Sunday, October 23, 2011

ZICOM ELECTRONIC SECURITY SYSTEMS LTD - In an Industry- with- Good potential and not so good Promoters.




Zicom Electronic Security Systems  is probably the only pure BSE  listed company from the   Electronic Security systems manufacturing industry.It produces various security systems solutions includes Home Alarm Systems,Video door phones,Fire alarm Systems,CCTV Surveillance,Fingerprint Locks,Metal Detectors..etc.Due to the increasing number of theft and burglary incidents scope of such business is increasing in recent times.Company recently introduced 24 x 7 burglary protection at a cost of Rs.16/- per day in the name of of '8 Ka Dum'.Zicom also introduced Security systems for telecom towers.All together the prospects of industry is very bright .The negative side of this company is the background of promoters and some of their recent actions which is not minority shareholder friendly. One of the promoter Mr Pramoud Rao earlier promoted a company(jointly) named Jayanthi Business Machine .After collecting money through an IPO company vanished in few years.In recent times Zicom sold its Building Solutions Group and Special Projects Group,which are mainly focused on government and institutional sales to Schneider electric and now left with retail business.The sold division had a turnover of approximately Rs.180 Cr and the business sold for Rs.224 Cr.In many recent cases this type asset sales are benefiting only the promoters and nothing to the minority share holders and this case too may not  an exception.If promoters are really like to save the minority share holders there were many other options like de-merge this business into a separate company ,issue the shares of this company to all share holders in proportion and then sell the entire company to the foreign buyer...etc. Another cause of concern is the lowest promoter holding as low as 20 %. But two points are attracting at this point of time.First one is its improving financials and second is the effort of promoters to hike their stake through open market purchases.We don't know what they are planning now but one thing is sure - this company is in an industry with good potential.If promoters are ready to change their attitude towards minority share holders and willing to utilize the amount generated from the sale of institutional business to grow the retail business, still there is chance.Only high risk investors can take limited exposure at CMP of Rs.38/-

10 comments :

  1. SIR
    URGENT HELP NEEDED TO EXIT FROM LANCO IND OR NOT MY BUY PRICE IS 38 RS?

    ReplyDelete
  2. Sir,

    Could you please tell you views on Navin Fluorine?

    ReplyDelete
  3. Hi Sir,

    Should I hold "Eastern Gases" on sell it off. I have few hundreds at 19.

    ReplyDelete
  4. Hi valuepick, wish you a very "HAPPY DEEPAWALI".i am currently invested in avanti seeds.Do you think the current rally will continue for a while??

    ReplyDelete
  5. HAPPY DEEPAVALI&PROSPEROUS NEWYEAR TO YOU AND EVERY INVESTOR IN THE WORLD

    ReplyDelete
  6. Hold Eastern Gases if you have a long term view

    ReplyDelete
  7. Thanks and wishing all a happy Deepawali

    ReplyDelete

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