Zee Entertainment Enterprises Ltd (Rs.134.52)

I want to The likelihood of USD depreciation or appreciation against the INR depends on various economic factors and trends. Here are key considerations for each scenario. a few points here:

Q. What is the coupon rate of FCCBs?

Ans. The coupon rate is 5%, which will be applicable for 10 years. This is substantially lower than the 11%/12% PLR which is generally available in India. 

Q. What is the conversion price of FCCBs after 10 years?

Ans. The conversion price is Rs.160 per share. 

Q. What is the total consideration under FCCB?

Ans. The total amount is$239 million (Rs.1960 Cr).

Q. Is there any problem of equity dilution in the short term?

Ans. Let us first read the news on the topic from CNBC TV18 website:

The FCCBs will be issued to Resonance Opportunities Fund, St. John's Wood Fund Ltd. and Ebisu Global Opportunities, on terms and conditions mutually decided between the company and the 'proposed' investors.

Zee Entertainment further said that these FCCBs will carry a coupon of 5% per annum and will be unsecured and unlisted in nature with a maturity period of 10 years.

In case all the FCCBs are converted to equity, it will result in a post-money dilution of 11.7%. As of the June quarter, promoter stake in Zee Entertainment is currently at 3.99%.

In the short term there will not be  any issue of equity dilution. In future a rise in top and bottomlines of the company will take care of equity dilution (if any), especially when the June, 2024 quarter results are good.

Q. Does ZEEL have presence in OTT platform?

Ans. ZEEL has presence both in Television segment and the OTT platforms. ZEE5 is the brand new digital entertainment destination launched by Zee Entertainment Enterprises Ltd. It is in OTT platform. 

Hence, if competition hardens in the TV space, it may shift a substantial chunk of its business or shift altogether to the OTT platforms. 

Q. What could be approximately price of the ZEEL shares after 10 years?

Ans. It is hard to predict its price after 10 years, however if we take an incremental INFLATION figure into consideration we could see a substantial rise in its share price (as a going concern) considering the current management guidance and their optimism.

Q. What does the company want to do with the FCCB?

Ans. This is an Irrelevant question, since such funds are generally used for the benefit of any company. Hope the management, under the able leadership of Puneet Goenka will utilise the funds to increase shareholders value.

Q. Since it is FCCB and hence it is affected by the USD ($) Vs INR (Rs) ratio. Will it have any adverse effect on the company?

Ans. If the USD ($) depreciates, it will generally benefit the Indian company that has issued Foreign Currency Convertible Bonds (FCCBs).

Reasons:

💢Lower Repayment Cost: FCCBs are denominated in USD ($), so the company needs to repay the bondholders in that currency. If the USD depreciates against the Indian Rupee (INR/Rs), the company will need fewer INR to buy the required USD for repayment. This reduces the overall cost of repayment.

💢Conversion to Equity: FCCBs have an option for bondholders to convert their bonds into equity at a predetermined conversion price. For example in this case the conversion price is Rs.160.

If the USD depreciates, the value of the conversion option may be less attractive to bondholders, as they might receive fewer INR for the same amount of USD. However, this primarily affects the bondholders and not the issuing company directly.

Overall, a depreciating USD will reduce the financial burden on the Indian company when it comes to repaying the principal and interest, thereby benefiting the borrower.

Q.  What is the chance of USD depreciation in future, considering the excessive money printed by fed?

Ans. There's a possibility that the USD could depreciate in the future if the U.S. Federal Reserve (FED) continues to print a significant amount of money. Let's find out how:

💢Inflation Risk: When the US Fed prints more money, it increases the money supply. If this increase outpaces economic growth, it can lead to inflation, where the value of each USD decreases because there are more dollars chasing the same amount of goods and services. 

This inflationary pressure can cause the USD to lose value relative to other currencies.

💢Decreased Confidence: Excessive money printing can lead to concerns about the long - term value of the USD. If investors and foreign governments lose confidence in the stability of the dollar, they may shift their investments to other currencies or assets, leading to a decrease in demand for the USD and, consequently, its depreciation.

A 15 July, 2024 edition of The Hindu says: "India and Russia have doubled their payments in national currencies (rupee-rouble) since last year despite sanctions by the U.S. and European Union, said Russia's largest, state-controlled bank Sberbank that handles a majority of payments for Indian exports to Russia". 

💢Interest Rates: To counter inflation, the US Fed might eventually raise interest rates. While higher rates can attract foreign investment (which might strengthen the USD), the timing and effectiveness of such measures are uncertain. If the inflationary impact of money printing is not contained, the depreciation risk remains.

💢Global Economic Factors: The USD's value is also influenced by global economic conditions, such as the strength of other currencies, geopolitical events, and trade balances. While money printing is a significant factor, it's not the only one that determines the USD's exchange rate.

In summary, excessive money printing by the US Fed could contribute to a future depreciation of the USD, especially if it leads to high inflation or erodes confidence in the currency. However, the actual impact will depend on a range of economic and policy factors. I believe there is more chance of USD depreciation than appreciation.

Q. If the USD depreciates then will the bond holders ask their money back or convert into equity? Which one is more likely?

Ans. If the USD depreciates, the decision by bondholders to either ask for their money back (redeem the bonds) or convert them into equity will depend on several factors, including the bondholders' expectations about the future value of the equity and the terms of the Foreign Currency Convertible Bonds (FCCBs). Let's look at the few hypothetical scenarios:

💢Redemption of Bonds (Asking for Money Back):

   💠Depreciating USD Impact: If the USD depreciates, the value of the repayment in USD decreases in terms of the bondholders' local currency. This might make bondholders more inclined to redeem the bonds, especially if they believe that the value of the equity (in INR) will not compensate for the loss due to currency depreciation.

   💠Risk Aversion: Bondholders who are risk-averse or unsure about the future performance of the issuing company’s stock might prefer to get their money back, especially if they expect further depreciation of the USD.

💢Conversion into Equity:

  💠Attractive Equity Valuation: If the company's stock is performing well or is expected to perform well, bondholders might opt to convert their bonds into equity. This could be particularly appealing if they believe that the potential gains from the stock market will outweigh the losses from the depreciating USD.

  💠Hedge Against Currency Risk: Converting into equity might also serve as a hedge against further depreciation of the USD. By holding equity in an Indian company, bondholders can benefit directly from any appreciation in the company’s stock, which might also appreciate due to a stronger INR.

Q. What if the USD appreciates Vs INR, then what option will the bond holders likely to take?

Ans. If the USD appreciates against the INR, bondholders will likely evaluate their options based on the following considerations:

💢Redemption:

   💠Higher Repayment Value: If the USD appreciates, the value of repayment in INR terms increases. Bondholders may find that redeeming the bonds is more attractive because they will receive a higher amount in INR compared to when the USD was weaker.

   💠Risk Management: For bondholders who prefer to avoid currency risk or seek a stable return, redemption might be preferred to secure the higher INR value now rather than potentially facing future uncertainties.

💢Conversion into Equity:

  💠Potential for Equity Growth: If the company's stock is performing well or is expected to perform well in future or is much above the agreed conversion price into equity bondholders might see potential for higher returns from the company's stock than from redeeming the bonds.

 💠Hedging Against Currency Risk: Conversion into equity could also be viewed as a way to hedge against further fluctuations in currency exchange rates, especially if bondholders expect continued volatility.

💢Bond Terms and Company Performance:

   💠Conversion Price: If the conversion price is favorable and the company’s stock is expected to appreciate, bondholders might choose conversion even with a stronger USD, as the potential gains from equity could outweigh the benefits of redemption.

  💠The Company’s Financial Health: The company’s performance and growth prospects will heavily influence this decision. A strong-performing company with good future prospects may make equity conversion more appealing despite the appreciation of the USD.

💢Market Conditions:

   💠Overall Market Sentiment: The broader market conditions and investor sentiment towards the company's sector can impact the decision. If the market outlook for equities is positive, bondholders might be inclined to convert.

The Summary:

💠Redemption: Bondholders might opt for redemption if the stronger USD results in a significantly higher INR repayment amount, especially if they prefer stability or are risk-averse.

💠Conversion: If the company’s equity offers promising growth prospects or if bondholders believe that converting into equity will yield better returns in the long run, they might choose to convert despite the stronger USD.

