Forbes Company - A Dark Horse
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Category: Investment Ideas - Creating winning portfolios!
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Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
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Printed Date: 24/Apr/2024 at 10:06am
Topic: Forbes Company - A Dark Horse
Posted By: shivkumar
Subject: Forbes Company - A Dark Horse
Date Posted: 25/Dec/2007 at 11:32pm
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Analysis of Forbes Company Date: December 24, 2007 Closing price: Rs 560.55 Description: The Shapoorji Pallonjee Group which took over Forbes Company from the Tatas has begun a process of unlocking value within the company. Earlier in 2007, the promoters who have a 73 per cent stake in Forbes Company (formerly known as Forbes Gokak), de-merged its subsidiary Gokak Textiles into a separate company. The Board of Directors of the Forbes is mulling ways to unlock more value into the company by way of de-merging more subsidiaries. Some of the company’s profitable divisions are also likely to be hived off into separate companies unlocking further value. At the closing price of Rs 560.55 on December 24, 2007, the market cap of Forbes Company is a mere Rs 723 crore. Though its present price to earnings ratio is high 40.13, I believe the markets have discounted only a tiny part of the company’s hidden value. Here’s list of the hidden gems I have managed to uncover so far: 1. Eureka Forbes A major player in the drinking water supply category, Eureka Forbes enjoys tremendous brand recall. Eureka Forbes which has brands like Aqua Guard has been growing at the rate of 35 per cent CAGR of top line and bottom line for the past five years. Its turnover for the FY07 was Rs 740 crores with PBDT OF Rs 48 crores and PAT of Rs 26 crores. Eureka Forbes is also in the water treatment business with its subsidiaries, Forbes Aquamall Ltd and Aquamall Water Solutions Ltd, which are 100 per cent wholly owned subsidiaries. In FY 07 Aquamall Water Solutions earned a PAT of Rs 10.5 crores on a turnover of Rs 181 crores while Forbes Aquamall Ltd earned a PAT of Rs 1.35 crores on a turnover of Rs 15.50 Crore. (EPS for FY 07 from Eureka Forbes alone stood at around Rs 20 per share.) Apart from setting up operations in the Far East and Eastern Europe, Eureka Forbes has entered the appliance maintenance services sector which is seen as a sunrise sector. EF has a 70 per cent holding in Pro-Handyman which provides maintenance services for electrical appliances to hotels, commercial establishments and managed residences. To put EF’s value into perspective, Ion Exchange another player in the water treatment business has a P/E ratio of 36. 2. Svadeshi Mills Ltd Svadeshi Mills Ltd, a subsidiary of Forbes Company, has wound up long ago and the liquidation process of the company is under progress. The liquidator has sold off the plant and machinery of the company to pay off the dues of employees. After surrendering part of the land (in prime Kurla area) to the Mumbai municipal corporation, the company is left with five acres of land for development. However the land remains encumbered as the liquidator has formally clear development of this property. Going by the valuations of similar property under development by Swan Mills, the Svadeshi Mills plot should yield at least Rs 1500 crore to the developer. It may be noted that Shapoorjee Pallonjee, the promoter of Forbes is a prominent real estate developer of Mumbai. 3. Other Subsidiaries Forbes Company has also ventured in to the shipping and logistics business and publishing. While Forbes Patvolk, the company’s shipping division is one of the oldest players in the business, Forbes Company has a profitable subsidiary called Forbes Sterling Star which operates in the shipping container business. The company has also signed a partnership with Shipping Corporation of India to purchase and operate ships with the first vessel coming by mid-2009. PAT from these subsidiaries during FY 07 amount to more than Rs 18 crores. EPS of Forbes Company taking into account income from all its subsidiaries alone will account for about Rs 38. Even without accounting for the potential upside from the value of land at Kurla, shares of Forbes Company is available at a P/E of 10. De-merger of Eureka Forbes alone will result in a spurt in the company’s share price since it is present in a high growth area. To summarise, the promoters are old Parsi business family from Mumbai known for their integrity. They own 18 per cent of Tata Sons, the holding company of Tata Group. However they are quite conservative and do not interact with analysts or the media. Apart from the hidden gems, Forbes Company’s own core business in the precision tools, business automation and energy systems sectors may see an upside following increased investments in infrastructure. The re-organization of Forbes Company into different verticals will see tremendous value unlocking. But it will sorely test the patience of an investor looking for short-term gains. TRIGGERS: De-merger of Eureka Forbes from Forbes Company. Government permission to develop land belonging to Svadeshi Mills at Kurla. |
Replies:
Posted By: shetty
Date Posted: 25/Dec/2007 at 7:26am
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Shivji,
There is a problem with Swadeshi Mills. It is actually a listed company. Forbes has a stake of about 7o% stake in the mills. It is under liquidation. Forbes has basically given up on Swadeshi Mills. There are about 3000 employees who have not been paid wages since 1998. Also a large number of secured and unsecured creditors are there. At the end of the liquidation Forbes will not get anything from Swadeshi. The shipping business may actually be a goldmine. They have a lot of assets. Buildings, land, flats etc. bought years ago. They have a Container Freight station which is a cash cow. The valuations will have to be comparable with that of the CFS of Gateway Distripaks and All Cargo as it is identical. The textile business which orignaly was the main business has turned around. It also has a textile machinery business which is also doing well. Small bit businesses like Bradma are being wound up. The problem here is that it is vey difficult to value this company. There are too many companies. |
Posted By: swapan
Date Posted: 25/Dec/2007 at 9:54am
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Nice analysis Shiv.
Not many know that Shapoorji Paloonji owns more of Tata Sons than Ratan Tata himself !
Forbes also has a stake in Next Gen Publishing house which is another high growth area, though I believe the business is very small currently.
From which source did you get the information on swadeshi mills ?
