Sunday, November 30, 2014

MIC ELECTRONICS - IN A COMEBACK EFFORT ?

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You may surprised to see one stock suggestion in this late Sunday evening . But there is one special reason for this . As many of you are aware , SEBI's new Research Analyst Regulation will come to effect from Tomorrow. I am not sure about the exact nature and  scope of this and still lot of confusion is there . Not sure whether there is any restriction for expressing opinion as an ordinary investor without claiming as a ' Research Analyst'  and not accepting any remuneration for the same . Talked with lot of people related with the industry and most of them shared similar thoughts and confusion in this matter. Till some clarity emerges , I may not be in a position to continue postings like the previous one's .Expecting some clarity in this matter at least by month end. Due to this reasons , now I forced to prepone  next weeks posting. Once again my sincere thanks for my friends and all blog readers who extended  overwhelming support in past four years.
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I can imagine lot of raising eyebrows after reading the name of the company we are going to discuss . Taking an anticipatory bail in the beginning itself,this is neither a stock for investors with average or below average risk taking capacity  nor for someone going to ask ‘ It is not moving , what should we do ? ‘ , on a daily basis . This is not a stock to put your entire corpus dedicated for investing in stocks but only a small portion you can afford to ignore for a long time. This is one company with a balance sheet in bad shape and already written off by market participants .You  may ask one question at this point  – If the situation is like this why we need to waste our time to study this company ? . Only because of one reason , I believe ,this company miserably failed  earlier mainly because its promoters  come up with a business before its time. So , if and only if you are interested to know about a high risk company , continue reading ...


MIC ELECTRONICS



PAST 


This is one company whose IPO oversubscribed by a whopping 50 times and the shares listed at a premium of 120 % to the offer price. Once it was a darling of investors including top institutional and foreign investors and stock price hits a high of Rs.1088 ( Before stock split from Rs.10 to current Rs.2) .From 2012 , company concentrating in two business verticals – True Colour LED Displays and LED Lighting Solutions . True colour LED Display business consists of Passenger Information Displays for Railways,Mobile Displays fitted on Trucks or Trailers,LED Advertisement Boards...etc .LED lighting solution business consists of Solar Street Lights , Solar Lanterns, Railway Coach Lighting ..etc. Company’s performance badly affected due to weak order flow from Railway because of  Indian Railway’s pathetic financial situation, Severe recessionary situation in over all economy ..etc. Company’s promoters pledge their shares and on account of non repayment these shares invoked and sold in market which resulted in sharp decline in promoter holding from 40% to less than 10 %

PRESENT 


Last year company received an order from Nashik Municipal Corporation (NMC) to replace 69,541 street lights ( News HERE) . This order is the largest such order so far in India cost close to Rs.150 Cr . Company faced lot of legal challenges to execute this order and finally it got permission to do the same. As a note to latest financial result ( Read note No.7 in this LINK)  , company clarified that they started execution of the same during the end of the September quarter. This order should be completed in next six months. In another  recent development from company is its introduction of   3-D hologram technology using  LEDs .This technology widely used by Telugu Desam party in the recently concluded elections ( Read the detailed news HERE) .The most important development happened in MIC in recent times  is the allotment of 74,462,070 share warrants to promoters and others . ( Even though some allottees are classified as public ,I strongly believe they are friends and relatives of  promoters itself  Read the details of this allotment HERE) .These warrants will be converted into shares at a price of Rs.3 . On conversion, promoters and their interested parties stake in MIC will reach close to 50 % from current level of below 10 %.



POSSIBLE FUTURE

It is true – its future is really uncertain , but still some hopes are reviving . As I said at the beginning  its products came before its time . Ten years back usage of LED was limited in various applications .But now people well aware about it and accepting as a good option for energy saving . One of its major customer was Railway and after a long time Railways’ financial health is expected to improve going forward . Our prime minister recently indicated green signal for privatization and renovation of railway stations ( News HERE) .MIC is the only company approved by RDSO for 13 types of Railway Coach lighting products to be used in Air conditioned coaches. Any improvement in Railway’s financial health and renovation of coaches and stations may augur well for MIC going forward  . Prime minister’s prestigious smart city projects and  Andhra Government's decision  to build world class capital city for the state may  increase the use of LED based products as a best alturnative for energy savings . If company can successfully complete the ongoing Nasik municipality street light project , it will surely  referred as a testimony for company’s ability to execute similar type large projects. I believe , after a long gap  promoters are confident about the future of company and that is why they are hiking their stake from current 8 % to a decent level by pumping substantial amount. Company also decided to sell one subsidiary in an effort to reduce its debt level.



Conclusion

I know , Lot of negatives are still there and it is not suitable for low risk takers . But now the stock is available around Rs.4.50 and promoters are subscribing shares @ Rs.3 . As a product reducing power  usage ,relevance of company’s  products are increasing with any increase in power cost . Nowadays more and more people using LED based lighting systems in place of conventional  lighting products . I hope ,if management is willing to show some sincere efforts to revive the company , it is the right time to go ahead . Considering the high risk nature, suggesting extra care and due diligence before any action.Stock is listed in both exchanges and trading @ less than Rs.5

Latest Investor Update HERE

Link to Latest Annual Report HERE

Link to Company Website HERE

Disc: It is safe to assume that I have vested interest in MIC.

68 comments :

  1. Dear VP,

    I sincerely hope that once clarity emerges, SEBIs new rule will not stop you from posting . Thanks for your selfless service. We only have our good wishes and prayers to offer. Thanks once again.

    Best Regards,
    Shankar.

    ReplyDelete
  2. Thanks sir for this pick but I feel very bad now how can I approach with u and suggessions can I mail u . God bless you sir

    ReplyDelete
  3. hope there will be chances for sincere people like you to continue after some clarity emerges. Hope to continue this blog if there is any chance to go ahead.Regards,K Harikrishnan.

    ReplyDelete
  4. Hi VP ji,

    I am following this site from very few days and i am hearing this bad news. I hope nothing will happy which will stop you from suggesting.

    Thanks.

    ReplyDelete
  5. Dear VP sir

    I am a person who made lot of profit from many of your recommendations. I am very much sad to hear that you are stopping the Blog updates due to SEBI rules . Expecting you back with blog updates asap and wishing u all the very best sir

    ReplyDelete
  6. Dear Vp Sebi will not stop u in any manner as its our prayer from God that you will always be our mentor in stock market...god bless u

    ReplyDelete
  7. We dont want to loose this perfect blog sir, let SEBI regulate but the teaching should not be stopped. I hope that the condition you mentioned does not happen. Stock will become multibagger and many bull and bear phase of market will come but the teacher like you is a once in a lifetime opportunity. I hope that nothing bad happen. Just wishing to GOD dont let the Savior of Financial Light banish. Please all prey to GOD. Thankyou very much sir thank u very much...........you taught us the lesson of life.

    ReplyDelete
  8. Dear VP,

    Thank you for this nice recommendations. It was one of my favorite pick.

    Sorry to hear about the new rule. Hope we will get more clarity on this soon.

    Once again thanks a lot :)

    --
    With Regards

    Bigul

    ReplyDelete
  9. Sir I miss u please your view upon orient green power hope u will soon again for our help god bless you

    ReplyDelete
  10. Dear VPji,
    thanks a lot for you so much help to small investors . We all hope you will be able to continue posting .

    ReplyDelete
  11. Dear sir,

    Hope clouds on VP family will get cleared soon. You made me an INVESTOR. Thanks and our prayers are always with you.

    ReplyDelete
  12. Dear Sir,
    I have been reading your blog off late and am really impressed by the selfless service you have done. I am new to markets and have not invested significantly. However I am open to taking risks . For first timers like us how much percentage of total annual investment amount do you recommend to invest in stocks like these (MIC for instance). This is my first post in this blog and appreciate your feedback.
    Thanks and Regards,
    Ajit

    ReplyDelete
  13. Dear VP,

    The show must go on..

    Keep posting.

    ReplyDelete
  14. Sir, Please dont stop recommendations or publishing your views. More than anything else, we learn so much from your postings. If need be, do charge a nominal amount which can be donated to charity or we could route the same directly to a charity in your name. I am sure hundreds of your followers will agree.

    ReplyDelete
  15. Dear sir,
    We can never do without your blog. If that is the case then please at least start a paid service or on FB or something. Please don't stop your posts

    ReplyDelete
  16. You should demand for remuneration from us then no problem arise from SEBI's new regulation.

    ReplyDelete
  17. i know the company well ,and we have condemned the company as a 'gone case'...in spite of what you wrote..it will take its' own sweet time[couple of years] for this company to turn into black...for sure...!!!

    ReplyDelete
  18. Goodbye vp. you will be missed by many. A thinker and a educator/ all too rare a combination. Another star ( blog) in the sky...you will be missed.

    ReplyDelete
  19. Hello sir

    Please respond on mails at least. It is big setback for us..

    Regards
    Gaurav

    ReplyDelete
  20. I think you can still continue GTS...

    ReplyDelete
  21. HI VP,

    I read your blog for the first time .Thanks for Enlightening me on certain Financial terms which i was not aware of .

    Can you please let me know about Vinyl chemicals (bought at 72) do i need to hold on to this or sell it ?
    and how about L&T fin ( avg is 83).

