Moneycontrol and other websites give a forum to discuss each stock. Nothing consolidated though and most of the forums are filled with people shouting at each other. So I thought is it worth starting a thread here for people to share which stock they have invested in and give some reasons. Others can comment and debate in a civil manner.
So here I go. I am very long on Welspun India. I think its cotton issues are behind it and the company is poised for growth.
Forgot to add price - started buying at 89 and am averaging 85 now on Welspun India.
Hello @Jambi
This is the Welspun India page on Screener and this is a discussion thread on Welspun India on ValuePickr.
This should provide some valuable insight.
This is the Fundamental analysis module on Varsity for those who wish to read more.
INOX WIND: Holding at 180 for a quarter now. Believing in the script told by the management on streamlining inventory. Decent order book size. Hopeful that the market will value it better.
Bhushan Steel
(NSE -BHUSANSTL /BSE - 500055 )
One of the Worst Performing Stock
If one can make a list of “Top 20 Worst Performing Stock” over the last 5 years, Bhusan Steel will find its place in the list. From the level of Rs.500 during 2013 today stock price is at only 67! Just imagine, 1 Lac investment in Bhusan Steel during 2013 is worth just thirteen thousand in 2017, loss of around 87%! The company was reporting loss since 2014. The book value, reserves all are negative with huge debts of around 45,000 crores in the books.
Business Failure due to over-ambition
There is a saying that if you eat more than you can chew, then you will invite a lot of trouble for yourself. The similar happened with Bhushan Steel. From 2005 to 2008 global steel price jumped heavily. Backed by ever increasing steel demand and price jump, optimism was everywhere. The company started building a huge (5 MTPA) integrated steel project in Odisha that was expected to commission by 2010. However, since 2009, global steel price crashed badly and the demand weakened. Thus the company find it very difficult to service its debts. From a 2008 peak of $1265/tonne, global steel price crashed to $300/tonne during 2012. Within 2013, Bhusan steel defaulted on its huge loan. Steel price continued to remain low until early 2016 and the problem compounded for the company. As of July 2017, loan default stands at a huge 45,000 crores! Needless to mention, inspite of increasing revenue, the company will continue posting the loss for the next many quarters too.
Where is the opportunity in such a business failure story?
The opportunity lies in one of the recent mega government reform “Insolvency and Bankruptcy Code (IBC), 2016”. On 26th July 2017, National Company Law Tribunal (NCLT) admitted Bhusan Steel being a defaulted company as per IBC and a Resolution Professional (RP) is appointed to take the management control. The task of RP is to invite prospective investors for takeover/restructure the company and sort out the resolution within 6 months with an extension of 90 days. If the RP failed for any resolution within the time period then the company would go into liquidation. Remember, only in the case of liquidation, the equity shares would become almost worthless. The most interesting part of the story is, till date major Indian players expressed interest in buying the stressed asset of Bhushan Steel. Those players are Tata Steel, JSW Steel, Vedanta and Piramal Group. Moreover renowned foreign players like Arcelor Mittal and POSCO also expressed interest. Expression of interest from renowned players in the industry indicates that at the current rate, the stock price is highly undervalued and the Odisha steel plant of Bhushan Steel has lots of potentials.
Earlier also, there were attempts of debt recasting, What is special now?
The primary differentiating factor is that earlier, promoter groups were negotiated with banks and other players for debt resolution. Now, Promoters are no more in the management control. Once NCLT approved the case, an Independent Resolution Professional (IRP) Mr. Vijay Kumar Iyer is managing the company and responsible for the resolution within January 2018 (with a further extension of 90 days). Total 9 listed companies were admitted by NCLT during July 2017, out of all those Bhushan Steel is the best player offering maximum chances of the turnaround. The new integrated steel plant of Odisha produce auto grid steel that is used by all major Automobile player like Maruti Suzuki, Hyundai, Mahindra Hero etc. With an EBITDA margin of more than 20%, the sales increased over the last 3 years. Increasing capacity utilization offers enough headroom for the future growth. This is why many renowned players from the sector are eager to purchase Bhushan Steel. Once the buyer is finalized and completes all the regulatory requirements, the stock price won’t remain at the current rate.
Target Price and time frame
There can’t be any specific price target for such stories as the stock price movement will depend on the future development. However, as per investment rationale, either the stock will generate double return within just the next Few months or will end up with 30%-40% loss from the current level of 70
want more information on IBC process related to Electrosteel steels ltd and compulsorily delisting of the shares held by shareholders.