Winning Strokes

Photo: 63 Moons Technologies Ltd

#The stock of Urja Global Ltd closed at Rs.5.44 down 4.90% in the lower circuits. If you can recollect, I had penned an article on 30 January, 2018 titled: Urja Global  Ltd: A case of Unbridled Stock Manipulation or too much Euphoria.....? At that time the scrip was quoting at Rs.9.72. After that I wrote several times in this blog not to get carried  away by the synthetic euphoria generated by vested groups and that any price of the stock above Rs.2-3, does not merit any attention -- the share I believe is moving towards that level. Now where are the Electric car, Solar Energy and African story gone? Why are the promoters who gave a (long) positive interview in YouTube are silent?

If possible read the contents of this blog on a regular basis,  to stay ahead of others. This blog is not an investment journal, however, I believe you will get lot of tips and tricks that might help you in chalking out an investment road map, in Indian bourses.

#The stock of Tata Motors Ltd moved to Rs.376.25, before closing at Rs.370.85. Tata Motors witnessed an overall growth of 38 per cent in passenger and commercial vehicle sales last month with its new passenger cars - Tiago, Tigor, Nexon and the Hexa being the growth drivers. In the commercial vehicle sector, industrial developments, fresh tenders in car carriers, coal movement and  the petroleum sector were attributed as growth drivers by the company. An increase in demand from construction, logistics, e-commerce and FMCG applications have also contributed to the retail of CVs. The growth is a promising one, considering the CV industry has been collectively limping back from the slow down witnessed in sales in 2017. 

Tata Motors Ltd reported a surge in quarterly profit, driven by higher sales at its Jaguar Land Rover (JLR) business after an exceptionally weak quarter a year earlier.

Net profit for the quarter ended December 31 came in at ₹11.99 billion ($187.15 million) compared with ₹937.7 million in the same quarter a year ago; the biggest jump in seven quarters. Tata Motors Ltd reported a near 11-fold rise in fiscal third-quarter profit as a surprise turnaround in its India business helped offset a slowdown in its Jaguar Land Rover (JLR) unit. 

Those who have bought the stock today in intraday dip can look for  short term targets of Rs.182-184; next week.

#The stock of Aban Offshore Ltd today closed flat at Rs.169.90, amidst a decline in the crude oil prices in the international markets. However, oil analysts expect the price of crude to rise steadily this year, but remain in a tight band dictated by U.S. shale output growth on one side and OPEC supply restraint on the other, a Reuters poll showed on Wednesday. The survey of 37 economists and analysts forecast Brent crude would average $63 a barrel in 2018, slightly higher than $62.37 projected in the previous month's poll. "OPEC's level of compliance (with agreed production curbs) and the pace of U.S. shale's output growth are likely to be the key fundamental price drivers in 2018," Ashley Petersen of Stratas Advisors said. Meanwhile,  the top oil exporter Saudi Arabia is likely to cut prices for all crude grades it sells to Asia in April after demand for Middle East crude fell in last month’s trade, trade sources said on Thursday. 

Based on the historical trend, population growth and economic outlook, most of the international agencies and consultants were of the view that oil demand would reach 121 mmbpd by 2040. However, as the automotive industry becomes more incentivized to build electric vehicles (EVs), this is unlikely.

Surely, EVs won’t replace all ICEs overnight. That transformation would require over decades. Therefore, no one is claiming that oil demand in road transportation in particular will be wiped out suddenly.  Offshore drilling rigs are an intrinsic part of the oil discovery and exploration industry and Aban Offshore Limited is a major player in this sector. 

In another development, there were earlier media reports that Promoters of Aban Offshore Ltd have offered to pay up to $600 million in a one-time settlement to 17 banks to which it collectively owes nearly $2 billion. The banks, meanwhile, are willing to take up to a 50% haircut which translates to around $1 billion as a potential one-time settlement -- this means perhaps we are very close to a settlement. 

#The stock of 63 Moons Technologies Ltd (Rs.92.95), formerly known as Financial Technologies Limited, was recommended today at around Rs.94-95, for short term targets of Rs.117-121. 

It is pertinent to mention here that Venkat Chary, Chairman of 63 moons technologies said on January, '18: "There are no liabilities today. Nothing has been proven. Not one contract entered into on NSEL platform has been proved illegal or irregular as on today. If any wrongdoing is proved against NSEL then at most we can take it to bankruptcy. We, as a holding company, have invested Rs 40 crore in NSEL and we will lose only that amount".

63 moons technologies (formerly FTIL) has already filed a special leave petition (SLP) in the Supreme Court challenging the Bombay High Court verdict upholding an MCA order directing the merger of scam-hit NSEL with FTIL. 

In February 2016, the GOI had passed an order directing the merger of scam-hit National Spot Exchange Ltd (NSEL) with FTIL. The draft order was issued in October 2014. It was the first case of the government ordering the merger of two private sector companies (under Section 396 of the Companies Act 1956).  

Section 396 in The Companies Act, 1956:

Power of Central Government to provide for amalgamation of companies in public interest.

(1) Where the Central Government is satisfied that it is essential in the public interest that two or more companies should amalgamate, then, notwithstanding anything contained in sections 394 and 395 but subject to the provisions of this section, the Central Government may, by order notified in the Official Gazette, provide for the amalgamation of those companies into a single company with such constitution; with such property, powers, rights, interests, authorities and privileges; and with such liabilities, duties, and obligations; as may be specified in the order. 

THE QUESTION THEREFORE REMAINS, HOW PENALIZING THE LEGITIMATE SHAREHOLDERS OF A COMPANY BECOMES, A CAUSE OF PUBLIC INTEREST,ESPECIALLY WHEN A COURT CASE IS GOING ON AND NOTHING HAS BEEN ESTABLISHED??!! ......only because NSEL was a subsidiary of Financial Technologies, where the latter held 99.99% stake? Now what are the characteristics of a subsidiary? 

According to an article in The  Economic Times, 26 November, '12: 

Each of these is a separate, legal entity with its unique identity and can be owned, either wholly or partially, by the parent company. The reasons for creating a subsidiary vary. It is either borne out of necessity (the nature of the parent firm's business, expansion to other geographies, etc), is the result of acquisitions or forays in a new line of business, or is formed purely as a legal wall to limit the liability of one company if either firm fails. 

The argument that:  If such amalgamations are not done then any person will be free to commit future frauds simply by floating a company and hiding behind a corporate veil, is misplaced, why?

Because Section 396 under which the merger was determined to be necessary in public interest, was meant to be used only for "exceptional cases". A loss in subsidiary company, due to highhandedness of its management cannot be construed as "Unique" and is a handiwork of the parent company. This is Utopian and goes against the principle of corporate spirit of independent management functions; apart from vitiating the concept of limited liability.  

I am therefore, sure that the Honourable Supreme Court of India, will take a note of the same and declare the government of India's illogical fiat as null and void. On the flip side if the apex court goes the High Court way, then it would set a dangerous precedence violating the concept of limited liability and would only mirror the face of a fascist regime; hereto India has never seen or witnessed.

Meanwhile, the net profit of 63 Moons Technologies rose 1564.29% to Rs.2.33 crore in the quarter ended December 2017 as against Rs.0.14 crore during the previous quarter ended December 2016.

The company’s new name is inspired from the 63 moons that orbit Jupiter -- it seems at present the planetary adjustments are progressing in the right direction, to get it's name cleared out of Rs.5,600 crore NSEL money laundering mess.