Hedge Fund Employee of Steve Cohen SAC Jailed in New Insider Trading Scandal, Level Global Investors and Diamondback also caught

18 Jan, 2012
Green Investing

More Hedge Fund Employees were arrested by the FBI on Insider Trading Charges . Note Raj Rajaratnam the high profile hedge fund manager of the technology hedge fund is already cooling his heels in jail after being convicted of insider trading by paying money to company and insiders for illegal information. A number of low rung employees have also been jailed for lesser terms. His friend Rajat Gupta who was a former Mckinsey chairman is also facing charges which may result in conviction for passing confidential information to Rajaratnam.

Raj Rajaratnam, a self-made hedge fund tycoon convicted in the biggest Wall Street trading scandal in a generation, was ordered on Thursday to serve 11 years in prison, one of the longest sentences ever in an insider-trading case. But judges have been handing down some tough sentences recently. A former Galleon employee, stock trader Zvi Goffer, 34, was sentenced last month to 10 years in prison and ordered to forfeit $10 million after being found guilty at trial.Prosecutors had made Rajaratnam the central figure of a sprawling criminal case, unveiled in October 2009, that touched some of America’s top companies, including Goldman Sachs GroupInc, Intel Corp, IBM and the elite McKinsey & Co consultancy.

The employees of these funds SAC, Diamondback and Sigma Capital Management have been arrested by the FBI. Note Sigma Capital is a subsidiary of SAC Advisors which is led by the famous fund manager Steve Cohen who has given stunning returns in the past . In the past scandal also fingers were raised that SAC might have indulged in insider trading as well. Arrest of a SAC employee may mean that the employee may be used to get proof against Steve Cohen.Earlier he said that the insider trading regulations were vague

Hedge fund billionaire Steven A. Cohen in sworn testimony earlier this year called the rules on insider trading “very vague” and said sometimes it’s a “judgment call” as to whether a tidbit about a public company is inside information.

The founder of SAC Capital Advisors LLC, one of the hedge fund industry’s best-known firms, offered up his views on insider trading during two days of deposition testimony in February and April this year as part of a long-running civil lawsuit filed by Canadian insurer Fairfax Financial.

Note Insider Trading though illegal in all countries is widely practised as it is very difficult to prove charges and it is not considered too big a crime. In countries like India where the  rule of law is not that strict, it is done quite blatantly and invites only monetary fines at best . This has encouraged a culture of widespread insider trading profiteering.

Insider Trading in the Indian Stock Markets is quite rampant with promoters of business groups known to indulge in this white collar crime. However it continues to flourish as the market regulator SEBI has not done much about it. Note Insider Trading is very difficult to prove , though the recent conviction and jailing of hedge fund manager in the US Raja Rajratnam and some of his associates shows it can be done if the regulators and enforcers are proactive. India seriously lags behind in cracking down on Insider Trading though in the recent past SEBI has woken up from its stupor.

Insider Trading in India – Regulator fines Ranbaxy,J P Associates Executives – Flash in the Pan or New Policy

9 Jan, 2012
Finance,IPO

Insider Trading in the Indian Stock Markets is quite rampant with promoters of business groups known to indulge in this white collar crime. However it continues to flourish as the market regulator SEBI has not done much about it. Note Insider Trading is very difficult to prove , though the recent conviction and jailing of hedge fund manager in the US Raja Rajratnam and some of his associates shows it can be done if the regulators and enforcers are proactive. India seriously lags behind in cracking down on Insider Trading though in the recent past SEBI has woken up from its stupor.

Note blatant pump and dump IPO’s have made the Indian market a heaven for stock market operators. Despite this going on for years,only recently SEBI has taken some steps against the manipulation of the primary market. Now SEBI has taken some steps in the Insider Trading case as well by fining executives of JP Associates and Ranbaxy both of which are constituents of the Indian main stock market index. However a mere fine will not do to deter insider traders. A big jail term for a insider trader will make white collar criminals think more in indulging in criminal activity rather than small fines .

SKS Microfinance Scandal

Indian Stock Markets are a very dangerous place to invest with circular trading,fleecing of retail investors by  management,pump and dump schemes in IPOs as common as a bid ask spread.The stock market regulator SEBI is mostly toothless failing to act against known stock manipulators known as “market operators” who act with impunity.The latest malfeasance has hit the stock of SKS Microfinance which was one of the most hyped IPOs last year with fabolous growth and profit figures and a high valuation.However the stock has seen its fortunes go down with the AndhraPradesh government launching a crackdown against the Microfinance Companies.This was done after the usurious interest rates and bad practises leading to suicides amongst borrowers.The stock has already touched new lows before it fell another 20% circuit down filter on April 6 2011.

