Forensics and the art of triangulation

anshu_saurabh · August 27, 2024, 8:48am

@VIFL
There is a thread, I will keep you guys updated there.

@trinadh
Screener Specter opens when you click on the drawer that appears near the top right of the page while you’re on a company page on Screener. It offers a quick glance at forensic insights, helping you to dig deeper into relevant areas. The extension complements Screener’s data by highlighting potential red flags or areas that may need closer attention.

If you have more questions or need further assistance, feel free to ask!

pranavpallod12 · October 19, 2024, 8:26am

Below is an interesting case of red flags. You’re welcome to check it out and correct me if I’m wrong somewhere or add to the list of red flags

(Note- This was done through just a cursory glance on the financials and fy24 annual report. So it’s not thorough)

Company name - BLUE CLOUD SOFTECH SOLUTIONS
PE - 137
Market cap- 3526cr

Here we go:

Its a Simple chain of thought

Sudden increase in revenues → negative Operating cash flows last 2 years (so sales are probably fictious) → promoter stake has come down from 55% to 2% in space of 3 years (if sales growth is so fast why is promoter rapidly selling stake → the stake sale has been accompanied with huge rise in share price , from 13 rs to 250rs high… so probably operator driven stock… promoter - operator nexus very likely-> warrants were alloted at very cheap prices and then sold by promoter at inflated prices to retail investors-> so operator drives stock up, promoter dumps stock on dumb retail investors

Also name of company is very fancy…to lure in the unsuspecting public

Company has 1 cr of fixed assets like property and computers (48cr of intangible assets in fixed assets) … doing 500cr sales…highly unlikely

50cr investment as loan given to related party (IT corpz ltd) … quite possibly siphoning of off funds from listed company to unlisted promoter company

Out of 504cr revenue, 186cr is from foreign branch (many times it has happened… where a listed company reports revenue from foreign branch/subsidiary only for that subsidiary to turn out fictious… Brightcom group is an example)

Statutory auditor resigned

No details given in annual report about the number of employees on company books…no details about promoter remuneration. No details of management discussion on industry and company operations.

Subsidiary was bought for 50cr from some parties through share swap arrangements (Did’nt look into it in depth, could be a plethora of red flags in here as well)

Disclaimer: This was just an interesting exercise to perform. waiting to hear you guys’ opinion

akash_das · October 19, 2024, 12:47pm

Blue Cloud Softech Solutions Ltd has been acquired by ITTB Software Private Limited and Janaki Yarlagadda. Their shareholding pattern has not been be changed from public to promoter category at present.

Sudden increase in revenue will be due to business integration from new promoters.

New promoters infuse capital via warrants or preferential allotment. Sometimes they do rights issue as well.

Previous management and auditors will be replaced by the new promoters which will show that a lot of resignation is happening.

Complete balance sheet can be interpreted only when the new promoters integrate their business with this company completely. Till then it will show that everything is in the subsidiary or group company.

These are normal things to expect in a takeover case.

Disclaimer: I am not invested in this company.

novice2014 · November 4, 2024, 8:05am

Every bull market creates excesses… However, in India, every time the perpetrators remain same.

Perhaps, it is embedded in genes, hence cannot be modified.

Those who wish to ride Anil Ambani comeback should take notice.

I congratulate BS to have courage to publish this.
Business Standard Article.pdf (130.8 KB)

mitansh · November 23, 2024, 5:59am

There is a company called urban enviro waste management which is growing at 50%+cagr, available at 19pe and has positive operating cash flows. I was unable to find any red flags in the company, but there must be something I am missing because I am unable to find the reason why is it trading so cheap compared to its growth. Can some forensic/red flags expert find any red flags or discrepancies which the company may have?
Thank you.

Not a buy/ sell recommendation

StonePitbull · November 23, 2024, 7:33am

Prima facie view : Poor operating cashflow, 33 Cr receivables.

mitansh · November 23, 2024, 12:40pm

IMO that is not the reason for its low valuation due to the following reasons :

The cumulative CFO/PAT from FY20-FY24 is 90% + as PAT IS 13CR and CFO is 12CR.

Most of the trade receivables are for a period of less than 6 months.

Its peer Antony waste has 30% of receivables as a percentage of sales. Urban enviro waste has 128cr sales and 34cr receivables which means it has ~26% of receivables as a percentage of sales.
The company is in B2G sector which is known for having high receivables but comparing with other companies its receivables still look healthy and even when most B2G companies have given negative CFO, in H1FY25 its CFO was positive.

