[speed_edge]

Hi Fellow BHPians,

Recently I came across below news in ToI - Link below.

https://economictimes.indiatimes.com...4.cms?from=mdr

While most of us are aware of telecom sector dues, It says GAIL has outstanding dues of 1,72,000 Crore. Wondering how to identify such outstanding numbers for companies? Though its just the allegation, but if it gets dragged it can have severe implications on stock value. As retail investors what could be the advice on such stocks?

Regards
SE

[fordday]

Betting against the grain.
How is it to bet for Vodafone stock now? It is hovering around Rs 3.
Lets not dwell on metrics or fundamentals or figures. There are infinite reasons not to put money on this stock.

But if someone wants to bet, what could be those reasons? Here are few from my side
- Govt will not allow Voda to go down because it will be absolute negative signal to business community who wants to come to India.
- Voda brings in another investor who is ready to pay /part pay the sum asked by Govt.
- Rich player aka Jio buys out Voda.
- Airtel and Voda merges to fight out the storm.

Each of these could be wrong, lets hear yours.

[SmartCat]

Originally Posted by speed_edge

While most of us are aware of telecom sector dues, It says GAIL has outstanding dues of 1,72,000 Crore.

Companies like GAIL have other options to appeal against the ruling
https://www.thehindubusinessline.com...le30841995.ece

Originally Posted by fordday

Betting against the grain.
How is it to bet for Vodafone stock now? It is hovering around Rs 3.
Lets not dwell on metrics or fundamentals or figures.

- Govt will not allow Voda to go down because it will be absolute negative signal to business community who wants to come to India.
- Voda brings in another investor who is ready to pay /part pay the sum asked by Govt.
- Rich player aka Jio buys out Voda.
- Airtel and Voda merges to fight out the storm.

But you have to understand what "Rs. 3 per share" means. Just because something is trading at Rs.3, it does not mean it is trading at close to zero valuation. Rs.3 per share means Vodafone Idea is valued at Rs. 10,000 cr. By investing at these prices, you are saying that its value won't go down to say, Rs. 5,000 cr in 6 months, and slide down slowly to Rs. 1,000 cr and then Rs. 100 cr.

How sure are you about that?

Reliance Communication is still listed on the stock market, and is trading at Rs. 0.3 per share or Rs. 200 cr valuation. About an year ago, it was trading at Rs. 3 per share or Rs. 2,000 cr valuation.

[warrioraks]

Originally Posted by rareone

Hey Guyz.

I am pretty new to stock market.

I have a query hope you guys can help me out.

Just tell me for online trading which is better.

icicidirect.com

or

hdfcsec.com

So that I can finalize & open a account in that.

If you intend to trade, then go for discount brokers like Upstox or Zerodha. They offer much better brokerage rates.

[redcruiser]

Originally Posted by SmartCat

But you have to understand what "Rs. 3 per share" means. Just because something is trading at Rs.3, it does not mean it is trading at close to zero valuation. Rs.3 per share means Vodafone Idea is valued at Rs. 10,000 cr. By investing at these prices, you are saying that its value won't go down to say, Rs. 5,000 cr in 6 months, and slide down slowly to Rs. 1,000 cr and then Rs. 100 cr.

How sure are you about that?

I think there is some heavy buying in IDEA by the big guys.
I have attached the picture where the trade was done.


In my opinion the price will move further from here.

[SmartCat]

Originally Posted by redcruiser

I think there is some heavy buying in IDEA by the big guys. I have attached the picture where the trade was done. In my opinion the price will move further from here.

Very common in stocks like this - there is even a phrase for that in the stock market. It's called a Dead Cat Bounce
https://www.investopedia.com/terms/d/deadcatbounce.asp

[BaCkSeAtDrIVeR]

Originally Posted by speed_edge

Wondering how to identify such outstanding numbers for companies? Though its just the allegation, but if it gets dragged it can have severe implications on stock value. As retail investors what could be the advice on such stocks?

Demands from governments have to be shown as liabilities. Disputed demands have to be shown as contingent liabilities, AFAIK. At least, as a note to the balance sheet. Else, the ?management is committing an accounting malpractice. Accounting prudence also demands that a provision is made in the P&L account. In other countries, directors of these telcos would have faced shareholder class action suits for the mess they are in now.

I fail to understand telcos failure to make provisions for AGR demands in their books. If they made provisions, why are they claiming to be facing bankruptcy?

[AZT]

Originally Posted by SmartCat

Very common in stocks like this - there is even a phrase for that in the stock market. It's called a Dead Cat Bounce
https://www.investopedia.com/terms/d/deadcatbounce.asp

Attachment 1971409

Though this case could also be them knowing something the masses don't. The government simply cant let Voda fail, job losses apart the amount they owe to banks is massive. Plus it's bad optics when you already have headlines about the economy being in a slump.