In essence, the decision will depend on the bondholders' assessment of the company’s future performance, their risk tolerance, and the comparative advantages of redeeming the bonds versus converting into equity.

Q. Which is likely for the USD? Appreciate or Depreciate?

Ans. Predicting the future movement of currencies, including whether the USD is more likely to depreciate or appreciate, involves considering a variety of economic factors and conditions. Here are some key factors to consider:

💢Points Supporting USD Depreciation:

      💠Monetary Policy:

    - Excessive Money Printing**: If the Federal Reserve prints too much money, it can lead to inflation and a decrease in the value of the USD.

         - Low Interest Rates: Extended periods of low interest rates can make the USD less attractive to investors seeking higher returns.

      💠Trade Deficits:

   - Continued Trade Imbalances: Large and persistent trade deficits can weaken the USD as more dollars are exchanged for foreign currencies.

💢Economic and Political Uncertainty:

   - Instability or Uncertainty: Political instability or economic challenges in the U.S. can erode confidence in the USD, leading to depreciation.

💢Global Economic Trends:

   - Rise of Other Currencies: If other major economies (like the Eurozone or China) strengthen their currencies or experience economic growth, the USD might weaken relative to these currencies.

💢Factors Supporting USD Appreciation:

     💠Interest Rate Differentials:

   - Higher Interest Rates: If the Federal Reserve raises interest rates, it can attract foreign investment, increasing demand for the USD and leading to appreciation.

💢Strong Economic Performance:

   - Robust Economic Indicators: Strong U.S. economic performance, including growth, low unemployment, and high consumer confidence, can strengthen the USD.

💢Safe-Haven Status:

   - Global Uncertainty: During times of global economic or geopolitical uncertainty, investors often flock to the USD as a safe-haven asset, leading to appreciation.

💢Fiscal and Monetary Policy:

   - Effective Policy Measures: Strong and effective fiscal and monetary policies can support the USD.

💢Conclusion:

Predicting whether the USD will depreciate or appreciate is complex and influenced by many variables. Historically, the USD has shown both appreciation and depreciation trends based on shifting economic conditions and policy decisions. Keeping informed about current economic indicators and policy actions is crucial for understanding potential future movements of the USD.

 Today's Call and Other Information 

Buy the shares of NMDC Ltd near the CMP of Rs.213.30, T: Rs.151/Rs.270. SL: Rs.192.

NMDC is India's single largest iron ore producer. NMDC is operating four Iron Ore mechanized mines viz., Bailadila Iron Ore Mines – Kirandul Complex (Dep-14, 14 NMZ, 11B & 11C), Bailadila Iron Ore Mine – Bacheli Complex (Dep-5,10 & 11A) in the Chhattisgarh State, Donimalai Iron Ore Mine and Kumaraswamy Iron Ore Mine in the Karnataka State. Photo: Egov.

Incidentally, a bench led by Chief Justice DY Chandrachud in a recent verdict allowed states to collect past dues in the form of royalty and tax from April 2005. The Chief Justice said that the time for payment of demand for tax shall be staggered in installments over a period of 12 years, starting April 1, 2026.

However, according to a report in CNBC TV, the three states who had earlier levied this kind of cess are: Odisha, Jharkhand, and Tamil Nadu. Hence, as per my understanding, NMDC Ltd will not be affected by this Supreme Court order. 

#The shares of BLB Ltd (Rs.18.39) Freezed in the NSE. I have good holding in my portfolio accounts. 

I have been recommending the scrip since sometime, especially when it fell around Rs.17.10. Buy scrips based mostly on Fundamentals and less on Charts.

#Buy the shares of ZEE TV Ltd (ZEEL) near the CMP of Rs.134.90, for targets of Rs.160/172. I am expecting an upgrading of the stock post raising of funds through FCCB.

However, on the negative side, in case all the FCCBs are converted to equity shares, the proposed equity shares that stand to get diluted will be 12.46 crore with a face value of ₹1 each at a conversion price of ₹160.2 per share. 

On the positive side the conversion price is more 15% premium to Zee Entertainment's CMP

#On the other hand issues related to J P Associates Ltd (Rs.9.22) and MEP Infrastructure Ltd (Rs.8.45) are on the verge of settlement, according to my close sources, who refused to be named.

#The shares of Devyani International Ltd (Rs.171) have again started its upward movement. You can take fresh positions in the counter. We can look for targets of Rs.200+ in the coming weeks, as Festival season is approaching.

 Today's Call 

Buy the shares of Integra Essentia Ltd near the CMP of Rs.4.67, for targets of Rs.7/9. SL: Rs.3.97.

Last month, Integra Essentia announced that the board of directors had approved the scheme of amalgamation of Integra Essentia (transferee company) and G G Engineering (transferor company).

The report further said: Integra Essentia shall issue and allot 48 equity shares of face value of Re.1 each to equity shareholders of G G Engineering for every 100 equity shares of face value of Re.1 each held by them in the transferor company.

G G Engineering specializes in producing high-quality infrastructural and structural steel, as well as engineering products, which are utilized in various sectors, including infrastructure, construction, large-scale projects, modern buildings, and high-rise residential and commercial developments. The merger will bolster the infrastructure division of G G Engineering, enhancing its operational efficiency and market competitiveness. The goal is to broaden the range of combined products and expand the customer base, both domestically and internationally.

Financial Performance Update: In the first quarter of FY24-25, Integra Essentia Ltd reported a impressive performance. 

The company's sales rose by 56.47% to Rs.86.06 crore for the quarter ending June 2024, as per a stock exchange filing. Net profit for the quarter saw a significant increase of 107.63%, reaching Rs.2.45 crore, compared to Rs.1.18 crore in the same period last year.

In the previous quarter, the company's net profit had soared by 250% year-over-year (YoY) to Rs.5.91 crore. Additionally, the company's total income for the first quarter increased by 40% YoY to Rs.100.6 crore, up from Rs.68.1 crore in the corresponding quarter of the previous year.

Company Profile: Integra Essentia operates in the Life Essentials sector, offering a wide range of products and services essential for modern living. These include Food (Agro Products), Clothing (Textiles and Garments), Infrastructure (Materials and Services for Construction and Infrastructure Development), and Energy (Materials, Products, and Services for Renewable Energy Equipment and Projects), along with many other products and services that support contemporary life.

Sadbhav Infrastructure Project Ltd and other Information  

Yesterday, I took some shares of Sadbhav Infra Project Ltd (Rs.7.60) and also sent this message on Facebook and Twitter (X). The stock initially hit the Upper Circuit, only to open few minutes later, when I believe most of my well-wishers could enter. 

Brief description: Roads are the backbone of any economy, and India's rapid growth has heightened the demand for a robust road infrastructure. While public funds alone cannot meet the needs for upgrading National Highways, the government of India has adopted a policy to involve the private sector through Build-Operate-Transfer (BOT) projects. 

Sadbhav Infrastructure Project Limited (SIPL), a subsidiary of Sadbhav Engineering Limited (SEL), was established in 2007 as an asset-holding company for road and infrastructure BOT projects. 

SIPL focuses on the development, operation, and maintenance of road infrastructure, aiming to build a sizable asset base in the road BOT sector. With less competition in the BOT Roads and Highway sector, SIPL is in a strong position to win projects with desired returns in future.

Currently, SIPL manages 10 BOT projects, covering a total of 2595.92 lane kilometers. Of these, six are operational, one is partially operational, and three are under development.

Financials: Net Sales of the company came at Rs.174.33 crore in March 2024 up 11.03% from Rs.157.01 crore in March 2023. 

Quarterly Net Loss was at Rs.95.40 crore in March 2024 down 127.89% from Rs.342.06 crore in March 2023, which is very encouraging.

However, the EBITDA stood at Rs.81.52 crore in March 2024 down 44.04% from Rs.145.67 crore in March 2023. I'm looking at a target of Rs.10+ for the scrip.

#In May, 2024, there was a news report in The Times of India, that: "Municipal Corporation of Delhi (MCD) has issued a public notice to auction on May 7 four confiscated properties, worth around Rs.30 crore, of former toll contractor MEP Infrastructure Developers Ltd (Rs.8.43) in Mumbai". 