Some more points to add

The company doesn’t have significant related party transactions and it is in B2G sector which makes it a bit difficult compared to B2B to show fictitious sales and profits.

I would really appreciate if someone could highlight any red flag or discrepancies which this company or its management might have.
Thank you.

Disclosure not a buy /sell recommendation.

Shankar_Dutt1 · June 3, 2025, 9:29pm

Promoter has raised funds through preferential, while himself participating in those preferential. His salary till date won’t even add upto 10 crores, but be has already paid more than 70 crores for Warrants and preferential to maintain his stake, while himself claiming to banks that he has no money to pay back their loans. Ganesh Nibe is a wilful defaulter. His house and property were auctioned. Details were available in eauction website and newspaper ads. Promoter does not have any education background in Engineering or any other degree. He cannot even converse in English.

novice2014 · August 2, 2025, 5:29pm

Update:

Past week events suggest that for AA and his backers, the chickens have come home to roost.

Past few weeks, the media was abuzz with gr8 comeback of AA with positive stories about RPower and RInfra.

But this was not evident in June SH of both:

RInfra:
Mathew Cyriac - 1,29,63,593 to 55,28,596
Authum - 4,31,21,879 to 4,12,59,850.
Vanguard - From 90,25,054 to 48,50,557.
Florintree - 86,21,066 to 62,55,559.

RPower: Highest number of shareholder numbers in past few years → Dilution rather than concentration.

After this falsified bank guarantee episode, the SECI chief who took the action was removed and RPower was showered with many contracts.

Past week, suddenly AA has come again under scanner.
Both the companies have issued multiple clarifications distancing themselves from AA.

Another curious thing: Authum promoters sold about 3.5% stake via bulk deals on the day of ED raid and later revealed their plan to lend the same to the company → ? Liquidity crisis: Both R Power and R Infra has authum as backer.

It appears political patronage driving favourable decisions has temporarily been suspended or withdrawn.

Lets see whether AA companies can ever create wealth for retailers !!

naruto · August 30, 2025, 2:25pm

Nirman Agri Genetics

This is supposed to be a normal hybrid seed company.

Sales: 29 (FY23) → 63 → 237 (FY25); Forecasting: 2000 Cr+ by 2030
– For reference Kaveri Seeds is trending between 1000 - 1200 Cr between FY14-FY25
Age of promoter (25 years based on public sources)
When people questioned on changing tax rate every year, they noted that they realized in between that agri output doesn’t have tax
Newly commissioned plant has capacity to generate 450 Cr in revenue but management is not encouraging visits
1%+ shareholders exited over time while company is posting great revenue numbers; Noted similar in Vakrangee etc,.

Since this company is coming up in screeners due to stellar revenue rate growth, thought i’ll post the flags I perceived.

Appendix

(Revenue forecast from: Q3/9M FY25 call)

Tax rate -

Plant visit request denied -

Shail1234 · October 2, 2025, 10:45am

Read some interesting inputs on Rudra ecovation. Yes it was promoted big time last year, how is the story now ? Any one tracking it ? Also new story of Kiri Industries, 2nd Oct was date of payment but its over. Look like non ending stories, any inputs there on ?

sougataG · October 15, 2025, 10:04am

Good catch. Here’s the interim order passed by SEBI on Nirman Agri

sarthak_saraf · October 15, 2025, 1:06pm

I have noticed and this might not be co related but companies/promoters that do heavy marketing on twitter or join these so called “spaces” eventually turn out to be bogus

Lawsikho one can look at them for their bogus acquisition

Promoter was joining spaces and doing over promotion on x

EMA partners another company although decent business but promoter back then used to do a lot of these spaces with finfluencers

sougataG · October 16, 2025, 5:32am

I do not join spaces mostly because I am unfamiliar with the track record of most of the individuals who participate in these meetings. Having said that, I did have a look at the company and passed on it based on

Explosive growth in the difficult seed markets in India. Selling seeds in India is not an easy task.
Promoter said, in a concall, he did not know about the taxation of agri companies. I found it very odd.
The gap between reported profits and cash flows was huge: Cash from ops - 32 cr vs profits 25cr.
In the BS, 111 cr in other assets and only 2 cr in FA. Almost everything is stuck in receivables or inventory.

