[vgsatwork]

Waiting for couple of updates from the company…

1. Share holding pattern for Q4 – For Q3, SHP was announced on 5th Jan (within 5 days of quarter ending). But for Q4, it has been 8 days and still no update. What are they waiting for?? There would be an SHP update due as and when the PW allotment happens. Is the company trying to avoid giving a SHP update for Q4 and issue an update ONLY after PW allotment??

2. It has been 1 week since BCG gave an update that it had received in principle approval from exchanges. Yet there is no update calling for board meeting to discuss about issuing the preferential warrants. It is only upon final board approval that PW would be issued after taking in 25% initial money. Not sure if the PW allottees have to arrange for funds to pay the 25% initial money. Again, they had more than 3 months to arrange the funds since the PW got approved in AGM in December… Nothing else could explain this delay in calling for Board meeting to issue the PW…

3. LOC – If LOC was delayed to ensure that the PW approval from exchanges, then nothing else could explain the silence on this topic now. Or LOC is gone for good??

[vgsatwork]

With the kind of retail holding in BCG (with ZERO institutional holding), no amount of news flow can sustain a rally since there would always be people who would want to sell and book profit(or cut losses) and hence the price stability of the stock would not be good with larger retail and NO institutional holding in BCG.

Price stability would happen only when there is sizeable institutional holding in the stock and the institutions intend to increase their stake(Due to underlying value in the stock) case of retailers/day traders selling to book their profits.

Institutional holding would increase only when the corporate governance improves with timely disclosures, management proves with every action that it keeps their shareholders interest in mind and the company being forthcoming in sharing the bad news as well promptly, which is something I yet to see with BCG.

Instead, what we had been observing is the large institutional shareholders have been systematically being pushed out due to prolonging of legacy issues, lack of transparency, management showing lack of appetite for top line growth over the last 3-4 years. Urgent need is for the management to realize that in the interest of all the shareholders, they must get few large institutional shareholders who would have at least 15-20% stake in BCG. This is the only way the price of the stock could be sustained even as the sentiment towards the stock improves.

Hence, Management should do these on priority basis to give the confidence to the institutional shareholders and get them onboard on priority basis.

1. Prove that it is hunger for growth by taking all the necessary steps to get the 20%+ top line growth with current or lightly lower margins on war footing
2. Disclose ALL relevant information to the shareholders in a timely manner, be it a positive or negative news
3. Management should stick their neck out and provide growth guidance along with results every quarters. This is the ONLY way that the management would EVER commit itself to delivering a result
4. Even if it is 10% or 20%, but be consistent in giving dividends year after year – I know most of the other companies in growth industries do not give any dividends, but BCG has to gain the TRUST of the market about their growth, consistency and commitment from management. If it costs them few % points of growth for the next few years, it is still acceptable so that they would gain the TRUST of the market
5. Have regular analyst’s call after every quarter to answer the queries from both institutional and retail share holders

[vgsatwork]

@odysee

I am reposting my earlier post #10937 on how soon the exchanges are Obliged to provide approval
*******
Someone had asked this question couple of days back as to how long the exchanges would take to decide on the PW approval. Looking at this below, exchange must have asked for details/clarifications from BCG. If they have provided the same, the approval should come through within 30 days of BCG providing those clarification. Again, here is a lapse from BCG in terms of disclosure. They should have disclosed if the exchanges have asked for clarification and whether the company provided the requisite details,etc,..

Below is the extract from LODR 2015 as far as obligation from exchanges are concerned

Obligation of stock exchange(s).
110. The stock exchange(s) shall grant in-principle approval/list the securities or
reject the application for in-principle approval /listing by the issuer or issuing
company, as the case maybe, within thirty days from the later of the following dates:
(a) the date of receipt of application for in-principle approval/listing from issuer or the issuing company, as the case may be,;
(b) the date of receipt of satisfactory reply from the issuer or the issuing
company, as the case may be, in cases where the stock exchange(s) has sought
any clarification from them.”
**************
Based on the conf call update, SKR said, all clarifications have been provided and this update was from 20th Feb. Hence by 20th March, exchanges should have conveyed their decision as per the LODR obligations. OTherwise there must have been additional queries from them which BCG has to respond/ might have taken time to respond due to which the 30 day limit is not yet reached.

In any case, from transparency perspective, an update from the company was due on 20th March (Exactly a month after CEO informing in conf call that ALL queries from exchanges have been responded back to). Market always treats no news as bad news in such cases….

[vgsatwork]

As long as there is no sizeable institutiona or Mutual fund holding in BCG, share prices would not move up significantly. That is unlikely to happen without significant improvement in corporate governance. Other way out is to hope that the PW allottees are smart and would do the right thing in their own interest and sell the stake to an institution or competitor. That could provide the price stability for the stock

[vgsatwork]

Per SKR, 6 crore should have been paid out to Axis on Monday,22nd Feb 2021 . I am not sure if this has been paid out and the company chose not to give any update through stock exchanges about this or this is one of those forward looking statements, which did not materialize?

But lack of update only affects the credibility of what the CEO said in conference call…

[vgsatwork]

I could not attend the conference call and heard the audio recording of the same. Overall it appears that the preferential issue allotment money seem to be used for some other purpose other than the stated purpose of closing debts. SKR indicated the agreed settlement amount is only 17 crores. But why is it not being paid off in full is a point that was completed left untouched.
Similarly the BDO audit, Morgan Stanley originally was the lender for LOC, etc, are diversions and the core question of why things are not being expedited as far as LOC being concerned, especially when there is no hick up with the LOC process per se and CEO and CFO openly admitting that they have reached a ‘plateau’ and grow beyond that they need capital. They have been at this plateau for the last 3 years and the hungry and urgency for growth is something which has not been touched upon
Biggest take away being that this PW is probably not the last of the capital raising/dilution move and definitely lot more is on the cards. If the value realisation does not happen with Axis and LOC, expect more dilution at low multiples like the PW. Also, w.r.t PW, SKR mentioned that all the info has been provided to the exchanges. So, we can expect the decision from exchanges latest by 21st March, assuming the clarification from BCG was provided only on 19th Feb. If BCG is indeed going slow on Axis and LOC only due to PW approval, then we should start seeing positive news flows around this from 22nd March onwards..

Another observation is the dividend payment happening in such hush hush manner is due to Axis Bank and SKR mentioned as much. I suspected that and mentioned in one of my posts. But, trying to pull an Houdini act under the watchful eyes of Axis Bank would only wrath from them once they come to know about this. It shouldn’t have been done this way. Axis loan should have been closed with preferential issue money and dividend payout should have opened in an transparent manner through their registered share transfer agent, Aarthi Consultants.

[vgsatwork]

Reply to #10977

It is strange to see that both the orders have absolutely nothing even as BCG put out a press release saying that it had settled with Axis, only to ‘clarify’ later with the verbatim email communication from the bank.

Guess whatever proposal that BCG had put out, Axis is in no mood to settle?

[vgsatwork]

Someone had asked this question couple of days back as to how long the exchanges would take to decide on the PW approval. Looking at this below, exchange must have asked for details/clarifications from BCG. If they have provided the same, the approval should come through within 30 days of BCG providing those clarification. Again, here is a lapse from BCG in terms of disclosure. They should have disclosed if the exchanges have asked for clarification and whether the company provided the requisite details,etc,..

Below is the extract from LODR 2015 as far as obligation from exchanges are concerned

Obligation of stock exchange(s).
110. The stock exchange(s) shall grant in-principle approval/list the securities or
reject the application for in-principle approval /listing by the issuer or issuing
company, as the case maybe, within thirty days from the later of the following dates:
(a) the date of receipt of application for in-principle approval/listing from issuer or the issuing company, as the case may be,;
(b) the date of receipt of satisfactory reply from the issuer or the issuing
company, as the case may be, in cases where the stock exchange(s) has sought
any clarification from them.”