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Posted By: shivkumar
Date Posted: 25/Dec/2007 at 10:03am
info on svadeshi mills is available on forbes annual report. you may also google swadeshi/svadeshi mills land, etc and you will be able to piece together in the info. |
Posted By: shivkumar
Date Posted: 25/Dec/2007 at 10:08am
that is why Forbes is a dark horse. people overlook forbes to concentrate on other sprinters in the bull run presenting opportunities for value hunters. Hope the promoters speed up the restructuring process. |
Posted By: swapan
Date Posted: 03/Jan/2008 at 9:54am
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Shiv,
Thanks ! This one seems to be rerated up ! It is currently quoting at 900 ! Usually I never buy till a week without putting in more research and I have lost quite a few good opportunities because of that in this bull market.
For a change I bought this (albeit a small quantity) immediately after your write up and I am glad I did ;-)
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Posted By: shivkumar
Date Posted: 03/Jan/2008 at 10:09am
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nice to know someone has benefited from my advice. also thank basant for this since he has created a forum of mutual benefit. now hold on to forbes company. shipping companies are getting re-rated in a big way. also forbes is expanding operations at mundra port and at jnpt in a big way. |
Posted By: smartcat
Date Posted: 03/Jan/2008 at 11:24am
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Forbes Co is a diversified company with multiple business interests, and generally, I tend to like such companies. Although Eureka Forbes is a consumer durable company, I like the way they market their products (Vaccum cleaner & Aquaguard). It would be interesting to know what kind of marketshare these two brands have.
Shipping and logistics business too looks interesting. But the land story is not - it might take some time to generate revenues.
However, there is something to remember - this company has been around for ages, and its turnover last year was hardly Rs. 700 crores. Net profit has actually fallen last year. |
Posted By: shetty
Date Posted: 04/Jan/2008 at 12:06pm
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Forbes Gokak was originally known as Forbes Campbell. It is the second oldest Company in India, almost 200 years old.
Huge assets, but makes very little money. Eureka Forbes has hit a rough patch. It was a 50 50 joint venture with Elecrolux. now 100% owned by forbes. They dont seem to be upgrading their machines. They created the market and were a monoply in vaccum cleaners. With competition and limited technological upgrdes, they are loosing market share. Swadeshi Mills is a black hole, from which no one will make money. Almost 1500 employees drawign an average pay of Rs. 15000/- in 1998 have not been paid a single pie. In fact 15 - 20 employees comitted suicide. There was a big controversy on this. They were one of the biggest agents for foreign shipping companies. But now the shipping companies have their own subsidaries. so forbes basically lost out. They have moved into CFS, but lack the management skills to compete with Gateway Distripaks, Maersk etc. Less said of the textile business teh better. Though they are making money. But the Company has unbelivable real estate. A large plot facing the Arabian sea near Gatewy of India etc. |
Posted By: smartcat
Date Posted: 04/Jan/2008 at 12:22pm
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Eureka Forbes will lose marketshare when new competition comes in. But I think they are still launching new innovative products, especially in the water purifier segment. What's heartening is that you will rarely see any other brand other than Aquaguard in small/medium sized hotels. This division might grow at 20 - 25% every year. Unless there is clarity on development of mill land, the markets will continue to ignore the land bank. Do you have any idea on when the development of this land will start? It might take years! However, the land value will keep appreciating every year.
Management might be honest. But honest management with little business acumen (200 yrs old, Rs. 700 crores turnover) can rarely create long term wealth.
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Posted By: shetty
Date Posted: 04/Jan/2008 at 12:46pm
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Swadeshi Mills is a separate Company which was listed. Forbes has some 50% to 70% of the Company.
It is in liquidation. Official liquidator has been appointed. So all decisiosns will be taken by the liquidator. When the sale happens, first the bankers will take the money, then state governemnt taxes, municpal taxes, income tax, electricity bils etc., employees dues, secured creditors and then unsecured creditors. What remains will come to Forbes. Only as much as they have a shareholding! Half the land of the Kurla mill which is the prime proerty is encroached. Even if Shapoorji develops it, the money from the development will not come into Forbes. But Forbes itself has a lot of land apart from this which it has no intention of developing! With Shapoorji owning almost 75% of the Company he may actually delist after a public offer. The Company Secretary called up all the large sharholders when Forbes was trading at 100 and offerring to buy their shares. |
Posted By: johnnybravo
Date Posted: 04/Jan/2008 at 1:22pm
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Not sure of this company, but Aquaguard is a big big brand. People don't ask 'water filter lagaya kya, they ask Aquaguard hai kya' ... Quality is a different issue though! |
Posted By: shivkumar
Date Posted: 04/Jan/2008 at 10:47pm
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eureka forbes and aquamall which is getting into large-scale water purification projects for companies and housing societies will be the major money spinners of forbes. The shipping and logistics division will be the other big money spinner when hived off. I expect these to be spun off the way Gokak Mills were hived off last year. forbes' other businesses and even the five acre land at Kurla are plain icing on the cake. I expect the management to test the patience of investors when it comes to spinning off subsidiaries. But at the last board meeting it was decided that it would consider restructuring the company. |
Posted By: shetty
Date Posted: 04/Jan/2008 at 10:50pm
| Shivji Forbes has no land in Kurla. It belongs to Swadeshi Mills. |
Posted By: shivkumar
Date Posted: 04/Jan/2008 at 10:56pm
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yes, the land belongs to swadeshi mills in which forbes has a substantial share holding. Forbes expects to develop this land as and when the liquidator give the green signal. All the dues pertaining to workers, debtors, etc have been paid off. Some two-thirds of the original 22 acres have been surrendered to the authorities to create infrastructure. And Forbes is left with five acres for development. This is much is very clear from the company's annual report. You may download it from the company website. Considering that other mills in the area have attracted great valuation, Forbes should not be lagging behind. If anything, Forbes should get better valuation because of the land surrendered to civic authorities to create infrastructure. This would make any project very attractive. What only remains is government clearance. My guess is that some politician needs to be bribed to obtain this clearance. Remains to be seen when and how much cash the promoters' family shells out the right people. |
Posted By: shetty
Date Posted: 04/Jan/2008 at 11:15am
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Shivji, I have downloaded the report for 2006-2007 from the website.
