BSEIndia: All Stock Market News: 07/18/08

Friday, July 18, 2008

DG - DLF History

DLF Ltd has informed BSE that a meeting of the Board of Directors of
 the Company will be held on July 10, 2008, to consider and approve the
 proposal for Buy-back of equity shares of the Company. Currently, the
 promoters holding is ~88%. If the company purchases shares and the
 promoter's holding goes beyond 90% then DLF might get delisted again.
 I'm saying again because, DLF was delisted in 1984 due to d same reason
 that promoter holding was >90%. Feedbacks

 welcomed.
 Class action needed to restore investor confidence26 Jun, 2006
 While
 the Indian capital market seems to be recovering from a savage
 correction, the mega issue of DLF Universal may have run into bigger
 trouble. The Securities and Exchange Board of India (Sebi) is
 understood to have tossed the decision of clearing its public offer to
 the Ministry of Company Affairs (MCA). Since the company is currently
 unlisted, the MCA is probably the right forum for dealing with investor
 complaints.
   
 Sebi has asked the MCA to decide whether the company
 should be allowed to list and go ahead with what will be India's
 biggest issue to raise an estimated Rs 13,600 crore by issuing 20.2
 crore equity shares to the public with a two rupee face value. Since
 the IPO document has to come back to Sebi for its clearance, it is
 obvious that DLF's listing plans have received a big setback.
   
 Here
 is a look at what

 DLF's minority shareholders have to say. The
 promoters of DLF today own 99.5% of its equity. The remaining 0.5% is
 held by investors who chose to stay on when DLF delisted the shares.
 DLF was a listed company until 2002-03, but its promoters increased
 their holding beyond 90%, admittedly in violation of Sebi's Takeover
 Code. They admitted the lapse, paid a fine of Rs 5 lakh and made an
 open offer to the public at Rs 320 per share to buy out minority
 shareholders and went private.
   
 Around 1,308 shareholders chose
 to hang on to their shares. Such shareholders invariably lose many of
 the privileges available to investors of listed companies, but since
 DLF intends to raise public money again—that too within three years of
 its September 2003 delisting—it cannot get away by leaving residual
 shareholders in the lurch.
   
 These shareholders allege that the
 company made a rights issue of partially

 convertible debentures in a
 1:1 ratio last year, but omitted to post the offer letter to 90% of the
 minority investors. The lucky 10% who got the letters and will profit
 enormously are all closely connected with the company. These debentures
 have since been converted into 10 equity shares each. Further, the
 company made a bonus issue in the ratio of 7:1 and then split the face
 value of shares to Rs 2 each.
   
 Those who did not get the rights
 offer were thus deprived of 400 shares each against each share held on
 the record date. Since the promoter holding is 99.5%, it is clear they
 did not want to share the bonanza emanating from their massive capital
 restructuring exercise with the 1,308 investors who clung on to their
 share holding.
   
 DLF's vice chairman Rajiv Singh insisted to us
 that the Offer Letters had been posted and that investors failed to
 apply for debentures because they did not see value in

 the company. He
 also says that several of these investors are brokers who simply
 misjudged the rights offer.
   
 But the company took care to
 build-in serious disincentives. The partly convertible debentures
 carried a 2% interest and were to be convertible anytime over the next
 20 years. The letter also made the misleading claim that the company
 had no plans to re-list its shares on the stock exchanges. Naturally,
 minority shareholders have written to Sebi alleging breach of trust.
   
 DLF's
 claims about having sent the Offer Letter are also debatable since I
 have received several letters from genuine investors such as Kiran
 Parghi who holds 40 shares or Major Jasbir Singh (retd.) who are
 ordinary investors who have not received their offer letters.
   
 The
 Midas Touch investors' association has a different allegation. It has
 written to Sebi saying that DLF's Earning Per Share (EPS) stated as

 Rs
 12.84 is misleading and it ought to be Rs 1.32 as per Sebi guidelines.
   
 It
 may well be that allegations against DLF are extra shrill because the
 incredible post-listing valuations reported by the media has heightened
 the sense of loss. Clearly, if the offers were not posted, investors
 have a right to demand restitution.
   
