[sandyc316]

@buffet Don’t think the SCORES portal holds much importance in this regard. Or else every board resolution for even big companies like TCS and Reliance etc can be delayed or held up by miscreants by filing thousands of complaints. The warrants issue has been passed in the AGM of the company and all that SEBI should check for is that none of the entities are barred from capital market or otherwise not fit. This alone can take some time given the list of entities is so long!

[sandyc316]

Thanks @j-bedi got it! This is the video if anyone is interested:
Rakesh Bansal studying BCG

As for dividend I feel there’s a 30% chance of dividend getting credited this week, 60% chance for the week after and a 10% for 25th. Let’s see.

[sandyc316]

@J.Bedi Can you please share a link or something for the same?

[sandyc316]

I’m also curious to know how and why did the Goenkas leave so suddenly? From a script that they’ve been tormenting for more than 5 yrs! Were they really driven out by the new players or were they retired once their purpose was served (as someone mentioned in Moneycontrol)?
Btw, BHAVIN Y MEHTA has reappeared today… maybe he likes trading in BCG. His company ALPHA LEON ENTERPRISES LLP has done bulk buying and selling today.

[sandyc316]

SKR’s latest article in Hans India:
https://www.thehansindia.com/business/anywhere-operations-the-new-tech-trend-of-2021-663866

[sandyc316]

lol! @Rathi_b I’m sure we’ll all happily agree to help you start that cafe!

[sandyc316]

@odysee You can not take that argument to the outside world and make it stick against the promoters. Thats the sad reality.

Unfortunately even though for us, the long term investors, the confidence in promoters is shaken and maybe received irreparable damage, for rest of the market nothing changes. It will not lead to the market valuing the company any lower than it currently does.

Only because we’re so emotionally invested that we can feel the betrayal that nobody else can.

[sandyc316]

For long time investors it’s shocking!.. feels like a move like Demonetization, a surgical strike (not sure on whom… maybe Goenkas?) which brings a lot of pain and hurt. But the promoters have thought this through because for someone who is watching from outside they might not see much wrong in this –
1) The warrant price is at 55% premium to the current stock price. That is very good premium. Not the promoter’s fault that the market has set such a low valuation.
2) The money that is being raised is equal to the current market valuation of the company! How did the company find investors who are fool enough to put in money equal to market cap of the company? Incredible job by the promoters!
3) If Reliance were to issue warrants at Rs. 3100 (at 55% premium assuming cmp – Rs. 2000) equal to the market cap of Reliance, how would the market react? Will investors feel cheated?

[sandyc316]

What’s disturbing and comforting at the same time is the fact that the promoters can and do control the price when required. Clearly the price had been kept in check for the last couple of months for the sole purpose of warrants. Will it be taken to new highs now? well, we’ll have to wait for that.

[sandyc316]

Does anyone have any idea if the OAK selling is over or how many shares are still pending? Is there any place that we can look that up?

[sandyc316]

@Rathi_b Since you’re following the Axis bank case, as per my understanding of the latest judgement, I feel this is exactly how Mr Suresh had explained in the conf call – Axis Bank, in-spite of there being an ongoing case for debt resolution, has unnecessarily filed this case in NCLT. To me, this is also probably one of the examples of why we should trust what the CEO says.

Hope for a speedy resolution for this. Can’t wait for the day when all the overhangs caused by these small issues is gone for good and we’re looking only at the bright road ahead!

[sandyc316]

I hope the issue with tax is the old legacy issue and not a new one (Company has had some ongoing issues with Service Tax and Income Tax dept after the merger). Just to point out:

From the last 4 years ARs (2016 – 2019):
“Financial Risks: Tax Issues: the Company has had a few income tax and service tax cases against it, which, if lost, may impact future cash flows. However, none of these is material. “

From 2018 full year financial report as mentioned by P C N & ASSOCIATES:
“The Company has outstanding undisputed statutory liabilities towards
income tax to the extent an amount of Rs. 6,72,07,539/ -“

Compared with 2019 full year financial report as mentioned by P C N & ASSOCIATES:
“With respect to Income Tax, TDS the company is not regular in depositing with appropriate authorities.”

Hope this is just a rephrasing of last year’s statement by the auditor.

