When Hero Honda was born to launch Bike manufacturing in India, Honda of Japan was a well-known brand. They took Munjals of Hero Cycles as partner in order to comply with the then license requirements (who proved to be loyal to Honda.) We, the minority shareholders, took up shares in the IPO just because of our fancy for brand HONDA and were rewarded for superb performance & financial pay back by way of dividends & bonus issues since mid 1980's.
However, to our chagrins and dismay, Honda had talked to just Munjals and NOT all other shareholders holding 47+% shares. To be fair to their INDIAN PARTNERS, Honda should have insisted on selling their 26% collectively to a SPV whose shares should have been offered to all such partners proportionately and Munjals may have taken up all UNSUBSCRIBED shares them severally (i.e., taking PE routes). Exit of Honda will be damaging to the business of Hero Honda and their shareholders.
Munjals are NO match to HONDA as far technology is concerned
Present plan is totally tilted in favour of Munjals. To safe-guard the interests of minority, the government must have a re-look on the severance of such collaborations & joint ventures..
Monday, December 20, 2010
Thursday, December 9, 2010
Piramal Health : A plan to share wealth EQUALLY
Contrary to suggestions from minority shareholders that promotors are enhancing their own stakes in Piramal HealthCare by giving an exit plan through buy back offer @ 600/- per share by tender methods. During first half ending on 30/09/2010, the Company declared an earning of Rs. 604.60 and reported a book value of Rs. 676.50 following a major business being sold to Abbotts of USA. Initial statement of promotor's participation in the buy back offers was doubted by most shareholders and market.
Interestingly, the promotors had sold 10,08,03,085 shares (at diverse prices ranging from 525 to 502) during a period of 30th August through 6th September 2010 & same were bought by three new entities and existing Cavaal Fininvest Pvt Ltd enhancing holdings from 6,40,000 shares to 1,58,52,677 shares. As these were carried out on the SE floors, the encashment of long term capital gains are fully tax-exempt. Promotors had officially stated their "intention to participate in the proposed buy back offer" to the extent of 10,14,43,085 shares and maintaining their holdings to 54% . It is a win-win situation for Piramals, as they may off load a part of their holdings post closures of open offer to other entities and book appropriate "losses" to neutralise "gains" upon acceptance of a proportionate holdings. A nice tax planning.
Kudos to Ajay Piramal for these scheme to distribute the windfalls in a fair manner. I am sure he will come up with further buy back scheme(s) as soon as possible in future.
Interestingly, the promotors had sold 10,08,03,085 shares (at diverse prices ranging from 525 to 502) during a period of 30th August through 6th September 2010 & same were bought by three new entities and existing Cavaal Fininvest Pvt Ltd enhancing holdings from 6,40,000 shares to 1,58,52,677 shares. As these were carried out on the SE floors, the encashment of long term capital gains are fully tax-exempt. Promotors had officially stated their "intention to participate in the proposed buy back offer" to the extent of 10,14,43,085 shares and maintaining their holdings to 54% . It is a win-win situation for Piramals, as they may off load a part of their holdings post closures of open offer to other entities and book appropriate "losses" to neutralise "gains" upon acceptance of a proportionate holdings. A nice tax planning.
Kudos to Ajay Piramal for these scheme to distribute the windfalls in a fair manner. I am sure he will come up with further buy back scheme(s) as soon as possible in future.
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