[Sobha]

@explorer, please avoid blames against others. Anybody can charge against anybody else with such blames. But many times whoever are unnecessarily criticised are genuine investors and with some good information.

Somebody can criticize you also…. as if.. you want to prevent a genuine information as you have vested interest. You can be charged with agent of management or agent of operator. It is not difficult to find a partial logic for that.
Please keep away from such things.
The forum has helped retail investors like me very much. I am thankful to the admin as well as other friends who were providing genuine information and analysis.

Any form can be utilised by anybody depending on their capacity. Everybody has to be vigilant on that. But making bad comments upon others will not help.

[Sobha]

Request the friends like Rathi, @drjaysee and others to share information whenever available. That is helpful. For that this type of forums also. But judging the correctness of information is an individual matter. You see MMB. so much information is there. But people know, what to take and what to not take. These information often helps very much

[Sobha]

Agree @sac310. But question is, why to fail in corporate governance? When funds like oak wanted to exit, it was supported with massive information and subsequent price rally. Same was the case in 2014 also when some funds exited.

So it is not that the promoter don’t know the value of information. Just opposite is the case. Dissemination of information will hurt the personal interest is the matter. So there is no corporate governance because that is satisfying somebody’s interest.

[Sobha]

@Saach, I don’t want to make any commends further. Certain times the evidence unfolds through Omission but not through Commission. Even courts accept that. For example, if an infant of some weeks dies of malnutrition without any other reasons, the parents are made guilty. It is not due to any acts of commission. But for not doing the necessary. That is giving food to infant in that case. The parents are bound to know that the infant will die if not fed.

Having said that try to understand the reason for Warrants. We were reported to be in final stages of LOC. Every identified problems could be addressed with that. Then why a massive dilution of 67% at only 15% of book value? Why promoter failed to explain? Why the problem with dividend? if the problem is genuine, why not notified properly? The things are self explanatory…

Don’t take any thing negative from this. I am vey positive due to the robust nature of business which can be verified through other means. For example adauth statistics on advertisements.

[Sobha]

Thanks @drjaysee for the update. Your update goes in tune with our already formed opinion….. The management will pay dividend little later….

The reason they explains is a lie.. Many friends reported that fund has not been paid to Arti for dividend payment. So it is not a question of hiccup in account. But the promoter might have expected the warrant approval before 25th. There is a small hiccup there. It is becoming little late. Till then they have to keep price around 7.

We have to see that the sole beneficiary of price suppression now is the promoter. So long as that remains, no scope of price appreciation. Some or other tricks will be played till then. Let us expect the the warrants will be approved soon and issues will turn to better side.

We have got a corrupt promoter. But there is no point in complaining. Because we are complaining to a more corrupt authority. That will yield nothing.

[Sobha]

Good Information

[Sobha]

No scope of take over. Skr and his IIT mate muskan together hold 42% as of now. Through oak, Everest and others sell off he took more than 8%. Oak shares have not came to open market. Skr kept the price above 10 for smooth exit of oak. Some friends met skr reported – “oak is exiting smoothly; purchase is not direct; but through other rout”. So promoters have more than 50% as of now.

[Sobha]

@Rathi_b,
Have you got the appointment or any response for meeting Skr?

[Sobha]

@Myshport, I have also sent almost same mail to Investor Relations.

[Sobha]

We have seen the NCLAT orders. No such reference to dividend was there. Likely that Warrants are most important for them. For that they are ready to accept falling reputation. Now they can narrate cash crunch. It will justify warrants.

[Sobha]

Logan,
Please don’t take the issue personally. I do remember, you were very critical of warrants.
Diana also was vey positive of the company. Seeing him also for 5-6 years in MMB. He is also agitated like many. Like many, I have also voted against PW.

[Sobha]

Friends,
My hypothesis is as follows:

My common sense points that if a person has 100 crore worth property and he is having 10 to 15 crore loan, he will try to sell a part of the property and settle the loan.

The brightcom group has more than 10 profitable subsidiaries and was having a total loan of 350 crore rupees if not gone to any litigation and fully paid as demanded. This is: 250 crore to daum. Another hundred crores to Indian banks. The management could have sold any subsidiary getting more than that amount and come out of the loan. But they have not done that. Why?

