PO is approved. Maybe that is the agreement.
3.So, the company will have a full PO fund for expansion plan (Looks like they have some big plan in the Indian market). They may even close Daum using this fund. Lycos will add around Rs. 3 to book and eps too. (I may be wrong in this)
4.As per the report from Rathi-b and team I understand LOC is a done deal and expect the announcement during AGM or immediately after US holidays over.
5.25 to 30 % growth once LOC is available.
6.Looks like Axis is closed as per yesterday’s price action.
7.Company will be debt free and interests paid for the loans will be added to the EPS.
8.They will correct the books and EPS and eventually we will see eps moving to double-digit.
9.Promotors + top 15 investors/group+ new PO allottees will be holding more than 80 percent of shares.
10.I believe BCG will be the share of the year 2021.

[jmathew]

It is clear that promotors with the support of operators want the share to trade below Rs.7 till AGM. Only after the AGM (PO approval) they will allow the shares to go up. I am sure LOC is approved and the Axis is ready to close. But if they announce it now then the price will shoot up and they have to give justification on PO allotment. So, we can expect the news only after the AGM. They may release Axis news a couple of days before AGM. 10 more trading sessions before AGM.
Once the issues are resolved, they will adjust the book, and EPS and BCG is going to be the share of 2021. Stay away from negative comments.

[jmathew]

Even though the PO allocation is totally against my expectation I believe this is a very good calculated move by the promotors.
1.Top 10 from the new list will get around 28 CR out of 34CR.
2.Most of them will be close to promotors and may stay invested for a long
3.They may also buy more now. (maybe holding good numbers already)
4.I believe companies priority is to close all outstanding issues ASAP.
5.Axis is a done deal.
6.If LOC get approved in this month (as per last CC SKR is very confident of getting LOC in this month) then we can expect Daum closure in JAN-FEB 2021
7.Worst case it will be closed with PO money and BCG will be debt-free
8.Lycose book value and EPS will be added to BCG (I am not sure about it but may add rs 3 to 4 tp BV)
9.Pledge shares will also be released along with the above
10.EPS will come down to Rs. 5 range.
11.If BCG can report 10 to 15 percent growth in Q3 and Q4 then the dilution is not a big deal at all. (I strongly believe we will see good growth in coming Quarters)
12. If we see the shareholding pattern top 15 groups are holding around 73 percent of the shares and the top 2000 holds 90 % of the shares. Please refer to page no. 92
13.Stock is under the full control of promotors and operates as they want to grab as much as possible at a lower rate but they are not able to do it as per the SHP 19 and 20
14.It is a blind buy at this stage for the short-term target of Rs 7 to 8 (30 to 40 percent gain)
15.I expect a huge move immediately after AGM.
16.All the above is just my view and I may be wrong.

[jmathew]

@m4max1979, thank you very much for correcting me. Great Even this “Promoters + top 15 investors hold 36.76 + 35.78 = 72.54 % “looks very good. Also, out of 13.80 CRS (27.2%), a good number will be with the top 1000 investors.
In my view, operators and promotors are fully controlling the price. LOC is the key; LOC means the book is clean and receivable is correct. I believe Axis is a done deal and it is just a matter of time. hopefully, we can expect two positive news ( LOC and Axis closure ) at any time from now and Daum settlement in a couple of months. Price needs to corrected to minimum book value if not EPS x average industry pe.

[jmathew]

If we go through the Sep 2020 SHP, 55.18 % of the stocks are with the top 15 investors/group
708, NRI -> 11.5%
237, Bodies and corporate ->12.69 %
PRAVEEN KHURANA -> 1.1%
RAJESH GOENKA -> 2.6%
PRIYA PRAKASH -> 3.63%
GEETHA PATHEJA -> 1.01%
N ANIL KUMAR -> 1.53%
PRABHAKAR REDDY NARAPAREDDY -> 1.1%
AKG FINVESTPRIVATE LTD -> 4.99%
Uno Metals Ltd -> 4.99%
Overseas corporate bodies -> 4.69%
MUSKAAN LIMITED -> 4.69%
Clearing Members -> 0.48%
Trusts -> 0.14%
Employees -> 0.04%

Please check the link below.
https://www.moneycontrol.com/bse/shareholding/shp_public_shares.php?sc_dispid=LGS#LGS

Promoters + top 15 investors hold 36.76 + 55.18 = 91.94 %

The remaining 49000 investors hold only 8 % of the total shares. (total Shareholders 50496 as per Sep SHP)

[jmathew]

@Rathi,
I agree with your views, but I strongly believe BCG can reach fair value very quickly once the major issues are settled.
One more point to be noted is around 52 percent of the stock is with the top 12 investors/group ( 708 NRI -> 11.5% and 237 Bodies and corporate 12.69).
So promoters + top investors hold more than 52+37=89 %
Please check the link below.
https://www.moneycontrol.com/bse/shareholding/shp_public_shares.php?sc_dispid=LGS#LGS
The remaining 49000 investors hold around 11 percent of shares. ( total Shareholders 50496 as per Sep SHP)
I expect a couple of good news at any time from now

[jmathew]

@ RAMGANESH.
Source Money Control. This is not a buy or sell call.
Affle Vs BCG (Just for comparison only)
Affle FV(10), Price Rs. 3140, EPS Rs.32.32, PE 97.3, and BV 90
BCG FV (2), Price Rs. 5.4, EPS Rs. 9, PE 0.60, and BV 56
If we split Affle FV to Rs.2, then Affle share price will be rs.630, EPS 6.5, pe 97.3 and BV rs.18
Personally, I am looking for LOC, ASAP and expecting it by Mid Dec 2020. LOC means the account/book is clean. There will be some specific reason for not closing the axis and I believe it will be also closed very soon.