    Thanks,
    Supreeth

    ReplyDelete
  22. Why not consider a paid subscription based platform in any case? Even a token subscribers fee of Rs 1/- would fall under the legal gambit of the new regulations I suppose. I am sure there would be plenty of members here willing to subscribe.

    Regards,

    Aditya

    ReplyDelete
  23. Respected Sir,

    SEBIs,recent initiative on advice is a rude shock to me , as you know am following you only recently,Am ready to subscribe in case you start one, as yours seems to be unique and unbiased. please let me know by email or thru this blog.
    Regards.

    ReplyDelete
  24. Almost daily I start my day reading your blog. But today, its a bad morning reading this sad news. Eyes r filled with tears. U have become a part of my family. Plz think of some way & stay connected. I am sure you will.
    God bless u & to all those who r connected with u.
    A BIG THANKS from the core of my heart.

    ReplyDelete
  25. We can't digest stopping this blog. I am following this blog last six months that's why my portfolio is in green.before I lost my money by trading we are ready to switch pay mode if you consider at least try to educate us by this bolg .
    Long live VP sir

    ReplyDelete

  26. Dear Sir,
    Please continue to guide/advice us instead SEBI...it is not applicable to a dedicated person like you...who taught us laymen investors into thoughtful investor.I appreciate all your efforts in this regard and soon I will and we will eagorously waiting your new posting on stocks.
    I want to buy these stocks:
    Sika interplant system bse code 523606
    Lawreshwar Poly bse code 532829

    kindly advice me accordingly.
    Thanks & regards

    ReplyDelete
  27. Plz use ur money control module till that.

    ReplyDelete
  28. Hello sir sebi rule not bound u to told about company health or about detail u never told people to buy this n that stock u just write ur feeling about that company in our law no body stop someone feeling to express about anyone not a company or person. And if u feel that is in law so u start ur paid service n in my feeling no body in this blog make loss anytime. There has lots of paid service company in this market and people join them .then why we not join ur paid service n teacher like u .sir don't stop this service no laws can stop to express ur feeling n if yes then go for paid service.I think that not break of law.we are always with u and plzzzzz u always with us.

    ReplyDelete
  29. dear vp sir
    you must not stop writing articles educating small investor.Hope new sebi guidelines wont stop you writing abt reco of stocks. You may also start service on payement basis.

    ReplyDelete
  30. vp sir missing you a lot..............please come back soon........
    we all with you........vp sir you are sharing such a good knowledge to us...
    please do not leave......vp sir you are true genuine researcher...

    ReplyDelete
  31. Friends

    We can't blame the ultimate purpose of SEBI .My only concern is about the tedious paper work and time to be spend to comply with . As an individual I have lot of limitations . If I forced to allot lot of time for this purpose , we may not even get enough time and concentration for our other works including finding out good companies . Anyway , will try to comply and may share my few words through other modes like MMB till there is some solution.

    ReplyDelete
    Replies
    1. Pls share your MMB id VP Sir

      Delete
    2. It is the same 'Valuepick' , not used for a long time and not sure whether it is still there.:)

      Delete
    3. Sir, I admire your work and attitude!!!

      Delete
    4. Ji, What is MMB

      Delete
    5. MMB is a board name on MoneyControl.com

      Delete
  32. Why not make group on private group on facebook or google ?? SEBI cant Stop private individuals discuss and reco stock...

    ReplyDelete
    Replies
    1. Lot of clarity required in this many things related with this subject .Let us wait for that

      Delete
    2. yes sir indeed a good suggestion as the closed group can only be accessed by the group members .. many self less people are doing it there ...
      Some like great arvind bajaj ji share it thru his own profile.
      some share on group.
      we hope if it can be done.
      any ways sir .. i have never inevsted in your calls but i have been seeing the market from a while and can say this is the only plc where i could see so many sucessful recos ..

      Delete
  33. Missing you VP ji.. You will come back strong..
    Thanks
    Prakash K

    ReplyDelete
  34. Sir

    Some other bloggers claiming they have registered , Why not you ?

    Atul

    ReplyDelete
  35. What is my issue is mentioned in one of previous reply - Please refer that .

    Regarding other bloggers claim

    As far as my understanding only very few registrations happened so far . I can even claim like " I am already registered " and cheat my readers . But as per rule , While recommending a stock in any public media the research analyst should reveal his identity with SEBI REGISTRATION NUMBER . If it is not there no meaning in mere claims. If it is there , that is OK , otherwise it may be equal to inviting unnecessary headaches which I don't like.

    Anyway will do the needful when there is some clarity and sanity in this issue.

