Shirpur Gold Refinery Ltd. - Investor's eagerly eyeing the company

Shirpur Gold Refinery ltd is definitely a subject of interest amongst investors. We all know that how everyone is found talking about Deccan Gold mines, and similarly Shirpur too has been able to garner investor's invest. The common link as obvious from the name is the presence in Gold related business, be it gold mining in the case of Deccan or Gold refining in the case of Shirpur Gold Refinery. We have already discussed Deccan in the past, the link for which can be found here.

Shirpur gold was promoted by the Patels of Autoriders group and it is believed to be the first and largest gold refinery in India. The Refinery came on ground in 2001 and was inaugurated by Chief Minister Vilasrao Deshmukh. Its capacity is 217 tonnes of GOLD per annum but later due to death of Mr.Mukesh Patel the group went in doldrums and the refinery could not go beyond the initial trial runs.

The company was recently taken over by Jayneer Capital Pvt. ltd. Jayneer Capital Pvt Ltd is one of the Indian promoters of ZNL and holds 40 per cent equity stake in ZNL (Zee News limited), thus an entity belonging to Mr. Subhash Chandra. Actually, the Zee group has been associated with the company since long. Zee group has been part of the company from 2000, when the proposed gold bars manufactured were intended to be marketed under Zee brand by paying them 20% royalty.

However, it has now taken over the total control of the company, and that is what is making the company quote at a market cap of 200 cr and more, even when it has not been able to start the operations. As far as Shirpur is concerned, there does not seem to be any ground breaking done since the time the management took over the control of the company. The management is merging its company which will lead to equity dilution and also there's a loan of Rs 227 crore from the management which may subsequently be converted to equity. There's lack of transparency as to when the activities will start.

I feel, the news of acquirement of the company has already been discounted in the current price, and would rather suggest investors to avoid this counter, as its been more than 10 months, and the new management has not been able to commence the operations.

Note: The stocks discussed at MPS thru blog postings are neither a part of “Business Insights” issue nor a “Penny Stocks” which we reco/publish for paid subscribers. These are just stock specific views by MPS team; one MUST do the due diligence before doing any investment based on our reco.

- Ekansh Mittal, Lead Associate - HBJ Capital Services Pvt. Ltd
Email: Ekansh@hbjcapital.com

Krishna Lifestyle Technologies Ltd - Some very important recent developments

Krishna Lifestyle Technologies Ltd., one of the most talked about stock in the penny stock circles. We get many queries related to the company, with many asking if it has the potential to be one of those "Business Insight" recommendations. We have had few reservations regarding the prospects of the company, its performance and it's balance sheet, and thus did not suggest it as one of our recommendations. However, the recent developments will ensure that we may never consider Krishna Lifestyle Technologies Ltd. as our long term recommendation.

Talking about the recent developments, the Tayal Family and several of the listed entities controlled by the Tayals directly or by their friends and associates have been banned by the SEBI from all stock market-related activities. For those of you who are not familiar with the Tayal's, they are the Promoters of Krishna Lifestyle Technologies Ltd. The suspension definitely brings the Promoter's and the company into bad light.

As per the recent order by SEBI the banned entities include Pravin K Tayal, Navin K Tayal, Sanjay K Tayal and Saurabh P Tayal, while the listed entities barred from the market include Jaybharat Textiles, Eskay K'n'IT, KSL & Industries, Ashahi Fibres and Krishna Lifestyle Technologies. Note that even Krishna Lifestyle Technologies Ltd has been banned and if one is to look into the Shareholding Pattern of Krishna Lifestyle, many of the above names can be found.

Just to put into perspective, the suspension is on account of fraudulent cornering of shares of Bank of Rajasthan by the Tayal's and the other entities.I won't go into further details of Bank of Rajasthan, because the important point here is the suspension of Krishna Lifestyle and their Promoter's. This may not have any effect on the performance of the company, but as I said earlier that they have brought a bad name to the company and to their image.

What this will do is that it may hamper company's fund raising activities especially through Private placements, because any investor would look into the quality of the management. Also it is unlikely that any renowned Institution would pick up stake in the company. Considering the above mentioned facts, I would suggest investors to avoid the company.

Note: The stocks discussed at MPS thru blog postings are neither a part of “Business Insights” issue nor a “Penny Stocks” which we reco/publish for paid subscribers. These are just stock specific views by MPS team; one MUST do the due diligence before doing any investment based on our reco.