There was another report on the same page saying: "In March, MCD had issued a public notice for the attachment of over Rs 3,900-crore assets and properties belonging to the company for non-payment of toll dues.".

Now there are few points here I would like to mention:

💢There are a whooping 31 subsidiary companies of MEP Infrastructure Ltd (Rs.8.45). I have reports that it's tool tax collections are going on smoothly at Airoli (New Bombay) and Dahisar (Bombay) tool Nakas (plazas).  

💢The company has more than 17+ years of experience in Toll Collection in 15 states in India with 3000+, workforce.

Brief description: Maintenance of, and collection of toll at, the five Mumbai Entry Points along with 27 flyovers and certain allied structures on the Sion–Panvel Highway, the Western Express Highway corridor, the Eastern Express Highway corridor, the Lal Bahadur Shashtri Marg corridor and the Airoli Bridge corridor. Collection of toll at five entry points into Mumbai consisting of five toll plazas at Airoli, Vashi, Dahisar, Mulund on Lal Bahadur Shastri Marg and Mulund on Eastern Express Highway.

Period of contract: 20.11.10 to 19.11.26 (means upto November, 2026).

The company is currently going through Debt restructuring and hence we need not have to worry much.

#Devyani International Limited, a quick service restaurant (QSR) operator, had recently released its financial results for the quarter ending June 30, 2024. The company, which operates KFC and Pizza Hut outlets in India, reported a 44.3% year-on-year (YoY) increase in revenue, reaching ₹1,221.9 crore in the June quarter, up from ₹846.6 crore in the same period last year.

Revenue in the first quarter also grew sequentially by 16.7%, rising from ₹1,047.1 crore in the fourth quarter. KFC India contributed ₹555 crore, Pizza Hut India brought in ₹182 crore, and Costa Coffee added ₹45 crore to the total.

Devyani International Limited posted a net profit of ₹22.43 crore in the June quarter, a significant improvement from the loss of ₹1.59 crore recorded in the previous year. This also marks a strong sequential recovery, following a loss of ₹48.95 crore in the last quarter.

The season of this sector will kickstart with Ganpati Festival in Mumbai and elsewhere. The Brokerage House Nuvama has given a target of Rs.208 for the scrip.

#The shares of P C Jewelers Ltd (Rs.95) hit another Upper Circuit and Buyer Freeze. We can look for target of Rs.97/99, in the short term. The Jewelry stocks have been rising due to the fall in gold prices.

The shares of the Financial Services Firm BLB Ltd (Rs.17.81) is trading near the 52 - week low price. I am expecting a satisfactory June, 2024 quarter results. The targets for the scrip till Durga Puja are Rs.27 and Rs.31.

Unfortunately, the stock is languishing in the T - group since a long time, even though there is hardly any activity in the counter. The SEBI should explain the reasons for executing such a behaviour with certain scrips listed in the BSE/NSE. 

By the way, the perfomance of the surveillance department of the BSE/NSE has been going from bad to worse. The NDA government should clarify the causes for such absymal functioning of the two leading domestic bourses.

Update on MEP Infrastructure Ltd and other information

#The stock of MEP Infrastructure Ltd (Rs.8.89) got suspended temporarily due the action by the surveillance department of the stock exchanges, under the provisions of IBC. 

It is to be noted that the National Company Law Tribunal had earlier initiated the corporate insolvency resolution process (CIRP) against MEP Infrastructure Developers Ltd on a plea filed by Bank of India and appointed an interim resolution professional to take control of the company. 

Meanwhile, according to a report in ET, MEP Infrastructure is contemplating to submit a plan under section 12A of the IBC and seek settlement with the lenders. Hence, there is no cause for worry.

#The shares of 63 Moons Technology Ltd (Rs.364.14) is available at a good price. You can accumulate them in phases.

#The shares of J P Associates Ltd (Rs.10.24) has hit another buyer freeze. Keep accumulating in market dips, as a big story is floating in the counter.

#Devyani. International Ltd (Rs.178) has come up with good, June quarter numbers. The stock would soon cross Rs.200. Stay Invested.

#A big corporate story is unfolding in Adani Wilmar Ltd (Rs.377). We can look for targets of Rs.600+ in the coming months.

 Today's Call 

Buy the shares of MEP Infrastructure Ltd (Rs. 8.77) for targets of Rs.17 and Rs.21. 

On 17 June, 2024 the ET reported quoting its Chairman that,  MEP Infrastructure Developers (MIDL) will submit a plan under Section 12A of the Insolvency and Bankruptcy Code (IBC) and seek a settlement with lenders. 2nd Photo: The Economic Times.

Average/Accumulate the shares of Vodafone Idea Ltd (Rs.15.15), J P Associates Ltd (Rs.9.76), Moons Technology Ltd (Rs.483), Adani Wilmar Ltd (Rs.372) in any market dip.

Meanwhile  Devyani International Ltd (Rs.173) came out with impressive set of numbers for the June, 2024 quarter. 

The company has reported a consolidated net profit of Rs.22.4 crore in Q1 FY25 as against a net loss of Rs 1.6 crore in Q1 FY24. Revenues from operation increased by 44% year-over-year to Rs.1,221.9 crore in the June’24 quarter. Accumulated!

#The selling in Indian bourses is basically due to unrest in Bangladesh. The government of India is keeping a close eye on the situation. I hope the things will get streamlined soon, with effective measures implemented by the Hasina Wazed government in Dhaka.

 Today's Call and Other Information 

#Buy the shares of Adani Wilmar Ltd near Rs.375/Rs.377, for intraday target of Rs.383.15 (Upper Circuit) and Rs.457 an Rs.660 for the short term.

Billionaire Gautam Adani's flagship entity Adani Enterprises on Thursday approved the demerger of the company's food FMCG business to Adani Wilmar.

"It is believed that the proposed demerger will unlock the direct value of the demerged company’s shareholders into the resulting company and allow a focused strategy and specialization for sustained growth for enhanced value, which would be in the best interest of all the stakeholders and the persons connected with the aforesaid companies," Adani Enterprises said in an exchange filing. Photo: Value Research.

#According to my sources, there are some good news for the shareholders of Debock Industries Ltd (Rs.7.60). 

After the exit of one of the promoters, now the business has shifted to the pragmatic hands of the gentleman, Mr.Manveer Singh. He is amiable, dynamic and business minded. We can pin our hopes on him.

Furthermore, once the new company merges with Debock Industries Ltd, then it might propel the stock to Rs.31/32. The new company I'm told has a Resort and is making a Race Course in Jaipur. The new company is tentatively to get merged before the next Deepawali, once it gets the required NCLT clearance.  

The mining from Granite Mines were scheduled from July, 2024, but is yet to commence. 

Moreover, the recent Union Budget's stress on agriculture is positive for this company. During the Budget 2024 presentation, the finance minister Smt. Nirmala Sitaraman, announced an allocation of ₹1.52 lakh crore for the agriculture sector. Additionally, the minister stated that the government plans to introduce 109 new high-yielding, climate-resilient seeds for 32 different field and horticulture crops.

Caveat: Some of information presented regarding Debock Industries Ltd, are source based news and hence you should confirm them from your contacts.

#The 1st Target of Parsvanath Developers Ltd (Rs.17.44) has been achieved as the stock. hit the upper circuit. You should book some profits and hold the rest with a SL of Rs.16.65.

#The shares of J P Associates Ltd (Rs.9.30), a world class company in the infrastructure space has hit the Upper Circuit. The stock unnecessarily fell from dizzy heights, especially when fresh bidding is expected to take place for its cement division. We can look for targets of Rs.12/17.

#Every dip should be used to accumulate the shares of the Aditya Birla group company, Vodafone Idea Ltd (Rs.16.28). Today it fell to Rs.15.75, where the prudent investors might have accumulated. 

Vodafone Idea Ltd has a total of $26 billion in outstanding debt, almost all of it owed to the Indian government for spectrum purchases. So any positive response from the NDA government, could push up the scrip to new 52 week levels.

Furthermore, you have to check the promoters list to understand the pedigree of the company. We have a target of Rs.50 - plus in the coming months. 

 Today's Call and Other Information

#By the shares of KFC India operator Devyani International Ltd (Rs.181.06) for targets of Rs.109/Rs.117. SL: Rs.172. 