The average industry pe is 27, so once the issues are settled, we can expect BCG moving quickly to pe 20 plus if not more.

Again, as per my understating more than 85 percent of the shares with strong hands and promotors are controlling the price with the help of operators at the moment.

[jmathew]

It is true that the price is not moving up and the share is not trading anywhere near to the fair value (ie eps 9 x pe 20 plus)
But I am confident that LOC will through before mid of Dec 2020 and AXIS will be closed anytime from now. We just need to wait for some more time as we know the share is under the full control of promotors and operators.

[jmathew]

Sir, I belive you have a valid point. I think skr is confident of getting loc before 31st Dec 2020 and will close axis anytime from now. Promoters may start buying too.

[jmathew]

I think BCG has reached an agreement with Axis for the closure of the Loan. They announced that the Q2 result will be declared on Nov 12, immediately after the last NCLT hearing. In the last two quarters, the result used to declare very late. I hope LOC also will be finalized before the result.

[jmathew]

#9112 @Admin, Sir Thanks a lot for creating this platform. Thanks a lot for your support and thanks a lot to all the members.
It is true that the share price is not moving anywhere near our expectations. I never expected that BCG will trade below rs 10 after it crossed rs 12.
Let us hope that the Axis loan will be closed very soon and LOC within the Q2 result. Truth is that OMS alone can fetch a market cap of 3000 cr or more. Keep a cool head.

[jmathew]

I understand YMA will back to BCG once Daum is settled. Please share your views.

https://www.bseindia.com/xml-data/corpfiling/AttachHis/99e26139-a316-428a-bfa2-901648ab5bd4.pdf

The Company’s FY2019 revenue is $368.8 million, which represents a 1.9% decrease over the FY2018 revenue of $375.9million. This decrease in revenue is primarily coming from decrease in YMA revenue of $13.6 million countered byincrease in OMS contributing $6.1 million, followed by Dream Ad Group increase at $3.2 million. The YMA Consolidated subsidiary which holds the LYCOS brand, has been handed back to Duam Communications in a court receivership, pending a final acquisition payment. It should kept in mind that the consolidated revenue only decreased marginally
even after removal of the revenue from an entire subsidiary

[jmathew]

• Pledged shares in sep 2019 was 11.8 crore
• Pleaded shares in sep 2020 is 5.95 cores (huge positive)
• We know OMS is a fully owned subsidiary of BCG and generating around 38 % revenue and audited by E & Y.
• We know AXIS closure expected at any time
• We know LOC approval is in the final stage along with the consolidation of 12 subsidiaries
• Only two major issues are pending Axis and LOC ( Daum will be closed after LOC).
• G group is holding around 15 Percentage of shares
• OAK exited and no more selling pressure for OAK
Dears Just relax and wait for the story to unfold.

[jmathew]

I believe we are very close to a huge up move. Axis will be closed at any time. We know BCG’s book is clean and LOC will be the answer to all those who are doubting profits and sales. I expect all the outstanding issues will be resolved before the Q2 result and BCG will trade near to the book value by Dec 2020 and pe x 10 by May 2021. Time to add more shares.

[jmathew]

Logan Sir, can you please share your view on the below points?
1.Even though promotors plus top 13 investors/groups hold around 90 percent of the stock why BCG is still trading below 1 p/e.
2.Is there someone controlling the price, as they want to corner more shares before some biggies or DII enter?
3. On the last couple of notification, we have noticed CS signature, any specific reason for it?
4. Retail investors have increased by more than 25 percent but total holding decreased by 5 percentage any specific reason for this.

Note: I entered BCG when it was trading at 19 and my average buying price is rs 6 now. I very much believe BCG will find its fair value in the coming months but the current price action is a big concern.

[jmathew]

Dears, is there any kind of well-planned price manipulation going on? If we look into the June shp, 51 percentage is with top 13 investors/groups (including NRI, bodies, and cooperates). This is without oak holding during that time. Also, from May to June the number of retail investors increased from around 30 K to 41 K but the percentage of the holding decreased from 4.7cr to 4.3 Cr. Please share your views.

[jmathew]

Last year August BCG was trading around Rs 3 to 3.5 range with lots of uncertainties. There was no clarify on OAK, Loan to Indian Banks, Pledge shares, Daum settlement and Subsidiaries.
Now we know that
1. OAK exited. (let us wait for official confirmation from the MGT)
2. Loans to Indian Banks (we know that only Axis is pending now and it will be closed soon). I believe Axis is a done deal.
3. Pledge shares are reduced from 59 percentage (in Sep 2019) to 33 or less as per June 30, 2020 SHP and more will be released once Axis is closed.
4. Daum closure (last stage as per the company’s discloser to the exchange). I believe it is a done deal.
5. US subsidiaries consolidation is done with the help BDO world’s 6th largest auditing firm.
6. Israeli subsidiary is fully audited by E & Y (around 38 percentage of the total income)
7. LOC is approved and due diligence process is underway as per the last con call. Once LOC is available 20 to 30 % more growth is expected.
8. New investors please go though the last CC. https://finance.yahoo.com/news/edited-transcript-lycos-nse-earnings-211340403.html
9. BCG is trading @ pe 1, where the average industry pe is 23
10. Book value is 55 plus.
11. Total income is around 2800 cr and profit is around 400cr
12. BCG is highly highly undervalued (as per my view)
13. Please do your research before buying or selling BCG.

[jmathew]

Affle is trading @2170, Consolidated book value is 90 and eps is Rs.26. If they decide to split the share to FV 2 then the price will be around Rs 430( eps 5.2 and book value 18).
BCG book value is Rs 55, eps 8.67, and trading below its eps.
BCG is highly undervalued and I believe LOC will be the game changer and it will take the price above the book value. SKR needs to close the axis issue and Daum asap.

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