- Ekansh Mittal, Lead Associate - HBJ Capital Services Pvt. Ltd
Email: Ekansh@hbjcapital.com

Sturdy Industries Ltd (BSE Code: 530611) : HBJ Capital's Holi Special Multibagger Penny Stock Recommendation

{Click on the image to download the detailed report}

Dear Investors,
-
Wish you all a belated Holi. Holi is a festival of colors, it is the best time make our life colorful (being happiness & prosperity), make a change, wake-up and look back, ask ourselves if we can make our life better by making a new relationship, a new association with someone somewhere. HBJ Capital inspires to be a part of your life, a part of your family, a trusted financial advisor helping you achieve your financial goals.

Holi is the apt time to break the ice, renew relationships and link yourself with those with a bit of color. Our expert team will help you with superior advices, outstanding stock reco & time to time follow-ups/updates so that you can do better investment & live a comfortable life. Your relationship, your trust, your association is what we are looking for. And time has come to take a call on your most trusted financial partner who will help you achieve your goals.

As promised, we are happy to release the Holi special issue of “Multibagger Penny Stock”. The stock selected operates in the business of micro irrigation, power, construction, infrastructure and telecom. The stock has potential to grow multifold as the company has humongous expansion plans in all the fields in which it operates which can increase its capacity multi fold. At present company is reporting good numbers, and the valuations are cheap considering all the aspects.

During this festive week, we have come out with a real gem which is trading at relatively low valuation than its peers and has an extraordinary management that has been growing the company exponentially for the last many years. HBJ Capital & MPS is proud to bring you the “Holi Special” Multibagger penny stock for Mar’2010 – Sturdy Industries Ltd (BSE Code: 530611)

• Sturdy Industries ltd is fast becoming an integrated player, backed by a great management and is on a rapid expansion plan.
• The promoter Mr. M.L. Gupta, Mr. Ramesh Gupta and Mr. Amit Gupta are Visionary and have good reputation in this field.
• The current market cap stands at Rs 21 crores, on the other side company has laid down expansion plans of Rs 546 Cr, indicating aggressiveness of the promoters to create wealth for shareholders. Add to that the Market potential for India's micro-irrigation sector could jump as much as 70% while company is available at very attractive valuations.

Happy Investing!!!

Regards,
Team MPS

"HBJ Corporate Services" - Are you willing to get yourself noticed and create value for the shareholders!!!

HBJ Capital Services Pvt. Ltd. is proud to bring to your notice "HBJ Corporate Services". This service specifically caters to the needs of well run and managed Micro/Nano Cap companies, Small/Mid cap listed/unlisted companies on BSE and NSE (or other exchanges), bring them to the notice of more than million investors across the length and breadth of India and thus create value for shareholders. We are well connected with millions of active investors who can bring value to an emerging business.

We at HBJ Capital are one of the leading, fastest growing & most innovative "Equity Research & Investment" company founded by best in class talents. Simplifying the whole process of selecting the best micro/nano, small and mid sized companies listed/unlisted on BSE and NSE for both retail, HNI, NRI and Institutional investors.

"HBJ Corporate Services", is about profiling (Fundamental analysis, news dissemination, etc.) the companies and sharing the same details with Financial Institutions, VC/PE Funds, Institutional Investors and more than a million Retail investors (through our opt-in email database) across India, thus

• Providing Investor Relations to emerging growth companies.
• Continually disseminating company's news press, result announcements coupled with complete analysis and emailing it to new investors.
• Increase the company's current shareholder base, investor interest and internet presence through dramatically enhanced exposure
• Increase market capitalization, and thus creating value for both the minority shareholders and the Promoters
• Increase liquidity
• Continual Coverage

We would like to invite promoters or management of listed/unlisted companies in India to get connected with us in order to avail above services for their portfolio companies.

For more details on the same contact Info@hbjcapital.com or Call +91 98867 36791 (Sandeep Jain, IIMA - Available 24x7).

- Ekansh Mittal, Lead Associate - HBJ Capital Services Pvt. Ltd
Email: Ekansh@hbjcapital.com

What is it about 26% ? The right to create troubles !!!

A few months back we had the two largest private shipbuilders in India involved in a takeover battle for acquiring the controlling stake in India's largest integrated offshore services player, i.e. Great Offshore. Bharti shipyard wanted to fend off ABG shipyard from acquiring 26% stake in the company and had to revise up its open offer price. These days another Corporate battle is doing the rounds and the company involved is none other than Anil Ambani's Reliance Media Works.

As you all must be aware that Inox purchased 43.2% stake in Fame from the Shroff family, the erstwhile promoters of the company, for Rs 44 a share last month and subsequently bought another 7.2% stake for Rs 50.75 before launching the mandatory 20% open offer for the minority shareholders at Rs 51 a share. Now, the only concern for Inox is the counter bid by RMW to acquire 63% stake for Rs 83.5 a share, while it currently holds 12%.

