Category: Observations

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Observations

Centrum: Kabhi Core, Kabhi Non-Core

There was an article today in the TOI about Centrum’s sale of its forex business

Nasdaq-listed Ebix Inc is set to acquire India’s leading airport foreign exchange provider CentrumDirect in a deal estimated at about $200 million, or Rs 1300 crore, people directly aware of the matter said.

Atlanta-headquartered software and e-commerce company Ebix has made an offer to buy 100% stake in the foreign exchange business unit of Centrum Group, a homegrown financial services firm promoted by Chandir Gidwani and Jaspal Bindra, which is awaiting formalities.

The divestment move is part of Centrum’s plans to exit non-core businesses. Former Standard Chartered honcho Bindra, who emerged as Centrum’s copromoter, has pursued a business streamlining exercise at Centrum. The sale of forex unit would provide Centrum with adequate capital to grow its NBFC operations focused on housing finance, SME and microfinance lending.

Amusingly this “non core” business was the largest revenue generator for Centrum as per their Annual Report !

 

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Observations This is India !

NMDC = No Money, Dividend Compulsory

This post belongs to my This is India ! series

NMDC held a Board Meeting on 17th March, 2018 and decided not to issue an interim dividend

The market reacted very badly and the stock crashed by around 7% the next trading day.

So imagine the market’s surprise when less than 10 days later NMDC offered a whopping interim dividend of Rs.4.3  (Dividend Yield of 3.5%)

The fact that the dividend is proposed to be paid before 31st March, 2018 betrays the fact that the Co was arm twisted by its largest shareholder (the Govt of India) who will gain around 1,340 Crores from the dividend.

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Observations

Coastal Corporation: Rights, Wrongs & Lies

Something fishy about the company withdrawing its rights issue when the stock is hitting upper circuit at Rs.88.30 per share

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Observations

Bharat Dynamics Vs Marico

Amusing to see that India’s premier missile manufacturer spends as much on research as our hair oil company.

R & D Expenses in Rs. Crores

Year Marico Bharat Dynamics
2015 19.74 22.72
2016 27.48 29.43
2017 32.55 34.71
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Observations

CESC Demerger in Trouble

The West Bengal Electricity Commission has put a spoke in the spinoff plans of CESC Ltd.

The detailed order of the Commission is dated 16 Feb, 2018 and can be downloaded from here.

As per the order:

“The above petition of CESC limited is not in line and is far from the provisions under section 17(3) of the Electricity Act, 2003 and regulation 5.11.3 of the West Bengal Electricity Regulatory Commission (Licensing and Conditions of License) Regulations,2013 which spell that CESC Limited is required to submit petition seeking prior approval of the Commission for the above arrangement.

The instant petition does not meet the Criteria of the Act and the regulations made thereunder and as such cannot be admitted and thus rejected.”

The surprising part is that CESC did not inform the exchanges about this very material order and kept the investors in the dark.