[vgsatwork]

Extract from SEBI listing Obligations and Disclosures Regulation 2015. What the management discloses to the shareholders through exchanges are being regulated though this.

Disclosure of events or information.
30. (1) Every listed entity shall make disclosures of any events or information which, in the opinion of the board of directors of the listed company, is material.
(2) Events specified in Para Aof Part A of Schedule III are deemed to be material
events and listed entity shall make disclosure of such events.
(3) The listed entity shall make disclosure of events specified in Para B of Part Aof Schedule III, based on application of the guidelines for materiality, as specified insub-regulation (4).
(4) (i) The listed entity shall consider the following criteria for determination of materiality of events/ information:
(a)the omission of an event or information, which is likely to result in
discontinuity or alteration of event or information already available
publicly; or
(b)the omission of an event or information is likely to result in significant
market reaction if the said omission came to light at a later date;
(c)In case where the criteria specified in sub-clauses (a) and (b) are not
applicable, an event/information may be treated as being material if in the
opinion of the board of directors of listed entity, the event / information is
considered material.
(ii) The listed entity shall frame a policy for determination of materiality, based
on criteria specified in this sub-regulation, duly approved by its board of
directors, which shall be disclosed on its website.
(5) The board of directors of the listed entity shall authorize one or more Key
Managerial Personnel for the purpose of determining materiality of an event or
information and for the purpose of making disclosures to stock exchange(s) under
this regulation and the contact details of such personnel shall be also disclosed to the stock exchange(s) and as well as on the listed entity’s website.
(6) The listed entity shall first disclose to stock exchange(s) of all events, as
specified in Part A of Schedule III, or information as soon as reasonably possible
and not later than twenty four hours from the occurrence of event or information:
Provided that in case the disclosure is made after twenty four hours of occurrence
of the event or information, the listed entity shall, along with such disclosures
provide explanation for delay:Provided further that disclosure with respect to events specified in sub-para4 of Para A of Part A of Schedule III shall be made within thirty minutes of the conclusion of the board meeting.
26 (7) The listed entity shall, with respect to disclosures referred to in this regulation, make disclosures updating material developments on a regular basis, till such time the event is resolved/closed, with relevant explanations.
(8) The listed entity shall disclose on its website all such events or information
which has been disclosed to stock exchange(s) under this regulation , and such
disclosures shall be hosted on the website of the listed entity for a minimum period of five years and thereafter as per the archival policy of the listed entity, as disclosed on its website.
(9) The listed entity shall disclose all events or information with respect to
subsidiaries which are material for the listed entity.
(10) The listed entity shall provide specific and adequate reply to all queries raised by stock exchange(s) with respect to any events or information:
Provided that the stock exchange(s) shall disseminate information and clarification
as soon as reasonably practicable.
(11) The listed entity may on its own initiative also, confirm or deny any reported
event or information to stock exchange(s).
(12) In case where an event occurs or an information is available with the listed
entity, which has not been indicated in Para A or B of Part A of Schedule III, but
which may have material effect on it, the listed entity is required to make adequate disclosures in regard thereof.

[vgsatwork]

Sent my questions to ir@brightcomgroup. Let us see if they respond. Anyway, intend to raise this in the conference call

[vgsatwork]

8. If the institutional investor (Oak) has been wanting to exit, why wasn’t it allotted to Muskan and what was the need for raising Equity by diluting the stake, if the raised capital has not been put to any kind of use since the allotemet date of 27th May 2020 till date?? For a shareholder, this has only diluted their EPS by about 10% and yet the capital has not been put to any use?? There have been reports from the NCLT hearing that AXIS bank has blocked this preferential issue money citing the fund that they are being owed? Why is there no update to the shareholders from the company to clarify on this?

9. Through other comprehensive income/(Loss) entries, 1174 crore has been shown as loss in FY 2019 and FY 2020 together, which is roughly about 1/3rd of the book value of the company. Yet sufficient explanation has not been provided with in terms of Loss details and the circumstances under which it happened, what the company is going to do to be more prudent going forward.

