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RPSG Ventures - A proxy IT play and an emerging FMCG company

Disclaimer: This report is the work of an investment adviser affiliated with the author. The report is the result of the adviser executing its investment strategy. The adviser holds a position in the security, however there is no assurance that the adviser will continue to hold the investment, or make additional investments and will not update the information to reflect future changes in the adviser’s assessment of the investment.

CESC Ventures (CESCV IN)

Non-fundamental selling and challenging market conditions create an opportunity for value minded long term investors

CESC Ventures was spun out of CESC Ltd earlier this year and has sold off since listing due to forced selling by mutual funds constrained by SEBI regulation on large/mid/small cap categorization in a tough overall period for small cap investors.

At least 18% of the company or 36% of the non-promoter shareholding was sold in the open market after the spinoff by large price insensitive mutual funds like HDFC Mutual Fund (18%), ICICI Mutual Fund (6.2%) and others. Actual spin-off related selling is probably higher given that ~75% of the named (largest) pre-spin shareholders exited.

Large discount to Net Asset Value

CESC Ventures trades at a 76% discount to fair “net asset value” on a SOTP Basis.


On a look through basis, CESC Ventures trades at a 20% FCF yield ex-FMCG if you assume FirstSource (FSOL) pays out ~50% of NI as dividends to CESC Ventures. Median HoldCo discounts in India are around 30% for active controlling stakes (i.e. Holding companies that actively turn over their portfolio by buying/selling assets) and sub-70% for non-controlling stakes. It is very rare to find HoldCos at discounts of 80% and HoldCos with this level of discount typically have corporate governance problems.

With that in mind, based on our work we think that it is unlikely that CESC Ventures’s HoldCo discount will widen further. On the other hand, if the FMCG business succeeds in doubling its revenues, is spun out, and trades at a 6x revenue multiple in line with peers, CESC Ventures could offer 10x upside from current levels over the next 5 years.

FMCG business - source of non-linear upside

The FMCG business, TooYumm, is headed by ex-McKinsey partner Suhail Sameer and the group plans to separately list the FMCG business once it reaches scale. CESC Ventures plans on using the cashflow generated from its mall in Kolkata and dividends from FirstSource to fund growth for TooYumm, which has grown to over 200cr in annual sales since its founding in 2017.

BPO business and Real Estate – underappreciated, steady cash-generative assets protecting downside

Since FSOL is publicly traded we won’t analyze it in detail, but we believe that FSOL could be an underappreciated source of upside and expect EBITDA to grow at a low double-digit pace over the next few years.

FSOL’s high dividend payout should provide a solid floor on the stock, while its modest valuation of ~9x trailing EPS is a large discount to comparable BPOs and leaves room for multiple expansion from currently depressed levels. Over the longer term, we’d expect FSOL to benefit from the increasing consolidation in the sector.


Quest is the premier mall in east India and has an 8% FCF yield which should grow at 4-5% a year. While Quest is operating at full occupancy (~99%), there is upside from re-pricing of the preliminary contracts signed by tenants when the mall was created. This should cause rents to increase 20-30% over the next few years as leases expire

We believe Sanjiv Goenka is a better capital allocator than the market thinks

Our conversations with other buyside and sell side participants suggest that Mr. Market has a negative view on Goenka’s capital allocation. While CESC’s shareholder returns over the long term have been in-line with indices, CESC has meaningfully outperformed power peers over the last 10 years

While power peers extrapolated the boom seen in power from 2003 to 2007 and engaged in leverage fueled capex to build out power plants, Goenka remained conservative while bidding for new projects. CESC continued to operate at 2-3x Debt/EBITDA while peer median leverage was ~5-6x Debt/EBITDA and the company’s balance sheet was described by analysts as “under-leveraged” and “conservative” at the time. This proved to be a winning strategy as CESC Ventures has meaningfully outperformed peers in its sector, including Reliance Power, Rattan Power, Tata Power, Torrent power, NTPC, and others.

CESC’s non-core investments in FirstSource and Quest Properties (Kolkata Mall and BKC assets) have been homeruns with +334% (CAGR of 23.8% incl. dividends reinvested) and +80% returns (not including interim cashflow) to date.

Even Goenka’s poor investments were driven by industry-wide issues rather than poor execution or high entry valuation. While investors criticize Sanjiv Goenka for the Spencers acquisition in hindsight, there was significant excitement around the stock and CESC greatly outperformed its power peers when Spencers was acquired.


