Kiran
Vyapar: Bought this small company few days back at
110. The same was shared via email to email subscriber group of this blog. It
is already trading at 140. It is LN Bangur group company with around 600 cr of
Equity/Mutual funds and 300 cr of group investments but with no debt and market
cap is just around 300 cr…Dividend yield 2.4%.
Vyapar: Bought this small company few days back at
110. The same was shared via email to email subscriber group of this blog. It
is already trading at 140. It is LN Bangur group company with around 600 cr of
Equity/Mutual funds and 300 cr of group investments but with no debt and market
cap is just around 300 cr…Dividend yield 2.4%.
But my main
trigger is not above…it has something much valuable hidden in it…and that
is 40% share in Agro warehousing business (Navjyoti Commodity Management
services ltd). Its warehouses are WDRA approved and hence they can issue
Warehousing receipts to be used by farmers for WR financing. As shared in
earlier posts also, in my view Warehouse receipts financing is the next big
thing and the same is expected to grow at fast pace. With Warehouse receipt financing,
a farmer can withstand the short term variations in the crop prices. Normally
at the time of harvest, due to oversupply agro produce prices are always low
but with demand picking up after 203 months prices generally returns to normal
higher levels. But our poor farmers do not have other financing options and
they also don’t have cheap warehousing options available with them which force
them to sell their produce at cheap prices to middlemen who later on reap huge
profits at the cost of farmers. But with WR receipt financing, farmer can meet
his short term needs and when prices normalize he can sell the crop and pay
back the loan amount. Banks can also provide loans fast due to adequate
security of the crops.
trigger is not above…it has something much valuable hidden in it…and that
is 40% share in Agro warehousing business (Navjyoti Commodity Management
services ltd). Its warehouses are WDRA approved and hence they can issue
Warehousing receipts to be used by farmers for WR financing. As shared in
earlier posts also, in my view Warehouse receipts financing is the next big
thing and the same is expected to grow at fast pace. With Warehouse receipt financing,
a farmer can withstand the short term variations in the crop prices. Normally
at the time of harvest, due to oversupply agro produce prices are always low
but with demand picking up after 203 months prices generally returns to normal
higher levels. But our poor farmers do not have other financing options and
they also don’t have cheap warehousing options available with them which force
them to sell their produce at cheap prices to middlemen who later on reap huge
profits at the cost of farmers. But with WR receipt financing, farmer can meet
his short term needs and when prices normalize he can sell the crop and pay
back the loan amount. Banks can also provide loans fast due to adequate
security of the crops.
But I think
cheap and reliable power is the main catalyst for the growth of warehousing in
India which at present is barely sufficient. Around 60% of total warehousing is
concentrated in 4 states Punjab, UP, Gujarat and WB. Also, around 80% of cold
chain warehouses cater to potatoes only, and if we add Onions then the same
will cross 90%. So Cold chain warehousing capacity dedicated to high valued horticulture is very low but i feel that just like the role of cold chain logistics in the growth of Dairy sector in India, the same success story will be replicated in horticulture also. Our Power sector is grappling with the low demand issues as we
couldn’t create the demand for power after creating big capacities, so the
steps like warehousing will provide big push to the demand for power provided
we can offer cheap power. This will provide double benefit.
cheap and reliable power is the main catalyst for the growth of warehousing in
India which at present is barely sufficient. Around 60% of total warehousing is
concentrated in 4 states Punjab, UP, Gujarat and WB. Also, around 80% of cold
chain warehouses cater to potatoes only, and if we add Onions then the same
will cross 90%. So Cold chain warehousing capacity dedicated to high valued horticulture is very low but i feel that just like the role of cold chain logistics in the growth of Dairy sector in India, the same success story will be replicated in horticulture also. Our Power sector is grappling with the low demand issues as we
couldn’t create the demand for power after creating big capacities, so the
steps like warehousing will provide big push to the demand for power provided
we can offer cheap power. This will provide double benefit.
I am waiting for
the IPO’s of bigger players in this area like Star Agri and Sohanlal
Commodity…but Kiran is also a good play. At present market is not aware of
this business just like it was about general insurance but recent IPO’s of
general insurance companies will ensure the high re-rating of our general ins
picks like Tube Investments, Bajaj Finserv, Sundaram Fin, Future Ent, Max India
etc. These were advised at much lower levels in the past but still all these
have huge growth potential.
the IPO’s of bigger players in this area like Star Agri and Sohanlal
Commodity…but Kiran is also a good play. At present market is not aware of
this business just like it was about general insurance but recent IPO’s of
general insurance companies will ensure the high re-rating of our general ins
picks like Tube Investments, Bajaj Finserv, Sundaram Fin, Future Ent, Max India
etc. These were advised at much lower levels in the past but still all these
have huge growth potential.
Navjyoti
provides supply chain solutions for agricultural commodities such as grain,
cereals, pulses, beans, oil seeds and other commercial crops. It handles over 5
million mts of commodities in more than 16 states across 300 locations and is
setting up 50+ state of the art agri logistics parks across India.
provides supply chain solutions for agricultural commodities such as grain,
cereals, pulses, beans, oil seeds and other commercial crops. It handles over 5
million mts of commodities in more than 16 states across 300 locations and is
setting up 50+ state of the art agri logistics parks across India.
Same thing will
happen for WR financing companies and i think players related to Agri finance
like Mahindra Fin and new age rural centric banks like RBL, IDFC can make big
inroads in this business.
happen for WR financing companies and i think players related to Agri finance
like Mahindra Fin and new age rural centric banks like RBL, IDFC can make big
inroads in this business.