[sandyc316]

Hi @headstead your statement gives a lot of confidence and I completely agree with you that there’s a lot of catching up that needs to happen even for the current business. I do hope to see that happening in the next 1 year. If everything falls in place perfectly then it’s going to be a fantastic year ahead for us!

[sandyc316]

Hi @headstead I’ve been thinking about the future of the company – in terms of short-term (say 6 months to 1yr) and medium-term (say 2-3 yrs from now)

My take is that the covid pandemic is going to give us a boost in the short term as you also mention. On top of that, as per Suresh, with the LOC coming in, we could see a 25-30% growth in topline immediately. So the next 1 yr could turn out very well for us.

However, beyond that I feel a lot will depend on our execution – be it on updating our technology and tools in DM or getting meaningful contribution from future technologies. While I trust the management to deliver on DM, the vertical of ‘future technologies’ is an un-chartered territory and that makes me wary and hopeful both at the same time.

What are your thoughts?

[sandyc316]

Can someone do an analysis of the latest shareholding pattern published today i.e. 02/07/2020 ?
I see somebody named Anil Kumar now listed as holding more than 1% of shares and along with Praveen Khurana and Geeta Patheja holds more than 5 million shares.
Also, Oak shares stand at 1.85 cr.
What about the Goenka group? Increase or decrease? What about NRI shareholding?

[sandyc316]

This is a wonderful news! Thanks for the update @admin

[sandyc316]

Even though a lot of us think that bringing in a top auditor for the Indian parent will bring credibility to the numbers, I feel that the management does not see it that way. Here’s what I think about the management’s thought process:

– The Indian parent’s profit is a very small fraction of the overall profit and hence bringing credibility for that will not impact the overall valuation much. The credibility has to be brought to the consolidated numbers. The management probably thinks that consolidating all subsidiaries into 1 and appointing a top auditor for the same should work and I do see some merit in that thought process.

– Secondly, if a LOC can be secured for the consolidated business then that can go a long way in showing the market that the business is valued highly outside India and again I’m sure we would all agree with the management on this.

– Thirdly, and probably a very crucial part of the management’s thought process, is improving cash flow. A business which has nil or negative cash flow can seldom be the market’s darling. Imagine this – If the company for the current year had posted a positive cash flow of 160cr (instead of 16cr) and announced a dividend of 50 paisa as 15% of that(instead of 5 paisa), then I’m sure a lot of market participants would see value in the stock. I think the management would have done there maths and they believe the LOC would help the company in improving the cash flow. I don’t know the math here or how it works and I’m willing to go with the management’s take on this.

– Fourthly, is bringing in growth. For the last 5 years we’ve not seen much growth in the business. Only when there’s growth, we can expect a cashflow of 16cr to grow to 160cr or 1600cr for that matter. I think the management believes that getting the Lycos brand back and securing the LOC can both help in pushing for growth next. I’m skeptical about how much the Lycos brand is going to help us and I do hope the LOC is not used for further acquisitions immediately. This is something that has to be executed very well and will be very critical for the future prospects of the company.

– Finally, the issue of pledged shares is probably the last in the pecking order for the management as those are for some personal loans and may need a bit of time before all of it can be free.

[sandyc316]

A point to note: The Menasa Research report does mention a Discount for lack of marketability of Rs 1,092 cr. for Subsidiary Companies Shares. Think the company has accounted for this as well in the write-off.
Everything should be clear once the management provides the explanation.

[sandyc316]

@VALUEBUYER001 But also, I think, more than anything, it goes to show that the company is deeply under valued! If the market cap were 5000cr i.e. a share price of rs. 100, will that be less shocking? Either way, we need clarity on this.

[sandyc316]

We should also check with the management how is this pandemic affecting the company operations.

1. Do we see any de-growth in the next couple of quarters?
2. Have any employees been fired or salaries reduced?
3. Also, if international travel is banned, when should we logically see Daum getting settled? End of this year or March next year?
4. Has the Covid-19 pandemic also affected the BDO audit? Do we see any change in timelines there? Will that be complete by end of this year or March next year?
5. One good point is that the standalone has been contributing positively for the last couple of quarters. Would the trend continue for the next quarters or will that be hampered because of this pandemic.

[Author]

Posts