December 08, 2010

Asset Laden Holding / Investment Companies- Promoters Uninterested in True Value Unlocking

Promoters initially  invite public investment by selling shares in their holding companies . These holding companies promote new companies  Over a period of time their promoted  ventures succeed and the original investment made by the holding company multiplies many times over in value .

 Now , instead of genuinely sharing the wealth with all the stakeholders  , non promoter minority share holders of original holding companies are  treated by Promoters  as UNWANTED , like poor relatives at a rich cousin's marriage party.

1 ) Majority stake in these Holding companies is always with the Promoters. So they are able to get all Resolutions passed . There are no Institutional holdings ( domestic or Foreign ). So  level of transparency in these companies is not at the same level as widely held companies.It suits the promoters to keep these companies in low profile and keep its true worth hidden.. Non promoter share holders suffer.

2 ) Over a period of time many share holders ' folios become dormant due to death of original shareholders and court cases .

3 ) In many pre 1947 incorporated companies many share holders migrated to Pakistan . Such folios ( Custodian of Enemy properties ) also are dormant .

4 ) Either these companies are  not listed or these are kept only NOTIONALLY listed in Regional Stock Exchanges. Such listings are of not much use to the non promoter  share holders.

5  ) Despite massive EPS these investment companies either skip dividends or declare  woefully low dividends. Such moves keep the company in low profile and the share rate ( if any ) artificially low. Such practices hurt non promoter share holders' interests .

6 ) Despite bulging Reserves Bonus Shares or Splits are not done.  (Very surprisingly , Binani Metals Limited , a Listed Company , has done a Reverse Split to unprecedented Rs. 1000/-.)

 7 ) Many such investment companies avoid sending Annual Reports to Non Promoter share holders.

8 ) Some such companies shift their Registered Offices to obscure places and hold meetings at venues which are difficult to reach. Many a time only  company officials ( with Proxies ) are in attendance  to see the proceedings through.

Investors ( non promoter ) of such investment companies should demand from the Government and SEBI to devise special Rules and Regulations for these companies

1 ) Such investment holding companies should compulsorily be listed in BSE / NSE. ( to improve liquidity ).

2 ) Face value should be split ( to improve liquidity )


 3 ) Meaningful quantum of dividends should be declared . ( Minimum 25 % of the Financial Year's EPS should be declared as Dividend  percentage )

Some Investment Holding Companies.


FARM ENTERPRISES LIMITED ( Reliance Enterprises Limited )

Mukesh Ambani Group ; Promoters' Shares in Reliance Industries Limited ; Not Listed , Massive EPS - No Dividend . AGM not in auditorium  ; Very few non company share holders attend AGM .Conversion of Equity Shares   to Preference shares) etc etc. Rate in unofficial market around Rs, 600 ( True Value may be in  thousands  ) .

There should be listing in the NSE .

http://www.rareindianshares.info/2009/12/farm-enterprises-limited.html


PNB FINANCE AND INDUSTRIES LIMITED
BHARAT NIDHI LIMITED
CAMAC COMMERCIAL

Belong to Samir Jain of Bennett Coleman And Company ( Times of India Group ). These companies hold promoters ' shares in Bennett Coleman And Company Limited .

Example : PNB Finance And Industries Limited ( Equity Rs. around 3 cr , Face value Rs. 10 ) holds , on consolidated basis , around 58 lakh shares of Bennett Coleman And Company Limited . This effectively translates into around 2 shares of Bennett Coleman And Company Limited for every one share of PNB Finance And Industries Ltd. Value of one share of Bennett Coleman And Co. has been worked out by some analysts to be very very High.

But share of PNB Finance And Industries Limited ( Face Value Rs. 10 ) is being traded unofficially Rs. 4500 - Rs.5000 which is a mere fraction of its true value. Although the EPS for the financial year ended was around Rs. 79  /- ,  dividend paid was only 6 % (  a return of 60 paise on an investment of nearly Rs. 5000 ).
( In the unofficial trades ,share price of Bharat Nidhi is around  25 % higher than that of PNB Finance And Industries Limited .Rate of Camac Commercial could be higher than Bharat Nidhi Limited )( There are , presently ,only buyers of PNB Finance and Bharat Nidhi shares and practically no seller )

No official trading in CSE .

DSE is closed.

There should be listing in NSE.

Shares should be split in to Re. 1 each .

 http://www.rareindianshares.info/2009/06/pnb-finance-industries-limited.html

http://www.rareindianshares.info/2010/09/bennett-coleman-and-company-limited.html


NBI INDUSTRIAL FINANCE LIMITED

BG Bangur group's holding company. Holds promoters shares in Shree Cement Limited ( reportedly around 8 : 5 Lakh ). No trading of NBI Industrial  ,: No dividend . Many complaints of non receipt of Annual Reports.

http://www.rareindianshares.info/search?q=new+bank+of+india

Digvijay Finlease Limited

http://www.rareindianshares.info/2015/06/digvijay-finlease-limited-great-hidden.html

BINANI METALS LIMITED

Holding company of Braj Binani group Holding very valuable shares of Binani Industries Limited and Binani Zinc Limited . 3 : 1 Rights Issue made for a Real Estate project which was later dropped . Promoters increase their holding.  Some times increasing share capital ( Rights Issue ). Some times decreasing Share Capital  ( Share buy backs ).