If the above said is a fact, why a sensible management reduces their stake in the company to 22% through huge dilution? If the entire business is a fraud, it can be explained. But from third party sources we know that, business is going well.

So first of all we have to reject the theory of dilution. It could be a managed dilution where by actually the promoters are increasing their stake. Any sensible management will try to make an absolute control of the company when the growth in the foreseeable future is very high and they cannot do it in the future, once the price picks up.

Suppose, the management want to increase the holding in the company to 70% or more, the following problem confront. The management doesn’t have the required money owing to the fact that they are first generation entrepreneurs.

Promoters already hold directly 18.5 cr shares. Their proxi, Muskan hold 2.5cr. making the total 21 crore or 42%. For that, sum of 25 crore paid to muskan. They could have easily acquired 8 crore shares from Goenka and Priya Prakash for 50 crore. If they want to add further 6 crore shares, that will not get below 150 crore as it will be an open market purchase. The total outflow involves is 220 crore for 70% of shares or 35 cr out of 50 crores.But the Frank fact remains that they don’t have that much money as it is evident from many previous incidences. So they want to get the entire additional stake free of cost.

They can think in another way in such a situation. That is the story of warrants. Suppose, they take 34 crore warrants for 260 crores and out of that at least 30 crore coming back to the promoters in future as those are allotted as per previous understanding, all their problems solved. This will make the total holding near to 70 percentage or more. Already they are keeping some additional shares got from oak and purchased in the name of proxi HNI, each of which is just below 1%.

For this scheme of warrents to be worked out at the said amount, the prices to be kept around 5 rupees.

After the required regulatory period, bring the shares under the control of the management. This can be by gradual increase in the stock in each quarter, a managed open offer, or forming a foreign holding company which owns huge shares fully under the present promoters. But again this needs the 260 crore rupees plus the commission for proxies. This can be solved through another mechanism.

Suppose he sells 4 crore shares in future, at 500 rupees, to some institutions, he will get back the money already paid as well as a huge additional sum. Still the management holding will remain near to 65% or above, and the total increase in holding happens free of cost. I think this is the game.

In order to keep the share price around 5, he is bound to drag the Axis case as well as release a significant portion of the Goenka – Priya Prakash stake to the public.

I think that the case against the Daum might have started genuinely, but in course of time he understood the potentiality of the business and his attitude changed to utilising the same for his personal benefit.

So I do reject the theory that his ego is making issues complex, but he is very greedy. But that doesn’t reject the robust nature of business.

The 260 crore rupees that is shown in the company accounts through the warrants, can be used for acquiring some firms like the boldwin or edgecase.

I don’t think Goenka was a proxy to skr. Skr might have politely asked to Goenka – we are going to dilute the company by 67% – do you want a small part of that? By this Goenka might have gone frustrated – and decided to exit. Same to Priya.

Now, there is no reason for controlling the price. probably till the regulatorory process of warrants are completed, the price may be in some control.

[Sobha]

@rathi_b,Thank you very much. Your comments are confidence boosting

[Sobha]

@Rathi_b, you know the discussions with skr better than anybody. You expressed your confidence also then. You expressed that you cannot reveal everything. Now we see that the retail holding has heavily increased. The number of retail investors doubled. Based on the discussions with skr, what is your thinking now? Goenkas entered in 2014. Why they might have exited? How you evaluate?

[Sobha]

5% circuit

[Sobha]

Any update on Axis case at NCLT?

[Sobha]

It cannot be. Those who buy today will not get dividend. May be NCLT.

[Sobha]

@Rathi_b, Thank you for your efforts. What will be the eps dilution after warrants? Have any discussion in this regard? Because Rs 260 cr reaching to company. I assume it will increase eps by 20%.The LOC will increase eps by 30% as per skr. Plus the interest outflow on loan of the parent is going to be zero. So what will be be the eps after proposed full dilution? And what is the expected growth rate after LOC and warrant money?

[Sobha]

Agree with buffet. Take-over possibilities and if that is denied, succession plan of the company can be asked.

[Sobha]

Why don’t we think the major 10 allotted with 37% and promoter22% will control the board with above 51%.

[Author]

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