Well, with Inox holding more than 50% stake in Fame, there is no way that RMW can acquire 63% stake by the open offer. However there still remains a concern for Inox, because it would definitely not want RMW to secure a board seat and veto power over corporate decisions, and that may happen provided RMW acquires a minimum 26 per cent stake in the company.

Now, what is it about 26% that many companies look forward to it ?

We all want certain powers bestowed on us. India lobbied for securing a permanent seat on UN Security Council, because it could have give us Veto Power, which at present is just with 5 countries.

Similarly, in Corporate Democracy the Investors wish to have certain powers so that the Management doesn't take decisions which might go against the interest of the shareholders. However, not everyone can be given similar rights, and thus every investor has voting rights commensurate with his shareholding in the company. Now, to be able to exercise control and authority over decision making, one needs to have larger interest in the company.

So, here comes the magic figure of 26 per cent. As per the provisions contained in the Companies Act, shareholders will have veto powers only when they hold a minimum stake of 26 per cent in the company. Generally, Veto powers denotes exercising authority of passing / not passing a resolution at the General Meeting or Board Meeting of a Company.

One can secure a board seat and the Veto power, if he holds 26% stake, and as it goes, the Veto power gives one the power to scuttle a proposal despite being in a minority given the fact that it takes a 75 per cent majority to pass special resolutions at company's General Meeting or Board Meeting. It can both prove to be a curse or a boon depending on the intentions of the one with the power, and it is quite obvious that Inox would not want RMW.

- Ekansh Mittal, Lead Associate - HBJ Capital Services Pvt. Ltd
Email: Ekansh@hbjcapital.com

FREE for all....Holi Special “Multibagger Penny Stock” Recommendation will be released soon!!!

To avail the detailed research report (Free for all),

SMS “REPORT (E-Mail ID)” to 098867 36791 or E-mail to Info@hbjcapital.com

Note: Existing members of various packages (paid/free) will default get this report.

- Team MPS

GTL Infrastructure Ltd - One of the largest Independent tower company

GTL Infrastructure, established in 2004 and part of Global group, is the pioneer in Shared Telecom Infrastructure in India. GTL Infrastructure offers ready to use passive infrastructure to wireless telecom operators.

This company is in the business of passive telecom infrastructure sharing, setting up of which involves large amount of capital. It's a highly capital intensive business initially, but can definitely reap huge benefits in the long run considering the roll out of 3G and subsequently 4G services.

Not all telecom operators can afford to set up their own towers, and therefore they resort to sharing, which provides ample of opportunities to companies like GTL infrastructure. Companies like Bharti and Rcom have their own tower companies, but the new entrants like swan, telenor, or even the relatively older folks like Aircel, Idea, BSNL, are dependent on the infrastructure set up by GTL or Bharti, Rcom.

At present, GTL can't be valued on the traditional lines of P/E. The company is generating cash from operations, which does not reflect in earnings on account of huge depreciation charge. At present the equity base is Rs 946 Cr, but will swell up to around 1200 Cr, if all the warrants and FCCBs are converted.

The company is in the midst of rolling out a Pan India network of 23,700 towers by 2010/11, and is offering the infrastructure to the leading service providers in India. The company has already approved acquiring 17,500 towers from Aircel and is planning to take its total cell sites to 50,000 in the next three years. Out of the equity funding of Rs 3,400 crore for the acquisition, GTL Infra will be contributing upto Rs 1,750 crore i.e. around 51%, while the rest shall be contributed by GTL Ltd. and other Promoter company.

The Management is expecting assured recurring potential revenue of Rs 700 crore per annum for next 15 years. However, let me point out that as per my understanding only Rs 350 crore shall reflect for GTL Infrastructure on account of its 51% contribution towards the equity of the SPV formed for the acquisition of the towers. The present earnings and the net profit are not the true reflection of the earnings potential of the company. However, looking at the rate of depreciation, and the interest charge, one cannot expect the company to post good results (on the basis of numbers) any time soon. But, the fact is that its telecom infrastructure will always be in demand, especially with the new entrants, and also on account of 3G services.

Thus, if one is ready to hold it for 4 years or so from now, then it can really prove to be a good investment. However, in the medium and shorter term, dont expect much out of this company.

Note: The stocks discussed at MPS thru blog postings are neither a part of “Business Insights” issue nor a “Penny Stocks” which we reco/publish for paid subscribers. These are just stock specific views by MPS team; one MUST do the due diligence before doing any investment based on our reco.

- Ekansh Mittal, Lead Associate - HBJ Capital Services Pvt. Ltd
Email: Ekansh@hbjcapital.com