There is only one thing that needs to be checked. Is the cash true or not and that will be decided by amount of debt they repay tis quarter and next. If they come up with some excuse on debt repayment, then “cooked books” can be assumed.
Not invested and have been following the PCJ thread only for educational purpose. I do not know if PCJ is a buy/sell under the current circumstances. Just would like to express my opinion here on the procedure followed for buyback announcement and withdrawal.
Having worked in a bank earlier, I feel the company should have approached banks first, before approaching their Board and announcing buy back (I am not sure, if its mandatory to have banks approval before approaching board but in my opinion is definitely a good practice to check through loan document covenants, as Board members are not expected to read through loan documents etc ). Even, if banks would have approved a buyback, they would still qualify their approval, subject to company’s Board approval.
May be they would have noticed this covenant in their loan agreement at a later date (once the buy back was announced). Or, in the standard loan documentation, a clause would have been inserted by the banks pertaining to the change in capital structure of the company. While signing the loan document, company would not have paid heed to this standard clause, which proved to be a thorn in the flesh now. Using the covenant, may be one of the bankers now would have asked the company to utilize the cash proceeds to reduce bank debt, rather than buyback of shares. In such cases, company may not reduce their debt (may be due to their working capital position or any other valid reason), they also can not move ahead with buyback.
Worst thing to happen in such cases is , a bank would like to exit the company fully after noticing some irregularities and would be using such covenant during these times to control the cash usage (please bear in mind, I am only providing a hypothetical situation here and not in any way pointing that some thing is wrong with PCJ).
Disc: not invested. This is not a buy/sell reco. Pls do your own due diligence.
They had an option for buyback offer from open market also. It would have also given support to stock prices and more no, of shares would have reduced. And why did they not confirmed this with Bankers earlier.
They could have given dividend also, Dividend and buyback means same to investors unless thier is some different tax treatment. What I am feeling is that they gave this buyback news just to fool the investors, Management do not seems to be trustworthy anymore.
Disc : Sold all holdings today in loss.
Too much chaos on this thread. All are requested to restrain rather than heating up the discussion.
Please keep the discussion civil, no personal attacks and no conjectures please. Support your discussion with logic and data. That will help you in your separating the “wheat from the chaff”. Never get emotionally attached to a stock.
What a sham! They never had the intention to buyback which is evident from them releasing a press release a couple of days before withdrawal but which was actually drafted 21 May. They are also competing with vakrangee to give an equally absurd reason to cancel buyback when the market has no trust in management figures and the only way to get some trust is to complete the buyback. I am sure now the banks will suffer more as the market cap of Rs1250crs has been wiped out just today and D/E looks increasingly bad. If the buy back happened, the banks would have more to gain as the price would have balanced at a level and they could also request for management pledge as a security for loan. In my opinion it would be in any bank’s interest for the buyback to have proceeded. I have zero trust in management that they have this cash that they claim to have. At a minimum they should share the bank’s correspondence rejecting the buyback.
Debt equity is not related to market capitalisation further Bank have protected the debt at the cost of equity holders which is a prudent measure(for Bankers). The cash if any not leaving the company for share buy back will be used for debt servicing.
Can anyone help with throwing light on the Promotors holdings in last 6 months ?
They yet to share the SHP for June-2018. As per SAST updates, no change in promoters holding. But not sure if they comeup with surprises in that too.
Any guardrails on when the SHP is expected ?
Can the following info. from valueresearch be considered authentic for upto March-18 ?
It’s authentic indeed! You can check for more details in one of the exchanges (BSE/NSE).
They have to justify soon on media otherwise many investors will be ruined.
Hi, I am new to Financial Statement analysis. Kindly refer to the table of PCJ results (Annual trends tab) as listed on BSE. https://www.bseindia.com/stock-share-price/stockreach_financials.aspx?scripcode=534809&expandable=0 Now, what I can see is the annual results of last 5 years - March 14 to March 18. For the years 2014 to 2016 the PBDT is calculated as follows. PBDT = Total Income - Expenditure - Interest. (For example: for March 2016, PBDT = 7308.63 - 6532.70 - 214.65 = 561.28) . This seems correct to me. However, for the years 2017 and 2018 the same row PBDT is calculated as PBDT = Total Income - Expenditure and the Interest amount is not reduced from the profits. (For example: for March 2018, PBDT = 9587.93 - 8797.30 = 790.63 This totally ignores the interest cost of 301.29 Cr). What is it that I am missing? Thanks, Regards,
(1) I came across this discrepancy while calculating % OPM in another forum. There is too much noise on that site. I hope I will get the answer here.
(2) I have 1500 shares of PCJ at 130 bought last month as the IV was very high. Now, I have no open options positions.
It is right as of March 2018. The SHP for July 2018 is yet to be disclosed. Still, this is not the latest info. I am sure that you are aware of the gifting controversy. The details related to this gifting are captured in the postal Ballot Notice (page 6/11) and I am reproducing the same here.
Promoter Padam Chand Gupta gifted 1,03,00,000 (1 Crore 3 Lac) shares in 6 tranches from April 2nd to April 20th. Thus his holdings in the company are now 9,04,43,600 or 22.93% This number is 25.55% as per your slide. The recipient of the gift is not mentioned in the notice but in the conf call (if I mistake not) it was mentioned that it is given to his daughter-in-law. Questions about logic behind gifting in tranches were not answered. It was suggested by the person who raised this question that if the shares are sold in less than 0.5% tranches by non-promoter then it need not be reported. I am not sure if that is indeed the act/rule but this was not contested by the management in conf call. Hence all this controversy of this not being a gift but sell by the promoter. Please note these changes to SHP. Anxiously waiting for July SHP. regards, Disclaimer: Holding 1500 shares at 130.
I had earlier noted down the “gifting” controversy. This gifting is not new to them. They did it in early and mid 2017 also to Shivani Gupta (PC Chands Daughter-in-law). She has been selling some amount. That is why the recent controversy is so surprising to me. And the gifting has only been happening in PC Chands family not Gargs family.
See details in this link:
The promotor selling needs to be reported to exchange and at times taken by hate holders as negatively and share price gets corrected.Therefore this method is employed by some promoters which effectively hides their identity as sellers
Thanks LTInvestor for bringing out the past gifts. Now, it is really surprising why so much negative reaction to this gifting. Hope it is all creation of some bear cartel and not something really bad. I am holding equity and if the balance sheet is good, debt is cleared, and new stores are mostly franchisee based then the bear cartel will have to end its operations soon. Since right now I am not in FnO I am not under pressure and can wait for a few months. thanks, regards,