AMBUJA CEMENT TO CRACK HARD 10 - 20 % TOMMORW PURE :( cheating of minority investors

  The much awaited announcement by Holcim has come out with the announcement of a restructuring where it will basically end up cleaning up the cash of Ambuja Cements.

This is the link on the proposed deal.

http://www.moneycontrol.com/news/business/holcim-ups-stakeambuja-cements_924432.html

This is the view from Anil Singhvi – ex CEO and MD of Ambuja Cements has lashed the holcim management as he sees no advantage in the Holcim – Ambuja merger. He calls this as a fraud on minority shareholders.

http://www.moneycontrol.com/news/business/see-no-advantageholcim-ambuja-merger-anil-singhvi_924520.html

Although Holcim owns majority stake in Ambuja Cements for last many years and it might be hurting to see the accumulated cash of 3800 crores lying unused So this deal augurs really well for Holcim and anyways who cares for the minority shareholders in India
Can any body be looking into this deal and stop such a hit on minority shareholders ?

The worst part about the decision is got a rumour in the day that Ambuja Cements may crack sharply tomorrow and the news has come out to be unfavorable !! How come some speculators are privy to such information.

Also more surprising is the fact stock rallied from 170 to 210 in last month. In last four days it has fallen from 212 to 190.
Was this a trap ? done by insiders or market players

A fall tomorrow seems inevitable but the extent is what market will decide. Some people expect a drop of 10-20% or even more.

This will be an interesting case. Will there be some activism and stop it ?

In India many promoters tend to screw minority shareholders through warrants, siphoning, royalty, pledging, CEO salaries and various ways. But when one sees large companies end up doing the same it is high time there is some activism and regulation. In another post will try to pick out some recent instances.

A BSE listed company uses cash to buy real estate ! after selling of the company !
A BSE listed company has a 90 cr theft loss and no FIR
A BSE listed company pays CEO 70 crores a year.
There are 10 BSE listed companies with the same address.

If time permits will write a post on the above.

There is a nice saying in India Businesses go Bankrupt and Promoters never Bank – Rupt in India means the Bank foots the bill ( NPAs and NPAs )

Wockhard collapses 20% in a day and 70% from Peak. Further dips a buying zone at 650-550

In the last couple of years the biggest gainer was Wockhardt moving from 300-500 zones to 2000-2200.
Mind you in 2008 it was one of the biggest pharma losers falling from 450 to 70 rs.

In the start of 2013 we saw a slew of reports on the stock at 1200-2200 levels Some targets may have been achieved but broking firms generally do not shift from a Buy to Sell directly and keep revising targets so that they keep getting access to the management.

One of the biggest initiation at top came by Bank of America Merill Lynch at 1930 levels. http://www.moneycontrol.com/news/business/bofa-merrill-initiates-wockhardtbuy_843094.html

Emkay also did initiate a buy at 1500 and targets got achieved but i doubt they reverted to sell.

Since then we have seen a spate of bad news on the stock and has collapsed to 670-700 levels. Let us look at it technically.

-> The major breakout happened in the stock on sustaining 380-430 resistance band and 600 next. This was the first indication of a long term trend change giving major upsides.

-> The next big signal to sell came only at 1600-1700 levels which was very clear.

-> On a longer term basis the stock may find a lot of support at 600-500 levels. As a matter of fact it can be an excellent buying opportunity into the stock at those levels.

-> The forthy move is over and one may see good support around 600. Investors may actually accumulate the stock on further dips if one can digest a dip to 500 in worst case. Upside we could be looking at 800-900 or higher again.

-> The current down fall is a mix of bad news and over participation which happened at 1800-2200 levels.



Conclusion – This is purely a technical take on the stock and we may keep a deep 20% stoploss and accumulate between 650-550 with a longer term view and reduce holdings on rise to 750 to lower costs.

Reliance Capital – Range Breakout target 430/460

Reliance Capital

There are around 3-5 attempts at the 390-395 mark in the last 6 months. The last couple of times the stock saw a violent fall to 310-320 where it almost looks like a double bottom.

Sustaining 395 opens up a move to 430/460 in the short term and maybe higher also all the way to 500. Looks like a nice Channel / Range breakout or even a cup and handle.

Given the stock is highly volatile as always the case with ADAG group stocks keep a stop of 380.