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Identifying Multibaggers
 The Equity Desk Forum :Market Strategies :Identifying Multibaggers
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basant
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Quote basant Replybullet Posted: 14/Feb/2008 at 8:00am
Originally posted by kulman

Promoters hit pay dirt as valuations soar 90-fold in 2 yrs
B G Shirsat / Mumbai January 28, 2007
Rs 1,066cr capital investment of 41 entrepreneurs has grown to nearly Rs 90,000 crore.
 
Most of the first generation entrepreneurs who have taken their companies public in the last two calendar years have hit pay dirt.
 
A study of 41 such entrepreneurs, who mobilised over Rs 12,400 crore through public issues in 2005 and 2006, shows that their capital investments of Rs 1,066 crore have grown almost 90 times to Rs 90,000 crore.
 
As much as three-fourths of this wealth is absolutely free, as the 75 per cent stake held by these promoters has been created by bonus issues prior to -- in some cases just before -- the public offers.
 
For some, the entire wealth is free, largely because nearly all of the equity was created by bonus capital.
 
Financially, they have done well, with sales growing at a compound annual rate of 30 per cent in three years. Profit has grown faster, at about 50 per cent. 
THE RICH AND THE FAMOUS
Promoter Company

Stake (%)

Bonus (%)

Capital*

Value*

Tulsi Tanti Suzlon Energy 60.00 96.58 4.28 25543.78
Kalanithi Maran Sun TV 89.00 97.41 1.60 10122.46
GM Rao GMR Infra. 79.00 40.00 158.66 9819.08
Sobha & PNC Menon Sobha Developers 86.00 66.66 21.14 6682.07
Pradeep Kumar Jain Parsvnath Develo 80.00 99.07 2.58 6075.72
Madhusudan Rao* Lanco Infratech 75.00 88.95 213.00 3944.14
Atul Punj Punj Lloyd 54.00 65.23 49.54 2941.00
Shashi Kiran Shetty Allcargo Global 79.00 91.16 1.30 2055.37
Bhadresh K Shah AIA Engg 69.00 80.00 21.59 1778.46
Chandru L Raheja Shoppers’ Stop 66.00 – 25.00 1594.04
*L Madhusudhan Rao, G Bhaskara Rao and L Sridhar * in Rs crore
 
------------------------------------
 
Read entire story on BS link above.
 
 
 
 
 
 
 
 
I had missed this link earlier but it is truely a wonderful post. On a generalised note please remember that for most promoters those initial 1 or 2 crores are also not pure cash. Generally promoters try and arrange money which in marwari parlance is called "entries". That means cheques go in but the actual money flow isn't incremental it is just an entry!!!
 
Makes one revisit the talk on Diversified vs Concentrated Portfolios and that is actually what a concentrated portfolio can make for you.Big%20smile
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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ramani
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Quote ramani Replybullet Posted: 12/Aug/2009 at 5:23am
Hello Basant and TEDs,
 
your insight (  the first post on this blog) is absolutely fantastic. i could only agree with you. i believe the same. rich will never share money but risk. starters because of no other choice ( opportunity cost of capital) will share money and risk. secondly, the passion they bring to the table is unparalleled - they are on fire.
 
otherside to be very honest, i dont see so many posts in that respects of companies like that in equitydesk. i see large concentration on midcaps and to some limited extent small caps.  or am i missing something here?
 
by the way VOLTAS in our TED list is also a TATA company...
 
I am looking forward to and support more discussion on small, micro and mini caps with fire in the belly of entrepreneurs and more than happy to share the risk for them as well.
 
 
warm regards
Ramani.
 
It's not important whether you are right or wrong, it more important how much you lose when you are wrong and how much money you make when you are right" - Soros. keep profit makers, sell loss-makers
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