Aditya Birla Nuvo and Grasim Merger(Grasim the dumping yard for poor Idea and Debt)

                                                 Just Heard the news that Aditya birla nuvo is being merged with Grasim and both the boards approved the merger.

The merger details are mentioned below for reference.

                                                                 Each shareholder of ABNUVO will get 3 shares of Grasim for every 10 shares held.Each shareholder of Grasim(Post merger) will get 7 shares of ABFinancial services limited(Which holds Housing finance,Insurance and Asset management company AMC ).

In total if a shareholder in Aditya birla Nuvo  is having 100 shares they will receive 30 shares of Grasim  210 shares of the to be listed Aditya birla Financial Services.

                                               

                                                 The merger might not be good news for minority shareholders of the ABNUVO and Grasim.Because the business which is having great potential is being spun out and being separately listed that is the Financial services business.The cash grizzling IDea will be a subsidiary of Grasim and it might need to fund it for expansion or for taking on Reliance JIO(This might be good for the shareholders of Grasim).

 Important things to note about the merger are mentioned below for reference

• Increasing promoter share is the main reason for the merger.   

                   The Promoter stake in Grasim is around 23 percent and in ABNUVO is 58 percent.If they merge both the promoter stake will be 40 percent that is a good place to be in for a promoter.

• New financial services company Aditya birla financial services company will have no exposure to the Debt laden and  Sinking company IDEA.

• " The merger will Unlock value for the shareholders", a statement by Kumar mangalam birla chairman of Aditya birla group(I did not expect such a nasty statement from such a person he is just dumping all the waste businesses which will lot of cash into Grasim).

• Grasim Industries will hold 57 percent stake in Aditya Birla Financial services company.

• Grasim(Debt Dumping Yard for Aditya Birla Group & Holding company)

                                 As per the records March 2016 debt of Grasim is around 9000 crores and debt of ABNUVO is around 33000 crores(worth mentioning).Already Grasim is holding 60% stake in Ultratech and now these companies are being merged into it so they are just making it a holding company.

                                      As per my analysis the holding company is being transferred from ABNUVO to Grasim and the main reasons for doing it are the Increasing of promoters shareholding to 40 % and they wanted some place to consolidate the shareholding of idea so that when cash is required it can be raised.

                                 Over all even good promoters like Birlas if they take minority shareholders for a ride it's time for minority shareholders to awake and reject the merger.Hope time comes when Promoters think differently and create more shareholder value like Tatas(tata group).

                                            I never thought that Kumar mangalam birla is in same page as Vedanta chairman Anil Agarwal.(Never in my wildest of Dreams)

Game of thrones Season 6 Episode 9 review

The promoters highhandedness these days(Example:VRL logistics promoters Vijay Sankeshwar and Anand Sankeshwar )

                          The promoters highhandedness these days

                                        Just a day earlier i have seen a video of VRL logistics promoter Vijay Sankeshwar saying he dont care about investors or what they think about foraying into Regional Airline ventures.The stock has crashed 40% in two days and its total waste of capital for investors who don't check the Credentials of the promoters before investing in the company.

                                     In the case of VRL LOGISTICS we cannot judge the promoters of the company because it is recently listed in the exchanges and now only the true colors of the promoters came out.But i read a lot of people  and market analysts like SP tulsian and others say always invest in a company where the promoters have sound principals.Because we have few examples in the past like the satyam's ramalingaraju trying to buy a real estate company with the money that did not exist and the rest in history and ramalings rajus fate is sealed at that point only.

                                      See the below video of the VRL LOGISTICS promoter saying to the CNBC TV18's anchors that he does not care about investors.

So while investing we need to make sure we invest in some company where it is having sound promoters and they always take care of the minority shareholders Like Aditya birla or Tatas.

                                                              Be careful and be wise while investing in a particular stock and check about the promoters credibility by searching in the internet about the person.

The beginning of the end for Public sector banks

The beginning of the end for Public Sector Banks

                                Asset quality of all the public sector banks moved from bad to worse and the quarterly earnings are not looking actually like earnings they are just mere meetings where Money is set aside for NPA's.  
                              Bank of Baroda management expressed that worst is over in terms of NPA's after the Q3 results and see the results of BOB for the Q4.

I read some article in the internet which said that.If you are trying to buy public sector banks say for 150 rupees a share.You are paying 100 rupees for the bank and 50 rs for the Non performing assets.