 The speed with which the IPO has been finalised shows that listing was part of
 the agenda even when the rights offer was made.
   
 Things
 have changed a bit since the media predicted stratospheric valuations
 for DLF and its Rs 60,000 crore land bank. The market is volatile and
 shaky and the very institutional investors who were hot on the chase of
 realty investments are now using their clout to beat down valuations.
 In a booming capital market and in the midst of a realty bubble, DLF
 may manage to fend off these charges and even get a clearance from the
 MCA, but it doesn't bode

 well in the long term if the company is seen
 as one that does not care about its minority shareholders.
   
 Companies
 such as Infosys have made millionaires out of thousands of investors,
 while DLF's promoters want a place in the global rich list while
 depriving 1200 of its die-hard investors their claim to justifiable
 profits. If the company is allowed to get away with this, it would make
 a mockery of investor protection rules. Worse, it would encourage more
 companies to delist shares, restructure capital and go public
 again—always at the cost of minority shareholders.
   
 Ideally, the
 regulators should take a leaf out of the Reserve Bank of India's book
 (the RBI recently ordered Citibank to ensure that every single credit
 card holder who qualified under the Fly-For-Sure scheme was given the
 free air tickets promised to them) and force the company to compensate
 investors through the promoters'

 substantial shareholding. Only then
 should the company be allowed to go public.
  In fact, large
 institutional investors must also support such restitution by the
 company, instead of committing substantial investments prior to the
 issue. After all good corporate governance will benefit all investors
 over the long run

__._,_.___

Messages in this topic (1) Reply (via web post) | Start a new topic

Messages | Database | Polls

Regards

BigGains !!

MARKETPLACE

Yahoo! Groups users, take advantage of a free trial offer from Blockbuster!

Change settings via the Web (Yahoo! ID required)
Change settings via email: Switch delivery to Daily Digest | Switch format to Traditional
Visit Your Group | Yahoo! Groups Terms of Use | Unsubscribe

__,_._,___

DG - FW: Sharekhan Post-Market Report dated July 18, 2008

From: The Sharekhan Research Team [mailto:marketwatch@research.sharekhan.com]
Sent: 18 July 2008 16:52
To: The Sharekhan Research Team
Subject: Sharekhan Post-Market Report dated July 18, 2008

Sharekhan's daily newsletter

Visit us at www.sharekhan.com

July 18, 2008

Index Performance

Index	Sensex	Nifty
Open	13,234.53	3,962.95
High	13,684.27	4,110.55
Low	13,093.34	3,926.30
Today's Cls	13,635.40	4,092.25
Prev Cls	13,111.85	3,947.20
Change	523.55	145.05
% Change	3.99	3.67

Market Indicators

Top Movers (Group A)
Company	Price (Rs)	% chg
Gainers
IDFC	109.70	15.47
ICICI Bank	617.60	12.05
Indian Bank	89.00	10.08
Essar Shipping	105.65	9.99
HDFC	2,067.55	9.47
Losers
Satyam Computer	385.95	-7.51
Tata Chemicals	254.25	-6.16
HCL Tech	201.10	-5.85
Bajaj Hindusthan	143.85	-3.81
Wipro	365.55	-3.75

Market Statistics
-	BSE	NSE
Advances	1,616	795
Declines	980	384
Unchanged	90	43
Volume(Nos)	28.05cr	54.63cr

Market Commentary

Volatile market ends buoyant

Led by buying in banking and realty stocks, Sensex recovered smartly in the afternoon and ended firm at 13,635.

Sensex wiped out losses of over 1,000 points incurred by it in the last five sessions, after a strong bout of buying led by banking, realty, public sector unit and oil & gas

stocks triggered a wide-spread buying.

In a highly volatile trading session, Sensex resumed 123 points higher at 13,235 following weakness in Asian indices and crashed to the day's low of 13,093 on relentless selling. While the market was on a recovery path thereafter, the Sensex witnessed a sharp turnaround in the afternoon as gains in heavyweights and banking and realty stocks propelled it to an intra-day high of 13,684. After gyrating 591 points during the intra-day trades, Sensex gained 524 points to close at 13,635, while Nifty ended 145 points higher at 4,092.

