Glodyne Technoserve

I have unearthed more info on this:

Co is burdened with huge debt of 800 crore and is likely to rise further with capex plan of another 300 crore this year. Last year also it had capex near 300 crore. Bulk of this money is going intoe-goverance projects. This is one area where no one has ever made money. Examples of failed companies which did heavy capex on e-goverance are Bartronics, Zylog, Spanco, Onmobile. Glodyne is follwing the disastrous path of these companies. Its US business has failed to recover despite management’s assurnace in a conference call 3 months back that it has revived. US business profitability nosedived in the first quarter as against management assurance of significnat improvement in profitability.

There are concerns (valid or invalid) that cash is being siphoned off in the guise of 500 crore acquisition and then 200-300 cr annual capex on e-goverancne projects.

Can any price be low enough for such company?

At LTP of 90.6 (as of 8-Sep-12), the stock is up 20% since the note (and 40% since 3-Sep-12, the day it made 52w low of 64.4). I have a dipstick investment here, and the plan was to add every time the prices fell 20% from the price at the time of the note. While in the light of the recent announcement, the price recoiled from 64.4/share to touch 90/share in 5-6 sessions, I am not planning to add anything until there is more clarity about the AGM, dividend, pledged shares and debt schedule. If these things turn out to be fine (unknown to me now), the stock will cruise through.

it has gained 40%+ in last 7 sessions from 64 to 97. Any reasons why? went from 440 to 64 and now again going up…does it make sense to buy now??

Could you please share some facts to substantiate this claim?

While I agree that nobody has really made serious money on e-governance projects, I’m yet to ascertain that this company is heavily into e-governance…

Regarding other concerns like siphoning off money, Does it really make sense for the promoters to kill the company by doing this esp. when they hold significant percentage of shares (57.58%) in the company which they have been increasing? Where does their interest lie? Keeping the hen alive or killing it?

Even informed investors like DIIs, Corporates are buying the stock from the market…

While I make no claims that all is hunky-dory with the company…just trying my bit to separate the whip from the chaff…and you know what I well may be prove wrong!

Regards,

Aksh

intoe-goverance

This is what really baffles me of the stock market…even for no apparent compelling reason for the prices to go down there is sudden drastic fall. where does the market get it’s facts (or fiction?) from? I think similar is the case with other companies like Rolta, Geodesic, Amar Remedies etc where in rumours do the trick or there are more than meets the eyes?..

I think one should give serious consideration as to who are your partners in the business…as major sell out by FIIs because some panic in Afghanistan can play serious havoc to the price of the asset that one holds!

And if the fact is that the price has gone down just because of sell out by non serious stock holders (i.e. lenders), I think it’s a very serious distress buy out opportunity, one needs to give serious look at. Having said that, Distressed Assets can take considerable time to get market attention.

There are some good observations by fellow investor Saji regarding IT Raids and Lenders giving loans to the company etc…If the numbers are hollow, why would they lend in the first place? and isn’t all these fears are already discounted in the current price?

Let’s try to dig more into this…