Note the stock fell before it announced the results after the close of the markets which means that insider trading had take n place.The volumes at 10 times certainly seems to hint so as the JP Morgan downgrade of the stock could not have led to such a big fall in which there are a large number of foreign and domestic funds as investors.Besides its problems in AndhraPradesh are hardly new and Indian brokers hardly that good that their reports cause such big stock price movements.Like other SEBI probes expect this one to fail or result in a small penatly which will not deter more such white collar fraunds in the Indian Stock Market.Insider Trading in India is quite widespread with some of the biggest business groups having been fined by SEBI like ADAG etc.

Inflation,Interest Rates and Corruption Triple Whammy Kill Indian Stocks

India’s Stock Market has been amongst the worst performing market in the world in 2011 due to a number of converging issues.While Inflation and Interest Rate Increases are common themes hitting emerging market stocks,corporate governance problems are providing the icing on the cake for bears.Yesterday,stocks of the Anil Ambani Group (ADAG) fell by a bone chilling 15-20% on news that India’s accounting body ICAI has asked for accounts from 2 of the group companies Reliance Communication and Reliance Infrastructure.While no wrongdoing has been proved yet,it goes to show the low trust in company management.Note the promoters and directors of this Group had recently paid a massive amount in penalty to SEBI for insider trading charges.2 of the companies had also been barred from capital market operations.This had already had hurt the stocks and this proved to be the last straw.The Group Leadership is now blaming “Bear Cartel” for the woes which seems a bit laughable considering that they were charged with insider trading themselves.

Insider Trading has increased around the world with even stalwarts like the Swiss Central Bank Chairman and the ex-CEO of Mckinsey in the docket for insider trading charges.

SEBI wakes up reluctantly and decides to investigate a pump and dump IPO Vaswani and Book Manager Ashika

28 May, 2011
IPO

SEBI has been strangely and inexplicably absent from its role of supervising the primary market in India despite a stream of pump and dump IPO by small disreputable promoters and investment bankers.Most of these IPOs have no fundamentals to justify lofty valuations and without the role of market operators and investment bankers have no hope in hell of getting subscribed.Its a scary gambling scheme in which retail investors put money only with the hope of getting out on the first day with probably listing gains.There is no way that an investor can make money in these issues in the long term.However the shenanigans of the promoters and bankers have gone unpunished leading to more and more of these junk IPOs getting into the stock market everyday.This only brings a bad name to Indian stock markets where manipulation can happen so brazenly and openly and pushes away genuine investors away from equities.SEBI has been recently been trying to get more retail investors into the stock market however it seems mere words as it does not take action on open corruption.

India’s Stock Market remains a heaven for Pump and Dump Operators of IPOs.Despite some high quality IPOs in recent times like Coal India,the majority of the IPOs being done are by fly by night operators and promoters.Their is little justification for the valuation and the subscription numbers.But it is a lucrative trade for shady operators who easily manage to manipulate small cap IPOs leaving huge losses for retail investors.The stock market regulator SEBI strangely remains asleep at the wheel despite some blatant pump and dump issues.More than 50% of the IPOs in the Indian stock market over the past year are  below their issue prices.But there has been no investigation and prosecution over these white collar crimes just seem gentle scolding.Like the totally infamous and ineffectual SEC of the US Stock Market,SEBI looks more and more like a toothless tiger.Despite some laudable reforms in favor of retail investors,it needs to act more quickly and reform much more.

Ashika involved in many of the Pump and Dump,Stock Scams,However no Stopping it

Note Ashika Capital has been involved in a the mid cap scam revealed by IB recently in which stock market operator Dangi and others were involved.This had led to massive losses in some of the popular mid cap stocks.Ashika was not involved in that scam but has been the lead banker in other dubious IPOs and FPOs. Tirupati Inks another junk offering where the issue price had no relation to the fundamental value of the company was book run by Ashika Capital.However despite continuous involvement in scams,Ashika keeps turning in new ones without SEBI doing anything much.

