(Full Disclosure:I have shares of Renuka Sugars in my personal and family portfolio)
Ravindra Trading (BSE Scrip Code:504341) is one of the many scrips in BSE which are under suspension.
In Oct 2008, Narendra Murkumbi, promoter of Shree Renuka Sugars made an open offer for the compay.The offer was for Rs.10/share.
Subsequent to the offer, the control of the company passed on from the original promoters (the Somani group) to Narendra Murkumbi who now holds 73.85% of the stake.
Once Narendra Murkumbi took over, the company got the kiss of life and it started trading coal.
In 2012, the company earned around 1.18 Crores as profits and gave a Rs. 1 dividend to its shareholders.
On Aug 20, 2012, the Board of Directors met and granted in-principle approval for the amalgamation of Shree Renuka Urja Pvt Ltd (under incorporation) and Shree Renuka Energy Limited into the company.
Now, Shree Renuka Energy is a subsdiary of Renuka Sugars.It is setting up a of 3×350 MW Coal Based thermal power plant at village Vantamuri, in Hukkeri Taluk, in Belgaum District , in Karnataka.
It is headed by J Suresh Kumar (former CFO of Lanco Infratech) who oversaw Lanco’s A$750 million buy of Australia’s Griffin Coal.
While the power plant is still awaiting various permissions and will take time to come up,it appears clear to me that eventually Ravindra Energy will be renamed as Renuka Energy and investors will be tapped for funds.
Smart moves, Mr.Murkumbi !
The old Wall Street adage is “Buy on Rumors, Sell on News”
Many people have lost money following this adage.
Take for example, Ramsarup Industries.In June 2010, a rumor spread that it is a takeover candidate for Arcelor Mittal.The stock shot up to around Rs.80.85.
There was no basis for that rumor.As truth came out and the dust settled, the stock drifted downwards and is now selling at Rs.4.5 !!
We cannot imagine an Apple without Steve Jobs.The two are so closely inter-linked that it is difficult to separate the founder from the company.
When the founder passes away, the company and hence the stock price are drastically affected. (as can be seen in Apple’s case )
There are many examples in the Indian context.The recent one being Amitabh Parekh of Parekh Aluminex.The stock has got hammered beyond shape after the unexpected demise of its charismatic founder.
If you cast an eye (not an evil one !) over your portfolio, you will find many companies which are closely interlinked with the founder.It is difficult to visualize that these companies can succeed and grow without them.
A sad but sobering thought.
5 stocks that hit their all time highs yesterday: