Latest announcement by the company…
If working capital is continuously negative - is it a violation of
Is JKIL - J Kumar infrastructure, executing projects worth thousands of
crores in Mumbai region, also a shell company ? As per this order -it is.
MCA/SEBI have to transparently share all their data/derivations wrt to
the alleged “shell companies” with the investing public. They can not keep
it a secret in their files. No laid down rule permits any Govt official to
suspend trading overnight with out giving notice to investing public.
Regarding confidentiality - just look at the trading pattern yesterday of
Pincon - does the sharp vertical fall in forenoon indicates any thing ?
Reinforces fact that quality and ethics is paramount. Also, as am investor , we should never get carried away by some other big or small investor buying. At the end it’s our gain or loss and we are responsible for it. Those who could read without bias it was very clear it’s not a quality play with governance standards
However, more surprised that apart from some notorious companies bring there ( don’t consider pincon or kumar infra bring notorious, just that their governance , balance sheet n cash flow were not up to mark ),there are many notorious companies who could be real shell one still not added to list. With time hope list to get longer. By the way do check MCA website , it gas some interesting list of companies uploaded . I remember checking their site 2 months back for sone other purposes and they had a list of shell n similar companies n if I remember they had defined what they mean by shell companies
As per MCA statement, shell companies are characterized by:
Nominal paid-up capital.
High reserves and surplus on account of receipt of high share premium.
Investment in unlisted companies.
No dividend income.
High cash in hand.
Private companies as majority shareholders.
Low turnover and operating income.
Nominal statutory payments and stock in trade.
Minimum fixed asset.
Thanks for clarification on definition Shell companies. Neither Pincon nor
JK infra are anywhere close to any of the parameters. I am sure that some
companies will go to the court of law as the order appears to be
arbitrarily applied to some companies. MCA and SEBI, as public bodies, must
share their reasons/facts/analyses in public domain for each of the
companies. No law of the land can support them for keeping these
As investors, even we can request them to share the facts.It will be great
learning for us for future.
Disc: A small tracking investment in Pincon. No longer invested in JKIL
The latest shareholding for JKIL is enclosed. The present public
Shareholders are the best financial institutions of the country. The
current situation either reflects poorly on all the best minds of the best
institutions of the country or …
Similarly, even Axis bank acquired more than 1% equity in Pincon in June 17
Pincon has aquired many small unlisted companies in recent past and no proper disclosure to the exchange and no major details in annual report.
Pincon has many private companies as share holders
Pincon has only 18cr fixed assets on balance sheet for 950cr revenue in FY16
HDFC held large quantity in Amtek and group companies, Satyam was a darling of marquee investors and still they could not see what was rotten. There are many such past examples and this is the problem when people invest based on presence of marquee names without paying heed to any other aspect. We do not know in all cases for the reason of presence of a marquee name, moreover these people can also be wrong. One should know the basic nuances of how these fund houses work before taking there presence as a vote of trust in blind faith.
Saurabh you are spot on here. But sadly, most of us learn this by experiencing.
Come on Saurabh, “Pincon Spirit” as such might not have done anything notorious, but the Promoter Monoranjan Roy was/is notorious. Although his arrest years back had been pish poshed, and Pincon spirit, earlier known as Sarang Viniudyog, had been in news for insider trading, and the same Promoter MR, brazenly manipulated his other company, Modi Udyog’s stock price from 50 to 350 and back to 35, within months and then changed the name of Modi Udyog to Pincon Life as if, all his wrong doings will get brushed under the carpet.
We can probably say, that there are other companies that need to be included in the list,but Pincon deserved this. I could tell the numbers seemed spurious and something wrong will eventually happen, but could not point out what, after a diligent research, I realized that this company is nothing but garbage in garbage out investment case and had exited completely in Jan.
As rightly pointed out by Saurabh, that we should never get carried away by who is buying. I learnt this from a bitter experience in GPPL. Where I had becomeemotionally biased even though my whole nine yards research -SWOT told me that Adani ports will not let GPPL survive, Porter’s analysis told me that port sector is in slump since a long time, the intrinsic value that I arrived at by doing a DCF, was 135, but I held on to it looking into SHP that oh, Kotak bought at 200 levels, and Kotak sure has finest minds in the fund house, and also other well known fund houses. Alas I realized a little late and booked losses at 180 levels, and GPPL i snow at 140 levels, since a long time.
But when our research stoops to the level of pondering into who is buying and who is selling, we must accept that it is flawed. They can afford that risk, its not their own money they are playing with. But we on the other hand can get wiped out.
Also it could be a very small stake ( as a percentage of the total portfolio ) and could have taken a conscious high risk-high return type of bet.
Those who were giving character certificate to Manoronjon Roy disappeared from the forum some time back. This is a lesson for the gullible investors. Value your money more than other’s opinion!
Promoter issues aside…Any idea why the company is deemed a shell company? I guess no one really knows the magic formula applied here.
Appears they pay real taxes and certainly sell real IMIL.
Anyways for now trading has been resumed. One can expect stock to correct big time over this week.
Also, their debt/working capital as a proportion of top line has gone down significantly but promoter pledge is at 100%. This appears to be a bumper year for Pincon from profitability perspective but the stock is a different matter altogether.
True. Even a 25cr investment in a 500cr fund is like 0.05%.
Also value “your” opinion more than any body else’s. Provided your research was thorough in the first place. Mostly people get intimidated by opinion’s from the likes of a CA or a CFA, even something as silly as a Top boarder , and to add to the woes if the report or opinion ‘looks and sounds’ complex, generally it carries more importance and value. Sadly, most of us learn the futility of opinions by experience.
Surprised to see positive operating cash flow in FY17 Annual report…
They readjusted the trade payable and other liabilities in the balance sheet reported during Q4 results.
Can someone from the forum verify the data.
Pincon_Janta_AR.PDF (654.2 KB)
What information I can extract from this Cash Flow data
Remember the old adage for the promoter if he can steal for you one day he can steal from you also