Dear friend, I am the employee here. The mgt is very bad and pays peanuts to employees and all money goes to managers. In last two years they have eaten so much of the reserves. please avoid the stock...

I agree that the fair value is more than the current market price. I myself bought it at a higher price and am regretting now. Due to the reasons cited earlier, the share is not being fancied by the market. Hence, it will not be easy to realise the fair value in the short/medium term And the uncertainty is more for the long term.My idea is that there are better opportunities for the investment amount than CCI at present....

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Dear Mr Ravi I have not opted and retained the demerged entity. But one of our client had given MPIL and got the payment back. I have received the MPIL share certificate....

Management might`ve gone for dfiversification, which may not always go right specially in near term, but professionals always have some hindsights, which may not appear right in near term but may gradually make the company strong in longer term, capable of absorbing sectorial setbacks. And diversification need not be necessarily in related businesses. True, things not going well for a few qtrs, but the stock too beatten the dust, much more than just factored in. The core business still in place, a good qtr is enough to make the price shoot. These r the times one can make the most of the money in stock like this. At least I had the courage to do that doubling my holding 3 weeks back & the price just doubled. ...

The basis of my arguements are as under: 1. DCHL has circulated a separate audited accounts recently for SPV, which you must have recd if you are a shareholder. In that case, you can see that most of the income was as a result of gate fee and ads, which may not happen now due to shifting of IPL outside india. 2. See the last 3 quarter results of DCHL which are pathetic, to say the least, and show a downward trend even for its key business segments,for no explicit reason. 3. Since IPL is not earning anything at the moment, and one is not sure of the future of the same, the commitments of SPV for the teams and admin costs have still to be met out of contributions from DCHL, which will be a loss to DCHL on a consolidated basis. I hope i have clarified the matter....

Yes, received Demand Draft of HSBC/ payable par at corporation bank local branch. Issued on Dt.03/03/2009. By reg.AD Post today. Do you know about account`s entry?...

Hi Thanks for the advice. Yes even I had it for 4 years and took a very big loss of 89% down on my investment. I sold it today. This is classic case of a company fooling its investors even though they had great value....

The management has again come out with a bad result. What do they mean by the US subsidiary billing at cost plus basis. Is this going to be a permanent way they would bill? What does it mean to the company. why should a company that is not adding value increase the remuneration of its managing director. He is destroying value. Probably its a typical MNC way of destroying value and bringing down the share price before buying back its own share. Are there any members who can throw some light on the insider story?...

Hi,

Can you tell the basis of your fair value estimate? Right now it is trading at 18 times its TTM earnings. Are you saying there will be earnings expansion or price expansion ?

Regards
Ravi...

Hi Atul,
May I know the basis of your argument on IPL? It is a special purpose investment vehicle which was created and even if we take the entire investment of DCHL out of its balance sheet and consider its debt and the cash flow I think its still a buy. Can you please explain the dilution in IPL venture? It may be useful information to other investors.
Regards
Ravi...

The reason is simple. They have a higher debt which is all FCCB. The issue with FCCB is that when the maturity date comes the investor has the option to either get the shares at the fixed price which is determined at the time of FCCB or they can get the interest paid. With the dollar appreciating its a double whammy for all companies that had issued FCCBs. The mkt has gone down and their share price has taken a beating. Now the investors would not be interested to take shares. Companies have only two option. Option1 is to pay the interest which will be higher than the percentage which was fixed as it has to paid in dollars. The interest outgowould be huge or Option2: reset the price of conversion of share price. In this case, the equity dilution would be huge and more so due to dollar appreciation. Mr Market is very ruthless now a days with all stocks that have huge debt and that too FCCBs. Hope that explains the reason. I continue to hold this stock for the reason that this company is worth dead than alive. It qouting below its liquidation value. It will have big exchange losses in the quarters coming due to dollar appreciation and MTM reporting. Once the economy recovers and if they survive this, it will be a multi multi bagger....

You have made a very good point. The business is a great cash cow business with almost one time capex. The management has been destroying wealth by putting all the cash generated in business that are not returning a dime. The irony is that as per the last annual report they have invested more in Odyssey (retail subsidiary)when all its doing is generate loss. I am not sure what the managements view on this. What is the potential that they see in this area. It makes sense to acquire business that are in line with newsprint media or other online magazine sorts but not an unrelated business like Odyssey. If you check their investment this is the one which has sucked the maximum cash but returning losses and they are putting more and more into it. Other business Sieger solutions which takes the ad contracts from Deccan and sells it to others gives a wonderful return on investment and they have invested less in it. Others are all not great to write anything home about. I hope the management mends its ways of using the cash created to enhance shareholders value rather than destroying it in the name of increasing sales/earnings. It would be great if some of our boarders who live in hyderabd take this point to the management during the next shareholders meeting that we would have...

Hi Supergeek,
I think you are right about the 51% as of date. What about the conversion of all those FCCBs given out which is a huge sum. Would not the promoter stake get diluted unless he is converting those warrants/fccbs himself?
Also I am not sure about the revised strike price they have announced now for the FCCBs. Now Gitanjali is in trouble because none of the FIIs would be intrested in buying the FCCBS at the conversion price which is very high compared to mkt price. The other option is to pay them back their principle with interest and mind you all these needs to be paid in US dollars. With the ruppee being weak this is not an options as there is no cash or reserve maintained for this. Hence, the only option is to reduce the conversion price and that is what the company has done now. All this sums up equity dilution that too at a lower price. Unless the diamond mkt turns arounds and this compnay extinguishes the FCCBs its positioned precariously....