The company remains optimistic about witnessing a recovery over the next few quarters and is confident of reaching 2,000 stores by the end of calendar year 2024. Photo: Devayani International Ltd.

#The morning call on J P Associates Ltd (Rs.8.44) saw it hit the Upper Circuit. The call was given when the scrip was at Rs.8.40. 

T₁: Rs.12,

T₂: Rs.17.

There is as such NO major negative news in the counter, except the debt overhang.  Now Fresh Bidding will take place for its cement division.

#The shares of 63 Moons Technology Ltd (Rs.384) is consolidating around the current ranges. It needs to give a close above Rs.387, for further upmove.

#The shares of Swan Energy Ltd (Rs.759.30). I had earlier give a target of Rs.1000, when it was available around Rs.210.

#The stock of BLB Ltd (Rs.18) can spurt anytime from now. Accumulate with a SL of Rs.16. 

#The stock of Vodafone Idea Ltd (Rs.16.39) has started to move in a range. Keep accumulating, it for targets mentioned earlier. 

The most striking point in the scrip is that: the government of India is holding substantial stake in the company. It is likely to be another Suzlon Energy Ltd (Rs.69), which if you remember, I recommended it around Rs.6.10, when most of the investors were not ready to buy the scrip -- some were even coming up with scary debt stories at that time. Now, all of these men have suddenly vanished.

#I waiting for the June, 2024 quarter results of Rajesh Exports Ltd (Rs.314). I am expecting some improvement in the Q1FY25 results, atleast in the topline. Meanwhile, the promoters have hiked their holdings in the counter. The work is going on for the completion of Lithium-ion battery factory at Dharwad, Karnataka.

Porinju Veliath: The Downfall of His Boldest Stock Call

Porinju Veliath, the charismatic stock market maven whose predictions in the mid, small, and micro-cap spaces once enthralled investors and traders on Indian bourses, has seen his star fall faster than a penny stock in a rising bull market. That's the price you pay for excesses in the share market.

💢Remember GVK Power & Infrastructure? At Rs.6.34, it’s making new 52-week lows. Porinju, in his heyday, boldly forecasted a target of Rs.27/29. Alas, the stock barely touched Rs.17, despite his relentless endorsements on various business channels. Sure, it hit an all-time high of around Rs.80 some 15 years ago, but those glory days are long gone.

💢The Hyderabad - based power and infrastructure company GVK Power & Infrastructure, dabbling in power, roads, urban infrastructure, bio-science, hotels, and manufacturing, was once heralded by none other than Porinju Veliath as the next Rs.1,00,000 crore giant. Fast forward to today, with a current market price of Rs.6.34, it barely scrapes together a market capitalization of Rs.1,001 crore. That's what happens when you go on a debt binge—things go south faster than a stock tip from a dubious guru.

Porinju Veliath, who once owned the stock, has since distanced himself from it. However, the damage has already been done,  GVK Power & Infrastructure has tumbled spectacularly from grace and investors lost money.

💢It seems the savvy investing crowd has caught on to his game of stock manipulation. After questioning his dubious recommendations, like Archies Ltd., I found myself blocked on Twitter—a badge of honor, perhaps.

💢Once, media channels couldn't get enough of him. At the drop of a hat, they'd roll out the red carpet for his so-called "STRONG Recommendations." Following that, YouTube videos would come at lightning speeds.

But after the spectacular flameouts of some of his top picks, their enthusiasm has waned. I suspect these business channels may have been swayed by financial incentives—after all, we live in an era where "paid news" isn't just a conspiracy theory but a business model.

💢Investors, especially those dabbling in small and micro-cap stocks, should tread carefully. Porinju Veliath's fall from grace in one of his highly recommended counters serves as a cautionary tale: the market is as much about careful analysis as it is about glitzy endorsements.

As the legendary investor Warren Buffett often advises, "Be fearful when others are greedy and greedy when others are fearful." Buffett's success stems from diligent research, a focus on fundamentals, and a long-term perspective. He warns against following the herd and stresses the importance of understanding the businesses you invest in.

Key Principles of Stock Investing:

1. Do Your Homework: Before investing, thoroughly research the company. Understand its business model, financial health, competitive landscape, and growth prospects. A well-informed decision is less likely to be swayed by market noise.

2. Focus on Value, Not Hype: Invest in companies with solid fundamentals and intrinsic value. Avoid getting caught up in market fads or hot tips that lack substantial backing.

3. Diversify: Spread your investments across different sectors and asset classes to mitigate risks. Diversification helps cushion against market volatility and unforeseen downturns in specific industries.

4. Think Long-Term: Successful investing requires patience. Focus on the long-term potential of your investments rather than short-term gains. As Buffett says, "Our favorite holding period is forever."

5. Stay Disciplined: Develop a clear investment strategy and stick to it. Avoid emotional decisions based on market fluctuations. Discipline helps in maintaining a balanced portfolio and achieving long-term goals.

6. Understand Your Risk Tolerance: Assess your risk tolerance and invest accordingly. High-risk investments can offer high rewards but also come with significant losses. Ensure your investment choices align with your risk appetite.

7. Beware of Speculation: Distinguish between investing and speculating. Investing is about buying shares in a company with the expectation of long-term growth, while speculation is akin to gambling on short-term market movements.

Conclusion: It's a jungle out there, folks. Investing in stock tips from strangers, no matter how charming or seemingly knowledgeable, can be perilous. The stock market is rife with pitfalls and sirens luring you with promises of quick riches. Beware of the sweet talk and glittering targets; they often mask the harsh realities of market volatility and the risks of following tips blindly. Do your due diligence, question boldly, and remember that no one—no matter how persuasive—has a crystal ball.

As the story of Porinju dims on the stock market horizon, may it remind us all to invest wisely and question boldly.

 Winning Strokes: Think Different 

The Indian markets are on a roll, after the Finance Minister Nirmala Sitharaman presented the Union Budget 2024-25 which focused on employment, skilling, MSMEs, and the middle class. The rally in the coming days is expected to become more broad-based -- picking up momentum in the small and mid cap space. The two very important development we witness in the budget 2024 are:

💢Provision of Rs 11.11 lakh crore (3.4% of GDP) for capital expenditure.

💢Aiming to reduce the fiscal deficit below 4.5% next year and and maintaining a declining central government debt-to-GDP ratio from 2026-27 onwards.

Proposing an investment of Rs 10 lakh crore, including Rs.2.2 lakh crore in central assistance, over the next five years under PM Awas Yojana Urban 2.0 to address the housing needs of 1 crore urban poor and middle-class families. This is positive for the real estate companies which are into affordable housing.

Post Budget 2024, the mutual fund managers have been recommending three sectors where you can park your fund: 

💢 Infrastructure.

💢Banks and Financial Sector.

💢 Consumption.

I have already recommended few stocks in the space among them are: J P Associates (Rs.8.50), Reliance Infrastructure (Rs.190.70),  Paytm Ltd (Rs. 494.55), Dhanlaxmi Bank Ltd (Rs.43.13) and Parsvnath Developers Ltd (Rs.11.97). 

My old recommendation, A2Z Infra Engineering Ltd (Rs.19.46) around Rs.5, has already given multibagger returns. I recommended when the ace Investor Shankar Sharma had just exited his holding in the company.

In the consumption story the stocks like: Rajesh Exports Ltd (Rs.313.40) and Vodafone Idea Ltd (Rs.15.98), Sarthak Industries Ltd (Rs.22.83), Eros International Media Ltd (Rs.19.40) is coming to my mind at the moment. These are my old recommendations. I'm expecting the scrip of Rajesh Exports to start doing well from H2FY25.

Meanwhile, Narendra Modi government who is a major stake holder in the company is making a killing in the shares of Vodafone Idea Ltd. It acquired its stake in Vodafone Idea Ltd at ₹10 per share, above the then market price of ₹6.85; as per Companies Act regulations. It was a very prudent move of the NDA government at the correct juncture.

The markets are expected to maintain positive momentum in the coming days, with the rally slowly turning into broad-based. The investors are suggested to cut down on speculation and buy scrips which has a story to tell. 