When you compare public sector banks and private sector banks any day Private sector banks stand out in the performance or any other characteristics.

Some times i feel bad seeing the results of banks our hard earned money which is invested by government into the banks as capital is slowing going through the drain quarter by quarter. Dont know when a public sector bank will declare NPA.See the staggering list of banks that posted Losses in this particular quarter.

•   Syndicate Bank loss at 2158 crores. See the profit of this bank in its previous operations so you can understand the amount of problems or dont care attitude of the bank managemets.

             

See this Bank had a loss which nearly wiped out its say 2 years profit.We never know where the money went or will the money come back,So rather than holding Public sector banks better to hold private sector banks because atleast they will try and make sure they show some profit or else people will move to another private sector banks.

                                                    Hope a day comes when all the Public sector banks are closed and there is competition among the private sector banks to provide quality services at reasonable prices.When i go to any public sector bank the attitude of the employees is so frustrating and the attitude of private sector bank employees is so good as they are selling their service to the customers.

                                            Even the Online sites of public sector banks are pathetic and their customer service is also useless and the toll free numbers does not even work out some times.

Some times the SBI toll free number only does not work.It is shown in  big size as customer service.

So my only advice to people is dont buy public sector banks go for something like Axis,ICICI,Kotak or yes bank or the best among them HDFC Bank :)

                                                      

PSU banks vs Private sector bank lenders which ones are worth buying now?


                                                                 The present scenario in the Indian banking sector is similar to the scenario in the general election.When you to a election for voting you would find all the criminals enlisted as candidates for the major parties.
                                                                     
                                                                 The banks are now fighting for the first spot in the NPAS, they are fighting among themselves in declaring who will beat my NPAs.I have read some where that at first IDBI bank declared a loss of 3300 crores in one quarter because of NPAs.Then came the Banker to every Indian this bank does not declare losses due to NPAs but it just eroded the investors wealth like kingfisher.
                        The share value just melted from 350 to 150 bugs.Now after some respite it again started its journey back to cheat more people.Then the Bank of Baroda came with its results and the results where fabulous on the bad side it had just thrashed the history created by IDBI bank by declaring some 3600 crores as loss in a quarter.

                                                         In the case of the private run banks their at-least people fear for their jobs so the losses or NPAs wont be like the government run banks.But the scenario is like picking up the best among the worst banks.

                                                           But one bank stands out among all the Indian banks and that the HDFC bank i have full respect for this one bank that is showing stellar number quarter after quarter kudos to this bank and hope its good run continues benefiting its investors and employees.

                                                      Now in the private sector banks also there is one culprit which did not disclose the NPAs and others properly and it got thrashed badly from 700 to 400 that bank is the AXIS bank.The only other private sector bank which is some what behaving like the public sector banks is the ICICI bank this one have taken its investors for a ride by destroying their wealth.

                                 The two other banks which some what stand out after the HDFC bank are the KOTAK MAHINDRA bank and the YES bank.In the coming years to come i would guess only the private sector banks will prevail and the government run banks will get closed if i am not wrong because of not having accountability and responsibility for the people'e money.

No Indian bank took on vijay mallya when he was not able to pay money.But if any small person doesn't pay his home loan EMI say for 5-6 months what will happen to his house,you cannot even think about that scenario.Now mallya is trying to escape and whats present in the banks balance sheets just 7000 Crores public money gone in the drain :).


                                                        I am not writing this out of frustration,this was just my observation based on my experience in reading lot of news and the events that are taking place around me.

Taxing EPF

                                           Taxing EPF of employees

The government in the current budget is trying to tax the Hard earned money of all the middle class and other salaried employees.

                                      On one hand they are giving tax amnesty by allowing black money holders to pay some part of their black money and make the money white.on the other hand trying to tax the money which general people save for leading peaceful life after retiring is very bad and i think this is the worst decision that a government formed by mostly backing of the middle class can do.

                                         Taxing 60% of the interest on the EPF from April 1st 2016 i dont think its good,Lets hope that the government comes back to their senses and rolls back this nasty tax.How much can any one pay.You are collecting income tax,sales tax,service tax and now some swach baharat cess.

                                 Try to get tax from the people who are not paying taxes.try to broaden the tax base done squeeze the existing tax base if this happens again and again then you might have to sit in the opposition for the rest of your life.