The valuation paid for Spencers at 1.7x EV/TTM sales was significantly below Future Retail (3.2x)’s and V2Retail (2.9x)’s trading multiple even though the asset was acquired from Sanjiv Goenka himself.

Analysts were bullish on the space and generally applauded CESC’s use of capital into retail.

Spencers did not meaningfully underperform organized retail peers from the period. For example, both Vishal Mega Mart and Subhiksha Retail went bankrupt. Industry wide profitability was extremely lack-luster due to massive overinvestments. Profitability in the space has only started coming back as of late:

Note how aggregate industry profits were negative until 2016 due to the aggressive competition by existing retail players despite massive revenue growth

Hard catalyst to reduce holdco discount

We believe that the FMCG business will eventually be spun off and will exit the HoldCo. This will provide a hard catalyst for reduction in the HoldCo discount. Sanjiv Goenka has publicly mentioned plans to separate out the business once it reaches maturity in the past. The spinoff of noncore investments at CESC which created the CESCV entity in the first place provides further evidence that Goenka is willing to separate out group companies to maximize value.


We think CESCV offers a very interesting risk-reward skew for investors who are not constrained by market cap and have the 2 to 3 year time horizon: TooYumm is a very young company with dynamic leadership, and it will suffer missteps and pivot business models along the way, even if it is successful at building a lasting FMCG brand in the end. Either TooYumm does so-so/fails and you get your money back, or TooYumm works and CESC Ventures is a multi-bagger as the NAV discount closes, underlying NAV grows, and the market wakes up to CESC Ventures’s demerger/spin-off plans.

Others may also be seeing value as small/mid-cap stock pickers like Ashish Dhawan (personally and through Ellipsis Partners owns 5% of company) and Arvind Khattar (1.2% stake) have been buying shares of CESC Ventures.

Assigning a fair 30% HoldCo discount to CESC Ventures’s net asset value would result in 2.8x MoM or +180% upside and if the FMCG business succeeds and is spun out, CESC Ventures could offer a 10x return over the next 5 years from current levels.


Hi @sarangg thanks for initiating this thread . I was wondering why we didn’t have a separate thread for this after demerger.

The thing which got me invested into this was solely Guiltfree industries or TooYumm… I am not at all worried about what other parts of CVL are valued at…

Were you able to find some more information on Guiltree … Segment size and opportunities and competitors (in terms of healthy snacks)…

Also adding information on some acquisitions which were made by CVL in last couple of years which seem to be interesting

  1. Apricot Foods (Evita brand of snacks based in Ahmedabad)

Group currently has two comapnies in its FMCG division - Guiltfree Industries, which makes various West Indian snacks under the Too Yumm brandname, and Apricot Foods, which the Group acquired last year. Apricot Foods operates in the mass consumption snacks market and sells its products under the eVita brandname.

  1. Herbolab

CESC Ventures, a part of the Sanjiv Goenka-owned RP-Sanjiv Goenka Group, will acquire a majority stake in Herbolab India Pvt Ltd, makers of ayurvedic medicines and products under the ‘Dr Vaidya’s’ brand.

The acquisition marks the company’s foray into the ayurvedic medicines and products category.

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Trying to understand consolidated statements here:

Consolidated Revenues: 4392 crores
Consolidated PAT: 234 crores
Consolidated Profit attributable for owners: 64 crores

FSL Revenues: 3826 crores
FSL PAT: 378 crores

CVL owns 55% of FSL.

Explaining the profit attributable for CVL owners = Consolidated PAT of CVL - (1-0.55) * FSL PAT = 234 - 0.45 * 378 = 64.
55% of FSL’s PAT is in CVL’s bottomline implying,
Profit to CVL shareholders through FSL = 0.55 * 378 = 200 crores
Revenue of CVL Consolidated through FSL = 1 * 3826 = 3826 crores

Revenue of CVL (excluding FSL) = 4392 - 3826 = 566 crores
Profit of CVL shareholders (excluding FSL) = 64 - 200 = -136 crores

Next business I’ll dig into is Standalone IT business.
Standalone Revenues = 124 crores
Standalone PAT = 65 crores

Revenue of CVL (excluding FSL & IT) = 566 - 124 = 442 crores
Profit of CVL shareholders (excluding FSL & IT) = -136-65 = -201 crores

Only sizeable business remaining is Guiltfree Industries (GIL). Remaining businesses are super small.