Vaswani Scam taken to another Low Level

Vaswani Industries is another one of those IPOs which happened in the market getting subscribed by 4 times.But the manipulation by the promoter and the banker Ashika Capital was taken to another low level.A large number of subscriptions were cancelled such that investors who had applied seeing 4 times would get many more shares than these had initially calculated.Note many retail investors put money into IPOs seeing the oversubscription numbers and by evidently manipulating this they had duped the retail investors.SEBI has decided to investigate this.Expect nothing much to come out of this except a small fine which would be laughably small and would lead to more such scams in the future.

SEBI to probe alleged irregularities in Vaswani IPO

Market regulator SEBI today said it will probe alleged irregularities in subscription of shares of sponge iron producer Vaswani Industries and investigation will be completed within 30 days.

The company, its promoters, directors and intermediaries have been asked by the Securities and Exchange Board of India (SEBI) to cooperate in the investigations.

SEBI, on May 13, had withheld the listing of the company’s IPO following complaints by about 100 investors alleging large scale withdrawal and rejections in the issue.

“A detailed investigations shall be initiated into the matter…The investigation shall be expeditiously completed within a period of 30 days, so that a decision on the listing application by the stock exchanges can be taken within the statuary time limit provided under the Companies Act,” SEBI said in an order.

More Indian Insider Trading Malfeasance exposed as SKS Microfinance falls 20% before Loss Announcement

8 May, 2011
Finance

Indian Stock Markets are a very dangerous place to invest with circular trading,fleecing of retail investors by  management,pump and dump schemes in IPOs as common as a bid ask spread.The stock market regulator SEBI is mostly toothless failing to act against known stock manipulators known as “market operators” who act with impunity.The latest malfeasance has hit the stock of SKS Microfinance which was one of the most hyped IPOs last year with fabolous growth and profit figures and a high valuation.However the stock has seen its fortunes go down with the Andhra Pradesh government launching a crackdown against the Microfinance Companies.This was done after the usurious interest rates and bad practises leading to suicides amongst borrowers.The stock has already touched new lows before it fell another 20% circuit down filter on April 6 2011.

Note the stock fell before it announced the results after the close of the markets which means that insider trading had take n place.The volumes at 10 times certainly seems to hint so as the JP Morgan downgrade of the stock could not have led to such a big fall in which there are a large number of foreign and domestic funds as investors.Besides its problems in Andhra Pradesh are hardly new and Indian brokers hardly that good that their reports cause such big stock price movements.Like other SEBI probes expect this one to fail or result in a small penatly which will not deter more such white collar fraunds in the Indian Stock Market.Insider Trading in India is quite widespread with some of the biggest business groups having been fined by SEBI like ADAG etc.

Mid cap and Small Cap Stocks are havens for rigging by promoters and stock brokers as SEBI seemingly does nothing.Even in the primary market,junk IPOs rule the roost with even the recent correction failing to see crap stocks making a debut (Sudar Garmets,Fineotex,Omkar etc.).To anyone with a modicum of common sense it is apparent that such low quality companies could not raise money without manipulating the markets.However SEBI in its infinite wisdom remains blind to this.Stock brokers like Ashika,Dangi continue to operate unimpeded despite being indicted for scamming.Even reputed stock brokers are involved in underhand and shady dealings.However SEBI does nothing indirectly encouraging fleecing of small and retail investors.Not that big investors like Goldman,GMO are immune to fly by night operators as well.

SKS Microfinance stock plunge faces regulatory probe

A steep plunge of 20 per cent in SKS Microfinance shares, hours ahead of its fourth quarter results on Friday, has come under the regulatory lens for possible breach of insider trading norms or hammering by a bear cartel.
The plunge was coupled with about 10-fold surge in the stock’s trading volumes, prompting the bourses and market regulator Sebi to conduct the probe, sources close to the development said. When contacted, a company spokesperson told PTI that SKS Microfinance has not received any communication in this regard from either Sebi or the stock exchanges. However, sources said the surge in trading volumes and a heavy fall in shares — on a day when the company announced a loss after the market hours — is being viewed as an unusual event to the market surveillance authorities and therefore they have begun a preliminary probe. The matter is being probed for possible breach of insider trading rules or hammering by a bear cartel, sources added. The fall coincided with a strong upward trend in the market, when the BSE Sensex rose over 300 points, and happened a couple of days after RBI said that bank loans to micro finance lenders would fall under the priority sector lending. The RBI decision was welcomed as a boost for the micro finance sector by SKS, the country’s only listed company from this space. SKS Microfinance shares opened weak on Friday, May 6, and hit the lowest permissible level for the day — which was also the lowest price in its history at Rs 330.65.