JP Associates Ltd (Rs. 8.50) and Buyer Freeze Syndrome

JP Associates Ltd has been enjoying a series of Buyer Freezes lately. Interstingly, when stocks surge, everyone becomes a market sage armed with lofty targets coupled with an array of postive vibes. 

But when they stumble or when the share starts hitting continuous Seller Freezes, it's all doom and gloom out there in the bourses — a phenomenon Rakesh Jhunjhunwala famously called "Analysis Paralysis." 

I've seen this play out with my earlier recommendations too like: Premier Explosives Ltd at Rs.29/30, Suzlon Energy Ltd at Rs.6, Swan Energy Ltd at Rs.210, and Wockhardt Ltd at Rs. 170, to name a few. These stocks have turned into multi - baggers over time. 

Incidentally, the real issue arises when some folks in stock market start comparing option trading gains to equities—apples and oranges, guys! Don't get confused!

Meanwhile, some of you have asked me, about JP Associates Ltd’s targets. Honestly:

💢 I have no clue why it plunged from such dizzy heights. The acronym, NCLT probably kicked in the fear psychosis.

💢 2ndly, with Adani reportedly interested in its cement division, who knows where it could go?

I'll post a brief review on my blog today, factoring in the latest news and budget updates, if time permits. Keep an eye on the blog update, after 7 pm.

Good morning and have a fantastic Sunday!

 BLB Ltd (Rs.18.05): An Emerging Opportunity in the Share Market

Recent intel from my reliable sources in Delhi indicates that the proposed open offer price of Rs.22.50, which surfaced in January 2024, was ultimately rejected by both parties due to procedural and other undisclosed issues. 

However, these setbacks have not deterred the company's outlook, as it is poised for a promising performance starting this quarter, according to the sources who preferred to remain anonymous.

By the way, as the shares of numerous brokerage houses are climbing in sync with the Sensex, this particular stock has the potential to be a standout performer. It is advisable to accumulate this stock close to the company, as it is expected to gain momentum imminently. Photo: Economic Times, March 2024.

Price Targets:

💢First Target: Rs. 32

💢Second Target: Rs. 37

So, dear investors, it appears the stage is set for this stock to steal the spotlight and dance its way up the charts. Keep an eye on it, for you never know when the music might start and the share price might just waltz to new heights. Happy investing, and may your portfolios be ever in your favor!

Important: Some shares where virtually there's hardly any activity, like sloth on a lazy Sunday, is  languishing in the T - group for months; for some reasons as mysterious as the Bermuda Triangle.

I would like to reiterate and emphasize that, since the arrival of the new Chairperson, the performance of SEBI and its Surveillance Department have been very abysmal and worrisome. 

Therefore, the Government of India should step in, plug the loopholes and rev up their engines to get things back on track.

The recent Telecom Tariff Hike was comparable to what money would have earned in Bank FDs..

Interest charged by banks and financial institutions is like a premium on your idle money, or in simpler terms, it's the rent you pay for letting your money change locations from your pocket to theirs.

Recently, telecom companies hiked their tariff plans after a three-year pause, much to the chagrin of many Indians. However, these recent hikes, ranging from 17-19%, coupled with the natural growth in data usage thanks to the 5G wave, are expected to push the industry average revenue per user (ARPU) to a decade-high of Rs.225-230 by fiscal 2026, up from Rs 182 in fiscal 2024, according to CRISIL Ratings. Photo: The India Times.

CRISIL Ratings also noted that, along with a reduction in capital expenditure due to fewer network investments following the completion of 5G roll-outs and limited spectrum renewals, the return on capital employed (RoCE) will improve. This will support deleveraging in the industry, thereby enhancing credit profiles. Prior to this, the telecom companies had raised their mobile tariffs in November 2021.

Now the question remains: was the telecom Tariff hike too steep. Let's examine:

Suppose we have Rs.1000, how much time would it take to double the amount with an existing interest rate of 8% for one year FDs? ====================

To find out how long it takes for an investment to double with an 8% annual interest rate, we can use the formula for compound interest:

 A = P (1 + r/n) ⁿᵗ ------ (1)

where:

- A,  is the amount of money accumulated after ( t) years, including interest.

- P, is the principal amount (the initial amount of money).

- r, is the annual interest rate (decimal).

- n, is the number of times that interest is compounded per year.

- t, is the number of years the money is invested for.

Here:

A = Rs.2000

P = Rs.1000 

r = 0.08 (or 8% per year)

n = 1 (We have taken it as compounded annually. If it is compounded monthly or weekly the figure would be different)

We need to solve for "t" (The time period the principal sum gets doubled). Putting the values in the equation (1) we get:

2000 = 1000 (1 + 0.08/1)ᵗ,

=> 2 = (1+ 0.08)ᵗ

Taking natural logarithm (ln) of both sides:

ln (2) = t * ln (1.08),

=> t ~ 9 years.

It will take approximately 9 years for Rs.1000 to become Rs.2000 at an 8% annual interest rate, compounded annually.

This means if anyone had kept the money in Banks it would have earned at ~26% (25.97%) interest in 3 - years. 

Remember we have taken PLR for calculation. The companies takes loan at a  much higher intes rate. So, considering those cases, was the telecom Tariff hike too high or less or fine ? 

Do let me know your views, either in this website or in the socal media platforms where I am active (Facebook and Twitter basically).

 Today's Call 

#Buy the shares of 63 Moons Technology Ltd (erstwhile Financial Technical Ltd) near the CMP of Rs.350, SL: Rs.342, T: Rs.421. 

63 Moons Group is radically transforming from a traditional fintech company to a leading-edge technological enterprise. This evolution focuses on emerging technologies, including blockchain, digital assets, cybersecurity, artificial intelligence (AI) and legal tech. 

63 Moons Technologies Ltd is transforming from fintech to tech enterprise, focusing on blockchain, AI, and cybersecurity. Key initiatives include 63 SATS, 3.0 Verse, and QiLegal. Photo: AngelOne

As mentioned above, the company has forayed into new verticals which will take the scrip to new highs.

63 moons Technologies offers consultancy, computer programming, and related services. It is a global leader in supplying technical intellectual property (IP) and domain expertise for the development and trading of advanced financial markets. These markets are designed to be transparent, efficient, and liquid, covering a wide range of asset classes such as stocks, commodities, currencies, and bonds.

#Accumulate the shares of Vodafone Idea Ltd near Rs.16.57/Rs.16.60, T: Rs.25/Rs.27/Rs.32. Three recent developments involving Vodafone Idea are noteworthy:

💢Financial Guarantee Waiver Request: As reported by The Business Standard on July 11, 2024, Vodafone Idea has approached the Department of Telecommunications (DoT) to request a waiver for a financial bank guarantee worth Rs 24,747 crore, which is due in September 2025. 

This guarantee must be deposited one year prior to the due date, as per spectrum auction rules. A source, who wished to remain anonymous, informed PTI of this request.

The moratorium period for spectrum payment obligations from auctions held until 2016 ends between October 2025 and September 2026. Given the government’s significant stake in the company, it is anticipated that measures will be taken to prevent any adverse impact on Vodafone Idea.

💢 Convertible Debentures Conversion: According to a report by the Economic Times on July 12, 2024, the Indian unit of American Tower Corp (ATC) has asked Vodafone Idea to convert the remaining 1,600 optionally convertible debentures (OCDs) into 160 million fully paid equity shares, representing a small 0.2% stake. Vodafone Idea is working towards this conversion as part of its financial strategy.

💢 Funding and Network Improvements: The India Times reported on July 11, 2024, that Vodafone Idea, bolstered by Rs 215 billion in recent funding, is set to enhance its network quality, potentially slowing subscriber growth for competitors Reliance Jio and Bharti Airtel. S&P Global noted that Vodafone Idea raised most of these funds through a Rs.180 billion follow-on public offer (FPO) completed in April 2024. 

The company plans to issue shares worth Rs.24.6 billion to equipment vendors Nokia and Ericsson to settle outstanding payments. 

Meanwhile, Equity Analysts have set target prices for the company’s shares ranging from Rs.22 to Rs.34, despite expectations of revenue decline due to a lack of network expansion and ongoing subscriber churn. 

Furthermore, on the positive side, the impact of recent tariff hikes by all three telecom operators is expected to be felt from the third quarter of FY25.