[riteshritesh]

The Government must surely be in a dilemma regarding the AGR dues. On one hand they want to help the telcos, but the SC rap made them helpless. They can't waive the Dues ( or can they by changing the act retrospectively?) as they must have accounted the AGR dues in their Budgets. Leaving that aside, if they do offer staggered payments, where does Voda IDEA and Bharti stand after making these payments. Their Capital will erode with nothing left for further investments and the mood( atleast of VodaIDEA) doesn't seem like they want to infuse more capital in the telecom businesses. Ulimately, the users will be left with Poor networks and no hopes for improvement in the near future.

[arvindmanju]

Guys what is the long term view on ITC, it has fallen quite a lot. Is it advisable to enter at 200Rs level? Fundamentals of the company looks good.

[SmartCat]

Originally Posted by AZT

Though this case could also be them knowing something the masses don't. The government simply cant let Voda fail, job losses apart the amount they owe to banks is massive. Plus it's bad optics when you already have headlines about the economy being in a slump.

With certain moves, Govt and/or Vodafone Idea can ensure that Reliance or Airtel buys out Vodafone Idea's towers, customers and overall business. Most of the jobs will be saved too. But shareholders will get 'nothing' out of such a deal. Neither Reliance nor Airtel will buy Vodafone Idea company and make an open offer. Too much debt and other contingent liabilities. They would directly buy out Vodafone Idea's customers and towers.

If Govt somehow cancels the AGR dues, it will be slow turnaround for Vodafone idea - because of large debt burden. Anyway, it is OK to punt on Vodafone Idea because of its insane moves. As long as you realize that it is a punt and NOT an investment.

Originally Posted by arvindmanju

Guys what is the long term view on ITC, it has fallen quite a lot. Is it advisable to enter at 200Rs level? Fundamentals of the company looks good.

Solid brand. Clean financials. Extremely low valuations for a FMCG stock. Worth a buy, but problem is that tobacco stocks are dropping world over - thanks to popularity of "socially responsible investing". FIIs are consistently selling ITC stock.

[BaCkSeAtDrIVeR]

Originally Posted by arvindmanju

Guys what is the long term view on ITC, it has fallen quite a lot. Is it advisable to enter at 200Rs level? Fundamentals of the company looks good.

I'm holding it for past 12 - 23 years. It concerns me that prices at multi year lows. But, my cost is in 2 digits taking into account the the bonus shares. IMHO, there are at least 2 factors hammering the price.
One is demise of YC Deveshwar. The leadership transition was going on, but, the sad event happened much before the leader transition ended. Second, which I'm not sure of, is the GST accounting issue. This is compounded by high taxation resulting in illegal imports if cigarettes financially lucrative.
I tried buying more as prices were coming down, but suspect that I was trying to catch a falling knife. Thankful that it has not gone below ₹ 202 levels.
Also, is anybody aware of stake held by an entity named "Specified undertaking of UTI"? These holdings acquired as a part of the old war for control where KL Chugh, mentor of Deveshwar was successful, are to be liquidated. Low prices will help the successful bidder. Is anybody BAT'ing for them? (Pun unintended)

[KL01toKA03]

What does everyone think about Avanti Feeds. I have invested a considerable part of my savings in their share and it seems to be moving up consistently. Is there any significant risk that I am missing?

[BaCkSeAtDrIVeR]

Originally Posted by KL01toKA03

I have invested a considerable part of my savings in their share and it seems to be moving up consistently. Is there any significant risk that I am missing?

Heard of PAYEOB?
Never mind if you have not. I just made it up, and it stands for Putting All Your Eggs in One Basket. Risky. Depending on your investment size, risk appetite and comfort level, put a cap on market value of a particular investment. That means, a market value of ₹ 10 lakh in an equity portfolio worth say, ₹ 50 lakh, at market price will make me uncomfortable. I'm looking for low risk, steady, stable growth. In that order.

If it was growth / high returns, things would be different.
Anyway, I dont use products (sarcasm unintended) of this company, so resisting from comments.

[bluevolt]

So it's bloodbath again in the streets!

The last 2-3 sessions have again made things for equities bleak.

In my current portfolio (All of them in heavy losses), please provide your inputs about these companies/MF. Meanwhile, I am not putting any fresh money in SIPs. Trust factor even for 'long term' funda is quite low considering recent dynamics (DHFL/Yes Bank/World Crisis/GST/NRC/NDA etc.)

*MFs
-> L&T emerging business fund (Small cap)
-> ABSL pure value fund (Value)
-> UTI transportation & logistics fund (Sectoral)

*Equities
-> Maruti & Tata Motors (Auto)
-> DHFL/IBHFL/AB Capital (NBFC)
-> ITC (FMCG)
-> Dhampur (Sugar), Ginni filaments (small cap)
-> HUDCO, RCF, PTC, MRPL (Public sectoR)

I know DHFL/IBHFL doesn't have any hopes but still.