During the day, marketmen attributed the fall to price target cut for the stock by JP Morgan by more than half from Rs 550 to Rs 200 due to weakening business model. in the evening, the company announced results for the fourth quarter ended March 31, which were uploaded on the websites of BSE and NSE at 6.26 pm and 6.35 pm respectively — which was well after the market closing. company reported a net loss of Rs 70 crore on lower income from operations and high credit costs. SKS had a net profit of Rs 63 crore in the year-ago period.

Future Ventures IPO Review and Analysis – Unique Indian Consumption Private Equity/Venture Capital Company with Cheap Valuation is a Good Buy

22 Apr, 2011
Finance,IPO

Future Ventures is a VC/Private Equity Company that has invested in a number of small Indian companies and startups mainly focused on the consumption industry in India.With India growing at around 8-9% in the last few years and expectations of strong future growth driven by consumption,Future Ventures seems a good investment considering the portfolio of companies that it owns (analyzed below).Future Ventures is a part  of the Future Group run by Kishore Biyani who started India’s most famous retail company Pantaloons.The Company has set a price band of 10-11 rupees a share with a target of raising around Rs. 750crore though the IPO.This would represent around 40% of the equity which would give it a post IPO market capitalization of around $375 million.Note the company had tried to come with an IPO 2 years ago but it was deemed to expensive at that time.

Future Group

Pantaloon Retail is the leading company of the Future Group and has been used to start a number of different businesses in India related  to the comsumption goods and retail like

1) Retail Companies – Future Bazaar, Central, Big Bazaar, Food Bazaar, Home Town and E-zone

2) Consumption and Finance Companies- Future Capital Holdings, Future General Insurance, Future Supply Chain, Future Agrovet, Future Media, Future Brands,

Future Ventures History

Future Ventures was started in 1996, as Subhikshith Finance & Investments. The company was acquired in  2007 by Future Value Retail a subsidiary of Pantaloon . Futures Ventures  is regulated by the RBI as a systemically important NBFC.The company invests in businesses which are strategically important to the group’s retail business.

Future Ventures Investee Companies List and Details

Future Ventures has invested in 14 companies mostly related to India’s Consumption Industry with Textiles/Fashion/Apparels Industry being the biggest investment sector.Makes sense also as Pantaloon is the biggest fashion retailer in India.

Textiles/Fashion Investments

  1. Indus-League Clothing ( Neutral investment,85% Stake) Indus-League Clothing  again has top of the line brand names in the textile retail sector and enjoys very good brand recall with “Urbana”, “Urban Yoga”, “Indigo Nation”, “John Miller”, “Scullers”.The company is growing at slower growth rates though it is the largest textile name in Future Venture portfolio with around $40 million in sales,however net margin is extremely low at 2%.
  2. Celio Future Fashion (Good Investment,~43% Stake) Celio is a JV  between Celio and Indus-League in the men’s apparel .Has expanded rapidly to  20 exclusive brand outlets and 70 multi-brand outlets with sales growth above 200% in 2010 ($6.5 million) with net margin of 18%.
  3. Lee Cooper (India) (Good Investment,84% Stake) Lee Cooper is the biggest brand in India’s Jeans and Shirts Category.This company  has a 15 year exclusive license ending 2021 to manufacture and market “Lee Cooper” products in India for 3% royalty.The company has shown an impressive growth of over 40% CAGR though net margin is low at 6%
  4. AND Designs (Good investment,23% Equity Stake ) AND Designs is present in  women’s apparel market, with focus on western wear.It has  44 brand outlets and 158 multi-brand outlets.The company has got a premium brand name in the Indian market and has presence in the major malls in Indian cities.A good brand to own.The company also has solid financials showing growth of more than 50% CAGR in revenues and with around Rs 58 crores in profit with more than 12% Net Margin.
  5. Biba Apparels (Good investment,13% Stake ) Biba Apparels is also involved in the women’s apparel segment. It has around  68 brand outlets and 133 multi-brand outlets.The company has slower growth rates of around 25% CAGR and a lower net margin of around 8%.However the  company also enjoys a significant brand name in the urban Indian consumer’s mind
  6. Turtle ( Neutral investment,~23% Stake) Turtle is a Kolkata seller of men’s apparel and is also like other companies has well known brand name.The company’s growth though has declined in 2010 and net margin remains low at around 4%.
  7. Holii Accessories (Too small to Tell) Holii is ja JV between the Company and Hidesign India which sells fashion accessories leather products under the brand name “Holii”. The company is still quite small with revs of  less than $1 million and has operating losses.

