Dear,
Very recently, I attended EGM of TTK Prestige. I normally don\`t attend these AGM/EGM unless there is something brewing up. In case of TTK Prestige too, I attended because the Company wanted to Delist its shares from the Stock Exchanges.
Me and my friend Mr.M.R.Ravindranath, opposed the move the delist the shares. In spite of standing by the company during difficult periods, the management was not willing to share wealth. When the Company came out with a public issue at a premium, we all contributed. Even when the stock price came down, we did not sell our shares. Afterwards what happened now is that the land which the Company has appreciated more than 200 crores. Now, they do not want the shareholders to enjoy those fruits and hence want to delist.
We knew that the management/promoters with more than 72% would win the ballot vote, but we wanted to register our disapproval ot the company\`s move and hence forced the management into a pressure cooker situation.
However, this is not the reason for my SELL call. This is because what the Chairman TT Jagannathan said. Listen to what he said \"We are making soft investments, which we cannot capitalise. It will come from profit and loss account. So, the profits will dip. Then share price will go down further, which is not good for the shareholders. Hence, we are delisting the shares and buying back from the public\".
If the Chairman of the company himself tells that the profits will dip, then I do not see any reason in holding the stock of the Company. Hence, my call, SELL TTK PRESTIGE.
Regards,
Srikanth Shankar Matrubai.
6 comments:
Hi,
If you think management is ethical and will not unduly want to screw the shareholders - and may pay bit higher than the current mkt price - which may be far lower than the fair value - why shouldnt we wait?
I think their actions speak louder - for ex- they received some money from real estate deal in ttk healthcare - and rather than hording that cash - they decided to reduce the equity.
Dont you feel that management will not even want to give a decent price above market price - even if its a fraction of fair value.
I think it doesnt make sense to make some money and reduce your reputation amongst shareholders..I wonder what your thoughts are.
Regards
J
Dear J,
I agree with you that the current market price is lower than the fair value of the company. But I do not feel the management is shareholder friendly simply because, I cannot understand the logic behind the Delisting of shares. I truly feel that the promoters/management is more interested in making money rather than getting worried about their reputation.
Regards,
Srikanth shankar Matrubai
Hi,
Just wanted to know if they mentioned anything about the price - i think floor price will be Rs. 140 - will they give any premium above that? My estimate of its fair value is above 225. I hold quite some shares in the company, will appreciate your response.
Regards
Vishal
That's the exact problem, Vishal. The management were unwilling to comment anything on the price. My guess is, they will settle for somewhere around 150 levels.
what if small shareholders dont sell out? the company would still remain public company and they are obligated to disburse dividends right? i am thinking even if liquidity is affected we would have chance to get decent dividends on this stock. what do you think?
Yes, Sundar, you can continue to hold the shares. But the company will not continue to be a Public company, as they already hold 73% and institutions who will definitely sell out hold around 12%, another 5% will not be too difficult for the management to get.
And, most importantly, the promoters/management themselves have said that they expect the company to post lower profits for at least another 2 years. So, your idea of holding for Dividend Yield will not work out.
Do not marry a stock. Tender at least 80% of your holding and you can keep the rest. That is my advice.
Best of luck,
Srikanth shankar Matrubai
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