At present WR Financing is available only for dry staples
like Wheat/Rice as warehousing standardization for horticulture crops is still
not available although in my view WR financing is more suitable for
horticulture crops as short term variations in horticulture crops are high and
farmers just get only 35% share of the final price paid by the consumers due to
middlemen. But for staples like wheat/rice, due to steps like Govt controlled Minimum Support prices,
Farmers garner much higher share in the final price paid for these. That’s
the main reason why i am investing big in Snowman also as it can enter this WR
financing business anytime and it is the biggest in organized cold chain
sector. I am seeing big opportunity for WR financing and logistics in
horticulture crops. At present there is no such news related to WR financing of
horticulture crops but i can see a real scope for it for snowman as it already
has everything in place.
like Wheat/Rice as warehousing standardization for horticulture crops is still
not available although in my view WR financing is more suitable for
horticulture crops as short term variations in horticulture crops are high and
farmers just get only 35% share of the final price paid by the consumers due to
middlemen. But for staples like wheat/rice, due to steps like Govt controlled Minimum Support prices,
Farmers garner much higher share in the final price paid for these. That’s
the main reason why i am investing big in Snowman also as it can enter this WR
financing business anytime and it is the biggest in organized cold chain
sector. I am seeing big opportunity for WR financing and logistics in
horticulture crops. At present there is no such news related to WR financing of
horticulture crops but i can see a real scope for it for snowman as it already
has everything in place.
Kiran is having
303286 share of Indian Energy Exchange who is coming with an IPO with price at
1650 valuing the stake of Kiran in it at 50 cr. Kiran is selling 90986 shares
valuing around 15 cr in the IPO. Our another pick in Power and defence sector,
Tata Power ltd is also selling its stake in the IPO valued at 206 cr.
303286 share of Indian Energy Exchange who is coming with an IPO with price at
1650 valuing the stake of Kiran in it at 50 cr. Kiran is selling 90986 shares
valuing around 15 cr in the IPO. Our another pick in Power and defence sector,
Tata Power ltd is also selling its stake in the IPO valued at 206 cr.
But this is just
the tip of the iceberg; like Kiran is having 16.37 lakh shares of Suryoday
Small Finance Bank Ltd which is growing very fast in rural India. It has received
its small financial
banking licence in the month of August, 2016 and commenced its operations as a
Small Finance Bank on 23rd January, 2017. Its earlier avatar was of Micro
finance institution. At present it is just in the teething phase with 4
branches opened this year, turnover of 254 cr and NP of 15 cr for the year but I
think the figure will grow much bigger with full year of operations starting
from this year.
the tip of the iceberg; like Kiran is having 16.37 lakh shares of Suryoday
Small Finance Bank Ltd which is growing very fast in rural India. It has received
its small financial
banking licence in the month of August, 2016 and commenced its operations as a
Small Finance Bank on 23rd January, 2017. Its earlier avatar was of Micro
finance institution. At present it is just in the teething phase with 4
branches opened this year, turnover of 254 cr and NP of 15 cr for the year but I
think the figure will grow much bigger with full year of operations starting
from this year.
I think value
unlocking from unlisted investments like Navjyoti will be much higher than
quoted investments. Its investments in listed companies are around 167 cr which
is valued around 334 cr on Mar-17 and I think the same should be much higher at
present. Even it is holding free hold land costing 25 cr…I don’t have the
figures but even the value of this could be way higher.
unlocking from unlisted investments like Navjyoti will be much higher than
quoted investments. Its investments in listed companies are around 167 cr which
is valued around 334 cr on Mar-17 and I think the same should be much higher at
present. Even it is holding free hold land costing 25 cr…I don’t have the
figures but even the value of this could be way higher.
Kiran is also
having a 46% share in LNB group’s renewable energy business which is growing
fast in Solar. I do not have much study about LNB group and also trying to find
out the more details of their WR business…so this stock deserves only risky
capital although high discount to investments, Dividend yield, Low PE of 7 give some margin of safety.
having a 46% share in LNB group’s renewable energy business which is growing
fast in Solar. I do not have much study about LNB group and also trying to find
out the more details of their WR business…so this stock deserves only risky
capital although high discount to investments, Dividend yield, Low PE of 7 give some margin of safety.
(Views
are personal and should not be taken as a recommendation for buying or
selling a stock. Stock markets are inherently risky so kindly do your
Due Diligence before investing. I am not a certified Sebi Analyst and
holding the shares discussed in this Post)
———- Forwarded message ———-
From: Gurpreet Singh
Date: 20 September 2017 at 10:11
Subject: Kiran Vyapar
To:
Dear All, bought this small company last day at 110. It is LN Bangur group company with around 600 cr of Equity/Mutual funds and 200 cr of group investments…with no debt…market cap is just around 300 cr…Dividend yield 2.4%.
But my main trigger is not above…it has something hidden in it…and that is 40% share in Agro warehousing business which are WDRA approved and hence they can issue Warehousing receipts to be used by farmers for WR financing….next big thing for me.
Will share more at the blog….today already up 18% to 128
Deserves only risky portion…
Regards
Gurpreet Singh
Dear Gurupreet Sir,
Wishing you happy and prosperous Deepavali
Really appreciate ur skill in analyzing the company. Learnt a lot from you.
Thanks
Manoj
Thanks Dear Manoj, My best Wishes for a Great joyful Diwali…
Thank sir for your sharing knowledge
Sir any views on Linde India, fairchem,gp petroleums and kiri industries
The company do lot of related party transactions and most of the money keeps lying with associates without earning any income.
Good to track.
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VERY INTERESTING
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