I took a small position (3% of portfolio) in IKAB Securities and Investments Ltd.
It was recently acquired by Mr. Madhusudan Kela of MK Ventures.
Mr Madhusudan Kela is a well known investor and was the Chief Investment Officer in Reliance Mutual Fund in the past. He was the architect behind the staggering growth in RMF’s AUM from less than Rs. 200 Cr to over 1 lakh Cr in less than a decade, for which he was recognised as the Best Equity Fund Manager, and received this award from the Prime Minister of India.
After a 17-year successful stint at Reliance Group, he went entrepreneurial in Jan 2018. He is currently the promoter of a proprietary investment vehicle started in 2018 — “MK VENTURES”, which is a boutique proprietary investment firm focussed on alpha opportunities. He is also on the committees of CII, FICCI and SIDBI.
Mr. Sumit Bhalotia has been appointed as Non-Executive Director of the company. He has over 15 years of work experience across diverse industries and includes more than a decade of experience in equity research & fund management. He is currently associated with MK Ventures. Before joining MK Ventures, Sumit was Assistant Vice President – Investments at Reliance Capital Ltd. Sumit has also been instrumental in developing a lot of the team’s proprietary models and market assessment tools. He closely tracks disruptions in existing businesses and emerging technologies, especially in Fintech, which has led to some of the firm’s key investments in this space.
Old investments in equities have been liquidated and the capital is kept in liquid funds. Company has no debt at present.
Approval has been sought to change the name of the Company from the existing Ikab Securities and Investment Limited to MKVentures Capital Limited in the board meeting. This seems to be an indirect listing of MK Ventures and would be used as a future investment vehicle of the firm.
After initial rise due to acquisition, the stock is currently in a consolidation phase. This can be a good opportunity if they can replicate the success of Reliance fund.
Risks associated with the business
- There is no current business activity of the company.
- The valuation is high at present in relation to the book value.
- No commentary by the management on how the company will operate in the future.
- Mr. Madhusudan Kela has acquired 83.66% of the company and will have to sell some portion to make it below 75% due to SEBI mandatory rule. This will have negative pressure on price when he sells.
- Company might be taken private, but the chances are very low.
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