I have a feeling this company has the blessings of some one high in the government.How else would a former sebi chairman serve as a director and yet so many frauds are going on.
Thanks for a polite and yet hard-hitting post.
It is not Vakrangee that has anything to earn people’s expectation of high stock returns. It is the people themselves - their dreams of getting rich. They may be coming-up with excuses to imagine Vakrangee as a stock that will give them great returns. This is very common and should go away after they suffer some losses. Obviously, it is better if we learn to appreciate reality without incurring losses.
There is a long documented history of people killing each other for the statues (of females) that they had fallen in love with. A statue could not have given them any love and yet they died for it.
P.S. Interestingly, this does not imply that Vakrangee can not give great returns in future. Everything is possible. Afterall, even with the current business model, the company had reached a sky-high market capitalization.
I repeat - Management will keep BSing till the facts overwhelm their story and they have no place to hide. In such instances all bad news comes out only at the end like a tsunami when it is too late to do anything about it, this is how people behave in general and managements are no different.
This is now another case study like Treehouse which every aspiring stock picker needs to study to minimize the chances of this happening to him/her.
Read through the reams of this thread and one will see that people kept defending this story even after the market reaction suggested that there are hard suspicions on this story. The ability to see the complete range of outcomes, iteratively assess the probability of each outcome and to keep seeking supporting/disproving information actively and objectively is the core skill that any serious investor needs to have. See the world for what it is, do not see what you want to see. IQ has nothing to do with this skill, the most objective investor who is not married to his stock picks will usually win the race in the long run. Experience teaches you things that an MBA/CFA never will
Many plausible scenarios have already been explained.
I will share just one on the election book records.
Vakrangee has been handling voter lists of vast regions within India. Part of this data is already available in the public domain. But it’s in PDF and only limited data points are available.
I suspect given the vastness of this data, at some.point Vakrangee decided to compile the different regions into a master database and monetise it.
Selling it to researchers, marketers, political parties, that kind of thing. Possibly they merged these with other available datasets as well.
However, it’s illegal. Possible that the auditors suspected this will come out in the ‘perfect storm’ and took anticipatory bail just to cover their rear. Not that they didn’t know before.
on positive side with over 90% fall, most of the bad scenarios may be priced in. e.g. even if their actual revenues and profits are 10% of current declared figures, it can justify the price.
The primary issue now is how the disclosures happen and if management and company is able to survive thru them. No debt in books is great advantage in such scenarios. There are no Banks, NCLT sitting upon you for resolution of debt. SEBI/MCA irrespective of their action will need to keep retail investor interest in mind. Also there is no queue of customers who are coming up to claim any of their deposits or advances (say demand delivery of bullion they paid for).
Hence at current price I only like to focus on how the disclosure play out and think price can stabilize and recover in majority of the scenarios.
When they are declaring the results ? any idea
If the revenue falls 90%, the company may not make any profits.
One should not forget Tree house and other companies having frauds balance sheet/promoters integrity issue. Market will punish for longtime! In spite of growth, market never give upward PE re-rating !
Please excuse me if I’ve erred in my interpretation. But, doesn’t erosion of 45000 crores of investor wealth warrant intervention from the relevant regulatory bodies?
IMHO… that’s why it is named as securities exchange board and not guaranteed exchange board…the onus is on you that u took risk…so that u make money… neither the board non govt told you
I do realise that capital erosion and capital markets go hand in hand. But, if nefarious activities are being conducted and there’s disregard by regulators I think that’s appalling. I’m inclined to agree with @Rohitsharma, authorities are least bothered about retail investors.
Edserv IPO came out in 2009 or 2010. A couple of agencies associated with the IPO process who helped the promoters siphon off more than 5 Cr were collectively fined 10L recently.
That’s the kind of intervention you can expect
But then this is the securities market, caveat emptor - do your own due diligence
Police department exist doesn’t mean, thief or crime no longer exists. Same applies here. SEBI may have its limitations or its actions may be delayed as well. It can handle the most obvious or repeated failures but may not be able to handle everything. Nothing is perfect.
SEBI do accept complaints on the basis of simple reason like “not satisfied with price of a stock”. You can go online to their SCORES system and put complain and list various points of concern or investigation. SEBI will do investigation on those points only and reply in time bound manner.
Normally we think that if an issue is in media , then investigation bodies will automatically investigate, most agencies consider them fake and useless.
A well drafted complain normally by an lawyer having handled several sebi cases can do wonders but in its absence hundreds of people putting complain can lead agencies to list all possible issues and do comprehensive investigation.
Most agencies are trained to work by striking off the list. Say you raise 5 issue they will go one by one and try to strike of those that prima-facie look ambiguous or may have difficult to get evidence to prove it. In court even strong evidence get rejected so even if something look good is not enough. They need to have something that has proven to work repeatedly in courts, else officers are ridiculed for their actions.
Many company managements specially this one has faced so many investigations in past and I am sure that atleast what they do is not easy to prove in courts and even agencies like sebi will have tough time.
Its bad that even the so called independent directors, ex SEBI person are still holding on to their posts. They should have at least resigned citing some personal/health/age excuses.
I had long back filed a scores complaint against Kaveri Telecom which is a chor company and I was unfortunately a shareholder at some point. After I had sold the shares and around 1 year later, some guy turns up at my native address which is shown in the records, and calls me saying he has come from SEBI in response to the complaint !!
Nobody else thinks that Vakrangee merged their Aadhaar dataset and Voter dataset and monetized them illegally?
Why have they cancelled dividends and buyback? Any guesses?
This was expected. I had a v strong feeling after auditors resigned that this will happen. Its v painful to see how people can do day light robbery and no regulator, govt cares at all. Approx 40 thousand crores plus market cap wiped out in 2-3 months and no one in govt/regulator is bothered a bit.
As per RBI data, total number of ATMs (including off site) in the country is 2,22,066. Of which 2,06,871 are bank ATMs and rest are white label ATMs. Currently Vakrangee has 770 ATMs.