Future Group Companies

Food Industry

  1. Capital Foods Exports ( Neutral investment,41% Stake ) It is a food processing company selling brands like “Ching’s Secret”, “Smith & Jones”, “Raji”, “Mama Marie” .It also exports these product though sales are still quite small at around $3 million with net margin of breakven.The company is looking to expand rapidly by building Food Parks.
  2. Future Consumer Enterprises (Bad Investment)- It produces and sells brands in the Food Space like  “Tasty Treat”, “Clean Mate”, “Care Mate”, “Premium Harvest” and “Fresh and Pure”.Again not much profit in the competitive sector
  3. Future Consumer Products(Bad Investment) -Very small company owing and selling the “Sach” brand with almost negligible revenues and profits.

The last 2 investments don’t make much sense,they should be combined with Capital Foods Exports as having 3 companeis doing pretty much the same thing leads to unnecessary costs .

Rural Retail

Aadhaar Retailing (Too Early to Tell) – Aadhar is present in the  rural and semi-urban retail sector. The company has been growing impressevely though it has incurred a major loss of Rs 19 crore last year which means a Net Margin of -40%.However it is growing its business and time will tell whether it will become big or not.

Footwear Retail

SSIPL Retail (Neutral Investment,6.5% Stake).SSIPL sells footwear from Nikie and has more than 100 exclusive stores.The biggest company in terms of revs with Rs 334 crore however Net Margin is quite pathetic at only 1.5%

Green and SRI Retail

Indus Tree Crafts (Neutral Investment,52% Stake) Indus Tree is in the  social entrepreneurship sector sellling Green and SRI products under the brand “Mother Earth” .It has a low number of outlets at only 5 exclusive and running at a loss.The company sells premium products which is out of the afforability reach which may restrict its growth despite its “Green” tag. crore.

Education

Amar Chitra Katha (Good Investment)- The company sells the most well known brand in the Indian comic space and has a large loyal following with again top brand recall amongst Indian consumer however sales are still quite low at less than $3 million and is running at a loss.The business has huge potential if executed upon.

Future Ventures will continue to own a  significant stake in portfolio firms so to have managment control and may look to divest portfolio companies through M&A or IPOs to exit its investments at an appropriate time

Advantages of Future Ventures

1) Valuation – The company is not expensive at around 1.1x post IPO book value.Note while the company has not made profits in 3 of the last 4 years it was due to the fact its companies are mostly in the startup phase when they are scaling up with losses.However a number of the companies are earning profits which is a good sign in the last year.The growth trajectory of most of the companies are also above 20%.The company has not earned a profit in the last year so the Future Ventures P/E ratio is not of much use.Normal valuations metrics and measures is not easily applied to a holdings/asset management company especially which is involved in Venture Capital.Book value gives a decent idea about the valuation

2) Good Portfolio – In the portfolio analyzed below you can see 5 good investments with only 2 bad ones in my opinion while others are neutral or too early to tell.I would be willing to buy 5 of these companies which makes Future Ventures a good stock buy

3) Management – Kishore Biyani is a 1st generation entrepreneur who is known as one of the best minds in the retail space in India and Future Ventures has a good management team with both operation and financial expertise.

4) Industry – Future Ventures is a unique Private Equity/Venture Capital story which is not easily available to investors focused on the rapidly growing Indian consumption industry.

Disadvantages of Future Ventures

  • Conflict of Interest – Not a major disadvantage as all Indian companies have that on a much bigger scale.Some of the companies owned operate in the same industry and are competitors.However the parent Future Ventures manages this conflict of interest would be interesting to see
  • No Investment Exit Till Now- Till now Future Ventures has not managed a single exist despite good stock market conditions in the last year.Successful investment of a couple of companies will show the true mettle of the management.
  • No Access to  Galaxy Entertainment Corporation Limited Prospectus which is strange -  “We had undertaken an initial public offer of their equity shares. Galaxy Entertainment Corporation Limited was acquired by our Promoters from the erstwhile promoters of Galaxy subsequent to its initial public offering of equity shares. We do not have access to the offer documents and other records of Galaxy”
  • Loyalty Payments for use of “Future” trademark - They have to pay Rs 1 crore as loyalty which increases a whopping 144% to Rs 2.44 crore in 2015.I think they could have done without the name as “Future” does not have a huge brand name in India ( Pantaloon does though).

