Did you know there is an animation company with zero profit but has a market capitalisation more than India's largest animation comapnies like Tata Elxsi and Prime Focus. Tata Elxsi's market cap is nearly Rs 1500 crore and Prime Focus nearly Rs 500 crore and this company market cap is nearly Rs 2600 crore. One large corporate group of India also owns stake in this company. This company is Pine Animation.
However, in 1989, the company was incorporated as Marudhupandi Finance which was a non-banking finance company (NBFC). In 2007, they changed their name to Stage Age Infotech. In 2008, they again changed their name to Four K Animation and in 2013 to Pine Animation. So, there have been series of name changes with the company.
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The company is engaged in the business of animation industry. It was actually suspended for trading but then it got revoked on June 22, 2012.
From 2009 to 2013, for five years the company has done a sale of Rs 10 crore, almost zero profit after tax (PAT). It is only in the last nine months they did something but again PAT was only Rs 36 lakh even if you have to see last nine months. So, there are no fundamentals to talk about this company.
Shareholding, which is most important thing for most of these companies, no promoter holding, public holding is nearly 100 percent. Around 165 shareholders own nearly 93 percent stake in this company.
The Bhushan Steel promoters owns stake in the company. Brij Bhushan Singhal, Ritu Singhal, Neeraj Singhal own stake in the company that could collectively be nearly 10 percent.
In September 2012, the promoter holding was 30 percent which came down to zero percent and that was a time when none of these Bhushan Steel promoters owned stake in the company. You then saw a radical change in the shareholding pattern. Bhushan Steel promoters came in and the promoter holding went to nil and then the stock moved up, zoomed up. There was 1:10 stock split. The stocks had shorn as high as nearly Rs 440 or something, now, trading around the Rs 93 mark after that stock split.
Q: I think it’s more in the business of changing names than animation, given the lack of sales or profit. You said there was a promoter till middle of 2012, who was that promoter, do we know who that company was or is it a recognized company or a set of companies?
A: There were few names again, individual names who were holding nearly 30 percent stake in the company and they went out and then there were few other investors who came in which were non-promoters of the company. In most of the companies, where long-term capital gain (LTCG) or short-term capital gain (STCG) features most, which we think could be one of the reasons. There is a change in the shareholding pattern which eventually happens after one-three years in most of these companies and that is why you see all this abnormal market caps with zero fundamentals and all these name changes.
Q: Is this a liquid stock? Does it trade regularly?
A: I haven't seen any liquidity in the stock in last few days and I doubt there are any shares which are even traded today.
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