Rei agro----a mysterious stock to understand.

[pradosha]

Mr. Pradosha, What's your view on REI AGRO stock now?

Hadn't visited this counter having lost interest in this stock.

It seems the stock is circulating in UC/LC cycle........operators feeding in LC and vomiting it out in UC...... unwary investors picking it up backed up by agressive propoganda from operator's agents in meneycontrol board. Thats the impression i get, i may be wrong though.

The massive fraud commited by the management may get burried in the guise of "Corrective Action Plan" initiated as per RBI guidelines provided the state of affairs of the company are "correctable". There can be some chance of the stock stabilising at a reasonable valuation if there is a workable Corrective Action Plan and the Institutions keep due control on the functioning of the company.

It is another matter that the regulatory system seems to offer very little on the question of why such a Corrective Action Plan was necessitated involving sacrifices from Public Financial Institutions and imposing deterrant punishment on the errant management.

 

[mateen1985]

For those who are boosting/believing themselves including me till 2 days back that REI AGRO is 10,000CR Revenue Company and Ammalay Commodities Dubai contributes to majority of the overseas profit.

The information provided here is 100% genuine and it is after the default case with United Arab Bank in the Kolkata High Court, I discussed with my Brother on 26th June who is currently working with one of the Five Banks (United Arab Bank, Mashreq bank, Emirates NBD, Noor Bank and al hilal Bank).
Ammalay has taken a loan of 493 Million AED from 5 Banks (United Arab Bank, Mashreq bank, Emirates NBD, Noor Bank and al hilal Bank) and has defaulted with all of them.

Ammalay convinced all the banks by showing the profits they made. When Ammalay defaulted Central Bank of Dubai ordered an Audit and found Ammalay has done bogus transactions, they showed profit by executing transactions and generating Invoice within the subsidiaries. Like Ammalay Dubai selling to Singapore, Mauritius subsidiaries etc.

And it is due to this reason the RTO with Gems TV didn’t go through

Gems TV: Termination of Reverse Takeover of Ammalay Commodities.

http://www.btinvest.com.sg/markets/news/79947.html?source=si_news

During the course of the Due Diligence Exercise, the Company uncovered significant trading transactions of the Vendor which appear to involve related parties (the “Highlighted Transactions”). The Highlighted Transactions constituted the majority of the Vendor’s business and were previously not disclosed by the Vendor to the Company. As of the date of this Announcement, notwithstanding the Company’s requests for an explanation of the Highlighted.

In the circumstances, in accordance with the terms of the SPA, the Company has, on 28 February 2014, terminated the SPA. As the Proposed Acquisition is no longer proceeding, the Company and the relevant counterparties have mutually agreed, on 28 February 2014, to terminate both the Disposal Agreement and the Deed of Guarantee.

Few More Facts:

REI AGRO Delhi Office can be reached @ 011-6676 8000.

Ammalay Site is not working.

Ammalay Dubai: 00971-443557446 is not reacheable.

Those who have been working with Ammalay Dubai have now shifted to other companies. (Please check linkedin).

It would be great if someone who is interested in this STOCK and works in Dubai can check whether Ammalay office exists or it is closed.

 

[pradosha]

Here is the full text of the Kolkata High Cour order referred in the above post of @mateen1985:

United Arab Bank Vs. Rei Agro Ltd.
LegalCrystal Citation : legalcrystal.com/1157102
Court : Kolkata
Decided On : Jul-18-2014
Judge : I. P. MUKERJI
Appellant : United Arab Bank
Respondent : Rei Agro Ltd.
Judgement :
TA No.124 of 2014 T No.263 of 2014 IN THE HIGH COURT AT CALCUTTA Ordinary Original Civil Jurisdiction ORIGINAL SIDE UNITED ARAB BANK Versus REI AGRO LTD.BEFORE: The Hon'ble JUSTICE I.P.MUKERJ.Date : 18th July, 2014.
Appearance: Mr.Sudipto Sarkar, Sr.Advocate Mr.Dhruba Ghosh, Advocate Mr.S.Chakraborty, Advocate for the petitioner Mr.S.N.Mookerji, Sr.Advocate Mr.Tilak Bose, Sr.Advocate Mr.P.Sinha, Advocate Mr.S.Mitra, Advocate Mr.S.Chowdhury, Advocate Mr.D.Ghosh, Advocate for the respondent The Court: The plaintiff is the lender.
An organisation by the name of “Ammalay” is the borrower.
The defendant is the guarantor.
Mr.Sarkar, learned Senior Advocate for the plaintiff, amongst many other things placed a Memorandum of Settlement dated 12th June, 2014 between the parties where a payment schedule was agreed upon for payment of the dues of the plaintiff.
According to him, only the fiRs.installment was paid on 12th June, 2014.
He relies on clause 9 of the Memorandum and argues that since there was default in the payment of subsequent installments by Ammalay and the defendant, the settlement has come to an end and the bank is entitled to enforce its entire outstanding claim immediately.
It is also suggested that the defendant has many other creditors whose dues they are unable to pay.
Acts of insolvency are also alleged.
Mr.S.N.Mookerji, learned Senior Advocate for the defendant, on the other hand submits that this Memorandum of Settlement was made to be signed by his client under duress and to be more specific at gun-point.
A sum of $one million was paid by his client prior to the execution of the Memorandum of Settlement to
which Mr.Sarkar replies that this amount was given credit to while calculating the amount due and the installments.
Considering the above prima facie case and the balance of convenience, I think that the assurance made in court by Mr.Mookerji, on instruction, that his client will not alienate, encumber, part with possession or otherwise deal with whatever interest it has in room No.15, 46C Chowringee Road, Everest House, (15th floor).Kolkata 700 071, is sufficient.
I do not think that any formal order is called for at this stage.
Let affidavits be exchanged according to the following directions :Affidavit in opposition is to be filed by 8th August, 2014.
List this application on 20th August, 2014.
Affidavit in reply may be filed in the meantime.
The point of maintainability is kept open.
This order will not affect the steps being taken in respect of any criminal complaint or criminal proceedings.
Certified photocopy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(I.P.MUKERJI, J.) G/
LegalCrystal - Indian Law Search Engine - www.legalcrystal.com