Revenues of GIL = 358 crores
PAT of GIL = This is not mentioned in the annual report :wink:
I assume GIL is going through a huge loss at current scale and will hope that it will eventually get profitable as the business scales.
Going through the annual report, it does suggest that the business is scaling well and patience is required from investors. Revenues of GIL were 189 crores in FY18 and grew to 358 crores in FY19. Production capacity increased 250%. Increased the variants from 5 to 25…

Too Yumm brand can also be observed in lots of BB Instant vending machines in Bengaluru IT offices. And I do see lots of my colleagues repeatedly buying those snacks in our office.

Top management has very good pedigree:

Revenues of other small subsidiaries = 442 - 358 = 84 crores
Profit of other small subsidiaries = Can’t be derived as we don’t know the profit of GIL

Discl: Interested, but no holdings


The FMCG division made loss before tax and interest of 227 Cr in FY19 on revenues of 365 cr vs loss of 61 Cr on 119 Cr revenues in FY18

In Q1-FY20, revenues were down and losses accelerated for the FMCG division. Would be interesting to see the numbers for Q2.


Company update till now
After showing losses for first 2 quarters, the company showed profit in dec quarter.
Guiltfree industries (Too yum) still showing loss but improvement seen over previous quarter and previous year quarter. Will update after latest quarter report.

Quest Properties and Bowlopedia Restaurants could be heavily impacted by lockdown. Firstsource solutions mar results shows gain in operating cash flow but reduced net profit due to increase in depreciation. The main source of cash for Cesc ventures is intact at present.

Cesc ventures acquired 8.49 per cent stake in Mumbai-based Peel-Works Private Ltd in Mar quarter to support Too Yum brand. Peel-Works is a technology-driven distribution company, which supplies food, grocery and consumer products to retailers and wholesalers where orders are collected through a software application.

Technically support is seen at 120 price but no improvement in fmcg business and deterioration of restaurant and mall business can push the price further down.
Disclosure - Invested


I disagree that lockdown can push price further down…

First Source 54% stake at Current Marketcap translates to around more than 1K crore…

And CESC Ventures is available at mcap of 300 crores even if I consider 120 level’s…

I think this company is hugely discounted…just waiting for some upside trigger…
Nothing can trigger downside at this moment for more than 20% fall…as it’s priced in worst to worst…that too with RPS Goenka group which is very well managed group

Disclosure : Holding shares with less allocation as I am confused as to what does group want to do as main business but I think it’s extremely undervaled and cheap stock available in market with well placed and experienced promoters

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Dear Friends
Firstly At CMP of Rs.39.55 FSL mcap is 2700cr plus
at 54%stake with CESC VENTURES (FSL stake is valued at 1450crs)

But ascribing Holding company discount of 80% (Caution: Bear Markets discounts are 2-3 times wider than Bull Markets) we deduce a value of 290 crores (for 54%stake)

Plus Approx 54% of 69.3 crore shares Multiplied by Rs.2 + Rs.2.5 dividend received in last 12 months. 37.4cr shares X rs.4.5 = Rs.168 crs. approx.

Revenue from Standalone Services , Capex, Bowlopedia, Mall Rentals, Real Estate , Too Yumm, Evita - Ignore all business opportunities. and ignore all future prospects for 1 year.

I am valuing Business simply on investments mentioned above as 290+168 crores= 458 crores (at this value Stock Price will equal to 458/ 2.651 crore shares= 172.75)

which clearly means you are buying
1.One of the Finest malls in India
2. Too Yumm
5.Peelworks- Supply chain company
6. Standalone IT services Business
Virtually all for free and Assets far higher than Debt
Disclaimer : I hold 3000 shares only now, sold almost 13000 bought at average price of 135 at a great profit…
Today’s CMP: Rs.189.4 (M-Cap 510 cr), likely will cross Rs.205 tomorrow with another 10% circuit filter(if at all)- taking Mcap to 560 crores
In other words all ventures priced at just 90 crores with immense future Capital appreciation without any Greenfield / Brownfield expansion. Only Branding expense like a new FMCG business, which anyways FSL is supporting in shape of Dividends, besides improving EBITDA with passage of each quarter.