Couldnt find any reference to the land. Kindly enlighten me where the reference to the 5 acres is. |
Posted By: shivkumar
Date Posted: 05/Jan/2008 at 3:37pm
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here are the published references to swadeshi mills land http://timesofindia.indiatimes.com/articleshow/14701207.cms http://www.mesn.org/articles/index.php?print/id:380 http://www.rediff.com/money/2002/apr/11mist.htm |
Posted By: swapan
Date Posted: 05/Jan/2008 at 11:12pm
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I found the below in one of the google groups. I lay no claims on in its accuracy, however since there is a lot of information it should be useful to someone trying to understand this company.
----------------------------------------------------
Before reading the report do understand there might be more real estate
which cannot be valued as there is a lack of information from the management about the same.Company is 200 year old and prime office space owned and occupied by it has not been valued by us.We have simply valued its swadeshi mills stake,Euraka forbes (100% stake) and its other known subsidaries.Doread the attached annual report before you make any query about the stock.Read the consolidated financial statements and notes from the auditors.Also refer the site of the comapny links given at the end for further info... At last we caught a multibagger-its indias oldest registered co.. **A 1200 cr sales after demerger and a 70 cr pbt company and a 40 cr pat refer the attached annual report for the latest annual consolidated results results submitted to the exchange are standalone Now the company owns 100% of euraka forbes(720 cr sales and 48 cr ebitda 26 cr net profit).stocks refer http://www.eurekaforbes.com/ - http://www.eurekaforbes.com/ for euraka financials http://www.eurekaforbes.com/aboutus/report05.php - http://www.eurekaforbes.com/aboutus/report05.php * *The Directors are pleased to submit their report and the audited * 40% of next gen publishing ** company has also set container freight stations in veshvi and co also holds 22% in swadeshi mills which owns 22 acres of prime land in also holds prime real estate in chandivali estate and thane in mumbai and in Value of forbes stake in swadeshi mills kurla land is pegged above of 1200 **49% in forbes infotainment which will be venturing in retail financial ** http://www.forbesinfotainment.com/vent_sretail.aspx - http://www.forbesinfotainment.com/vent_sretail.aspx Recognising the growing dominance of retail and its pervasive approach, FIL * The Forbes Group, founded in 1767 by John Forbes from Aberdeenshire, The Group is a professionally run conglomerate with interests in textiles, *The Forbes Group has a heritage of over 200 years and is totally committed * *The Present ** *Mission *Our Vision for Corporate and Social Excellence * check out the inbuilt value in the company's various businesses check the consolidated results in the second half of the reports attached* *re**fer these sites for additional info http://www.forbes.co.in/ - http://www.forbes.co.in/ http://www.forbesinfotainment.com/ - http://www.forbesinfotainment.com/ http://www.dhandhanadhan.com/ - http://www.dhandhanadhan.com/ Only Shapoorji paloonji interview in last 10 years do read this link as he http://www.rediff.com/money/2002/apr/11mist.htm - http://www.rediff.com/money/2002/apr/11mist.htm http://shapoorji.in/SPGroup/default.asp?pageid=5* - http://shapoorji.in/SPGroup/default.asp?pageid=5* *SOURCE THE NTC OWNS 27 ACRES NW DUE 2 SETTLEMENT BETWEEN THE ALL PARTIES . SOURCE ** http://www.dhandhanadhan.com/ - www.dhandhanadhan.com < http://www.dhandhanadhan.com,www.forbesindia.net/ - http://www.dhandhanadhan.com,www.forbesindia.net/ > http://www.forbesindia.net/ - www.forbesindia.net < http://www.dhandhanadhan.com,www.forbesindia.net/ - http://www.dhandhanadhan.com,www.forbesindia.net/ > http://www.ftlindia.com/ - http://www.ftlindia.com/ http://www.nextgenpublishing.in/ - http://www.nextgenpublishing.in w < http://www.sebi.gov.in/dp/nextgen.pdf.Next - http://www.sebi.gov.in/dp/nextgen.pdf.Next >ww.sebi.gov.in/dp/nextgen.pdf< http://www.sebi.gov.in/dp/nextgen.pdf.Next - http://www.sebi.gov.in/dp/nextgen.pdf.Next > [1] http://www.totem-forbes.com/ - www.totem-forbes.com [2]202.70.193.71:8080/company.html **[3] http://www.forbespatvolk**.com/ - http://www.forbespatvolk**.com/ [4] http://www.falindia.com/ - www.falindia.com [5] http://www.forbesinfotainment.com/ - www.forbesinfotainment.com [6] http://www.dhandhandhan.com/ - www.dhandhandhan.com [7] http://www.aquamall.com/ - www.aquamall.com http://www.expresstravelworld.com/200712/market04.shtml - http://www.expresstravelworld.com/200712/market04.shtml |
Posted By: shetty
Date Posted: 08/Jan/2008 at 11:11am
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You have mentioned at at least two posts that the balance sheet of Forbes says that they are entitled to 5 acres.
