PITTIE GROUP: FRAGRANCE FADES WITH PROMOTERS' PRIVATE INTERESTS

Article Abstract:

Pittie group had raised Rs1,000 million from the public in 1995. Pittie Cement and Industries Ltd (PCIL) has brought out a public issue at par aggregating Rs49.1 million for setting up a cement facility with a capacity of 150 tonnes per day (tpd) and mini cement plants of 150 tpd capacity. In three years, investors received three-fold gain on the investment in PCIL. PCIL came out with a rights-cum-public offer for Rs1589.6 million. The rights issue was priced at Rs50 for fully convertible debentures and Rs220 for the public. PCIL had taken a conversion premium of Rs1429.7 million and its reserves amounted to Rs64 million. The engineering unit at Borananda Industrial Area in Jodhpur was not completed even after three years. The capacity utilisation at its cement units was 42.7 percent. The scrip of PCIL is trading at Rs4.35. Pittie Finance Ltd (PFL) went public in June 1994. The shares were offered at a premium of Rs15 and the scrip is traded at Rs2 now. Pittie group is involved in Indo-American Cement Corporation Ltd (IACCL) and Penta Capsules Ltd (PCL). PCL was promoted by Bokadia group when it floated a public issue in May 1995 and later it was claimed to be a Pittie group company. PCL has not reported its working performance at all till date. PCIL holds shares at Rs60 each totalling Rs3 million in Namaskar Leasing (NL) which is its subsidiary. NL has invested Rs9.3 million in PFL shares, Rs11.2 million in Pittie Projects and Investment Ltd's shares. PFL has Rs47 million worth of shares in PCIL and Rs35 million worth of shares in Pittie Securities (PS). PS has invested Rs46.1 million in PCIL. The public money has been diverted to the promoter's private companies. The investment of Rs1,382.49 million in the Pittie group stands reduced to Rs88.03 million now. The loss is around Rs1294.46 million which works out to 93.6 percent of the money invested. (rk) >EN

Comment:

Brings out public issue at par aggregating Rs49.1 mil for setting up cement facility w/ capacity of 150 tones per day

Cement, Cement Manufacturing, Pittie Cement and Industries Ltd.

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DEWAN GROUP: TARGET FALL SHORT 70%, INVESTMENTS CRASH BY 88%

Article Abstract:

Dewan Sugars Ltd (DSL) of the Dewan Group had floated a public issue of 13.71 lakh convertible debentures of Rs100 each to net Rs137.1 million about 3 years ago. The debentures carried an interest of 18 percent. In March 1998, DSL floated a rights issue to net Rs89.6 million. The rights offer got poor response despite carrying 18 percent interest. With the rights issue failing, DSL made a public offer of convertible debentures having a maturity of 17 months from the date of allotment. In anticipation of the issue devolving, DSL has the entire amount underwritten. The Dewan Group was hoping to increase its turnover from around Rs3 billion in 1994-95 to Rs10 billion by 1997-98. Its turnover was Rs1.5 billion in 1994-95. Yet it had set a target of Rs5 billion for 1996-97. It had floated Prominent Securities Ltd (PSL) in April 1996. The offer was made by the promoters at par. Even though the promoters' average cost of holding was Rs10.32 per share, they offered the shares to the public at Rs10 per share. PSL had promised a gross income of over Rs100 million and a dividend of 18 percent for the year ended September 1996. Prior to its public issue, PSL was in operation for over 5 years, but was able to achieve growth only in 1995, on the eve of its public issue. Post- issue, it gross income had grown to Rs120.6 million, but it could not declare a dividend as it incurred a loss of Rs3 lakh against the projected profit of Rs39.5 million. In the year ended September 1997, it posted a profit of Rs0.2 million on a turnover of Rs19.4 million. PSL could not declare dividend for the year. The Dewan Group had targeted a turnover of Rs10 billion for 1997-98 but it is just about making Rs3.5 billion in 1998-99. (gs) >EN

Comment:

Makes public offer of convertible debentures having maturity of 17 months from date of allotment

Sugar & Confectionery Products, Sugar and Confectionery Product Manufacturing, Sweeteners, Dewan Sugars Ltd.

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USHA GROUP - ELUSIVE INVESTOR CONFIDENCE

Article Abstract:

Between July 1984 and August 1996, the Usha group has come out with 19 capital issues intended to mop up Rs12.17 billion. However, the group, consisting of 9 companies, could collect only Rs6.7 billion. Most of the companies are not traded regularly. Despite having sales of Rs28.22 billion in 1997-1998, the group's bottomline fell to less than Rs500 million with almost all companies announcing a fall in profits. Usha Ispat, which entered the capital market in mid-1992, completed its project only in March 1994 despite promises of an October 1992 start-up. The company had in mid-1992 reported an EPS of Rs5 and dividend of 40%. Later the EPS nosedived to 50 paise and no dividend was paid. Malvika Steel, another group company, projected during its public offering a net profit of Rs2,290 million for the year ended June 1997. But it ended up making a net profit of Rs108.2 million. (nv)

Comment:

Comes out w/ 19 capital issues intended to mop up Rs12.17 bil

Diversified Companies, Usha

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