The upmove from 160-190 band has brought up the price to 200 odd levels.
Only discounting valuation of FSL’s MCap and applying 80% holding company discount, the stock of CESC venture is fairly valued at 215 odd levels.

Don’t forget , 80% holding company discount is Absurd yet the price indicates this.
Imagine the margin of safety rests on this wide discount and still not discounting future growth of other half a dozen businesses.

The big business will come post IPL2020 and other such marketing events.
Already company has started posting advertisements of TooYumm Karare featuring Virat Kohli.
time to spend 150+crores received from FSL in Fy20 , next tranche of dividend for fy21 coming soon

happy investing,

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What has changed in past 6 months From Feb 29 , 2020 to August 29 , 2020
CESC Ventures Price on Feb 28,2020 : 275
CESC Ventures Price on Aug 28,2020 : 265
FSL Price on Feb 28,2020 : 40
FSL Price on Aug 28,2020 : 65

mCAP of FSL on Aug 28,2020 : 4522 cr
mCAP of CESCVen on Aug 28,2020 : 703 cr

mcap of CESC VENTURES should include
102 cr. cash (as on 31-03-20 as per Annual Report) = 102 cr
plus 53.9% stake Value of FSL Mcap
at a Holding co. discount of 30% = 2436 x 70% = 1705 cr
(BULL MARKET CASE further 10% discount added instead of 20%)
TOTAL= 1807 Crs.
1807/ 2.651 crore shares = Rs.682 Target Price

believing there’s no Value in any other business and no cash Generation for next indefinite period.

Even if any of other business is demerged further in future after economies of scale
play in and generate moderate to High Cash , the stock price can see 9-10 times upside

Other Scalable Businesses

  1. Ayurvedic / herbal Medicines
  2. Too Yum
  3. E-Vita
  4. Mall and real estate in Haldia
  5. Bowlopedia

Hypothesis 1 If the Shares in FSL are directly alloted to CESC Ventures shareholders there is an outright Value of 2550 crs. instead of discounted Valuation as discussed above targeting Price 2550 / 2.651 cr shares ~ Rs.962

Hypothesis 2:if both the Situations fructify, Allotment of FSL shares to CESCVen retail sh.holders
Demerger and listing of other businesses (BIG BOOM) (can be Valued at 2 X of Annual Sales like an average FMCG company = 1000crs turnover X 2-3 times in a couple of years
believing Too Yum and Evita are able to grow Sales Volume in current Progression. (current trailing annual turnover expected around Rs.300 crores- qtr. ending 30June 2020 results awaited)

(DFMfoods is valued at 3 X Price/Sales at an annual turnover of Rs.450crs. )
(Pratap Snacks is valued at 1X at a turnover of Rs1400 crores)
(Tasty Bites valued at 7-8X at a turnover of Rs.450 crores)

target for Hypothesis 2: Best case scenario and all situations fructify
(a)mcap of FSL plus cash per share .,.,.,.,.,.,.,.,.,.,.,.,.,.,.,.,.,.,.,.,.,.,.,., = 2550 crore mcap
(b)3 X annual turnover of Snacks business of 1000 crores .,.,.,.,.,.,…= 3000 crores mcap
( c )Herbolab and Bowlopedia plus Mall and Real Estate Business = 1000 crore mcap

Projected total business valued after 2 years in best case scenario= 6550 mcap ÷ 2.651cr shares = Rs. 2470 (Price target for CESC Ventures)

(above all, FSL standalone growth Projection not included)
Strong RPSanjivGoenka Group pedigree

Please do rate and Share :pray:
Sharing is caring

Disclaimer: I hold at lowest levels of 109 in 2020 COVID crash and heavily traded


CESC Ventures PRICE ( CMP) today around Rs.240 (mCap- 635 crores)
FSL PRICE (CMP) around Rs.61.5 (mCap belongs to CESCVen Rs.2300 crs.)
CESC VENTURES VALUE @ 50% Holding co. discount comes to Rs.434

comparable company
DFM Foods CMP around Rs.345 (mcap 1735 crs.)

(RESULTS for June’20 Qtr. awaited in 2 days for CESC VENTURES)

On 8th Sept.,2020
DFM-FOODS hits Circuit today at 366.30 on NSE
at 10:38am is circuit frozen with traded qty. 87000plus and buyer o circuit 77000plus


Dhandho investing is a framework created by Mohnish Pabrai. The essential idea is elegantly summarized by “heads I win, tails I don’t lose much”.

I’ve created my interpretation of this idea. While looking at a Dhandho opportunity, there are three questions:

  • Can the company sustainably lose money/invest?
  • What is the present valuation covering? (i.e. What am I paying for? What is free?)
  • What is the opportunity of that new/nascent venture?

If the answers are yes, just the main business, and big, we’ve hit a jackpot.

CESC Ventures is essentially a holding company, which prima facie, appears to be a Too-Good-To-Be-True Dhandho opportunity. CESC Ventures holds 54.1% of Firstsource Solutions Limited (a listed IT company). So a straightforward calculation of CESC Venture’s holdings in FSL with their prices gives us a discount value of 72%.

Particulars Value
CMP FSL Rs. 62.9
CMP CESCV Rs. 244.5
Stock holding Ratio (1 share of CESCV has x Shares of FSL) 14.10
CMP FS Value of CESCV Rs. 887.28
Current Discount 72.4%

CESC Ventures Discount

But there’s more to CESC Ventures as well.

CESC Ventures is essentially a holding company with 4 more subsidiaries apart from FSL.

Sl. No. Subsidiary Sector Brand
1 Firstsource Solution Limited IT Firstsource
2 Quest Properties Real Estate Quest
3 Bowlopedia Restaurants Hospitality Waffle Wallah, Bombay Toastee
4 Guiltfree Industries FMCG Too Yumm, e-Vita (step down)
5 Herbolab India Ayurvedic Medicines Dr. Vaidya’s

CESC Ventures Subsidiaries

These subsidiaries in turn have step down subsidiaries with businesses or investments.

Below is a graphical representation of the relationship including holding percentage, company profile, and flows.

CESC Ventures holding structure (FY20 figures)

What is happening here?

RP-Sanjiv Goenka Group decided to spin off CESC Venture from CESC (their flagship power company based out of Kolkata). While doing so, they rolled in a few more companies into the mix.

It’s structured beautifully. And this is what caught my attention. What’s essentially happening here is CESC Ventures is primarily using the dividends from their FSL holding the buy other companies and manage/grow their existing companies. They are also using Quest properties in a similar manner for their venture capital investments (visible in the right-hand side in the relationship structure). CESC ventures also has an IT services business that adds to the top line but the impact on the bottom line is limited compared to the dividends from FSL.

The dividends from FSL come up to a sizable number that allows CESC Ventures to explore opportunities. In FY-20, CESC Ventures received around Rs. 168 crores in dividends from FSL (Rs. 2 from FY19 final and Rs. 2.5 from FY20 interim declared in Feb). This is used to back Guiltfree and Bolwopedia. In FY20, CESC Ventures also picked up a 64.6% stake in Herbolabs.

Date Entity No. of Shares Dividend Per Share Dividend Income
06-05-2019 CESC Ventures 37,39,76,673 2 74,79,53,346
17-02-2020 CESC Ventures 37,39,76,673 2.5 93,49,41,683
Total 1,68,28,95,029

CESC Ventures’ dividend from FSL

The below figure shows what happened in FY20 – how cash moved around.

What happened in FY20

Well, you might notice that the sum of CESC Ventures’ investments is greater than the dividend that came in. That’s because of two things. The first is that there is a Rs. 60.23 crores adjustment at Guiltfree against share application money paid in the previous period. The second is that not all the cash actually moved. The cash flow statement calls out a Purchase of non-current investments of Rs. 20.99 crores. This matches the Peel-Works investment. Investment in Subsidiaries including Share Application has a figure of Rs. 108.84 crores against it. This brings the total investment to Rs. 129.84 crores as against an increase in investments in the balance sheet of Rs. 193.7 crores. Adjusting for the Rs. 60.23 crores with Guilt, this makes it Rs. 133.47 crores.

However, just these investments aren’t enough as there are ventures that are losing money. Too Yumm is a gigantic black hole losing money but that’s being taken care of by a mix of equity and (primarily) debt (an additional Rs. 81.63 crores was taken on in long term borrowings taking the total to Rs. 231.62). Similarly, with Apricot Foods (debt) and Herbolabs (equity) at a significantly smaller scale.

Given Guiltfree’s scale and importance, perhaps a closer look is required.