I did not look further.

Deven · October 16, 2025, 10:03am

Back with one more - Analysis of Nirman Agri Fraud

Company: Nirman Agri Genetics Ltd (incorporated August 2020, Nashik-based).
Business: Hybrid seeds, crop protection, bio-organic products.
IPO: ₹20.30 crore on NSE Emerge (SME) in March 2023, managed by First Overseas Capital Ltd (FOCL).

IMP: SEBI initiated examination as part of a wider probe into SME IPOs managed by FOCL, after irregularities were earlier found in Synoptics Technologies Ltd.

Almost entire IPO money (₹18.89 crore, i.e., 93%) was diverted or siphoned off through fake or related-party entities. Details you can find in enclosed document.

Inquiry is based on IPOs managed by FOCL. As per chatgpt below are partial list of ipo managed by FOCL.

Synoptics Technologies Ltd
Pyramid Technoplast
Italian Edibles Ltd
Clinitech Laboratory Ltd
Sameera Agro & Infra Ltd
Ishan International Ltd
Veerkrupa Jewellers Ltd

Double check if you are invested in any of above companies.

Who owns FOCL:
(First Overseas Capital Ltd.) was “set up by a team under the CIFCO banner” and then separated as an independent entity around 1995.

The current Managing Director is Satyen Dalal.
On corporate registries, the directors include Pratul Narendra Dalal, Puja Satyen Dalal, Satyen Bhupendra Dalal, and Devanshu Pravin Desai.

The “team under CIFCO” origin suggests a collective founding rather than a sole founder.

How you may have prevented in investing in Nirman:

Reducing promoter stake.
Make it mantra – Huge red flag if promoter is selling, if not fraud than it’s high valuation or decreased performance.

Cashflow:
Despite profit of 10 & 25 Cr, CFO is 4 & minus 32.

Others are there but just 2 would have been enough to stay away.

Disc: My 2 cents to create awareness for vp friend, not from finance background nor have any statutory license.
Nirman Agri Sebi Order.pdf (656.9 KB)

naruto · October 17, 2025, 7:56am

One time, I was wandering in Chitkul (Himachal Pradesh). I met a cafe owner and we were talking for some time. Then he told me that he is preparing for SME IPO for the cafe + 2 more hotels in mumbai in his name and he just had a call with exchange folks. He showed me a paper with answers.

I asked him the usual questions - # of shares, market cap expectation etc,.

He said he knows nothing about all that. His friend is doing all the leg work and he is just the front.

In another conversation, CAs based out of Hyderabad who do SME IPOs also cautioned me about the quality of companies coming out in SME IPO.

When you see folks like gensol, 8k miles, vakrangee it turns equity investing into minesweeper. No wonder Nalanda Capital folks spend money to get an assessment of founders.

novice2014 · October 19, 2025, 5:55am

A curious case of Asian Hotels (North) Limited

The company is planning to allocate 2,31,80,000 shares at a price of 330/- to a non promoter entity - Elana Holdings PTE. LTD, worth 765 odd cr. This entity will then hold 54.37% stake but will still remain a non promoter. The EGM notice says that the ultimate beneficiary is Ms.
Shreya Agarwal who already holds 21.88% as non promoter.

A curious company → In simple terms, everyone wants her as girl friend, but no one wants to marry her !! (ie, happy to invest 1000 odd cr as non promoter, but dont want to become promoter)

rgds

akash_das · October 26, 2025, 7:46am

Ampvolts Ltd
Fight between independent director and company regarding governance lapses. This was a takeover case where new promoters were going to develop ev charging infrastructure.

Deven · November 4, 2025, 9:50am

Company seems in limelight with news like

Blue Cloud Softech Solutions Limited Signs USD 9.63 Million
Contract with Axiom Vortex Inc for Deployment of Advanced EDR and Perimeter
Security Solutions for Defense Sector Clients
&
Blue Cloud Softech Solutions Limited Signs USD 150 Million Technology Ownership Transfer (ToT)
Agreement with Israel-based Technology Firm to Develop Edge-AI Chip Hardware Design and Manufacture Semiconductors in India

However I and my chatgpt is failed to extract reliable info about education qualification and work experience of Janaki Yarlagadda and her family.

Disc: Not invested and have negative biases.