In an interesting development, Narendra Modi government is making a killing in the shares of Vodafone Idea Ltd. It acquired its stake in Vodafone Idea Ltd at ₹10 per share, above the then market price of ₹6.85; as per Companies Act regulations. It was a very prudent move of the NDA government.

#Accumulate the shares of BLB Ltd (Rs.18.65) in market dips. In January 2024, media reports indicated that Dream Achiever Consultancy Services Private Limited had announced an open offer for the acquisition of up to 1,37,44,967 (One crore thirty-seven lakh forty-four thousand nine hundred sixty-seven) fully paid-up equity shares of BLB Limited.

The shares have a face value of Re.1 each and represent 26% of the total issued, outstanding, and fully paid-up equity share capital of the company. The offer price was set at Rs.22.60 per equity share, higher than the CMP of the shares, indicating some form safety in terms of investment.

#In another significant development, the shares of Indowind Energy Ltd (Rs.32) made an intraday high of Rs.34.65, a couple of days back. I have been recommending the share since it was near Rs.10. The stock has given multifold returns to patient shareholders. You may book complete profits and wait for dips to enter.

#In an encouraging development, the shares of my recently recommended P C Jewelers Ltd (Rs.70) made a new 52 - week high Today at Rs.70.70. You may book profits and wait for dips to enter again. Congratulations to the shareholders.

 Today's Call

Introduction: BLB Limited specializes in 'Jobbing and Arbitrage,' known for its strong capital commitment and deep understanding of market dynamics and structure. The company's main business is trading and investing in shares and securities. BLB Limited is a corporate member of the National Stock Exchange of India Limited (NSE).

Buy the shares of BLB Ltd near the CMP of Rs.19.50, for targets above Rs.27.

According to ICICI Securities, here are the strengths of the company:

💢 Rising Net Cash Flow and Cash from Operating activity.

💢Company with Low Debt.

💢Increasing Revenue every quarter for the past 2 quarters. Photo: Nirmal Bang.

In a significant development in January, 2024, Dream Achiever Consultancy Services Private Limited, purchased 1.37 crore fully paid-up equity shares from public shareholders at a price of Rs.22.60 per share through an open offer. The total expenditure incurred by Dream Achiever Consultancy on this open offer amounted to Rs 31.006 crore. The face value of BLB Limited shares is Re.1.

Special Offer: If you have a portfolio size of Rs.1 (one) lakh and want to earn a steady income through a steady mix of delivery based (>= 80%) and options trading (<= 20%), then you can go for my profit sharing (70:30 below Rs.10 lakhs -- fixed) arrangement. If you remember, earlier the minimum portfolio size to join me was Rs.2 (two) lakhs.

Procedure:

💢You have to compulsorily open a demat account in my associated Brokerage House.

💢 Provide me, User Name and Password to trade (buy and sell) in your account.

💢The profit and loss will be adjusted every week and settled. If there's any loss, it will be adjusted in the future trade.

💢No stock will be bought in Figures Market, except sometimes a little risk will be taken in the Options Trading with less than 20% of the total portfolio amount (occassionally) to speed up the process and at the same time lower the risk of the money invested. 

💢No margin trading will be done in the account, to maintain a limited risk profile of the portfolio.

💢No other demat account, except those from my associated Brokerage House, will qualify for this offer.

💢This offer is valid till Kali Pooja (Deepawali/Sambat).

💢For more details, please send me a mail at: suman2005s@rediffmail.com or sumanm2007s@gmail.com.

1.

 Today's Call

Introduction:

Ashoka Metcast Ltd is a part of a diversified business group having interests in several sectors, which include: Oil and Gas, Steel, Infrastructure, Electronic Equipments and Real Estate. 

Its flagship Group Company - Gujarat Natural Resources Ltd is engaged in the business of Oil & Gas exploration and production. The company is listed in the BSE.

Buy the shares of Ashoka Metcast Ltd near Rs.20.40/Rs.20.50, for short term targets of Rs.32/37.

Financials:

Market Cap: Rs.50 Cr.

EPS: Rs.2.

TTM P/E: 10.10.

Industry P/E: 44.24.

Book value: Rs.41.83.

Ashoka Metcast Ltd's March, 2024 quarter's Financial Performance: 

Ashoka Metcast's net profit increased by 185.60% to Rs.3.57 crore in the quarter ending March 2024, compared to Rs.1.25 crore in the same quarter of the previous year. During the same period, sales went up by 104.62% to Rs 39.39 crore, from Rs.19.25 crore the previous year.

For the full year ending March 2024, the net profit grew by 48.76% to Rs.4.79 crore, up from Rs.3.22 crore the previous year. Annual sales also rose by 31.34% to Rs.66.25 crore, compared to Rs.50.44 crore in the previous year. 

From Simply Wall:

Ashoka Metcast had ₹127.9m of debt at March 2024, down from ₹157.5m a year prior. However, because it has a cash reserve of ₹15.1m, its net debt is less, at about ₹112.8m.

The latest balance sheet data shows that Ashoka Metcast had liabilities of ₹206.1m due within a year, and liabilities of ₹60.2m falling due after that. On the other hand, it had cash of ₹15.1m and ₹262.8m worth of receivables due within a year. So it actually has ₹11.6m more liquid assets than total liabilities.

This surplus suggests that Ashoka Metcast has a conservative balance sheet, and could probably eliminate its debt without much difficulty. Photo: Markets Guruji.

Special Offer: If you have a portfolio size of Rs.1 (one) lakh and want to earn a steady income through a steady mix of delivery based (>= 80%) and options trading (<= 20%), then you can go for my profit sharing (70:30 below Rs.10 lakhs -- fixed) arrangement. If you remember, earlier the minimum portfolio size to join me was Rs.2 (two) lakhs.

Procedure:

💢You have to compulsorily open a demat account in my associated Brokerage House.

💢 Provide me, User Name and Password to trade (buy and sell) in your account.

💢The profit and loss will be adjusted every week and settled. If there's any loss, it will be adjusted in the future trade.

💢No stock will be bought in Figures Market, except sometimes a little risk will be taken in the Options Trading with less than 20% of the total portfolio amount (occassionally) to speed up the process and at the same time lower the risk of the money invested. 

💢No margin trading will be done in the account, to maintain a limited risk profile of the portfolio.

💢No other demat account, except those from my associated Brokerage House, will qualify for this offer.

💢This offer is valid till Kali Pooja (Deepawali/Sambat).

💢For more details, please send me a mail at: suman2005s@rediffmail.com or sumanm2007s@gmail.com.

 Today's Call

#Re - enter the shares of Vodafone Idea Ltd (Rs.17.41) near the CMP for short term targets of Rs.22 and Rs.28. After the tariff hike and a bounce from Rs.17.30, the stock is looking attractive Moreover, Nuvama expects an inflow of $ 254 million through the passive funds. Also, Vodafone Idea, 5 other stocks expected to enter MSCI index, as per a recent report in Economic Times.

Meanwhile, JM Financial is bullish on Vodafone Idea as they see the telecom space remain in pink after the recent price hike. The stock has witnessed a bump in volumes in the last 3 months along with a bullish pole and flag pattern set up, says the research firm. The analysts gave a target of Rs.24/28 for the stock.

Amar Deo Singh, Head Advisory at Angel One on Monday said the telecom companies will gain from the recent tariff hike as they have not raised tariffs since 2021. 

For Vodafone Idea Ltd (VIL), the analyst said the stock has been like a "slow and steady" performer recently. "It seems that the worst is over for the stock. If it manages to sustain above Rs 21-22 levels, then the stock is headed for significant rally," Singh stated.

#The stock of Swan Energy Ltd (Rs.624) made an intraday high of Rs.628. The value unlocking of the shares will take place after the listing of RNEL, which has the capability to manufacture war ships.

#The shares of Indowind Energy Ltd (Rs.29.99) hit the Buyer Freeze in the NSE. I have been repeatedly advocating a buy and hold in the scrip since it was around Rs.11/12.

#Paravnath Developers Ltd (Rs.12.58) is showing gradual Improvement in fundamentals. The risk taking investors can buy the scrip for short term targets of Rs.21/22.