                                               This is not my frustration by the frustration of lakhs of Indians.Hope some respite comes in next budget.

IS reservation necessary in Private sector ?

                                       Recently i have read about this topic in rediff. The writer was asking for a reservation of 27 % for backward castes in private sector.I want to ask one thing can't they want reservation in Army or any other thing.They only want reservation in private sector where only talent is rewarded and casteism is not.I dont understand is that all these backward caste guys in the name of reservation they have already screwed the Government sector by working and taking bribes and not working.

                        My intention is not to malign them but just wanted to share the anger of all other people who are meritorious than the people who are getting seats in the name of reservation and enjoying.

                        There should be a fair system where all the meritorious people are rewarded regardless of their caste,color or religion.I dont know what was the thought process of ambedkar when he was preparing constitution his intention of giving right to backward caste people was good,But not at the cost of other people's life.The main reason told by the so called people is that the no of government jobs are reducing everyday.

                       Let the so called people who wanted to strive for the upliftment of the backward caste put their hard earned money and start companies and give jobs to all backward caste people.Not to the people who deserve the job and will see how many days will the company run :).


 These are my personal views and i am not against any caste or religion.I am person who would love to work in a community where everyone is having equal opportunity and merit gets first place.

The article which i was mentioning about is mentioned below for reference.

http://www.rediff.com/business/interview/why-i-support-27-reservation-in-private-sector-jobs/20160211.htm

IS Quick Heal IPO worthy for investors to invest?

Quick Heal Technologies Ltd (QHT) is one of the leading providers of security software products and solutions in India with a market share of over 30%.

Company's proprietary antivirus technology works to detect security threats including virus and malware attacks in real time to protect users IT assets across platforms, including Windows, Mac, Android, iOS and Linux, and across devices, including desktops, laptops, mobile/ smartphones and tablets.

Since its incorporation, more than 24.5 million licenses of the products have been installed and as of June 30, 2015, company has over 6.9 million active licenses spread across more than 80 countries.

Sequoia Capital had invested Rs 60 crore in the company way back in 2010 and currently holds about 10% of the company’s shares.They are planning to offload 5.4 % stake.

Strengths or good points about the company are mentioned below:

• Good brand name and strong distribution channel.
• Zero debt company with free cash flow.
• Strong management team and also a venture capitalist team of Sequoia Capital.

Currently, the company has 33 branch offices in India and consists of 1,200 people in its team and a network of 15,000 channel partners in hundred countries.

One of the Nice article  i found in the Forbes site on Quick heal dates back to November 8, 2012 tells the below thing about quick heal.

Q

uick Heal is a completely homegrown anti-virus software company that’s not only beaten big, multi-billion dollar competitors like McAfee and Symantec, but is also taking back the fight to their turfs in other countries around the world. 

 “They’re growing like a weed while throwing out amazing cash flows. What a great business!” says Sumir Chadha, co-founder and managing director of Westbridge Capital, who is on the board of Quick Heal representing Sequoia Capital.

The company, which started as a calculator repair firm before creating the brand Quick Heal in 1995, has seen revenues grow 15 per cent in FY15 to ₹292.2 crore. However, profits have consistently declined over the last three years. In FY13, net profits stood at ₹77.5 crore, which dropped to ₹61.5 crore in FY14, and further to ₹56.2 crore in FY15. Kailash Katkar said the decline was due to the company’s increased R&D spend in the last three years.

“In the last three years, we’ve launched many new products with the help of our R&D efforts. While this has led to increase in revenue, we’ve maintained lower margins to ensure we are investing for the future,” Kailash Katkar said. The company said it will use the proceeds of the sale to invest in advertising, R&D and for buying new offices in Kolkata, Pune and New Delhi. The minimum bid lot will be of 45 shares and in multiples of 45 equity shares thereafter and will be listed on both the BSE and the NSE. The offer will be open from February 8-10.

The main worry for the company is regarding the declining profits.

Closing comments and Conclusion:

It is a  worthy of investment as there is no peer to compare the PE or anything in Indian markets and it is a cash generating machine.It is just having less exposure globally once it gets firm grip globally it might generate more cash.

Better to invest in a zero debt company with potential to grow than in a company with a lot of debt and which is trying to survive or in public sector banks( you dont know which one will last this tide :) ).

please provide your comments if you have any so that i can try and improve my self or any-other things on which you want me to write a blog.