The market breadth was positive. Of the 2,686 stocks traded on the BSE 1,616 stocks advanced, 980 stocks declined and 90 stocks ended unchanged. Except the BSE Metal and BSE IT indexes, other sectoral indices ended positive. The BSE Bankex index led the pack and gained 8.02% at 6,186 followed by the BSE Realty index (up 5.52% at 4,428) and the BSE PSU index (up 4.30% at 5,866.67).

ICICI Bank was the star performer among the heavyweights and the stock soared 12.05% at Rs617.60. Among the other major gainers, HDFC advanced 9.47% at Rs2,067.55, HDFC Bank jumped 7.87% at Rs1,033.55, Jaiprakash Associates rose 7.72% at Rs160.55, Bharti Airtel moved up by 7.10% at Rs802, DLF advanced 6.99% at Rs457.05 and Reliance Infra added 6.07% at Rs855.65. While State Bank of India (SBI), Bharat Heavy Electricals Ltd, ITC, National Thermal Power Corporation, Reliance Industries, Oil and Natural Gas Corporation, Larsen & Toubro, Reliance Communications and Maruti Suzuki India ended with a gain of over 4-5%.

Banking stocks were in demand and scaled higher. Yes Bank soared 8.93% at Rs120.20, Axis Bank flared up 8.07% at Rs686.80, HDFC Bank added 7.87% at Rs1,033.55, Punjab National Bank gained 7.56% at Rs440.45 and UBI was up 6.62% at Rs115.20. In realty pack, Ansal zoomed 7.83% at Rs93.60, Indiabulls Realestate shot up by 7.62% at Rs290.25, DLF Infraprojects rose 6.99% at Rs457.05 and HDIL gained 4.99% at Rs431.35.

European Indices at 16:26 IST on 18-07-2008

Index	Level	Change (pts)	Change (%)
FTSE 100 Index	5283.70	-2.60	-0.05
CAC 40 Index	4248.27	22.28	0.53
DAX Index	6288.99	17.72	0.28

Asian Indices at close on 18-07-2008

Index	Level	Change (pts)	Change (%)
Nikkei 225	12803.70	-84.25	-0.65
Hang Seng Index	21874.19	139.47	0.64
Kospi Index	1509.99	-15.57	-1.02
Straits Times Index	2847.73	-16.37	-0.57
Jakarta Composite Index	2141.13	-26.57	-1.23

To know more about our products and services, click here.

“This document has been prepared by Sharekhan Ltd. This Document is subject to changes without prior notice and is intended only for the person or entity to which it is addressed to and may contain confidential and/or privileged material and is not for any type of circulation. Any review, retransmission, or any other use is prohibited. Kindly note that this document does not constitute an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction.
Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. SHAREKHAN will not treat recipients as customers by virtue of their receiving this report.
The information contained herein is from publicly available data or other sources believed to be reliable. While we would endeavour to update the information herein on reasonable basis, SHAREKHAN, its subsidiaries and associated companies, their directors and employees (“SHAREKHAN and affiliates”) are under no obligation to update or keep the information current. Also, there may be regulatory, compliance, or other reasons that may prevent SHAREKHAN and affiliates from doing so. We do not represent that information contained herein is accurate or complete and it should not be relied upon as such. This document is prepared for assistance only and is not intended to be and must not alone betaken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. We do not undertake to advise you as to any change of our views. Affiliates of Sharekhan may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report.
This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject SHAREKHAN and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.
SHAREKHAN & affiliates may have used the information set forth herein before publication and may have positions in, may from time to time purchase or sell or may be materially interested in any of the securities mentioned or related securities. SHAREKHAN may from time to time solicit from, or perform investment banking, or other services for, any company mentioned herein. Without limiting any of the foregoing, in no event shall SHAREKHAN, any of its affiliates or any third party involved in, or related to, computing or compiling the information have any liability for any damages of any kind. Any comments or statements made herein are those of the analyst and do not necessarily reflect those of SHAREKHAN.”

To unsubscribe write to myaccount@sharekhan.com