Securekloud Technologies Ltd (was 8k Miles Software Ltd), Cloud Computing

I compared the shareholding pattern of June with that in the September agm voting disclosure and here are my findings, please share your thoughts.

June shareholding

  • Promoter - 17516066 (57.39%)
  • Public Institutions - 1677489 (5.49%)
  • Public Non institutions - 11324050 (37.1%)

Shareholding in AGM voting disclosure -September

  • Promoter - 14936066 (48.94%, decrease of 8.45%)
  • Public Institutions - 4099175 (13.43%, increase of 7.94%)
  • Public non institutions - 11482364 (37.62%, increase of 0.52%)

Looks like the promotots have sold stake to institutionsā€¦

Good observation @siddharthadhamankar it seems it is Suresh Venkatachari who has offloaded. These raise some important Qā€™s:

  1. What could be his pressing motive behind this share sale?
  2. Institutional investors still see value in buying a substantial chunk of the 8K Miles Software business. And also remain invested as institutional holding is still intact. Should this evoke trust?

Was there a book closure announced for AGM?These are holdings as of what date?

The decrease in promoter share might be because of pledging. I think Banker will have voting rights.

More shares pledged by SV
His stake has indeed down to 47%, which includes earlier pledged shares.

There has to be some value for someone to accept the pledge of another banking fraud .

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In AR 17-18 his holding was 17029533.Yesterdays pledge disclosure says his holding to be 14459533.
So did he sell some shares between April and Sepā€™18.Every sale by a promoter has to be disclosed to stock exchanges as per listing requirement.Did anyone see disclosures of sale in the above period?Was there a violation of listing agreement?

These are additional pledge created for the existing loans availed from IFCI & Indian Bank

Maybe due to price correction the banks would have liquidated the pledged stocks. Now he has pledged additional stocks against the loans.

Any idea about the loan amounts from IFCI and Indian Bank?

Does liquidation of pledged stocks required to be informed to the exchanges?

Promoter share sales have to be notified to stock exchanges by the promoter.Rs 15 crs borrowings from Indian Bank and Rs20 crs from IFCI as of Mar31.

@P-Shekhar this price crash in 8k miles software has been unprecedented and deeply painful for many, including large investors and institutions as well. Corporate governance is a strange animal and valuations hold little meaning when there is a threat to the integrity of the management. When trust is lost in a specific area, the impact is extrapolated and people start disbelieving anything and everything. So people have justifiably started distrusting the annual report, the audit opinion, and the growth story in general, and everything that 8k miles software does and discloses to the exchanges is now seen as a complete lie. My investment rational like your is also primarily based on valuation and I believe in this particular case there is a lot of irrationally in this blanket distrust and hence I am continuing to accumulate albeit in small quantities; though I will not advise anyone to accumulate at this point. Itā€™s a very personal call based on personal conviction.

I have exchanged some emails with the company and the responses that I received inspire hope and confidence for me atleast. I suggest you converse with with the company to get a first hand perspective yourself before making a decision. However note that there is a much higher probability of getting a quick and insightful response if your communication is constructive as opposed to hostile and aggressive.

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@siddharthadhamankar

Pl share some highlights of those emails. What did I ask and what was their response that evoked hope and confidence?

@siddharthadhamankar I absolutely agree about not being hostile in letters. Main reason i found this forum (by fluke) was bcos i couldnā€™t get any email ID for grievance cell. My trading methods may be vastly different from yours. I see that you are very knowledgeable with reading P/L, BS,etc. Since as a TA, i feel that price itself factors in most news and all other events; just the same i use basic parameters from Fundamentals such as 4 year, growth in Topline and PAT, possibly Q-o-Q growth too. But growth may be hampered as I pick stocks which have been battered quite a bit which can be direct result of poorer earning compared to past and not necessarily a bad company. I look for zero debt, ROE and ROCE above 9, zero shares pledged by promoter or at least nominal pledging which sounds reasonable enough to possibly be used back into the company growth. As such, returns border between 40-80% per annum, maybe barring deep bearish cuts in market. Would like your feedback on ISFT if you dont mind as it too has taken the same battering as 8k and charts look identical . My entries and exits are purely technical. FA is just a feelgood factor for me to buy correct stocks and not just any illiquid garbage that may seem to have decent charts :slight_smile:

also, if you could provide me the email ID to which you sent mail; I too could try from my end to clarify future prospects and as Harsh_Vijh requested; possibly if you could share what companyā€™s reply broadly suggested. Thanks in advance

has anyone asked for the clarification from the company about the reduction in the promoterā€™s equityā€¦I m sure almost all of us will be interested in knowing the exact truthā€¦