Front Running and Swan Energy Ltd (Rs.192.15)

Accumulate the stocks from distress selling....

Front-running is an illegal and unethical practice where someone trades in shares based on advance information from a broker, dealer, analyst, or other executive at a market intermediary in their personal accounts, before the trades are executed by that entity.  Photo: The Hindu BusinessLine.

After the name of Swan Energy Ltd, got entangled with Quant Mutual Fund, selling has been witnessed in the counter, especially yesterday when it fell more than 4% in intraday trade, closing near the days low. 

It is to be noted that around 100 stocks out of the basket consisting of 178 that are part of the portfolio of Quant Mutual Fund ended lower, post Moneycontrol's report on Sunday that mentioned SEBI's search and seizure operations on the premises of the fund house. The operation was conducted across two locations – Mumbai and Hyderabad. Quant Mutual Fund is owned by Sandeep Tandon, with assets under management close to Rs.90,000 crore.

It is pertinent to mention here that Quant Mutual Fund has been a top performer, growing its AUM significantly from Rs.258 crore in January 2020 to over Rs.90,000 crore by June 2024. 

However, selling in the counters of Swan Energy Ltd is just a MISNOMER, since allegations of front running is on the fund house and has nothing to do with individual stocks; except creating a negative sentiment on future performance (of the stocks in its portfolio); leading to forced redemptions by the investors -- means there could be sudden increase in supply of the shares of Swan Energy Ltd. 

The prudent investors should therefore accumulate the panic - selling - stocks by the investors of Quant Fund.

Meanwhile, according to Trenlyne, in May 2024, 27 mutual funds bought while only 4 mutual funds sold Swan Energy Ltd, resulting in a net change of 193,576 shares. 

Kirtan Shah from Credence Wealth Advisors LLP noted that Quant MF holds substantial investments in large-cap stocks, with significant exposure to Reliance. He mentioned that liquidity for redemptions isn't a concern but anticipated potential selling in mid and small-cap stocks held by Quant, possibly leading to short-term underperformance.

You need to accumulate, since a major event like RELISTING of the shares of Reliance Naval and Engineering Ltd (RNEL) will take place very soon. Post Listing Swan Energy Ltd will get the tag of Defence Stock, since according to my sources, RNEL has a high probability of getting contract for making WAR SHIPS.

Another major factor fueling the positive sentiment around Swan Energy Limited is its recent success in obtaining a significant order from the Karnataka government. 

The company will be installing India's second-largest solar plant, a pioneering project that highlights Swan Energy’s dedication to sustainable energy solutions. This initiative aligns seamlessly with the Indian government’s ambitious renewable energy targets and is anticipated to greatly enhance the company’s long-term growth.

About Swan Energy Ltd:

Swan Energy Limited, based in Mumbai, Maharashtra, is a global company with a long history dating back to 1909. Owned and managed by the Dave and Merchant families, it operates in three main areas:

Textile: Swan Energy produces and sells cotton and polyester textiles. It has a modern fabric processing plant in Ahmedabad, capable of handling 100,000 meters per day.

Real Estate: This segment focuses on developing and managing residential and commercial properties. The company is known for its high-quality construction and has completed over 24 million square feet of projects.

Energy: Swan Energy plays a crucial role in India’s energy sector with its 5 MMTPA FSRU-based LNG terminal in Jafrabad, Gujarat, the first of its kind in the country.

The company is known for its quality products and services and is always looking for growth and innovation opportunities. 

Some of its notable achievements include the 2018 commissioning of the Jafrabad LNG terminal, winning the “Best Energy Company” award at the CNBC-TV18 India Business Leaders Awards in 2020, and being ranked 10th on Forbes India’s Most Valuable Private Companies list in 2021.

As Swan Energy continues to grow and achieve milestones, it remains a significant player in India’s industrial sector. With a strong focus on renewable energy, the company is well-positioned for a bright future that aligns with India’s energy goals.

Investors and stakeholders are keenly watching its progress, expecting substantial returns in the coming years.

 Today's Calls

#Buy the shares of P C Jewelers Ltd (Rs.50.40) near the CMP for targets of Rs.61/67. The company has come up with better Bottomline in March, 2024 quarter. It is raising Rs.2000 crore debt through rights issue and private placement. Photo: Just Dial.

On June 26, 2024 the price of 10 grams of gold was ~Rs.72,000. Pure 24-carat gold was valued at Rs.72,220 per 10 grams, while 22-carat gold was priced at Rs.66,240 per 10 grams, indicating a drop in price. At the same time, the price of silver dropped to Rs.91,600 per kilogram.

#The share of Vodafone Idea Ltd (Rs.18.04) made a new 52 - week and reached my 1st Target of Rs.18. Book some profits and wait for dips to enter.

#The stock of Parshnath Developers Ltd (Rs.13.70) moved to Rs.13.80. The company came up with satisfactory March quarter results. Accumulate for targets of Rs.17/22. 

#The scrip of J P Associates Ltd (Rs.9.92) made an intraday high of Rs.10.25 yesterday. Accumulate for targets of Rs.17/19.

#Accumulate the shares of Eros International Media Ltd (Rs.19.52) near the CMP. T: Rs.27/32, which it should reach before Durga Pooja.

 Swan Energy Ltd (Rs.618.65): Buy

Target: Rs.1000+

Time: 9 to 12 months.

One of the most influential businessmen in NaMo's India is someone you likely haven't heard of much. If you search for Nikhil V. Merchant online, you'll struggle to find a photograph, profile, interview, or even a quote from the entrepreneur in his fifties. However, his close ties with Narendra Modi are well-known among the top ranks of the Bharatiya Janata Party (BJP) and its government in Delhi. Photo: Instgram.

While other corporate giants make headlines, the promoter of a relatively obscure company, who is believed to have Midas touch, Swan Energy Ltd, is genuinely enjoying "Achche Din" as public sector firms eagerly seek to do business with him. Swan is led by Nikhil Merchant and his father-in-law, Navinbhai Dave, who purchased it from the Goenka group in 1991.

Swan Energy Limited is an Indian business enterprise that operates in the petrochemical, textile, real estate, and energy industries. Textile, Energy, Building/Others, Distribution & Development, Warehousing, Manufacturing, and Power Generation are some of its segments.

Swan Energy's diversified business verticals include Oil & Gas, Petrochemical Manufacturing & Trading, Textiles, and Realty. Its business segments encompass Textile, Energy, Construction/Others, Distribution & Development, Warehousing, Manufacturing, and Power Generation.

Swan Energy Ltd (Rs.618.65) earlier this year raised Rs.3,000 crore from qualified institutional placement of shares, priced at Rs.670 apiece, this is at a premium of ~7.50% with respect to CMP. 

In March, 2024, its natural gas business arm Swan LNG Pvt Ltd prepaid Rs.2,206 crore of loan taken from a consortium of lenders. Post-prepayment, Swan LNG's debt has come down to Rs.1,611 crore and the firm will save around Rs.250 crore in interest cost annually.

Reliance Naval and Engineering Limited (R-Naval) is an Indian company based in Mumbai that builds ships and heavy industrial equipment. It used to be called Reliance Defence & Engineering Limited, Pipavav Shipyard Limited, and Pipavav Defence & Offshore Engineering Limited. The company is working on getting listed again on both stock exchanges.

In March, 2024 Swan Energy announced that in accordance with the order of the Hon'ble NCLT, Ahmedabad Bench dated 23 December 2022, issuance of 1 equity share for every 275 equity shares held by the existing shareholders of RNEL (Reliance Naval and Engineering Ltd) is completed. RNEL is in the process of obtaining the RELISTING approval from the stock exchanges and has made the required payments as demanded by the exchanges. The final listing approval is under consideration of the exchanges. Once the listing of RNEL is done tentatively by August, 2024, the value will unlock.

This acquisition is a strategic move for the company, positioning itself as major player in the commercial and Naval Vessel manufacturing and ship repair company in India. It is poised to become the largest private entity in its domain of operations in India. Moreover, according to my sources, there's a high chance of RNEL getting contracts for making  WAR SHIPS as it is a highly sophisticated company. 

It is to be remembered that Swan Energy is a strategic investor of Successful Resolution Applicant (SRA), i.e., Hazel Mercantile (HML), through a Special Purpose Vehicle, namely Hazel Infra (HIL), to acquire Reliance Naval & Engineering.