 

[smallfish]

I looked at REI agro numbers on moneycontrol

Share Capital 130 Cr
Debt: 5141 Cr
Mar'14 loss of 47.15 Cr

What else is there to discuss?

 

[pradosha]

You are right @smallfish.......cant discuss about BIG FISH

 

[mastermind007]

I am furnishing below relevant information having bearing on the valuation of the stock:

1. Promoter increasing their stake continuously (37.89% in March 2010 to 53.39 in Sept 2013) at all price levels buying in the open market over the years evident from SEBI SAST disclosures and quarterly SHP changes.

2. FIIs have been consistently holding substantial equity with intermittent increase/decrease quarter to quarter----Current holding 35.60% in Sept 2013, which is an increase from 23.64% in March 2010.

3. Retail holding (Individual) has declined from 15.31% in March 2010 to 5.14% in Sept 2013.

4. As at Sept 2013, the aggregate holding of Promoter/FII combine is about 89%. If one were to add the Bodies Corporate holdings under Public category, as these can be entities indirectly under promoter control, Promoters exercise control over almost 95% of the equity.

5. Equity of the company has been expanded in 2010/11 by way of Rights and GDR issues at Premium of 18.50 per equity share of Rs.1 face value. About 15% of right shares were subscribed by FIIs by way of rights renouncement.

6.There are outstanding FCCBs whose position is as follows as per AR of 2012-13:
“5.5% Unsecured Foreign Currency Convertible Bonds: The Company issued on 13.11.2009, 5.5% 105000 Foreign Currency Convertible Bonds (FCCB) of US $ 1000 each aggregating US $105 million [ ` 493.71 Crores] at par. The bonds are redeemable on 13th November, 2014 unless previously converted; these bonds are convertible into equity shares at an initial conversion price of ` 46.70 per equity share with existing fixed rate of exchange on conversion @ ` 47.02 = US $ 1.00 at the option of the bond holder at any time on or after 22nd December, 2009 and prior to the close of business on 13th November, 2014. The outstanding 104,650 bonds when fully converted would result in issue of additional 105,367,088 equity shares of ` 1/-each. Apart from this, FCCB holders retain the right to subscribe in Equity Shares to the extent of 210,734,176 Equity Shares of the Company as per Letter of Offer issued by the Company for Issue of Right Equity Shares in the ratio of 2:1 at a price of ` 19.50 (Including Share Premium of Rs. 18.50 per share) at the time of conversion into Equity Shares on or before 13th November, 2014.”
Due to rupee depreciation the amount to be paid to the FCCB holders, as on 31st March 2013, was Rs.569.18 Cr, as against the initial borrowed amount of 493.71 Cr and the redemption amount will increase/decrease depending on the exchange rate at the time of redemption in November 2014 or earlier as per redemption stipulations. In the event of conversion into equity and exercise of RIGHTS reserved in their favour , FCCB holders would have subscribed to 28.41% in the expanded equity(from the present 95.80 Cr. to 127.41 Cr) resulting in corresponding changes in the Promoter holding to 40.14% and FII holding to 51.57%, based on holding as per Q2 2013-14 SHP. As per SEBI SAST disclosure dt 19th July 2013,BlackRock Global Allocation Fund ,Inc. has acquired 88715000 Convertible Warrants on 3rd July 2013 which represents 8.34% w.r.t expanded equity capital of the company in the event of conversion.

6. REI has embarked on a capacity expansion programme in the recent past with considerable Capex .There is appreciable improvement in its top and bottom line and the operating cash flow since the last three years and the significant thing is that a major part of the REVENUE and PROFITS are contributed by its overseas subsidiaries.

CONSOLIDATED FINANCIALS
Particulars-------2012-13--2011-12----Change
Total Revenue-----9,548-----5,411-----76.4%
EBIDTA----------- 1,490-----1,025------45.3%
PBT---------------- 763-------446------71.2%
PAT---------------- 701-------398------76.1%

STANDALONE FINANCIALS
Particulars-------- 2012-13----2011-12---Change
Total Revenue------5,101-------4,255----19.9%
EBIDTA--------------933---------862-----8.2%
Borrowing Cost--------609--------540----- 12.9%
PAT------------------211------- 226------6.7%

The EPS for 2012-13 was Rs.2.18 on Standalone basis and Rs.7.30 on Consolidated basis (Equity Share FV Rs. 1). The company is highly geared on debt reported to be due to working capital intensive nature of the Basmati Rice industry requiring ageing of Rice for 18-24 months after procurement. The company’s increasing debt year after year and huge inventory are negative factors though financing cost as a percentage of Revenues has not increased implying that the company has been able to generate revenues to cover such increases. The performance during Q1 of 2013-14 is also good and the Basmati rice industry as a whole is doing well. The company has paid a dividend of 50 %(50 paisa) for FY 2012-13 on 30/10/2013.

7. The stock is in downtrend after reaching Rs. 15 levels in May/June 2013 and is now making new lows almost every alternate day .The CMP is 6.35.It is widely believed that the movement of the stock is manipulated and is totally under the control of the promoters, who continue to buy the stock at current level too, as seen from a recent SEBI SAST disclosure dt29/10/2013. There is no rational explanation for the stock to be trading at the present level given its consistent growth in top and bottom line, good performance numbers, dividend track record, strong SHP, visible brand building through media ads for its Rain Drop basmati rice and the Basmati Rice industry itself doing pretty well currently with good export earnings due to rupee devaluation and higher price in the domestic market as well. It is also surprising, however, that no DII/Mutual fund has evinced interest in the stock.

Can anybody throw light on the drastic decline in stock price which defies logic in the light of the details furnished above?

pradosha

You've done marvelous fundamental analysis; More than the REI agro, I find contents of this thread work of art for those wanting to learn nuances of fundamental analysis.

They've taken trader's money showing good reports in '08 and now with reduced prices, they want to push those traders out before rebuilding profits. Money has not vanished. It is within family control and it will utilised to rise the stock.

Kirloskar Ferrous did this trick from 1994 to 2003-2004 and effectively they've built a profitable empire on funds stolen from market. I had purchased Kirloskar Ferrous in IPO from my savings of my first salary and sold it in disgust in 2001 after nagging@Home over it got too much to bear ... Amount of loss is insignifcant in big picture of schemes but the disgust remains.

Another company in bad state is Tulip Telecom and it is so bad that even JP Morgan and Religare have booked out of it. Not confirmed but JP Morgan bought it at around 80Rs and sold at 4/- Rs.

GODREJCP is another stock which used to show unhealthy levels of transactions within family but that seems to have been deleted/vanished from records.

 

[mastermind007]

RAJLXIN is another operator driven scrip that has gone from price of 3.75 rs (1996) to 275.00/- (6 Aug 2014)

It is one of the most unbelievable chart you'll ever see. "Chart of Bull heaven"

 

[Relish]

GODREJCP is another stock which used to show unhealthy levels of transactions within family but that seems to have been deleted/vanished from records.

I found this data from google, in 2006 share price down from Rs707 to RS150 then stayed there. Can you provide more details since i found many expert advise this share ?

 

[mastermind007]

These are all the bulk/block deals on GODREJCP that I had seen in April May 2014 from one broker's site and have now vanished from his site as well as it is missing from NSE's sites too.

I repeat, I had seen all of these data on my broker's site and then at NSE site in May 2014 and now it seems to have been deleted from NSE as well as my broker's site.

It seems that Owners.Directors of the company (and/or their relatives) sold 1,020,000 shares (worth 86.9 Crores) to the Company on 13 November 2013.
Entire set of transactions has had zero impact on price and everyone got 852 rs per share. Every buy matches with Every sell in the data.

This was followed by a drop in price....

Again on 18 February 2014, bulk transactions of 1,150,000 Shares @ 749.8 is recorded. Precise Info on buyer is missing. But "GODREJ N BOYCE MFG CO LTD" is listed as seller and "GODREJ INDUSTRIES LTD" is listed as buyer for the trade at the same price on same date for same quantity. I do remember seeing the names like Tanya Dubash repeating many times but now it appears only once.

