How To Make Fresh Investments Now
Gloom and doom pervades the stock markets. Should you run away from stocks now? Banks are in a mess; auto sales are down; and economic growth is so poor that if I adjust for the fudging that goes on, who knows what kind of numbers we will end up with. You never know where the bottom is.
 
This is not an unusual situation. Maybe it is a first for those who have started to invest in...
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  • Nifty, Sensex Srruggling to Head Higher – Wednesday clsoing report
    We had mentioned in Monday’s closing report that Nifty, Sensex upmove may continue. The major indices went up a bit today. On the NSE, there were 1,337 advances, 472 declines and 316 unchanged. The trends of the Indian stock markets in the course of Wednesday’s trading are given in the table below:
     
     
    Tata Metaliks has announced that the second blast furnace and its associated facilities in Kharagpur will undergo a planned shutdown, for maintenance and overhauling from September 12, 2019 at 10.00 a.m. The operations are expected to be back on stream from September 16, 2019 at 10.00 p.m.
     
    Bank of Baroda has issued unsecured, redeemable 7.75% basel-3 compliant tier-2 bonds - Series XXII of face value of Rs10 lakh each. The bank has raised Rs500 crore through issue of 5000 bonds.
     
    Directors of L&T Finance Holdings approved issuance of up to one crore cumulative compulsorily redeemable non-convertible preference shares aggregating to a nominal amount of up to Rs100 crore on a private placement basis at the dividend rate of 7.95% p.a. payable annually. The shares will be listed on the BSE.
     
    Tata Motors Group’s global wholesales in August 2019, including Jaguar Land Rover, were at 72,464, lower by 32%, over August 2018. Global wholesales of all Tata Motors' commercial vehicles and Tata Daewoo range in August 2019 were at 25,366, lower by 45%, over August 2018. Global wholesales of all passenger vehicles in August 2019 were at 47,098, lower by 22%, compared to August 2018.
     
    Bharat Heavy Electricals Limited (BHEL) has successfully commissioned the 1320 MW IB Thermal Power Station (2x660MW). Located in Jharsuguda district of Odisha, the project is owned by Odisha Power Generation Corporation Limited (OPGC), a joint venture company of the Government of Odisha and AES, a US-based energy company. Previously, BHEL had set up two units of 210 MW at IB Thermal Power Station which are in operation for more than 20 years.
     
    India Ratings & Research (Ind-Ra) have assigned the credit ratings to I G Petrochemicals. Term Loan rating has been affirmed as INDA+/Stable; long term borrowings has been assigned INDA+/Stable rating; bank facilities rating has been affirmed as INDA+/Stable/IND A1+.
     
    Sanofi India has approved sale and transfer of its manufacturing facility at Ankleshwar, Gujarat to Zentiva and its legal entity in India, Zentiva Private Limited for a consideration of Rs2,617 million, subject to customary working capital adjustments. This transaction is subject to shareholders' approval and the completion of certain conditions as defined under the business transfer agreement. 
     
    The Board of NHPC will meet on 17 September 2019 to consider the proposal for raising of debt up to Rs2,500 crore through issuance of corporate bonds in one or more series/tranches on private placement basis and other options.
     
    The top gainers and top losers of the major indices are given in the table below:
     
     
    The closing values of the major Asian indices are given in the table below:
     
     
  • User

    Vivimed Labs Did Not Disclose Transfer and Sale of Business Units, Twice
    Vivimed announced its limited review results of Q3 FY16-17 on 14 February 2017 and reported a revenue of Rs363 crore (O2 FY17 - Rs300 crore) and a profit after tax (PAT) of Rs52 crores (Q2 FY16-17 - Rs26 crore). The revenue included Rs73 crore of business transfer agreement (BTA) with Ordain Health Care Ltd of Klarsehen Pvt Ltd, which was a one-time sale of an entire product line, mentioned in the annual reports. There were no specific disclosures in the results.
     
    This was disclosed only in the annual report, which is released six months after the year-end. As per as per the accounting standards, Vivimed should have disclosed the sale of such a product line as 'discontinuing operations' and should give a clear break up of continuing operations and discontinuing operations in its press release. 
     
    It failed to make the disclosure and even auditors did not qualify their audit report for violation of accounting standards. It is price sensitive information and requires specific disclosure to the stock exchanges. Vivimed failed to disclose this to stock exchanges.
     
    For Q4 FY16-17 Vivimed reported a revenue of Rs440 crore and a PAT of Rs115 crore. There was no other disclosure in the limited review results. The results gave the impression that the revenue and PAT numbers were growing and margins are expanding. 
     
    However, the revenue included Rs163 crore of net consideration for the slump sale of manufacturing units located at Bonthapally, Medak District for a consideration of Rs380 crore to Clariant India Ltd. Selling of facility is price sensitive information and as per accounting standards and under SEBI (Listing Obligations and Disclosure Requirements), Vivimed should have disclosed this to the stock exchanges. Vivimed didn’t.
     
    We asked Vivimed how such important disclosures were missed out. Yugandhar Kopparthi, company secretary & compliance officer, promised to reply but hasn’t even after about three weeks. As and when we receive their reply we will add to the article. It is shocking that a large listed company and its auditors can openly violate securities laws, regulations and accounting standards.
     
    Vivimed Lab claims to be an integrated pharmaceutical company and manufactures of active pharmaceutical ingredient (APIs) and formulations for various therapeutic areas. The company's (API) business comprises of generic/ regulatory APIs and APIs for the contract development and manufacturing organisation (CDMO) segment. 
     
    This constitutes 70% of its total pharmaceutical business and the balance is contributed by the finished dosage formulations (FDFs) segment. The company is weighed down by debt. For the June quarter, revenues were down by 5% and net profit was down by 180%.
     
    Vivimed Labs closed Monday around 15% higher at Rs17.30 on the BSE, while the benchmark Sensex ended the day marginally up at 37,145.
     
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