Please dont make statements if you are not aware. 5 acres have never been and till date the offical liquidator is not proposing to do allot 5 acres to Forbes. |
Posted By: shivkumar
Date Posted: 08/Jan/2008 at 11:29am
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sorry abt wrong attribution. But here are the references on svadeshi mills' land. -------------------------- *REFER PAGE 11 OF THE ANNUAL REPORT > > 16.4.Assets of The Svadeshi Mills Company Limited continue to be in the hands of the Official Liquidator, High Court, Bombay, who has effected a sale of part of the assets i.e. plant and machinery and has distributed proceeds to employees. The process of realisation of balance assets is expected to be long drawn, as it involves several agencies and complicated legal issues -------------------- http://www.mesn.org/articles/index.php?print/id:380 (article from DNA newspaper) Let us understand this with three live cases. Between 1991 and 2001, three mills actually opted for this manner of redevelopment of their lands. The owners of Swadeshi Mills at Kurla handed over 22,000 sq m (approximately 5.4 acre) each to the BMC and the MHADA, while retaining the same area of land admeasuring 5.4 acre for his private development plans. This was necessary since the mill razed all existing structures as part of its redevelopment plan. |
Posted By: shetty
Date Posted: 09/Jan/2008 at 12:51pm
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The retention of 5 acres is of the mill land. The land is retained by Swadeshi Mills. Apart from mill land, there is residential colony land that is yet to be sorted out. Then there is some land that has been encroached. Swadeshi issue is a mess. Everyone will end up lossing money. Only the enroachers and the babus will gain. |
Posted By: shetty
Date Posted: 09/Jan/2008 at 12:54pm
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Forgot to add. forbes land assets if fully valued would ensure that the share price would be priced upwards of Rs. 5000/-.
But what do the Shapoorjis intend to do???? |
Posted By: shivkumar
Date Posted: 09/Jan/2008 at 2:53pm
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One is waiting for the Shapoorjis to begin unlocking value in the company. As we all know, Pallonjee wants to take out as much cash out of his company as possible. Last week Ratan Tata indicated that there won't be any IPO of Tata Sons. Pallonjee Mistry who owns 18 per cent must look elsewhere for cash. One is hoping that Forbes would be the horse that is flogged the hardest! |
Posted By: shetty
Date Posted: 09/Jan/2008 at 3:06pm
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Pallonjis son in law Noel Tata is set to succeed Ratan Tata.
So I personally feel that he may not do anything overt and cheat the shareholders. He woudnt want to jeopoardise Noel Tata's accession. But the probelm is that as soon as Shapoorji took over Forbes he formed a team who went about convincing all the large shareholders to sell their stake in Forbes to the Shapoorjis investment company. As a result floating stock is very low today. Lets wait and watch |
Posted By: shivkumar
Date Posted: 09/Jan/2008 at 3:19pm
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still the promoters own just 73.35 per cent of the company's shareholding with the remaining shares held by the public, PSUs, FIs, etc. While the promoters cannot be forced to unlock value, they cannot act like the Ruias of Essars have been doing for long. If one goes by their track record with Gokak Mills, the promoters' conduct was quite spotless. They could have royally gypped the small shareholders if they wanted to. |
Posted By: gopal
Date Posted: 30/Mar/2008 at 2:59pm
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shiv kumar bhai,
How much does forbes-gotak hold in forbes infotainment please do inform us all
How much does forbes-gotak hold in forbes technosys please do inform us all
:) ------------- Women are like the stock market Coz they're irrational n can bankrupt u if u're not careful |
Posted By: Ajith
Date Posted: 30/Mar/2008 at 5:20pm
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Hugely undervalued but will it delist like JK Investors?In any case little to lose from current levels. ------------- Ajith |
Posted By: shivkumar
Date Posted: 30/Mar/2008 at 5:28pm
Forbes holds 49 per cent in Forbes infotainment and 100 per cent in Forbes technosys. |
Posted By: shivkumar
Date Posted: 30/Mar/2008 at 5:29pm
| can't say if it will delist. but the company secretary has been trying to coax large shareholders to sell out for many years. |
Posted By: gopal
Date Posted: 30/Mar/2008 at 6:52pm
Ajith Bhai / Shivkumar bhai,
On one hand you are mentioning that stock is hugely undervalued .... but then why is it currently trading at Rs475/- at a 52 PE
don't you both think PE of 52 is very high
By the way does forbes hold shares in Shapoorji Pallonji Group
or does Shapoorji Pallonji Group hold shares in forbes group
I went through the annual report of Forbes group but it is not clear on its holdings and also on holding percentages in other forbes companies / Shapoorji Pallonji Group
I have tried to name few companies in the report, please inform if I have missed any. Can some one please kindly inform how much percentage Forbes holds in each of these companies, thanks
Name of Company :: Nature of Business
The Forbes Group comprises primarily of 4 divisions Forbes Textiles Gokak Mills
Forbes Cambell Knitwear Upmarket Brand Division Forbes Apparel Brand Forbes Canvas Forbes Engineering Forbes Precision Tools
Forbes Bradma Automation Forbes Agencies Division Forbes Patvolk Shipping Seaspeed Shipping Agencies Ltd
Forvol International Services ltd Barwill Forbes Shipping Services Ltd Forbes Sterling Star Ltd Forbes Group Companies Eureka Forbes Ltd
Facit Asia Limited Nypro Forbes Ltd NEX GEN THNX in advance
------------- Women are like the stock market Coz they're irrational n can bankrupt u if u're not careful |
Posted By: Ajith
Date Posted: 30/Mar/2008 at 7:28pm
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Gopalji, From Shivkumarji 's posts ,I could get a lot of additional information on Forbes which I have been following superficially for the past few years without actually buying it. PE is just 1 tool which can be misleading.Eureka Forbes,land,other businesses,eminent promoters make the company undervalued. But the question remains whether the promoters want to share the wealth with minority shareholders. If the answer is no , thats why the share is undervalued and it will remain so except for the difference in exit price.Else its a great long term buy. ------------- Ajith |
Posted By: gopal
Date Posted: 30/Mar/2008 at 8:13pm
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There is news article saying that Gokak textiles is separate from forbes and that forbes has transferred all its interest in it to Gokak textiles
Gokak Textiles to start trading today
2008-03-19 08:02:01 Source : moneycontrol.com
<SCRIPT src="http://img1.moneycontrol.com/news/news_inside_google.js">
Gokak http://www.moneycontrol.com/india/news/market-news/gokak-textiles-to-start-trading-today/331961# - - Textiles will start trading from today after the scheme of arrangements. The BSE ID is 532957. http://www.moneycontrol.com/india/stockpricequote/textiles-spinning-cotton-blended/forbes-gokak/16/04/FG - has transferred textile division to Gokak Textiles. The particulars of the Scheme of Arrangement are as mentioned below:
------------- Women are like the stock market Coz they're irrational n can bankrupt u if u're not careful |
Posted By: shivkumar
Date Posted: 30/Mar/2008 at 11:37pm
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We expect the company to demerge its divisions and subsidiaries as well. Just Eureka Forbes demerger alone would take the share price many notches. And the company's Forbes Patvolk division with the container freight station (CFS) at Veshvi alone should give it valuations compared to Allcargo Logistics. Then there is the land. From FY 2010, the Basel II accounting norms come into play whereby companies will have value assets at market place. Forbes owns a big chunk of land in South Mumbai since it was set up shortly after the British got Mumbai as dowry from the Portguese. Forbes' land is at Ballard Estate/Ballard Pier where prices are slightly below Nariman Point. Svadeshi Mills land is also free of encumbrances and permission to build may come anytime now. |
Posted By: gopal
Date Posted: 31/Mar/2008 at 9:39pm
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today I have taken a light exposure to forbes & company ....