This purchase works out at 86.2 crores. So net net, they've increased their own portfolio by 1,30,000 shares while also pocketing 67.7 lakhs of profit.

Although exact data has gone missing from NSE and my broker site, majority of it is still available on internet-at-large and I was able to still find this old data from India Infoline site http://www.indiainfoline.com/Market...-Research/Godrej-Consumer-Products-Ltd/532424

Bulk Deals
27-07-04 The Royal Bank Of Scotland PLC As Depository Of First State Asia Pacific Fund Sub Fund Of F Sell 855,000 199.03
27-07-04 First State Investments(UK) Buy 855,000 199.03
15-02-10 SMALLER CAP WORLD FUND INC Buy 1,814,900 256.00
04-03-09 GODREJ INDUSTRIES LTD Buy 3,402,268 126.00
04-03-09 GODREJ AND BOYCE MFG CO Sell 3,400,000 126.00
27-06-05 BIRLA SUN LIFE TRUSTEE CO Buy 425,000 329.00
27-06-05 BIRLA SUNLIFE MUTUAL FUND Sell 425,000 329.00
15-12-04 BIRLA SUNLIFE AC DIV YIEL Buy 500,000 251.50
02-11-04 GODREJ INDUSTRIES LTD Buy 2,225,000 223.00
02-11-04 GODREJ AND BOYCE MFG LTD Sell 2,225,000 223.00

Block Deals
20-06-14 GODREJ N BOYCE MFG CO LTD Sell 500,000 810.00
20-06-14 GODREJ INDUSTRIES LTD Buy 500,000 810.00
18-02-14 GODREJ N BOYCE MFG CO LTD Sell 400,000 749.80
18-02-14 GODREJ N BOYCE MFG CO LTD Sell 350,000 749.80
18-02-14 GODREJ N BOYCE MFG CO LTD Sell 400,000 749.80
18-02-14 GODREJ INDUSTRIES LTD Buy 350,000 749.80
18-02-14 GODREJ INDUSTRIES LTD Buy 400,000 749.80
18-02-14 GODREJ INDUSTRIES LTD Buy 400,000 749.80
13-11-13 FREYAN VIJAY CRISHNA Sell 102,000 852.00
13-11-13 GODREJ INDUSTRIES LTD Buy 204,000 852.00
13-11-13 GODREJ INDUSTRIES LTD Buy 102,000 852.00
13-11-13 GODREJ INDUSTRIES LTD Buy 68,000 852.00
13-11-13 GODREJ INDUSTRIES LTD Buy 68,000 852.00
13-11-13 GODREJ INDUSTRIES LTD Buy 102,000 852.00
13-11-13 GODREJ INDUSTRIES LTD Buy 204,000 852.00
13-11-13 GODREJ INDUSTRIES LTD Buy 102,000 852.00
13-11-13 GODREJ INDUSTRIES LTD Buy 68,000 852.00
13-11-13 GODREJ INDUSTRIES LTD Buy 102,000 852.00
13-11-13 NADIR BURJOR GODREJ Sell 204,000 852.00
13-11-13 NAVROZE JAMSHYD GODREJ Sell 102,000 852.00
13-11-13 NYRIKA VIJAY CRISHNA Sell 102,000 852.00
13-11-13 NISABA ADI GODREJ Sell 68,000 852.00
13-11-13 PIROJSHA ADI GODREJ Sell 68,000 852.00
13-11-13 RISHAD KAIKHUSHRU NAOROJI Sell 204,000 852.00
13-11-13 RAIKA JAMSHYD GODREJ Sell 102,000 852.00
13-11-13 TANYA ARVIND DUBASH Sell 68,000 852.00
13-08-13 FREYAN KAIKHUSHRU CRISHNA Sell 120,000 862.00
13-08-13 GODREJ INDUSTRIES LTD Buy 120,000 862.00
13-08-13 GODREJ INDUSTRIES LTD Buy 120,000 862.00
13-08-13 GODREJ INDUSTRIES LTD Buy 240,000 862.00

 

[mastermind007]

I found this data from google, in 2006 share price down from Rs707 to RS150 then stayed there. Can you provide more details since i found many expert advise this share ?

This sounds like some corporate action to me that I am not aware of until today.

EOD database that I have was purchased in 2012 (with data from 1994) and it seems to be already adjusted. highest I can find in 2006 is 170.40

YUP, Thats it!!!!

GODREJCP had undergone 4 to 1 split in 2006.

Split (last 10 yr)
Announcement Date Old Face Value New Face Value Ex-Split Date
26-Apr-2006 4.00 1.00 24-Aug-2006

followed by one rights issue in 2008

Rights (last 10 yr)
Announcement Date Rights Ratio Record Date Ex Date
23-Nov-2007 1 : 7 19-Mar-2008 12-Mar-2008