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Shorters usually do not like news which will bring more volatility than expected and hence the action today. Mr. PIRAMAL has shown his business acumen on numerous occasions.
Now, whether his investment bet on Shriram was a hit or miss can be up to debate but does one good/bad decision decide your investment of earned money in a share? I have even heard some curse him as a bad man for selling the business to Abbott for a huge profit. We need to decide whatās good or bad.
Disc:invested.
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Below news may be the reason Piramal liquidated its holding in STFCā¦ and market felt Piramal is in deep troubleā¦
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JB chemicals is in me too products and a very conservative company. They are cash rich and make part of their APIs requirement inhouse, especially for their lead brands. Promoters are cash rich as is the company. Their asking price will be at higher end of the spectrum and may not do justice to acquirer, only my opinion. Unichem also was expensive. Such acquisitions are good for acquirer if the promoter or company is in some sort of working capital troubles and in a hurry. This deal overall may benefit more to the sellerā¦
Just an opinion. No position in either of three.
SoftBank plans to invest $1 billion in Piramal group, talks in final stage The deal would peg the value of the financial services arm of Piramal Group at over $4 billion, estimates suggest. As per Business standard
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Letās assume that the news is true and the deal happens. Not sure if 4B valuation is pre or post 1B investment. Assuming 4B is post 1B investment, it means current valuation of financial service is 3B. As per June investor presentation http://www.piramal.com/assets/pdf/financial_investor_presentations/PEL-Investor-Presentation-june.pdf
Financial service is 54% of revenue and 60% of capital employed. We can value other Piramal business heads separately as per our own valuation method. Considering that the current market cap is roughly 5.4B, I think SoftBank is paying a fair price. Itās a positive news considering the current market sentiment. Views invited!
Disc: PEL is 10% of my portfolio
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Itās also sign of stress in PELās cash flow situation. Sold STFL stake. Now Softbank and if I Combine this with their repetitive statement that they lend only to A grade developers this management though good but business they operate is avg at best .Better to participate in real estate theme via debt free oberoi or rental based brigade /prestige.
They have raised close to 16K crore in the last 6 months. Also as per presentation they dont have any ALM mismatches. So not sure if they are in stress.
All companies while presenting alm picture have shown positive alm mismatch including undrawn approved bank lines . Problem is banks have suddenly stopped disbursing even approved lines after the fiasco to all hfcs and now the alm mismatch is negative
Investing in Piramal Enterprises is a bet on Ajay Piramal. When he exited the pharma biz, the companyās stock price was in hibernation for long while AP tried various
things like the DRG business, finance, and even investing in Vodafone. Not everything paid off well, but Piramal knows how to cut his losses and average on his winning bets.
Am sure if the deal with Softbank materializes, it will be a big game changer for Piramal. He could be amassing ammunition for an all-out campaign to dominate the fintech space.
disclosure: holding PEL in core portfolio hence biased.
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All Investment logic says, buy good cos when there is blood in the street. Yes , PEL has done some mistakes, which they r correcting. AP might have understood it and quickly correcting by whatever means possibleā¦
Just think would you have bought ICICI or Axis, 1 year back ? What changed till date except management change ? Has all NPA vanished ? No but street has got back the confidenceā¦
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I have no idea as how FNO shorting worksā¦but looking at these numbers from last few daysā¦i think shorting guys are at workā¦I think these guys turn up in scrips which are in news for obvious reasonā¦when the majority of the institutional buyers remain intact
P.Sā¦Invested from last 3 years and staring at a big lossā¦
will AP weather his nbfc crisis or not?
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These could be naked shorts by operators.But very often large shareholders to mask the details of delivery and their names being revealed sell in the derivative market and hedge their holdings.
But he is facing a large crisis and seems to be running around to raise funds.
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Exhaustive Annual Report released by PEL. Any one has any special info from this AR?
Are you talking about annual report for 2018-19?? In case yes, please do share the link of latest annual report. Cant find on their website
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