Summary

Future Ventures seems a good buy to me given the inexpensive valuation,leverage to Indian’s Consumer Durables and Fast Moving Consumer Goods (FMCG) sectors,decent portfolio and reasonably decent management ( tough to find in the Indian stock markets).Given the junk and crap IPOs that keep hitting the Indian market which is a pump and dump IPO heaven for market operators,this issue looks pretty good.Not consumption focused companies in India have given good returns in recent times which have good brand names like Lovable Lingerie

Lovable Lingerie IPO Review and Analysis – Should you buy the Stock for some love?

7 Mar, 2011
Green Investing

Lovable Lingerie is an inner-wear textile company that is coming out with a $20 million IPO.Unlike other totally junk issues which are totally hands of  market operators,this one seems to have decent fundamentals and the valuation is not too expensive either.The company has managed to sell 6% pre-IPO to Sequoia Capital which is one of the blue blood PE firms in the country.However this should not be an endorsement given that a number of their investments have bombed in the recent mid cap and small cap carnage.Corporate governance and management issues in small companies in India is totally out of control so investing just based on pure fundamentals does not help.Also a number of other companies in the same sector in textiles remain at attractive valuations.That said the company does have good differentiation as it leverages on the fast growing Indian consumer growth story.The company sells Lingerie though top retail outlets like Lifestyle,Shopper’s Stop in top Indian metros and has good brand recall.Here are the positives and negatives of the company based on its DRHP.

Issue Details

The company is coming out with a public issue of 4.5 million shares at a price band of Rs 195-205 to raise around $20 million diluting around 27% with the total market cap of around $70 million post IPO.The company will use most of the money to expand manufacturing,build its brand,open a new JV,open new outlets and a design studio.The money being raised seems that it will be well used.

Positives

1) Very high Return Metrics - The company has managed to generate high returns on very low equity and capital investment leading to ROCE and ROE of over 50%.

2) Good Growth,Zero Debt and Improving Margins – The company has managed to growth topline at a CAGR of 30% and bottomline at 38%.The company managed a 15% Net Margin on sales ending 2010.The company also has negligible debt

3) Valuation – The company’s valuation does not seem expensive at around 10x P/E ( considering the IPO cash) compared to higher valued Peers like Page Industries.However given the smaller size and limited operating history it is not a surprise as well given that other textile companies operate at single digit margins.

4) Good Industry – “The overall innerwear market (excluding kids) in India was worth `around $2.3 billion in CY 2009. It has grown at a CAGR 16% over the last four years. The growth can be only continue as India’s per capita incomes continues to grow and aspiration level  keeps growing.

Negatives

1) Rising Material Costs – The price of cotton is skyrocketing along with other commodities.This will put huge pressure of the margins of the company as it may not be able to pass on the costs to the customers given the tough competition.

“The cost of fabrics, lace and elastic accounted for 32.10%, 27.53%, 35.27% and 36.75% of total expenditure in each of the Financial Years 2008, 2009 and 2010 and for the nine months period ended December 31, 2010, respectively”

2) Conflicts of interest with other promoter companies - The company’s promoters have other companies which are in the same innnerwear line of business.Given the tendencies of Indian promoters to fleece minority investors I would be careful

“some of our Directors are also directors on the boards of our Promoter Group companies or
other companies engaged in or likely to engage in, or whose memorandum of association enable them to
engage in, the same line of business as our Company.”

3) Competition – The lingerie market in India faces tough competition from both organized and unorganized players.Given the highly attractive nature of this sub sector,does not look like it will decrease anytime soon.There are other major brands like  Triumph, Enamor, Amante, Jockey, Juliet, Softline.

4) Irregularities in Lease Agreements - Another source of discomfort in that the company’s premises have irregularities.

“The lease agreements entered into by our Company with respect to our Kolkata branch office, Chennai branch office and Delhi branch office have neither been stamped nor have they been registered with the relevant local authorities.”

Summary

After the raft of junk IPO issues like Omkar,Sudar Garments,Lovable Lingerie seems to be a much better stock.However the current steep fall of Indian mid cap and small caps has made the comparisons look not so good for the company.There are both negatives and positives for buying the Lovable stock.The P/B,P/E and P/S metrics for the company are reasonable given the growth,return metrics and low debt size.However there are some issues as well.Note a total thumbs up in subscribing to the Lovable Lingerie IPO but you some adventurous investors could test it I guess.Note the Indian consumer growth story is just about starting and Lovable Lingerie if it manages to execute without the common frauds being seen should do well.

Most Popular

Recent Comments