FiberWeb India - Bouncer (growth) or yorker (trap)?


(Left this forum) #107

Guys, academically if you are not invested there can be good learning for all of us here.

Those interested in creative accounting watch out for combination like these:

OVERSEAS TRADING COMPANY>>>HIGH DEBTORS>>>HUGE CASH BALANCE

PREVIOUS DISTRIBUTION RECORD >>>CONVERTIBLE WARRANTS>>>PREFERENTIAL ALLOTMENT TO BROKERAGE HOUSE

And if all of our apprehensions are unfounded what can be greater learning then? We have to revisit our framework altogether which becomes upside down.

By the way being a observer of money life products for a long time, they really get into nerves of a company if they want. I have seen it in past, in fact this may be beginning of a series of article to be published.

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(VK) #108

I agree with you on the learning part and you have been a major contributor of that. Thank you for it.


#109

I have come to know about following 3 key clients of Fiberweb (India):

  1. Precision Converters Inc.
  2. Dewitt Co.
  3. Ovasco Industries

All of these three companies are based in US and are importers of Technical textiles.


(jayesh265) #110

What’s the source of this information?
How it could be established that they’re continuously buying products from Fiberweb?


(Satish Earthling) #111

First post by this author and no concrete back up of facts , highly misleading post.


(mayur doshi) #112

@Donald, @hitesh2710, @ayushmit, hi, how to value company coming out of bifr, showing some great results, but at sane time some questions on bs being bogus. How to find hidden value


(kartiks) #113

Some investors are strongly disagreeing to the audited Financial Statements of the company , Instead airing all the issues they have, on Social media and blog, in my opinion, they rather would have taken up the official channel, if at all the motive is protecting investors.

http://www.bseindia.com/investors/invGrievances.aspx


(drganesh) #114

very well said kartiks, those who questioned the selling of so called promoters are not breathing about recent preferential allotment to 3.60 L shares by promoter which may work around 280 as positive one.


#115

I got to know from some offline sources, not sure if these companies are continuously buying. It would be great if some VP members could verify it.


#116

Even I am slightly skeptical as I got to know from some offline sources. Hence it would be great if some VP members can verify it.


(zain) #117

Infusing 10+ Cr to build trust? (Or just 25% of that , since it’s warrants), I think they have already collected 40+ Cr by selling shares. Is this move genuine or just another trick to sell more shares?

Only time will show us :slight_smile:

Disc: Invested earlier, now reduced the holdings to tracking position


(mightymedico) #118

After seeing all these shady things going on in this scrip, I feel I have done myself a great favor by exiting it before it’s too late. There is no lack of good scrips in this bull market.


(Sameer Shah) #119

Company has declared they will be going ahead with issuance of bonus shares to the existing shareholders. Although ratio is yet to be declared in the upcoming BoD meeting schedule on 5 dec. Am curious to know, why any company sitting at a critical juncture of CapEx (which btw Fiberweb is), would dilute equity and over commit themselves of servicing expanded equity base ?
Insightful comments would be highly appreciated.

Disclaimer invested in Fiberweb. Thanks…


(zain) #120

Personally I think it’s another red flag to add, issuing bonus at this juncture, since it’s not the need of the hour.


(Sravan) #121

too many events too soon, i’m not feeling comfortable.

  1. issuing preferential shares to promoters. if they are confident they should have bought from market. that would have raised my confidence multifold. with preferential issue they dont have to pay full upfront
  2. bonus issue. which is not required at this juncture. since capital is required for expansion plan. they have to pay for bonus issue at 10Rs each. even if take 1:1 issue. then 14crores will be spent on this bonus issue.
    they have issued preferential shares to strategic investor for capex required for expansion, now seems they are using that money for bonus issue.

(chetanb) #122

This post was flagged by the community and is temporarily hidden.


(Sravan) #123

when bonus is issued, it will be fully paid equity of face value. that is my understanding.


(drganesh) #124

it is merely a paper adjustment within the company not going to reflect as expenditure, and in my understanding not necessary to purchase from open market to prove confident and possible promoter may be having idea and confident about company progress, so by warrant route he can block an additional 75 percent extra shares with the cushioning of one year can be taken as positive


(manan1379) #125

issuing preferencial shares will provide company with funds which can b used for expansion or working capital which wud not hav been available if dey wud purchase from open market


(Sameer Shah) #126

Agreed. However, I guess they are sitting on huge free cash (correct me if I am wrong), then why not fund your capacity expansion via available cash than raising capital via preferential shares ? On the other end if the intent is to send the positive signal to the investor fraternity by increasing promoter holding then why not buy back from the open market ? I mean what else can be better news for investor than knowing that promoters are pumping their own money in the company in which they are invested.

This EPS dilution via preferential shares and now bonus is not making sense (at least to me). Insightful views would be highly appreciated. Thanks…

Disc : Invested in the stock