Based on Guiltfree’s P&L, 2 things are clear:

  • Marketing & Advertising and Sales promotion are a significant part of their expenses. Together, they made up 166.82%, 87.4%, and 89.6% of revenue from operations for FY18, FY19, and FY20 respectively.
  • Scale is important. While revenue from operations grew 387%, total expenses 197.8% between FY18 and FY19. Revenue from operations declines by 22.18% while total expenses declined only by 5%. It’s not going to be easy to only focus on costs here. Revenue growth and scale will be the main factor going forward.

Looking at ratios at this point in its growth stage may not reveal anything important, apart from the way it manages its receivables and payments (which is fine).

What are the shareholders doing?

While the promoters have had a constant holding of 49.92%, the others have been pretty active.

FPI and mutual funds seem to be exiting their position since the listing while individual shareholders (up to 2 lac – that’s the small retail people like me) seem to be acquiring shares. However, what is interesting is that the total number of shareholders has been decreasing across categories, signifying that the existing shareholders are acquiring the shares being offloaded. This could also be interpreted as a sign of conviction.

Shareholding pattern from March 2019 to June 2020

Since these shares were acquired at close to no cost and CESC shares didn’t correct much since the spin-off, entities that got these shares got it for close to free. Any price they sell at is a no-loss proposition. This huge selling pressure by mutual funds and FPIs (with other entities also selling), pushed prices down.

The market has settled down at a discount rate of 70% to the FSIL holdings. If there is another trigger to start selling, prices will again start dropping as the category absorbing the shares are small retail holders.

What’s the verdict?

  • Can the company sustainably lose money/invest?

Yes. The company is heavily dependent on Firstsource’s dividends, without which things could get difficult. If the businesses themselves fail, the dividends can manage to smoothen things over time. Firstsource has been stable over the past decade. They have managed to make acquisitions and adapt to industry changes while also managing their debt. So the expectation is things will continue to be fine in the future.

  • What is the present valuation covering? (i.e. What am I paying for? What is free?)

At the present valuation, FSL is available at a 70% discount with the other businesses being available for free. HOWEVER, deciding to buy simply based on the discount in these crazy markets may not be the best way. It’s important to consider FSL’s price movement and valuation as well. When you look at the delivery volumes of CESC Ventures, you notice a pattern of price movement linked to actual delivery volumes. This is important to keep in mind.

  • What is the opportunity of that new/nascent venture?

There are multiple opportunities with nonlinear payoffs. There are ventures from FMCG (Too Yumm and e-Vita), Hospitality (Waffle Wallah, Bombay Toastee), Ayurvedic medicines, and venture capital investments. While there are natural limits to some of these ventures (Waffle Wallah may not grow to be as big as FSL), the FMCG and Ayurvedic bets combined with the venture capital investments do show some promise.

At this point, it’s important to recognize that the time scales are pretty long on this one. Once I complete my targeted acquisition, I’m prepared to be sitting on this for 10 years (unless there is some issue of fraud (which I think is very low) or some other risk showing up) just tracking developments annually (with the annual reports of its subsidiaries being released on the site).

I’m capping my exposure to this at 3% of my portfolio. In the intervening period, it is possible that the stock will test sub 100 levels. Keeping a small sum aside for that might be a good idea. I’ve completed about 58% of my allocation so far.

It’s also important to recognize another opportunity (that would be a levered opportunity). As FSL dividends are crucial, they will continue to flow to CESC Ventures. Buying into FSL seems to be a good dividend play. It is available at an incredible yield (was actually, now I think it’s a little overvalued but the yield still looks good). This is something I have done. The problem now is that this becomes a levered play (without debt). If FSL goes up, CESC Ventures goes up. If FSL goes down, CESC Ventures also goes down. I take double the hit in the short term (and long term if things go wrong at FSL and ALL the other companies). Both together will make up 6% of my portfolio. I don’t think CESC Ventures will be in a position to pay any dividends in the next 10 years.


Isn’t it inefficient for CESC Ventures to pay tax on dividends received and reinvest them (instead of distributing it as dividends themselves)? It just adds a layer of taxation that makes the holding company discount higher!

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Cesc Ventures as the name suggests is like a venture capital fund. They will invest in multiple businesses and few will payoff later. If one wants dividend he can directly buy FSL. If one wants to invest in new business like Guiltfree industry with less risk of failure and loss of capital then he can buy CESCVENT.