------------- Women are like the stock market Coz they're irrational n can bankrupt u if u're not careful |
Posted By: shivkumar
Date Posted: 01/May/2008 at 10:22am
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Forbes & Company consortium to develop Simar Port (Filing with BSE) Forbes & Company Ltd has announced that a Consortium of the Companies, that includes Forbes & Company Ltd has received a Letter of Intent issued by Gujarat Maritime Board, Gandhinagar, Gujarat, granting the right to develop Simar Port for commercial use on 'Build - Own - Operate - Transfer' basis. The Companies in the Consortium are - 1. Shapoorji Pallonji & Co. Ltd - Lead Promoter 2. Afcons Infrastructure Ltd 3. Forbes & Company Ltd (Formerly known as Forbes Gokak Ltd) As per the conditions of the Letter of Intent the Lead Promoter has to prepare and submit a detailed Project Report within 12 months of issue of the Letter of Intent and obtain all environment clearances, coastal regulation zone clearances and effective financial closure and all such. other clearances and permissions within 18 months of issue of the Letter of Intent. -------------------------------- The proposed port is next to Pipavav port. As per reports appearing in some newspapers, the Simar port will be primarily into LNG terminal business. |
Posted By: sksenthil
Date Posted: 18/Jan/2010 at 8:06am
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Before reading the report do understand there might be more real estate
which cannot be valued as there is a lack of information from the
management about the same.Company is 200 year old and prime office
space owned and occupied by it has not been valued by us.We have simply
valued its swadeshi mills stake,Euraka forbes (100% stake) and its
other known subsidaries.Do read the attached annual report http://www.traderji.com/# - - .Read
the consolidated financial statements and notes from the auditors.Also
refer the site of the comapny links given at the end for further info... At last we caught a multibagger-its indias oldest registered co.. A 1200 cr sales after demerger and a 70 cr pbt company and a 40 cr pat co.. refer the attached annual report for the latest annual consolidated results results submitted to the exchange are standalone The stock of forbes and co is showing sharp movement as markets is valuing its 100% subsidiaries and expected value unlocking the 200+ year old company shapoorji pallonji group company is buzzing in the bourses as the company is undergoing a restructuring.Company last year hived off the textiles divison.The company has given a return of 55% in past week. Now the company owns 100% of euraka forbes(720 cr sales and 48 cr ebitda 26 cr net profit).stocks in water treatment space is being given higher pe ratios as markets have caught fancy of them. Ion exchange in a similar space is valued at a pe of 55+.euraka forbes segment eps is itself 26 on forbes consolidated balance sheet. ==================== ------------- |
Posted By: shivkumar
Date Posted: 18/Jan/2010 at 9:10am
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some amount of restructuring is in the offing to divide the company between the two brothers Shapour and Cyrus. Pallonjee Mistry has indicated as much though the time frame given is a couple of years down the line. |
Posted By: samirarora
Date Posted: 24/Jul/2010 at 6:56pm
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Hi Shivkumarji,
Could you kindly let me know the source of the above news , ie the restructuring, expected to take place, although after two years.
Am getting more and more interested in this company and this is a great thread, full of information from the very first thread, thanks!!!
Best wishes,
samir. ------------- |
Posted By: shivkumar
Date Posted: 24/Jul/2010 at 7:33pm
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If you check the company's annual report of FY 09 you will see that Forbes has closed/merged nine subsidiaries. there could be more in FY10 as well. waiting for the annual report. let's see what the management comes up with at the AGM. Please note that Eureka Forbes is facing major headwinds. Company's margins are shrinking as new competitors enter the water purification business. At the same time, the company's direct sales channel is facing cost pressures. Eureka Forbes launched a new low-price water purifier earlier this month. Need to find out more info about its performance. So one cannot play this for growth, but as a value unlocking story. |
Posted By: karn
Date Posted: 24/Jul/2010 at 7:42pm
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Shiv Ji, I do not follow eureka forbes. But there was an interview on money control 1-2 days ago. In which the director (is he the senior SP's son?) said that they are doing very well. He also added that they do not have any plans for the market.
Regards, K. ------------- “Invert, always invert.” |
Posted By: excel_monkey
Date Posted: 24/Jul/2010 at 7:47pm
Forbes is just a small part of groups business in scheme of division Forbes would be insignificant compared to their Tata sons stake and construction business |
Posted By: shivkumar
Date Posted: 24/Jul/2010 at 7:56pm
| Forbes does not hold stake in Tata Sons. Also lion's share of the company's revenues come from Eureka Forbes. |
Posted By: samirarora
Date Posted: 24/Jul/2010 at 8:02pm
|
Yes, but, i think, the competition is in the passive water filter category. Even tata chemicals has come out with a model, called swach in the rs.1000 category. The one from eureka forbes was earlier rs.1900 or so, but now, this type of filter is going to priced at rs.1000 kind of levels, but then, the one for 1k is much lesser too look at , then the more expensive counter parts. Also looked at their air filters.. eureka has two models, one for 6k and the 40 m square capacity for 9k.. compared that to LG models on the LG website, which were 18k onwards .All companies have competition, and a good hot selling product will only add competition with time but water filters in India is still a HUGE opportunity and forbes is the pioneer and so far the leader.