I also want to know so many truths.Early this year I met him and asked about a new venture.The answer was a binary- yes or no and he told me he will not answer till September this year.Obviously he was contemplating various options though announcement was made.Last year I told him the intangible assets do not inspire confidence and gave him 3 options.I have seen his AR this year and there are major changes made to intangible assets.
I still see a total overhauling of accounts by Deloitte or they quitting.The reserves have also been marked down.He doesnā€™t have cash to buy his own shares at Rs150 though he made a preferential issue in 2014-15 at Rs 398.Even to meet the working capital on turnover of about Rs900 crs he needs about Rs250-300 crs and he appears to be broke.Either he issues fresh shares in the Indian outfit ( if someone is willing to buy) to raise about Rs.200-250 crs,which will mean a dilution of 30% or he issues shares in US subsidiary which means lesser profits for the Indian listed unit.Looks there will be a substantial downgrading of EPS for this year plus selling pressure from institutions now that the Outlook has been marked negative by CARE.Some of his peers in Chennai are baffled at the way things have panned out.The acts of his CFO and the accusation by his previous auditor have caused irreparable damage to the reputation.

Hi Sir,

Have you spoken to SV directly ?Are you a news reporter or any research analyst
What do you mean by ā€œhis peers at Chennai are unhappy by the way things are panned outā€.
Please provide more info sir

can you please share emails.

As i had said earlier, i have very little(if not nil) knowledge of how to read BS and audits. First time in 6 years that a trade seems on the verge of failing and cash being completely eroded for me. Canā€™t even say it will be a lesson learnt as there were practically zero hints of anything like this happening in April when i bought for the 2nd time after previous successful trade. I doubt anyone did as i can make out from the discussion. Only thing i see some are confident(hopeful) that business will be back to normal (hopeful) and some are totally negative following all the bad(confusing) news surrounding 8KMS. Personally i never use ā€œhopeā€ for a trade; same as i try to avoid panic in crashes. Buying stocks at multi year lows mainly cos of market, sector, earnings,etc going down has always helped my trade a bit late also if not in my stipulated planned time of exit. As i said, personally it would be better to leave 8k alone for now and not average more on such uncertainty on the back of chances of more bad news Vs chances of good news being very high. Better idea would be to see earnings and growth and allow a quarter or so (same time Nifty and Dow suggest they can fall also) and buy on technical strength(which will be on the back of good news and fundamental strength too) once stock moves above 235-274 zone. I know that is double of what is trading now but past data suggests the stock is capable of doing 250-700% in 2-14 months. just my observation. Not that history has to repeat this time but from history, i have seen in past that bad news does somehow get absorbed and things happen positively. Such was the case with Sathyam too. Can happen again with 8k also given past performance and all the accolades the company had received. Would like to hear more ā€œgut feelsā€ and ā€œideasā€ from other boarders. Another point to be noted is there are many other stocks in my portfolio battered down to 20-30% of original buy price (though now they have been averaged) but none are giving me the spooks as this one, so after final buy at 191, i decided to call it a day. Weekly support levels now are placed at 117, 113, 99, 84, 78, 63, 58 and all time low of 36-37(these are not LC prices). I had said earlier that i do not expect 117 to break. Can be utter chaos if it does (not that we havenā€™t already gone through enough mayhem :frowning: )
i know this forum, as indicated from what iā€™ve read suggests that it is a dominantly Fundamental forum with most adding inputs about management, BS,PL,etc. If ok with all, i would like to add inputs which are technical in nature also for those so inclined. Not just for 8k, but any stock, index. For now would only like to discuss the following 3-4.

  1. Brent as i felt in March had breached the crucial resistance of 69-70 levels (cross of red line on chart below) and entered the zone between the 2 black lines. It seems quite probable now that we may see levels of 97-104 by Dec or maybe early next year.

  2. USD/INR charts hinting that we can go all the way to 77-80 on the dollar soon enough (as was obvious by recent RBI meet)

  3. Dow charts made it quite clear in past 3 weeks that a peak is in progress and 27000 may well not breach though we kept falling and Dow kept rising. (as shown by green line). Following which, we have to see levels where support (demand) can be met as a 1st stage. Blue line shows that level marked at 24,714 or roughly 900 points fall.


Yesterdays 800+ point fall came as no surprise to me though nifty was up yesterday (dow futures had already impended doom by 2pm yesterday)
4 Next brings me to our favourite Nifty. There was a very good chance for us to beat all time highs and go higher till we fell below the red line at 11,392, which signalled sell-off. immediate target and support is marked by blue line at 10,460 which we breached and bounced above again yesterday. Next support and target is signalled by yellow line marked at 9813 which we can surely expect in weeks to come. I would even further venture and say by quarterly charts (not shown) that we may breach 9800 and go lower to 9500-9250 zone. Last word being, we can expect 2 quarters of fall (consolidation with negative bias) which may coincide with elections next year for bullishness to return considering all the above factors.


Also just found out that as a new user, i am allowed only 3 replies in the forum. Till they extend that, i guess i canā€™t post. Hope above info was helpful. OOPs. also found out allowed only 2 links in a post so, forced to delete dollar/inr and brent charts.

My post is clear on my meeting.I am not a reporter.
I wear many hats -predominantly as an analyst.
I said his peers are"baffled".Baffled that the company has fallen from a position of strength to where it is due to self inflicted damage.