    ReplyDelete
  36. absolutely correct, we can't blaim SEBI this method has been used world wide otherwise people can fall prey to frauds. Though there are people like VP ji who give a solid research based advice but many can do the same and create artificial inflation in penny stocks. This practice is there since long.
    Please watch once upon a wallstreet for more cleartiy :P

    I myself is CFA level 2 candidate and admire the move by SEBI but at the same time unable to overcome the loss of not getting recommendations from VP ji.

    ReplyDelete
  37. vp sir...
    your mmb id is active...........673 followers is't correct sir..?
    if sebi restrict please come to mmb sir...

    ReplyDelete
    Replies
    1. Sure , till registration go through :)

      Delete
    2. please let me know... how can i register on mmb with vp sir..
      plsss plss pls plsss
      i am very upstate since morning..

      Delete
    3. Within few hours the followers list has crossed 750 now. I know that the number of followers will increase like anything..keep counting. We just can't imagine stock market without VP Sir.

      Delete
    4. People who are upstate :) kindly google mmb.moneycontrol and register. Then follow 'Value Pick'

      Delete
  38. Sir, let's wait and watch for more clarification. Also learning without a stock recommendation can always continue. Oils like you to please share those more valuable teachings in the interim. Take care.

    ReplyDelete
  39. Actually the problem .. After watching your success and research on value stocks ( which I think in India no one can do better than you ) many came up with blogs and started recommending stocks on thier and marketed their operator based scrips and dupe small investors/traders ..
    Like aceinvestor.WordPress ,

    Most of the analyst try to manipulate investors (actually 80%/of them are traders who come for quick gains) and get stuck higher levels ..

    I think first SEBI should come up with a rule -try to educate people before opening a demat account !!

    ReplyDelete
    Replies
    1. That is true. Infact aceinvestortrader.wordpress.com has copied some of the VP's recommendations like V2 Retail, Aimco etc. and recently he has copied VP sir's GTS and named it as "Name this Gem". I think in India hardly few give their own analysis and recommendations and VP sir is one among them.

      Delete
    2. Hi,
      this is unfair to accuse of other bloggers been copying .

      Multiple peoples recommended same stock at various juncture of time . Stocks like DHFL, Ashianaa housing and many other are reconmonded by various broking houses multiple times .

      Dear VPji,
      I have a humble request, there are readers who are trying to create unnecessary rivalry here . I have seen peoples are getting opinion from one blog and are they cross checking same at other blogs .

      VPji you are the GEM, so we look at you as role model, please ask readers to stop making unnecessary reference to other bloggers .

      Thanks & Regards,

      Delete
  40. Expression of opinion is the right of any individual, be it stock or any other subject. I do not think SEBI can bar that and it does not have the right to do so. Lets hope for the Best.

    ReplyDelete
  41. What is mmb id??please share with us..

    ReplyDelete
  42. Sir, i have been following your blog, but this reco appears different - i mean promoter holding is just 8%.

    ReplyDelete
  43. This opinion clearly means you read only the company name provided as the headline and nothing below that.

    ReplyDelete
  44. Sir.. I think you are under pressure from management to post this stock.. Absolutely something fishy here

    ReplyDelete
    Replies
    1. VPji,
      hats of to you, who can even allow such comment to be published at your own blog .

      Regards,
      Prashant

      Delete
    2. A very bad joke too

      Delete
    3. Dear

      If we are crooked ourself ,we can see everything through such an eye and feel everyone around us are like us.It is quite natural.

      Delete
  45. Hello Mr. ValuePick,

    I've been following you from a few days, have not yet invested, but just seeing the picks and evaluating the way you approach the market, value the stocks etc. and found it very interesting. I believe you have a great thing going here, and I must thank you for this selfless service.

    With respect to the RA regulation, if the need is to declare yourself as a named RA with registration number etc, by all means please do so and keep it a paid service - not because you need the money as already seen from the wealth of advice offered out for no charge, but so that the audience who know your details are ringed in and you have a visibility of it. That will help you will remain within regulation and we will continue to benefit from your well honed skills. It is a humble suggestion, please do consider whenever you take the final decision after clarity comes through.

    Wish you and everybody good luck in the markets!

    ReplyDelete
    Replies
    1. As ordinary individuals we have lot of limitation to deal with top bureaucracy and this may be tough compared with institutions or people with deep pockets. Anyway , will try for that .Let us wait and see.

      Delete
  46. How sebi allowed the promoters and their friends to subscribe to pref. shares below market price i.e. Rs.3 ?

    ReplyDelete
  47. Dear VP Sir,

    Shall I hold this stock or sell as price is coming down??

    Please advise

    Thanks

    ReplyDelete
  48. Dear VP Sir, Bilcare have become half from your recomended value, Need your advise please.

    Rgds

    ReplyDelete

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