FACE VALUE INCREASED TO UNPRECEDENTED Rs. 1000 ( No other Listed company in India has a Face Value of Rs. 1000 ). Many share holders became holders of fractional shares . Their ( including many dormant folios  ) shares compulsorily sold   at fraction of the true value. Share value should have been split to Re. One.Now , valuable holdings being transferred to a private limited company i.e. Dharmik Commondeal Private Limited not at true value but at book value .

http://www.rareindianshares.info/2012/09/rate-89-paise-per-share-transfer-of-48.html

http://www.rareindianshares.info/2009/06/binani-metals-limited.html
http://www.rareindianshares.info/2011/01/binani-metals-limited-why-face-value.html
http://www.sebi.gov.in/dp/binani.pdf
 http://www.rareindianshares.info/2012/09/treat-non-promoter-monority-share.html


OSCAR INVESTMENTS LIMITED

Of  Religare / Fortis group. Made a fortune by selling Ranbaxy shares. Although listed in BSE ( actively traded ) but no dividend

http://www.rareindianshares.info/2010/09/oscar-investments-limited.html

BHARTI TELECOM LIMITED

On a capital base of around Rs. 21 crore , Bharti Telecom holds around 172 crore shares of Bharti Airtel ( worth around Rs. 53 ,000 crore ). For the financial year 2009 -10 , Bharti Telecom received dividend income of Rs.173 crore which was utilised to buy a further 55 lakh shares of Bharti Airtel . But no Dividend for the share holders of Bharti Telecom Limited

http://www.rareindianshares.info/2011/02/bharti-telecom-limited.html


NALWA SONS INVESTMENT

http://www.rareindianshares.info/2010/12/nalwa-sons-investments-limited-jindal.html 


CHEMINVEST LIMITED
http://www.rareindianshares.info/2011/09/cheminvest-limited-annual-report-2010.html 
http://www.rareindianshares.info/2011/07/cheminvest-limited.html

WILLIAMSON FINANCIAL


Summit Securities

Kalyani Investment Company

Balmer Lawrie Investment

Placid Limited


SIL INVESTMENTS LIMITED ( SUTLEJ COTTON MILLS )

http://www.rareindianshares.info/search?q=sil 

Macrofil Investments Limited

Holding company of Nusli Wadia group ( i.e. Bombay Dyeing group ).

http://www.rareindianshares.info/2009/06/macrofil-investments-limited.html

Yamuna Syndicate Limited

Holding Company of  Isgec Heavy Engineering ( Saraswati Industrial Syndicate ) of Ranjit Puri Group

http://www.rareindianshares.info/search?q=yamuna+syndicate+limited


Digvijay Finlease Limited

Holding Company of B.G. Bangur Group

http://www.rareindianshares.info/2015/06/digvijay-finlease-limited-great-hidden.html



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http://www.suchetadalal.com/?id=175202d7-a5ce-be2f-492fe1477460&base=sub_sections_content&f&t=Essar%27s+Delisted+Saga

http://www.rareindianshares.info/2013/04/nirma-drops-move-to-consolidate-face.html --------------------------------------------------------------------------------------------------------------

On the other hand  there are some progressive and pro- investor investment companies ( whose example all investment companies should follow ).



Like


Bajaj Holding And Investment Limited
Tata Investment Corporation Limited
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http://economictimes.indiatimes.com/personal-finance/savings-centre/analysis/small-equity-investor-how-to-safeguard-your-interests/articleshow/21742266.cms?curpg=3
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Macrofil Investments ,Digvijay Finlease , NBI Industrial Finance and other Unlisted Promoters' Holding Companies should follow the examples of

1 ) Max India Promoters are paying a fair price of Rs.94 for every share ( Re. 1 paid up ) of their Unlisted Holding Company - Cheminvest Limited.

http://www.rareindianshares.info/2016/06/unlisted-max-india-promoter-companies.html

2 ) Reliance Industries Promoters gave 1 share of Reliance Industries for every 1 share of their Unlisted Holding Company - Farm Enterprises Limited ( earlier  Reliance Enterprises ) 

http://www.rareindianshares.info/2015/12/farm-enterprises-shareholders-get-new.html


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HUM MEHNAT KASH ISS DUNIYA SE
JAB APNA HISSA MANGEY GEY
IK BAGH NAHI; IKK KHET NAHIN
HUM SAARI DUNIYA MANGEY GEY
( Josh Malihabadi )
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General Warning : Investment in Shares Can be Injurious to Your Wealth

Disclosure : We have  family holdings in many of the Companies mentioned above

Disclaimer : All comments / facts stated purely in good faith to further the interests of fellow public investors. Please recheck every fact.
NO responsibility with this blog / writer

1 comment:

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