The wonderful world of Indian Business - 1

In continuation to earlier posts, below video is a connecting point.

The wonderful world of Indian Business

1. How Authum acquired Reliance Commercial Finance is covered in detail in the Business World article : Anil Ambani Group Secure Rs 1,043 Cr Investment From Authum's Reliance Commercial Finance. The article is worth reading to understand how the Reliance Commercial Finance was acquired and how preference shares were issued to Authum after clearance from the Board.

2. Who is Authum: Authum Investment & Infrastructure Ltd is a listed company (BSE: 539177). Promoters Alpana Sanjay Dangi. Alpana Sanjay Dangi is wife of Sanjay Dangi.

3. Who is Sanjay Dangi? A detailed article on Sanjay Dangi was covered in Moneylife (Sucheta Dalal and Debashis Basu). Article: Sanjay Dangi, another barred market manipulator, still pulling strings. The article covers many of the deals covered and handled by Sanjay Dangi. Another article from Business Today: Top bidder for Reliance Home Fin wife of once banned investor Sanjay Dangi.
4. Authum Balance Sheet and Profit & Loss Account from Screener.in

Suddenly in the year March 2020 onwards there is an inflow of funds as borrowings which starts from INR 273 crores and reaches to INR 970 Crores in March 2023. Investments in the company starts from INR 330 Crores and reaches INR 3,593 Crores in the year March 2023.

5. Share price of Authum:

 

Share price of Authum moved from INR 4.1 in March 2020 to INR 465 IN 26 Aug 2023. Note: There is a 100 times growth in a span of 3 years.

6.  Main question: How a listed company with Share capital and Reserves of INR 50 Crores in March 2019 (almost same from March 2012) increased to INR 3,000 Crores approx. in the year 2022. In the year 2023 it lend INR 1,043 Crores to Anil Ambani Group. Does an unknown entity with a market cap of INR 77 Crores approx.. in March 2020 has the audacity to lent INR 1,073 Croes to Anil Ambani Group. Can Anil Ambani group accept that its dealing with Authum a INR 77 Crores company.

7.  What we have to do is to connect the dots………

8.  As the Business Standard article states Upon completion of this transaction, Reliance Commercial will possess an 11 per cent ownership stake in Reliance Infrastructure and a two per cent stake in Reliance Power. Remember when you speak of Reliance Commercial it is Authum.

9.   Authum received funds before March 2020, and invested since then heavily. Someone guided that when there is blood on the streets invest heavily.

10. How it happened:  Authum an unknown micro-cap listed entity receives funds. Funds are invested in Market during the start of Covid. Market recovers. Authum grows to a small cap. In the mean time it acquires Reliance Commercial. Finally, it lends to Anil Ambani Group.  

Note: The post is with an intention to learn and not raise fingers. 

Learnings from an Article

 An article in theWire.in has thrown many sides of the deal making. The article is very lengthy and lots of information floats.

The learning from the article is:

1. How an entrepreneur keeps vigil?

2. How change in political leadership changes state policy?

3. Emergence of a new business leader has to be blessed by a political party in India.

4. Vulnerability of business houses if they are associated with only one political party.

5. Innocent citizens, who vote based on freebies and are taken for a ride.

6. Misleading heading of the article hides the truth as they do not want to invite trouble.

Worth reading.

Adani’s Acquisitions: Inside the Company’s Growth Machine

Source: Debashis Basu

How Debt Hurts?

Please read the below article by Shripal with respect to the perils of debt. 

When celebrities are not left out where does an ordinary individual stand.

Learning:

1. Debt hurts badly.

2. You don't handle Debt, Debt handles you.

2. Expansion and Growth at any cost can push one to debt trap.

4. Organic growth is more beneficial in the long run.

Worth reading.

Link to the LinkedIn written by Shripal Morakhia (SMAAASH Entertainment) is provided below:

Another victim

Source: Alphaideas