[vgsatwork]

Lot of announcements were being made in first half of 2020 without any kind of status update on them post Aug/sep of 2020. some of the items wherein we need clarity (Not as an update in Conf call, but as an update to exchanges, just like how it was done in first half of 2020).

1. Consolidation of all subsidiaries into one entity – Update on the same was provided to exchanges last in Feb 2020. What is the latest update on this? When would the new entity be created?

2. BDO Audit – Last update on this topic was in June 2020 saying that audit was in progress. No subsequent update. What is happening on this? Would this audit report be made available to the shareholders? If not, with whom such a report would be shared with?

3. Daum Settlement – Last update on this topic was in June. No further update has been provided. What is the latest on this? when can we expect a closure?

4. Investor meet – Last update on this topic was in early June. No further update in terms of whether or not the investor meet happened and to which investor groups these presentation were being made? Till date, we do not see any institutional shareholding in BCG. Is it because investors are concerned about pending legal issues? What is management’s plan to address this? (Bringing in institutional shareholders, without whose presence value realization of the stock is very difficult)

5. LOC update – Last update on this topic was on 13th Nov 2020 and it said company is in advanced stages of setting up first tranche of the LOC application process. There is no further update for the past 3 months on this topic. This is particularly important since while the entire ad tech industry is growing at a very healthy pace of 20%+, BCG’s top line growth is flat fo the last 3 years and there has been NO ATTEMPT from the management side to address the top line growth issue and based on earlier updates, the impeding factor seems to be capital. If BCG is having LOC approved and is in advanced stages of setting up first tranche of the same, Why there is no update for the past 4 months on this and why is the top line NOT growing, despite there being a clear and easy route (LOC) to access capital?

6. Axis bank loan update – on 13th Aug 2020 an update was provided through stock exchanges which in essence stated that BCG has sent a formal proposal to Axis and awaiting response from Axis Bank. We have recently seen an update on 15th Feb, which is stating pretty much the same thing after 6 months and the matter still is in NCLT court. Why is the company not closing this issue when the preferential issue was being raised for 30 crores with the stated objective of closing existing debts?

7. Per the investor update on 16th Mar 2020, There is a share purchase agreement in place to transfer the institution holding to new investor. Also, as per the investor presentation from 05 Jun 2020, for Oak’s exit, it mentioned that buyers were lined up. Yet the update in Mid June when Oak has sold in open market, did not mention anything about the share purchase agreement or what happened to the arrangement in general. By end of August 2020, Oak exited fully and there is no new institutional investor. Why was there no update provided to the shareholders about the promised share purchase didn’t happen?

[vgsatwork]

Again, a lesson for BCG in corporate governance. Email from bank warns them that it should not be deemed as accepted or admitted by them. Yet, BCG went ahead and put out a press release saying that it has settled.

I am sure someone from Axis must have warned him looking at the press release of 14th Feb and as a result, an hurried late night clarification update which has their verbatim reply (with screenshot) has been provided as an update to exchanges.

This saga can clearly be highlighted as a case for price manipulation since there was no significant development on the ground and yet management issued a press release only to subsequently issue a clarification with verbatim response from them. This obviously seems to have been an attempt to influence the price of the stock by putting out a press release when there is no material development/change in an issue that is sub judice..

[vgsatwork]

@Logan
Reply to #10855

I am sure Axis must be looking at all the announcements from BCG including the dividend news. I suspect that the reason why(No update to stock exchange on dividend payment being made, including yesterday’s press release) dividend payment was hush hush even without Arthi consultants know anything about it and without having a payment remark indicating dividend payment was for BCG might have been to go under the radar and not be seen by Axis as making dividend payments even as they satisfy the shareholders with a token dividend. If Axis know of the payments being made, they would have stopped that as well just like how they had blocked the PI money.

if you read the business updates to stock exchanges, there is always some word play in them and none of them were in definitive terms and hence they could be held accountable. So, they might have hood winked Axis with some of the developments like dividend payment (There is no official record for Axis to prove that BCG paid dividends since entire payment process was under the radar)

[vgsatwork]

@sobha @radhetheoptimist

Per the post #10848 – There is no settlement and yet the Media release from yesterday says that “The company has settled with Axis Bank on the closure of the loan. Bank is working on a formal approval of the same”. As long as they cannot be held accountable, they can keep doing this by throwing a carrot (a business update to stock exchange) which may or may not have any material basis.