Shivkumarji, what do you make of these subsidaries being either closed down or being diverted to founder group...do you think its being done to the benefit of shareholders, or is it just promoters diverting perfectly good businesses...
Best wishes,
samir. ------------- |
Posted By: samirarora
Date Posted: 24/Jul/2010 at 8:07pm
|
yes.. thats quite correct, forbes does not hold tata sons, but shaporji pallonji group that holds 18 percent in tata sons also holds forbes , as one of their many holdings and in the overall reality of what the SP group owns, Forbes is only a small component, esp. with the low valuation it presently has.
The shapoorji pallonji group has many companies, and only two of them are publicly listed.
Forbes and company
Gokak Textiles.
The only question is, will the SP group look to expand the companies while they are still publicly listed OR, will they wait to delist companies or hive off subsidaries in a way, that public does not benefit.
They are known to be slow and silent, but then are a very very rich group..so what are the chances, that they 'don't' let the 26 percent shareholder benefit?
best wishes,
samir. ------------- |
Posted By: excel_monkey
Date Posted: 24/Jul/2010 at 8:24pm
Shiv I was talking about Pallonji Group |
Posted By: samirarora
Date Posted: 24/Jul/2010 at 9:06pm
|
It is clear, that Forbes and company has a LOT to give to the shareholder..there is no doubt about it, both from the business and from asset point of view...
The question is..
Will the esteemed shaporji Pallonji group chose to share this wealth?
and if yes, When?
considering that its the Pallonji group we are talking about, chances are more than less, that shareholders will eventually benefit, say 80-90 percent atleast, thats what i feel...
fingers crossed! ------------- |
Posted By: manishdave
Date Posted: 24/Jul/2010 at 9:19pm
|
Good company dubious management. They owned a company called South India Viscose. News says this - "The Sirumugai-based South India Viscose (SIV) Industries Limited, known for not abiding by the environmental and ecological norms, has decided to sell off its wind farms and other properties." Source Business Standard: 22-08-06 Read further: Some of the major companies undergoing liquidation or being readied for liquidation include viscose major SIV Industries Limited of Pallonji Shapoorji Mistry group of Eureka Fobes fame, Jiyajeerao Cotton Mills of Birlas, cotton yarn major Arihant Industries, Hitkari Potteries, plastic pipes major Uniplas India Limited, Rajinder Steel Limited. The assets of many such companies seized by financial institutions and banks are up for sale. They are almost in the same league as companies undergoing liquidation. Have
the authorities cared to investigate the manner in which such corporate
failures are engineered? Have the regulators sniffed around for
accountancy and other frauds as one of the reasons for such failures?
If so, how and whom have they prospected and sent them to jail? What is
the Government's success rate in unmasking corporate frauds? Source: Taxindiaonline.com http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4727 Artilce futher says- Will Bombay Stock Exchange, Securities and Exchange Board of India, Ministry of Company Affairs, BIFR, lenders or any other entity in the governance system ask Mistry to explain why he let SIV sink? And why should he be allowed to again tap the gullible investors? |
Posted By: shivkumar
Date Posted: 25/Jul/2010 at 1:26pm
| No the management is not at all dubious. My only worry is they don't have the hunger for growth and they are a bit too diversified. But that is getting corrected. Restructuring of subsidiaries is happening without any loss to shareholders. Please download the annual report and subsidiary annual report from the company website and see it for yourself. |
Posted By: karn
Date Posted: 28/Jul/2010 at 2:26pm
|
Shivji, Please confirm this to me. I think that Eureka Forbes is directly owned by Shapurji Pallonji Group and not by Forbes Company. Hence the revenue goes into SP kitty and its performance has no affect on Forbes balance sheet.
Regards, K. ------------- “Invert, always invert.” |
Posted By: samirarora
Date Posted: 28/Jul/2010 at 3:49pm
|
Eureka Forbes is part of Forbes and company.
Check Forbes and company website, go to investor section and check balance sheet titled, balance sheet of subsidary companies.
best wishes,
samir. ------------- |
Posted By: samirarora
Date Posted: 28/Jul/2010 at 3:54pm
I also firmly believe that promoters are A class and which is what attracts me to this company so much. Further, in all their statements and their website and annual reports, they talk of customer satisfaction more than stakeholder value, which i remember reading (forget source now) is better for shareholder in the long run, rather than a promoter, always manipulating stock/numbers/company, to make share prices better.
It has to be said here, that more restructuring is happening with this company, than it has for decades and that is a very good sign. The promoters are going along with their play, slowly and steadily and had the 'economic downturn 'not happened when it did, hence slowing things down , forbes would be a very different company now.
I feel, now that phase seems to be over, there is a good chance, that management will continue with their restructuring once again.
Best wishes,
samir. ------------- |
Posted By: karn
Date Posted: 28/Jul/2010 at 4:08pm
|
thanks samir.
Sorry forgot to ask. There is one question that is puzzling me.. Why were they not able to leverage their position earlier in the market? And is it too late now? As far as I remember, when they had launched aquaguard and vacuum cleaner, they were the only one. They had better chances than compared to now, as now they have to compete with other major players too. Regards, K. ------------- “Invert, always invert.” |
Posted By: samirarora
Date Posted: 28/Jul/2010 at 5:52pm
|
The group is placed in a manner, that they have not felt the need to go to the market. Most of the businesses are private in nature, the fact that forbes and because of that eureka forbes are publicly listed is just an accident.
