First, the record has to be set straight. A number of investors appear to have assumed that because the official announcement regarding the sale of Jubilant’s loss-making retail division came immediately after Porinju bought a truckload of the stock, Porinju must have acted on insider information.
The allegation has obviously hurt Porinju’s sentiments and he has rushed to clarify that it is not so.
In his latest interview to ET, Porinju suo motu clarified that his purchase of the Jubilant Industries stock was dictated by common sense as to how the management would act with respect to the loss-making retail division and that he had no inkling that the management had in fact taken a decision to sell the retail division. “I bought the stock and am a bit embarrassed looking at the announcement by the management … people will misunderstand that I bought the stock on insider information .. I don’t know the management and have never interacted with them” Porinju stated. He emphasized that it is sheer luck that things happened the way they did and the gains flew in thick and fast.
Porinju’s claim appears to be plausible because no person buying the stock with the sinister motive of benefiting from insider info will broadcast the fact of his purchase to the public. Instead, he will keep total radio silence and also fly under the radar to avoid detection. In Porinju’s case, the purchase was by a bulk deal reported to the stock exchanges. Also, the rationale for the purchase was also announced to the public by Porinju.
So, it does appear that Porinju has to be given the benefit of doubt and a clean chit in the matter.
Anyway, as if to prove the point, Porinju showed up again today at the Jubilant counter and scooped up yet another chunk of 60,000 shares at Rs. 169.97 each.
Interestingly, two other heavy-duty investors joined Porinju in the buying spree. Rajasthan Global Securities Ltd bought 299,589 shares at about Rs. 169 each while Trapu Investments Pvt. Ltd bought a chunk of 69,000 shares at Rs. 169.25 each. However, the aggressive buying action did not result in the stock price spiraling out of control because Samena Special Situations Mauritius sold a large part of its holding.
Jubilant Industries’ current market capitalisation stands at about Rs. 200 crore. According to Porinju, the stock is still grossly under-priced. He says that the core standalone business enjoys high margins and is worth at least Rs. 500-600 crore. If Porinju is right in his estimate then there are much more gains waiting to be harvested from the stock.
very hard to believe it is not inside trading. He has told hat the management may separate the business and the mgmt react to it in a week. very hard to believe. Sorry Porinju Veliyath can’t believe u in this case..
all game is fishy. first he bought and then appeared on tv channel for recommendation, then company announced.
only fool will believe that it was not insider.
And again he is disclosing that he & his associate further bought to artificially raise the share price in next orbit. So that he can sell while the tempted retail investors jumped in to buy at his disclosure.
Hard to believe it is sheer luck and rare coincidence because one exactly says on TV what action management would take. The announcement from the company management after few days exactly matches the hypothesis. Let it be investigated by an independent authority and validate the innocence.
may be management got a clue of about what to do with their business from him.
Even then you can’t find a buyer in a wink.
point.
well this is called a pure value investing with great mind
this is not a insider trading
Value Investing ..what an example set by PorinJu…He is getting popular as a juggler and a punter who is minting money by doing short term trades.
Show me the moat?
I got these share when it was demerged from jubilent life sciences and i was hopping from the 1st day that it should sell their retail business and now after this guy recommended this company and bought it .. they gonna sell the retail . Its not coincidental . SEBI should look into it and put this guy into jail.
None will brodcast if bought under inside information
that is commonsense
To all the haters here. Do you think any sane person would announce to the public that he is buying the stock, if he is acting on inside info?
By public proclamation, he has probably created the perfect Alibi!
Yea cuz SEBI only has the power to watch interviews on TV and make a call -_-
Here is a man, who has consistently proven that he can see value when others see otherwise, why this animosity towards him ? I think it was a great call by him. Look at Shreyas shipping (37Rs reco to a record high of 530Rs) and bunch of other stocks, when he spoke about them, no one wanted to buy it, but then suddenly everyone wants it.
Lets look at one of his recommendations, Pricol – this is a company that makes speedometers, not to mention tons of other automobile accessories. This is a such an undervalued stock and has been recommended by him multiple times. Now if he were to see value in the possibility that a certain loss making entity is the reason for the stock to remain the same level for extended periods of time and then goes ahead a buys a bulk deal of the stock, and then gives his rationale on why he see value ( This is usually followed by a bunch of numbskulls who then realize ” Hey what he is saying is right” then rush to pick more of the stock on his recomendations, this is seen by the management as a possibility to give higher returns to the stock holders and in turn do the action for which he has bought the stock. Would this mean that he is a liar. Come on, stop being jealous and get a grip. I am no expert but I strongly believe that he has the skill and he understands value investing better than a lot of us.
Value investing???
Is there a moat for this company?
Also, you want to say that management running show since a long time weren’t aware that retail business is eating profits and just when porinju said management announced the sale in a week’s time, suddenly they realized their mistake …they conducted valuation….they selected buyer and announced the sell off of retail business…all this in 1 week??
Sell off was already planned, it would have taken atleast weeks if not months to calculate valuation of their retail business / find the prospective buyer and negotiate and strike a deal for sell off.
This is crystal clear insider trading and by announcing on TV and disclosing his rationale for buying, he made sure he doesn’t get accused also he gets poor retail investors as buyers when he turns seller and fool them all.
Porinju and promoter are hand in hand and they will make money at expense of retail investors.
If this is value buy….lets see shareholding pattern and share price after 6 months – 1year, till then porinju would have disappeared.
Instead of escalating this issue to SEBi, I’m sorry to see Arjun giving him a clean chit to porinju.
This is a classic insider trade and he bringing out with a Reco is all part of the game, the matter should be investigated by a competent authority.
Regards
Bhs
Also everyone should note that when he buys, he buy it in bulk so that his name will appear under bulk deals but when he is selling the stocks which made the fortune he will sell in small qty so that it wont appear in bulk deals.
Great article. Thanks for sharing.
The reserves have dwindled from 272 Cr in 2011 to 41 Cr in 2015. On the other hand, borrowings have escalated from 04 Cr in 2011 to 356 Cr in 2015. The other negative factors are Stock is trading at 4.18 times its book value. Company has low-interest coverage ratio. The company has a low return on equity of -37.81% for the last 3 years. Contingent liabilities of Rs.103.05 Cr.