[vgsatwork]

Reply to #10843

Axis is not lone case. Infact, BCG has said so many things as part of their business updates to stock exchanges and there is no subsequent follow up or developments. Some examples are
1. Consolidation of subsidiaries into one company (Informed about an year back in Feb 2020). No follow through updates
2. BDO audit – Last update in June 2020 said that Audit is on going. No follow through updates
3. Daum – Discussion on Lycos settlement – Last update was in June 2020. No follow through updates

Except of few of the offences like Insider Trading, Price Manipulation, etc,. these kind of lapses does not make the promotors pay big sums either through penalty or through specific orders against them.

[vgsatwork]

@radhutheoptimist

Prior to yesterday, Last official update from BCG on Axis loan was on 13th Aug 2020 and if you see both the updates that are 6 months apart from each other, it is not hugely different. In both the cases, they are waiting for Axis to revert back.

May be there is some development. But purely looking at the updates, it is just clever wordplay. We can expect the market to react if we see any material development in the NCLT hearing.

[vgsatwork]

In the last two years (refer P&L of Annual report of Fy 19 & FY20), 1174 crores have gone through asset impairment and loss on investment write off and it is these kind of things which are in grey zone and concern areas as you do not have any kind of notes to explain these items.

If we have to suspect anything from financials stand point, it is THESE items since the number is there under other comprehensive income/loss category and ABSOLUTELY no reasons or notes given for the same.

One could have possibly siphoned it off and there is no way to prove/disprove this since detailed notes is not there and just a loss entry alone is there in the Annual report.

[vgsatwork]

@Diana_Horton

The preferential allotment money is there in balance sheet. If you see the stand alone balance sheet published as part of Q2 result, you could see the money as increase in equity category (between Mar 31 and Sep 30th). Given that the Q1& Q2 stand alone profit after tax is only 66.34 lakhs and the increase in equity between 31st March and 30th Sep is 30.58 crores, which can only be preferential allotment money.

But what is puzzling is WHY IT IS NOT BEING USED TO PAY OFF AXIS and they are dragging their feet on this, given that if the case proceeds to IBC, retail investors would panic and sell. Vulture investors (people who can pretty much buy off every share that is available for sale in the market in one shot) would then get in to the stock in no time to force asset sale and realize the book value by buying it almost at 1/8th to 1/10th of the BV. No matter how many operators that the promoter deploys, they would not be able to match these investors might since they would have smelt the blood (that the company is in IBC and by forcing asset sale, one can technically realize the book value) and have very deep pockets.

[vgsatwork]

@ Buffet @ Diana_Horton

There is always the possibility of warrants being rejected by the exchanges.

If we go with the logic of promoter are suppressing the share prices to corner the PW through their friends and only after the PW is approved they would allow the share price to go up, then what would the promotors do if the PW is rejected? How long they can keep the share price suppressed then?

A shock and awe move like 34 crore PW can be used only once. If they come up with anything like that again post rejection of PW, people would see through the same and defeat the resolution, especially now that retail investors knew what is coming and what is promotors strategy.

So, if the PW gets rejected, the only option in front of them is to go for Preferential issue, which is OK since full payment has to be made upfront and market would see that as definite commitment with lock in period and share price would move up. The other option for them is buy from open market directly. If they buy through proxy, then it would be very long drawn battle for them to get that stake and they would have missed the forest looking for the trees in terms of the lost opportunity & opportunity cost. I don’t think they would be that stupid.

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