Its not too late even now though, as every and most businesses, that get succesful, will attract competition, except, where capex is so high, that its not easy for any non-serious competition to raise its head, but in that case, the rivalry is with the capex, instead of with a competitor.
best wishes,
samir. ------------- |
Posted By: pkumar
Date Posted: 28/Jul/2010 at 6:10pm
| as per my understanding, Forbes and company as a stock has only garments and eureka forbes business listed in Forbes & Company stock. They were planning to go public for Afcons Infra as well before2008. Does the comapny has interest in any other segment as well |
Posted By: karn
Date Posted: 28/Jul/2010 at 6:25pm
|
Agreed Samir
------------- “Invert, always invert.” |
Posted By: manishdave
Date Posted: 28/Jul/2010 at 8:23pm
|
Well, I am in minority here but I would still rate this management -ve. Let me ask this. Why can't they restructure company once and fix it? Why do they need to keep so many subsidiaries and why do they need to keep on restructuring? Why did SIV sink? Funding was not the problem. THey did big GDR. Why is market not undervaluing Forbes gokak? Is it unrecognized? Even in this bull market? Even after economic boom why they can't pay decent dividend? How many failed busineses do they have? Finally if you read report tone is negative on almost all divisions. |
Posted By: hit2710
Date Posted: 28/Jul/2010 at 8:36pm
Bottomline is that this is a business(es) which looks difficult to understand and hence valuation is a difficult exercise. If biggest bet is on Eureka forbes, then why not go for ion exchange? They seem to be turning the corner. In my view plenty of better understandable opportunities exist. Unless some fairy comes out of the sack, upsides seem difficult to imagine. (I hold the right to go wrong  ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: tigershark
Date Posted: 28/Jul/2010 at 8:52pm
|
tata chem sach rs 999 is flooding the mkt.
------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: manishdave
Date Posted: 28/Jul/2010 at 9:08pm
Understanding management is more difficult than businesses. Someone please explain what great have they done in any division in last 10 years ever after having somes great products? And how many failed ventures? |
Posted By: tejas
Date Posted: 28/Jul/2010 at 11:10pm
Samir, I have serous doubt with regards to the Motivation of this group to create value for minority shareholders. I am in complete agreement with Manish Dave. This group is an Avoid. ------------- Earnings, Earnings, Earnings. |
Posted By: samirarora
Date Posted: 28/Jul/2010 at 10:10am
|
If you say so, although, i feel otherwise.
To be able to judge the motivation of a group is a tough call and i think this company is far better than many others , that are so popular with many investors... hence if all companies are bad in some way or another, than this might be one too.. ------------- |
Posted By: samirarora
Date Posted: 15/Aug/2010 at 6:19pm
|
Well...another quarterly result announced on 13th August, nothing special to write about, seems pretty bad as usual .... now to wait for the AGM...then the next quarterly result.. then the next... and so on.....zzzzzzz!!!! ------------- |
Posted By: Kirtibhai
Date Posted: 14/Sep/2010 at 11:04am
| Hi Any update on Svadeshi mills... The project seems to have come up very nicely in Kurla.. Is there anything left for the equity holders |
Posted By: samirarora
Date Posted: 16/Sep/2010 at 3:19pm
|
Some information i found....
INDIA DISCOVERY FUND, owned by Bay Capital partners of USA is the second largest shareholder in Forbes and company, with their stake now over 8%, the stake having been purchased over last year and as recently as April-May 2010. Promoters own close to 75 percent while India discovery Fund owns approx 8% +. Here is the investment rationale that Bay Capital Parners overall use for the investment process... Investment Process Bay Capital has a unique five-step methodology to identify investment ideas that can deliver sustainable returns over the long-term. 1. Idea Generation Our expertise lies in identifying opportunities as early as possible. The steps we take to spot opportunities are: Identify the investment universe in line with investment objectives which is based on a macro-economic view Select companies on criteria such as quality of management, scalability of the business, return ratios and other financial parameters. Use a bottom-up approach to spot emerging ideas based on local knowledge of developments in the Indian economy 2. Evaluation Each investment idea is evaluated against a number of parameters. These include: Business quality evaluation: Competitive advantages, growth catalysts and quality of management Valuation: Financial modelling to arrive at a target price Due diligence: Using external analysts and industry contacts to evaluate company management 3. Active Investing Our team works closely with investee companies to help them identify and explore new opportunities. We help companies in the following ways: Build on synergies with other investee companies Improve investor communication Source capital Act as a catalyst for growth 4. Monitoring We constantly monitor our investments to ensure that they are in line with our investment objectives and within our risk parameters. Our monitoring methodology includes: Quarterly financial review Ongoing reference checks Regular management meetings Evaluating research from brokers 5. Exit We only invest in opportunities where we see an identifiable trigger for an exit. These would include: Company’s progress in realizing potential Competitive dynamics Achievement of target valuation Strategic buyer in place Change in the company’s fundamentals Change in government policies and HERE IS INVESTMENT PROFILE OF INDIA DISCOVERY FUND India Discovery Fund India Discovery Fund is an India-dedicated fund which uses a private equity approach to investing in the public markets. The fund uses no leverage and focuses on mid-market companies that are direct beneficiaries of the infrastructure story or the domestic consumption story. The fund is a concentrated portfolio of 8-10 names. Its strategy is to identify catalysts and value creation opportunities in each of the investee companies. A disciplined bottom-up research methodology combined with due diligence and active engagement with the companies enable us to help in unlocking long-term value for all our investors. Source: http://www.bay-cap.com/investment/india-discovery-fund.html The point i am making is the funds philosophy of buying only 8-10 stocks and hence their confidence instilled in buying forbes and company to have this company as one of the 10 stocks. Hope someone else finds this interesting too!! ------------- |
Posted By: barla
Date Posted: 16/Sep/2010 at 4:44pm
|
Forbes owns only 23% in Swadeshi Mills.