In a significant development, in August 2016, India's major public sector oil companies, ONGC, IOC, and HPCL, backed Merchant's favored project—an LNG terminal at Jafrabad port in Gujarat. These three firms reserved 60% of the terminal's capacity, which is a floating storage regasification unit (FSRU). Additionally, the Gujarat government company GSPC reportedly booked 1.5 MT of the terminal's capacity. These offtake agreements have made the LNG venture almost risk-free for Nikhil Merchant.

I am not aware of the final status of its Rs.5600 crore (Rs.56 billion) Floating Storage and Regasification Unit-based liquid natural gas (LNG) import terminal at Jafrabad in Gujarat, but last time I read somewhere that it is in the final stages of completion. This is a massive venture and could alone take the scrip above Rs.1000.

In 2022, Swan Energy, the manufactures and markets cotton and polyester textile products in the country expanded the capacity of its Ahmedabad plant to 3 million metres per month. 

The business aims to tap into retail and export markets in areas including Latin America, South Africa, Vietnam, Bangladesh, Sri Lanka, and the US.

Flip side: Probably, the only notable controversy involving Swan occurred in March 2009, when the Gujarat government under Narendra Modi decided to transfer a 49% stake in the Gujarat State Petroleum Corporation’s Pipavav Power Company Ltd (GPPL) to Swan Energy for Rs.381 crore.

 Today's Calls

#You can take fresh entry at Paytm Ltd near the CMP of Rs.404.75, T: Rs.441, SL: Rs.392. 

There are media reports about Zomato Ltd (Rs.195.50) being in talks with Paytm for acquiring the latter’s movies and event ticketing business. Both the companies confirmed the development but said that the talks were at preliminary stages and no binding agreement was signed. This if happens will be a win - win situation for both the companies. If you remember, I recommended Zomato Ltd near Rs.53, which turned out to be a multibagger. There is rumour of Gautam Adani group, in talks with Paytm Ltd to take a substantial stake in the company.

The Economic Times reported on June 16, 2024 that Zomato is looking to acquire Paytm’s movie booking and events unit, in a deal that may value Paytm’s vertical at around Rs.1,600-1,750 crore. Post the addition of receivables from cinema exhibitors, the valuation could go up to Rs.2,000 crore, according to that report.

#The stock of Indowind Energy Ltd (Rs.25.45) is clocking huge volume today. In the NSE, the volume of shares traded has crossed 18 lakhs. Something could be cooking in the counter. Keep watch.

#The scrip of Vodafone Idea Ltd (Rs.17.10) is getting resistance around Rs.17.40. Unless the shares closes above this level, it might consolidate around the current ranges. Keep SL of Rs.16.70.

#The cost cutting measures of Zee Entertainment Enterprises Ltd (Rs.155.45) should etch a better fundamentals for the company. The company has already turned positive in the March, 2024 quarter. This positive momentum is expected to continue in future. You should keep it in your portfolio, as it rumoured to be closely associated with the BJP government. Target: Rs.197. Photo: Live Law.

#The stock of J P Associates Ltd (Rs.10.74) made an intraday high of Rs.10.94, clocking a huge volume of 68.45 lakhs. Accumulate!

#Meanwhile, Parsvanath Developers Ltd (Rs.13.26) came out with satisfactory set of March, 2024 quarter results.

💢Consolidated net loss of Rs.307.37 crore in Q4FY24 Vs Rs.421.18 crore in Q4FY23, showing an improvement on Y - o - Y basis.

💢However, an elevated Finance cost of Rs.223.46 crore in Q4FY23 Vs Rs.106.37 crore in Q4FY23 is a matter of concern.

💢Fall in sales should not be of much concern for a construction company, because it will deliver when its project gets completed. Hold!! 

 Today's Call

#Accumulate the shares of Zee Entertainment Enterprises Ltd near the CMP of Rs.155 for targets of Rs.170 and Rs.197.The short term correction seems to be over in the scrip. 

#The shares of Sarthak Industries Ltd (Rs.25.50) have not moved up since a long time. This quarter results of the company is expected to be better than Q4FY24.

#Accumulate the shares of Eros International Media Ltd (Rs.20.68) near the CMP for targets of Rs.27/31. The season of the media sector has already kicked off.

#The stock of IDFC First Bank Ltd (Rs.83.40) made an intraday high of Rs.83.94. The stock was recommended around Rs.78 on Twitter (X) last week.

#Buy the shares of Parsvanath Developers Ltd (Rs.14) for short term targets of Rs.19/21. If you remember, I have been recommending the scrip since it was around Rs.7/8.

In the Q3FY24 the company came out with good results. The topline increased by 223.41% & the loss decreased by 89.75% YoY. As compared to the previous quarter the revenue grew by 83.1% and the loss decreased by 77.98%.

Parsvanath Developers Ltd has informed the BSE that the meeting of the Board of Directors of the Company is scheduled on 20/06/2024 ,inter alia, to consider and approve The Audited Financial Results of the Company (both Standalone and Consolidated) for the Quarter and Financial Year ended March 31, 2024, and Recommend dividend, if any, for the Financial Year 2023-24.

#The shares of Indowind Energy Ltd (Rs.26.10) hit the Upper Circuit. I have been advocating a buy on the scrip since some time.

#In a significant development Vodafone Group plans to sell an almost 18% stake in India's Indus Towers for up to $ 2 billion (~Rs.16,500 Cr). This is a significant increase from the approximately 10% stake they initially intended to sell. 

The telecom company, holds 21.50% stake in Indus Towers. It is planning to use the proceeds from the sale to repay debt, according to a report by Reuters.

Moreover a tariff hike of ~20% by telecom Companies can come at any time.

Thus the revised target of Vodafone Idea Ltd (Rs.16.54) is Rs.32.

#My recently recommended Dhanlaxmi Bank Ltd (Rs.44.88) hit the Upper Circuit. It is one of the finest banks from South India.

#Accumulate the shares of J P Associates Ltd (Rs.10.80), for targets of Rs.21/25, as now NCLT will speed up the process of the sale of cement division.

 Today's Call

Buy the shares of Jaiprakash Associates Ltd (J P Associates Ltd) near the CMP of Rs.11.21, for short term targets of Rs.19/21. SL: Rs.9.70.

Founded by Jaiprakash Gaur, the group experienced rapid growth from 2000 to 2006, benefiting from surges in real estate and infrastructure. Jaypee Power Ventures Ltd and the group’s engineering and construction arm, JP Associates Ltd, saw their revenues increase significantly, with annual growth rates of 26.92% and 32.08%, respectively, from 1999-2000 to 2014-15. However, during this period their debts also grew substantially, increasing by 40 times and 20 times, respectively.

Recently, the Allahabad bench of the National Company Law Tribunal (NCLT) directed initiation of insolvency proceedings against debt-ridden Jaiprakash Associates (JAL). The insolvency plea against the company was filed by ICICI Bank and State Bank of India in 2018 and 2022 respectively.

Pronouncing the order, a two-member NCLT bench, comprising members Praveen Gupta and Ashish Verma also appointed an interim resolution professional (IRP). Photo: Just Dial.

Reduction or Debt: The company has been selling its cement plants to reduce debt. In December 2022, Jaiprakash Associates (JAL) and Dalmia Bharat had signed a framework for the acquisition of JAL's cement, clinker and power plants for an enterprise value of Rs.5,666 crore. In April 2023, a definitive agreement was signed between Dalmia Bharat and JAL to acquire the cement business as per the announcement.

Out of its substantial debt of ₹29,805 Cr, JP Associates (Rs.10.80) plans to transfer ₹18,955 Cr to a SPV. This transfer, which is part of a Scheme of Arrangement, awaits approval from the NCLT and has already been endorsed by all relevant stakeholders.

In order to reduce its debt, J P Associates Ltd in November last year, announced a deal to transfer about shares worth Rs.360 crore to ICICI Bank under a settlement agreement.

The company is thus slowly cutting down its debt and currently it needs around Rs.5000 crore to clear off the NCLT mess, which I believe is achievable, without much hassles.

I feel this NCLT move might speed up the process of Cement division sale, which is struck up since 2022.