It seems Praveg shareholders having rock solid conviction to hold the stocks for long time. At a time when the whole small-micro cap space is going through correction, it’s good to see Praveg is doing well. Thanks to company’s extremely positive future outlook.
Anyone who is tracking Praveg must listen to the last concall. The management is crystal clear on future planning and execution.
Though not having a strong moat, given the total addressable market size company should do extremely well in next few years. Low liquidity is a concern though. A stock split here will solve liquidity problem to an extended.
I want to deploy 15-20% of PF in this. What cons do you guys see?
If management can walk the talk.( keep a check on concal n results).
Hospitality is totally dependent on ratings. So have to monitor if their ratings are high.
tourism industry is cyclical in nature. If tourism goes down, will heavily impact the company.
Their event management business, its not scalable imo, they are into this as it provides good cash.
they take land on lease, so have to make sure they get the tender on subsequent tenure.
it is a asset light business, till now there is no competitor like Praveg, but big pockets or already established hotel brands can enter into this industry. So have to monitor that as well regularly.
@Sunit_Das
I generally do not provide my opinion on stocks that I do not hold (Praveg, for instance, I do not hold, but I am tracking it). However, with your comment about deploying a significant amount, I am concerned, so I’m sharing my thoughts. Please keep in mind that I am not an expert and do not hold this stock, hence I may have biased view.
Three years ago, the market cap was 16.7 crores, and now it’s 1171 crores. 30-40% growth or good prospects is as per me in price.
According to screener data, the promoter seems to be selling a substantial portion. In 2020, they held 74%, and now it’s down to 56%. If there is no explanation for this, one should be extremely concerned. My number one criteria for buying or holding a small-cap stock is promoter activity. I maintain distance, regardless of business aspects, if the promoter is selling, especially in small-cap stocks.
The recent resignation of Paras Patel is a significant development. In my opinion, he was a key person. It’s essential to investigate the actual reasons behind his departure and assess its potential impact.
Promoter is a Chartered Accountant and buys mini cap companies for takeover, pumps up the price to astronomical level, integrates some business activity with it to generate interest and sells after pumping to buy another small company for pumping. Currently they are pumping Jhaveri Credits & Capital Ltd.
Please note that the company will perform on its merit, I have only highlighted the mode of operation of the promoter.
Thanks for adding your opinion.
Want to correct your second point. The promotors holding didn’t drop to 55%. If you check the entities under public holding you will see the following-
And about 3rd point on Mr. Paresh’s resignation, I don’t feel thats a problem because it’s their family business. He exited and handed over to Mr. Vishnu. Also he cited health issues are the reasons for his resignation (we can take that with a pinch of salt though).
Any one done more research on Promoters? For small cap company… promoter reputation and honesty is the most important parameter for valuation calculation.
Why they are diluting share capital by issuing warrants after IPO even though they have enough funding?!! What’s reason Paras patel leaving… health is not correct reason as stated in disclosure. Kindly share more on promoters background and red flags if any
While going through BSE filling, I found that chairman, director and KMP resigned from Jhaveri credit and capital and Praveg chairman and Director and other KMP are on the role of this company!!!
Why promoter are selling holding in their own company and focusing on brokerage company!!! Surprising
Note: Jhaveri Credit and capital was penny stock (Rs 6-7 in December 22) and with manipulation it reached to 160 through series of upper circuits without any materially changes in business
@akash_das as per offer, which has been executed on 23 June 2023… price of Jhaveri was around 90 on BSE but Vishnubhai bought it at Rs 16!!! and presently it trading at 162!!
By the way … Chairman and Director of Praveg is Chartered Account (CA) so he might knowing better how to cook/manipulate the books!!
There is no disclosure on acquisition of Jhaveri by Vishnupatel in Praveg company exchange filing
Note: CFO of Praveg resigned in June 2022 …who might not able to work under CA Vishnu Patel pressure for book keeping
If we keep the stock manipulation aside, the rest of this is perfectly legal and common. It’s basically a reverse IPO where a private company acquires a public company to list itself. This way, they bypass the scrutiny for IPO listing and can list on the mainboard instead of SME.
Let’s take this company for example. Sword & Shield Pharma Limited was acquired by Praveg Communications Limited in 2019.
They increased their shareholding by a scheme of amalgamation with these terms. “In accordance with the Scheme, upon the Scheme becoming effective and in consideration of amalgamation, Praveg Communications (India) limited shall issue and allot 75 (Seventy Five) fully paid up Equity Shares of Rs.10/- each for every 1 (One) Equity Share of Rs.10/- each fully paid up, to the equity shareholders of Transferor Company i.e. Praveg Communications Limited, whose name appear in the register of members as on the ‘Record Date’ i.e. March 6, 2020.”
They wanted to enter into the real estate and energy business.
“At present, the Company is engaged in the business of Exhibitions and Events Management. The company has various plans for expansion of its business operations from the present level and accordingly, it is proposed to start the business of Real Estate and Energy Business. In order to commence the same, it is proposed to alter the Main objects clause of the Memorandum of Association (MOA).”
They liquidated some of their holdings to buy Jhaveri Credit.They may be starting the real estate or energy business with Jhaveri Credit after acquisition. Since this company is not an acquirer, they have no obligation to report to exchange regarding this.
Jhaveri surged because Vishnupatel acquired stake. Praveg was listed the same way and has created immense value in the last few years. The stock has surged from single digits to highs of 600+.
If you look at the news related to Jhaveri, the promoters will possibly list another unlisted entity. It’s in the domain of solar energy.
Coming back to Praveg, it won another contract for a tent resort in Diu. They are expanding presence in Gujarat, Daman & Diu, Uttar Predesh, and Rajasthan. If things proceed as per plan, they are positioned to deliver robust growth in the next 12 to 18 months.
High capital intensive business and tough competition - all valuation parameters will be disturbed ?
I still keep my red flags on promotors as I know personally the group - how they have mastering in “corruption” culture in government tourism department
I have the following concerns which are prohibiting me in making bigger allocation to this company. If anyone can resolve these, I’ll appreciate
What’s the reason Paras Patel has handed over all the stake to Vishnu bhai ? It’s mentioned that Paras bhai leaving because of health concerns but it’s difficult to believe that someone who has spent 20 yrs building the company will leave so quietly.
Involvement of Vishnubhai in “Jhaveri credit” is a bigger red flag. How much time and attention Vishnu bhai can pay at Praveg when he seem to have amassed such a large stake in Jhaveri ?
Solicitors leaving is almost always a bad news. What’s the reason ?