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dividends of that Magnitude are Order of the Past now.

Recently RadioCity (Music Broadcast) deviced a very special way of rewarding Minority Shareholders Instead. They issued a (Free) Bonus Non-Conv Pref Share 1:10 at a redemption value of Rs.120 to be paid at the end of 3 years. (in other words a Rs.12 dividend after 3 yrs, but the same will be listed on Bourses)

So, the same could be traded and sold after discounting with RFR and determining Present Value, presuming Business stays steady and creates value over next 3 years.

The same is not given to Promoters/ Holding company i.e. Jagran Prakashan.
Hope they too give some reward for being in dumps to their own sharegolders, in upcoing board meeting just to pump the price to its intrinsic value (presuming stable performance of company in Post Covid Era)

The companies need to see loopholes and draft some mechanism of rewarding Incestors.

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It seems that the Department of Telecom has removed the restrictions on the compliances that had to be followed by BPO/ Contact centers. Will this have an impact on Firstsource to get more business and hence have an impact on CESC V?

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Stocks gain momentum when the crowds run after them.

The underlying of CESCVentures is FSL, it has cooled off for 2 months but not declined.
CESC Ventures on the other hand is quoting at a steep discount as if in Bear Market. In all probability, FSL next leg up, albeit steady, will be a catalyst for reduction in Holding company discount with CESCVenture.

ONE more margin improvement for FSL will catapult both FSL and CESCVentures.
Hope for good times!!

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At the outset, this presentation on the break-up of utilisation of FSL dividends is really really helpful. Thanks alot.

Would love to know your views on these queries on Guiltfree:

  1. I understand that there has been multiple changes on the leadership role. Any Idea who is currently leading this part of the business (creds if any would really help)

  2. Also Q2 Results seem to suggest significant lower cash burn at the same time I saw no presence in IPL. Isnt this counter productive given that lack of focus on marketing can seriously hamper market share gains?


I’m glad it was helpful :slight_smile:

Unfortunately, I don’t have a view on either of the two questions. It is difficult to judge such a company on a quarterly basis. I prefer to judge these on an annual basis with their individual financials at the end of the year than looking at the rolled up statements. These are uncertain times and reducing cash burn isn’t such a bad idea. Their marketing expenses have been driving their losses. Also, I don’t know what their thinking is (they aren’t the most communicative bunch - in their Annual reports/site).

I didn’t know of the change till I read your question. It doesn’t impact my hypothesis or trigger my sell criteria.

On the new person -,Strategy%2C%20Business%20and%20General%20Management.

I’m sorry my reply isn’t helpful. I just don’t have a view on these.


The holding company discount today stands at 76.5%
The Management of Goenka Group doesn’t sensitize until something conclusive to delve upon.

new CEO dynamics evolve over 15-18 months. Until then , the solace needs to be in FSL performing handsomely on bourses. There is no Co-branding like LAYS CHIPS etc. for offering FREE DATA in JIO/AIRTEL/VODA or PAYTM/AMAZON cashbacks. Probably may happen in next couple of quarters.

What i strongly believe is the Holding company discount in Bull Market has to reduce to 30-40%. Which in turn could flare up the price of CESC Ventures to all time High (…if and only if…Bull markets momentum…)

On Technical Front, the stock had been absorbing all major selling from 294 odd levels to 210 levels in last couple of months. Stocks are driven by holding in strong hands and not retail investors.
Some other hunky dory scenarios
a) An EBITDA positive Quarter for FMCG
b) Real ESTATE division reporting Significant growth and Hived off (demerger) along with Quest Mall
c) Herbolab jumping in with Significant ramp-up and revenue boost (HIGH MARGIN BUSINESS)

if scenario b) plays out, holding company discount will go down to 25-30% catapulting the stock price, as markets will view this as willingness to stay transparent and reward Minority shareholders.

caveat:In bull markets , we like to paint rosy pictures and in bear market we see the doom not ending.

Anyone having details of how the Herbolab - Dr vaidya part of business is performing ever since pandemic? All Ayurvedic companies doing really well. Even Emami benefiting hugely from the Zandu part of their business…How have been the Herbolab performing and can it be significant part of CVL bottomline anytime soon? Also, CVL works as a investor and then sell its stake in Herbolab etc or it has long term vision around ayurveda? Thanks