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| Share Market |
Have you already made crores in
stock market or do you want to make??
What you are thinking now, ideas of creating
wealth through share market, then bad news this time many of the investors
missed an opportunity to convert small investment into a big investment within
a short span of time??
Yes, I'm talking about Ruchi Soya, which is one of the largest manufacturers of
edible oil in India. They have been acquired by Patanjali Ayurveda in 2019.
Ruchi Soya was founded in 1986 in Madhya
Pradesh, India and slowly gradually became household name because of their
products like edible oil, Vanaspati, soya chunks, soya flour etc. they produced
brands like Ruchi Gold Palmolein and Ruchi Gold Mustard oil; Nutrela
Soyabean oil, Nutrela Mustrad oil, Nutrela Sunflower oil, etc.
Ruchi Soya Industries limited, once had lot of
issues and went through a roller coaster ride from running businesses,
financials, debt pressure and all that led the company to bankruptcy also.
This is where Patanjali took over the company
whereby they reduced the face value of share to Rs. 2, later with reverse
merger of Patanjali's company -99.03% shares were taken up by Baba Ramdev's Patanjali company where by only small portion of shares was made available to
public. However per Indian listing regulation, Patanjali group will have to
reduce their own shareholding in the company to 75%, but Ruchi Soya has three
years, but till then promoter will take maximum benefit of movement in share
price.
After infusing fresh money in the capital,
Patanjali also took additional bank loans to settle old loans from Ruchi Soya
and other operational matters of business. So after acquisition in December
2019, Ruchi Soya were re-listed on the stock exchanges in January'20, post that
the share price was trending on Rs. 17 per share.
Look at the below graph where stock price was
touching Rs. 17 per share in Jan'20 reached to Rs.1519 on 26th Jun 20, a return
of 8865% which means someone invested Rs. 100,000 in Jan 2020 would have become
Rs.89,65,000 in less than 6 months’ time.
Financial Snapshot of the company-
Now let’s take a look at the financial of the
company how Ruchi Soya performed on a quarterly and yearly basis. In the quarter
ended March 2020, company reported a loss of Rs.41+ crores, against a previous
year quarterly profit Mar 2019 of Rs. 32.11
However the quarterly sales of Mar 2020 vis-Ã -vis
2019 shown only marginal increment of 1.42%. The sales reported for Mar 20 was
only Rs. 3191 crores against Rs.3146 crores sales achieved in Mar 2019.
However the interesting fact noted by me is –
during the full year ended Mar 20 shown a net profit increase of 9900 % i.e. Rs.
7,662 crores against profit for the year ended Mar 2019, i.e. Rs. 77 crores,
which is also contributor to this increase price and increase in demand for
this share.
But, unfortunately only 0.97% of shares are getting
traded in open market i.e. by public and remaining 99.03% shares of Ruchi Soya
are held by promoter company i.e. Baba Ramdev’s Company Patanjali.
In this increase rally also, high demand and
less supply of share played a bigger role. On this there is another theory
which says – since the independent or free float of stock was very less in
numbers thus, manipulation of share price is very easy.
Some of the expert doubt the movement noted in
price of Ruchi Soya and they also request for investigation in this matter.
There are certain links that you can follow to
track shares, financials of company, recommendations etc.
Review
possible Multi-Bagger
For Mutual
Fund check important link –
However I would say Stock Market is like a
mystery that no one can predict with accuracy, but you can still learn to
understand – how to read movement in share price, financials, trends, news
impacting share price and sentiment etc.
Multi-
Bagger Stock
Q- What
are Multi-bagger stocks?
A-
These are equity shares of a company which
generate ultra-returns or multiple times higher than its associated cost. For example
stock / share like Ruchi Soya bought at Rs.17 per share, became Rs. 1535 in six
months or it could be 5 years or 10 years also. Which means stock gave a result
of 8888%,
Q- How to
identify Multi-bagger stocks?
A-
Usually small sized company, for this deep
research is done for Excellent Management companies, having following features:-
a.
High Growth of company- Sales, profit, Earnings
per share, great brand image of product produced by company, high customer satisfaction
level
b.
High earnings per share compare to market
c.
Large volume of sales is covered by company
d.
Monopoly of company or restriction for other
player / companies to enter the market where this multi bagger is operated.
Is there any risk buying Multi-bagger
Shares?
Yes, multi-bagger share are risky, because if
these shares come with multiple returns then same shares can give you extreme
losses also.
To make wealth, these multi bagger shares
should be purchased in bulk i.e. at lower prices which later give you higher
return.
Here Investor need to carefully observe the
above mentioned points, before investing in any multi-bagger stock.
Examples of few Multi-bagger stocks gave 4 to 5
digit % growth.
Check below (Source: Economics Times) -
Warren Buffet is the Guru of all in making wealth. Once he
was the richest person on planet earth and all his wealth came from investing
only with a net worth as on Dec 2019 was USD $88.9 billion or currently google
says it is $ 6780 crores.
Advice for you:-
“Focus
on the company management. Good managers in a bad business are better than bad
managers in a good business. An investor should chase the story behind his
investment, not the money on the table. Money can make you rich, but the story
can make you wealthy,”
However
picking the right stock or share from the right sector is key to success of
making money. However it is also not an easy task.
Till
then keep learning and add your feedback in comment section if you learned
anything new today. Do share the article in case you think this will help
others also.
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