The dissolution of Swadeshi is through Bombay High Court appointed official liquidator. 3000 employees of Swadeshi Mills were left unemployed without payment of their terminal dues such as grauity, leave encashment etc. Even the provident fund of almost a year was deposited. The dues without interest would be a minimum of 3 lakhs per head. That is a minimum of 90 crores. With interest the amount would today exceed over 250 crores.
Also there are secured and unsecured creditors like banks, suppliers, dealers. Also there are statutory dues such as taxes etc. Also MHADA has taken over a portion of the land.
Also a large number of employees ex-employees have squatted on the properties.
So nothing is going to come to any shareholder.
|
Posted By: samirarora
Date Posted: 28/Sep/2010 at 12:43pm
|
1. forbes does not talk about shareholding in swadeshi, basically, the shareholding part is written off , but talks more of approx. 45 crore debt that swadeshi owes to forbes holding company. In case of liquidation, which is imperative, shareholders get nothing, but debtors stand a better chance... forbes talks only of the debt and has stated '' we will do everything in our power, to get back this amount owed to us by swadeshi mills''
source: annual report of forbes and company.
------------- |
Posted By: samirarora
Date Posted: 28/Sep/2010 at 12:45pm
|
2. I am wondering, whether forbes and company , the holding company of eureka forbes/aquamall and various other water treatment subsidaries related to this line, might enjoy some kind of re-rating, once wabag (recent IPO) lists and there is added talk in the market regarding water treatment products/companies/services ??? ------------- |
Posted By: anthro
Date Posted: 30/Sep/2010 at 1:15pm
| if only theres a way to measure hunger of promoters to maximise shareholder wealth ! Forbes promoters seem to be so contended ? |
Posted By: kushal.masand
Date Posted: 27/Dec/2010 at 1:17am
| this one might be a long wait..... |
Posted By: samirarora
Date Posted: 02/Apr/2011 at 12:05pm
|
http://www.dailymotion.com/video/xhxfle_shapoorji-pallonji-aims-to-make-eureka-forbes-a-global-firm_news - http://www.dailymotion.com/video/xhxfle_shapoorji-pallonji-aims-to-make-eureka-forbes-a-global-firm_news
to take presence of eureka forbes from present 20 countries to 50 countries in next four years..
as far as ''dark horse'' goes... i feel this maybe the ultimate dark horse in the market at present... now how long the wait will be.. is anyone's guess...
but still , worth watch interview as promoters are hardly seen otherwise. ------------- |
Posted By: barla
Date Posted: 02/Apr/2011 at 1:54am
|
owns a lot of properety all over india. decent busniess also. but a very long wait indeed.
|
Posted By: hidden_value
Date Posted: 01/Aug/2011 at 5:40pm
| sir,I have 100 shares of svadeshi mills. Svadeshi mills own 48 acres land at bandra kurla valued not less than 15000 crores rupees. shapoorji pallonji now want to acuqire this property, which is under liquidation since last 10 years. winding up order already issued by HC in the matter. Will I get proper value of share ? what should be the true value of the share? |
Posted By: manfromthehills
Date Posted: 17/Aug/2011 at 10:38pm
| Hmmmmm.. Thats tricky! I guess you better meet similar folks and arrange one attorney. |
Posted By: aditrades
Date Posted: 16/Oct/2011 at 9:17pm
Shapoorji Pallonji loses court battle for Swadeshi MillsThe 45-acre Sion property, which is worth at least Rs 1,600 crore, may now be put up for an auction
Bapu Deedwania, Yogesh Sadhwani & Sunil Baghel
Posted On Sunday, October 16, 2011 at 03:23:13 AM
------------- "A loss never bothers me after I take it. I forget it overnight. But being wrong - not taking the loss - that is what does damage to the pocketbook and to the soul." Jesse Livermore |
Posted By: samirarora
Date Posted: 17/Oct/2011 at 12:43pm
|
I am holding forbes and waiting..waiting.....waiting... someday ... my ship will come in!!! ------------- |
Posted By: samirarora
Date Posted: 17/Apr/2012 at 11:33am
|
Anyone watching the price action of this stock? Any comments? 18/04/2012 PS- I am of course, still holding and will continue to hold .
------------- |
Posted By: hit2710
Date Posted: 18/Apr/2012 at 12:22pm
Obviously since its a dark horse, one will have to need to wait longer.  ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: aditrades
Date Posted: 13/Jul/2012 at 10:57am
|
Silently stock has moved from390 to 620 in less then 7 months results have been great after a long haul co.. is able to generate FCF and is low on debt with a great brand value of eureka forbes ------------- "A loss never bothers me after I take it. I forget it overnight. But being wrong - not taking the loss - that is what does damage to the pocketbook and to the soul." Jesse Livermore |
Posted By: extreme
Date Posted: 17/Jul/2012 at 6:09pm
| Do they own water purifier business or is it private to its parent????? I can not see any info. on water purifier on their website |
Posted By: Kalyan
Date Posted: 23/Sep/2012 at 10:31pm
|
What happened ?????
Fireworks with good volume.  ------------- kalyan |
Posted By: aditrades
Date Posted: 23/Sep/2012 at 9:16am
|
Structural changes taking place margins increasing and co... is fast taking back market share in eureka forbes moreover SP is now personally handling day to day affairs of the parent co... one more trigger is the swadeshi mill land proceeds co.. will get 300 crs by way of loan repayment which has been written off and will also receive an equivalent amount as shareholding payment ------------- "A loss never bothers me after I take it. I forget it overnight. But being wrong - not taking the loss - that is what does damage to the pocketbook and to the soul." Jesse Livermore |
Posted By: vedik
Date Posted: 24/Sep/2012 at 12:10pm
|
Thanks a lot Mr. Shiv! For a new member like us your post is work as a tutor. Many of us did not have any idea about Svadeshi Mills Ltd before come to to your post. Thank you very much! |
Posted By: shivkumar
Date Posted: 24/Sep/2012 at 12:13pm
| Please note that I do not have any positions on Forbes now. I took full exit around 2009 at Rs 500 levels. |