April 28, 2017

Yamuna Syndicate- Justice , Fairplay Demand of Shareholders

The Yamuna Syndicate Ltd

Shareholders Beware!!! Think twice before you take decision!

“The world has enough for everyone’s needs, but not for everyone’s greed.”

(Shares of The Yamuna Syndicate Limited have now become rare and in a way untradeable because of issues discussed in this write up, but at the moment the options available to the current shareholders are limited if they want to cash in on their investment. There are certain buyers in the market that are buying these shares for reasons best known to them, and they are also offering good quotes. If any shareholder feels that the price is justified then it is a matter of personal choice and preference. This blog is only intended to help people realize the true value of the shares in this company so that they can by themselves judge if the price that is offered to them is correct or not. Rest we all know that shares investment return also depends on a person’s requirement and his risk taking ability. This post is intended to give all readers a fair idea of what shares in The Yamuna Syndicate Ltd are worth.

This post has been written by a person who is an equity research analyst and has a good knowledge of the subject and a fair amount of experience into the markets.

Please note: The author also holds a small quantity of these shares and can be reached atncs.190882@gmail.com)

After the derecognition of the Delhi Stock Exchange (DSE) by the government, trading in all the companies that were listed on DSE got suspended. One such Company was The Yamuna Syndicate Ltd (YSL). In such an event, all the companies were given 2 options by the government.

1.      To list themselves on a nationwide exchange (BSE/NSE/MCX-SX)
2.      To give exit offer to the existing shareholders

Listing on a bigger stock exchange calls for a lot of requirements that need to be fulfilled before the company is eligible to be listed. It also incurs a lot of costs and compliance pressure on the companies. There are many companies that can go for it but most of the companies on the regional stock exchange due to unsophisticated ways of operating generally avoid this option.
The same happened with YSL and instead of listing they chose to give an exit offer to the shareholder.

·        The exit offer made initially was of Rs 1600.25 in 2015.
·        Another exit offer that was made was of Rs 1845.26 in 2016.

A normal person looking at the previous price range of trading of these shares would happily accept this offer being satisfied and it would not create any suspicion in the mind of anyone looking at the transaction. Even upon looking at the income of the company, books of accounts and everything- it all looks fine!
But wait, it is not!

Very few people know that YSL may be a small company but it has a holding of 44.83% (32,96,526 shares) in another huge company that is even listed on the BSE (Bombay Stock Exchange). This company as some of you might already be knowing as posted in an earlier blog in this website (link:http://www.rareindianshares.info/2016/11/yamuna-syndicate-exit-price-only-rs1845.html) is ISGEC Heavy Engg. Ltd. (BSE Code : 533033).

Now, interestingly YSL has 2,11,648 shares outstanding and it holds 32,96,526 shares in IGSEC ie each shareholder of YSL is a beneficiary of (32,96,526÷211648) 15.57 shares of IGSEC. Now the market price of one share of IGSEC is over Rs 6000.
Therefore leaving aside everything that YSL has, each share should be worth of at least Rs 90,000/-. Mind you that YSL is also not a loss making company and has a positive value only. So the value of YSL will only increase.

Now compare the exit offer of Rs 1600, Rs 1800 and the real value of Rs 90,000 + as on 27th April 2017. Mind you, those offers at Rs. 1600 and Rs. 1800 were also illegal as they are not as per Government and SEBI laws. If 10% shareholders get together, they can even get the promoters and management of the company to task for illegality and get them behind bars for misrepresenting and fooling shareholders. This is as per Companies Act and SEBI Act. 

The government like always is silent, the shareholders like always are clueless and people who know things are doing wait and watch. And so many innocent people have already tendered their shares at such small price (only 2% of the value).
If any shareholder feels aggrieved from this and wants to explore options of what can be done to get a fair price of our shares, should write to BSE and SEBI directly, or email me.

Disclosure: I am not an activist or a trouble maker for anyone. But I am not a fool too.

This is the state of our markets. I am thankful of the opportunity to be allowed to write on this blog. 


Nilesh Shah, Ahmedabad


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