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Deepak Kapur

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14 Jan, 10 tweets, 3 min read

https://twitter.com/VedikaBhaia/status/1481622731695493121

Anatomy of pump

Read below thread & articles

indiatimes.com/trending/socia…

scoopwhoop.com/women/how-mala…

dtnext.in/News/TopNews/2…

All identical. Many more links on net

Clearly co PR or cartel planting this misleading narrative on massive scale thru media/twitterati

Beware

#ccd

https://twitter.com/VedikaBhaia/status/1481622731695493121

How did the debt come down :

1) sale of stake held by co in Mindtree to LnT for ~ 2700 cr. This was actually done when VGS was still alive. just months b4 his unfortunate death

2) sale of real estate asset global village tech park to blackstone for approx EV 2000 - 2500 cr

3) CDE lost controlling stake in its subsidiary Sical Logistics as lenders invoked collateral shares. SCL had debt of 1500 cr which used 2 add 2 CDE consolidated debt

But no control = SL no longer subsidiary = it's debt can't show in consol debt of CDE. Just an accounting thing

So as you can see, most debt reduction has come from selliing prime non core assets. Not operating cash flows!

And another 1500 cr debt disappeared from book because they lost control of a subsidiary due to defauls

Malavika Hegde is in a tough spot and may be fighting hard to save CDE. There still are some other non core assets which can b sold to pay dues. But overall the CCD biz is struggling - unlike what the current narratives being planted by someone are saying

Look for yourself : the ccd operations are shrinking. This screenshot is from their annual report

Also even though networth is 3900 cr on consol basis, there are about 2700 cr of related party loans on asset side. These i think are part of what investigations revealed: some 3500 cr of loans to related party.

No news on how, if and when this money is coming back.

Other auditor qualifications in annual report also paint a pic of a company struggling with cash flows and many dues.

The last credit rating report also said : issuer not cooperating

There are just too many red flags.

The planted articles r trying to suggest the biz is turning around

I wish it does cause CCD has a lot of good memories. But then there r economic realities

& unlike the planted narrative, no investors pumped in money. I couldn't find ne news

The thread is not a recommendation to buy or sell. Do your own home work.

Atleast read the management's and auditors own words in the annual report.

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More from @tapak7

Deepak Kapur

@tapak7

11 Apr 21

#thread

I can't tell you how important it is to calculate your PMS/ RIA / AIF annual performance on post tax basis. Use this no to compare against benchmark

Benchmarked performance shown by PMS/AIFs/RIAs (including on SmallCase) is usually post fees & costs but NOT post taxes

The reason most don't talk about post tax performance is that for each client the tax implications will be different. hence it's messy. Fair enough

Therefore as a client it's for you to go back & c what the performance was post tax

Usually an index is used as benchmark to compare performance. Remember, when any PMS/AIF/RIA uses an index as benchmark, they are in some ways comparing how their active investing worked against just buy & hold index strategy

Read 15 tweets

Deepak Kapur

@tapak7

13 Mar 21

A thread on some observations from #Nazaratechnologies DRHP - largely to do with revenue analysis. The IPO notes of i-bankers aren't delving on these points. Since I noticed them, I am putting them out here.

(not an opinion or recco wrt to IPO)

Reported consolidated revenues:

Sep 2020 (6m) = 200 cr (~annualised 400 cr)
Mar 2020 (12m) = 248 cr
Mar 2019 (12m) = 170 cr
Mar 2018 (12 m) = 172 cr

Interesting insight into the 200 cr rev for 6 months ended Sep '20:

1) 79/200 cr is from segment 'gamified early learning'. This entire 79 cr is attributable to subsidiary, paper boat apps: makers of Kiddopia. Nazara owns 51% - acquired in '20. Entire 79 cr rev is from N America

Read 13 tweets

Deepak Kapur

@tapak7

3 Nov 20

Not one #lauruslabs bull speaks or deep dives the balance sheet.

So as someone with no position (past, current or expected in future) in LL I am going to highlight a red flag 🚩 - that's bothering me

A short thread....

It's is the cash & cash equivalents (C&CE) on B/S in context of narrative, that for me, is a BIG🚩. Here r figures

C&CE (cr)
Mar 17 - 4
Mar 18 - 3
Mar 19 - 3
Mar 20 - 2
Sep 20- 2

vs Sales (cr)
Mar 17 - 1900
Mar 18 - 2050
Mar 19 - 2300
Mar 20 - 2850
Sep 20 - 4200 (annualised)

The working capital of #lauruslabs (Inventory + Trade Receivables - Trade Payables):

Sep 2020: 1250 cr
Mar 2020: 1080 cr
Mar 2019: 900 cr

To support its recent & projected growth, JUST THE incremental WC need is almost 1 cr per day !!

Read 13 tweets

Deepak Kapur

@tapak7

17 Sep 20

Yesterday #snowflake IPO ~ $120. Closing share price ~ $250

Closing Mcap~ $70 bn
P/E: N/A
ttm P/S on close ~ 175x

By all reads / hears: Snowflake is a great biz & not a fly by night operator

So was Red Hat that did a IPO in 1999 : a short thread👇

In Aug '99 #RedHat went public. IPO~ $14. IPO day close~ $52.

Outstanding shares end August ~ 66.6 mn. ttm revenue ~ $13 mn. Loss making

So on IPO day close:

Mcap $3.5 bn
P/E: N/A
ttm P/S ~ 270x

By Nov/Dec the shares had touched ~ $140. Mcap > $10 bn

Due to exercise of ESOPS & conversion of preferred shares to common stock the total outstanding shares jumped to 153 mn by end Feb 2000

28 Feb 1999 shares were trading down at ~ $44. Mcap ~ $6.7 bn

Read 7 tweets

Deepak Kapur

@tapak7

3 Sep 20

#vodaidea is a delight to analyse from two perspectives: 1) #gametheory and 2) Soro's #reflexivity theory

some thoughts...

Competition would like Vodaidea gone. But Vodaidea has bought itself a couple of yrs of survival from AGR verdict as they will be able to raise enough funds to last a couple of years by convincing board that 'as ARPU's rise things will get better'

To kill Vodaidea competition needs to keep ARPUs low for 2 more years. But competition itself doesn't make enough money at these ARPUs. So will they want to self inflict pain for 2 more yrs?

Read 11 tweets

Deepak Kapur

@tapak7

22 Mar 20

@RBI

Forced selling by NBFC's who have loaned against shares (LAS) is exacerbating sell off in cash mkts. There is a case for RBI to reduce margin requirments for LAS to mitigate some of this stress with little impact to lenders @RBI @nsitharaman @FinMinIndia

I explain:

Currently RBI mandates that a minimum 50% LTV be maintained at any point for LAS. So if one borrowed 50 against share worth 100, then if share falls to 80, investor should bring in additional 10 as collateral. OTH, if share goes to 120, investor can borrow an additional 10!

With this rigid margining system, in a rapidly falling market, NBFCs r forced to sell collateralised shares if clients can't meet margin requirements within mandated time frames. While forced selling is theoretically possible, r markets clearly lack ability to absorb this selling

Read 11 tweets

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