The news came as a big surprise because Geometric is one of the few stocks which suffers the ignominy of having been called a “disaster” in public by the Badshah of Dalal Street.
Rakesh Jhunjhunwala’s love story with Geometric dates back to several years ago. On 6th November 2003, at a public meeting conducted by capitalideasonline.com, Rakesh Jhunjhunwala was asked to name two of his favourite stocks. He named … hold your breath … Titan Industries .. and … Geometric. Interestingly, while Rakesh was a bit diffident about Titan (it had already doubled and had huge debt), he was very bullish on Geometric and called the PLM (product lifecycle management) space in which Geometric was engaged “the biggest element of enterprise software” and bought 39.65 lakh of its’ shares.
Rakesh Jhunjhunwala had good reason to shame Geometric by calling it a “disaster” because since that fateful day of 6th November 2003 when Geometric was quoting at Rs. 45 (adjusted for splits etc), it is today quoting Rs. 116, giving an aggregate return of 141%. The bulk of the gains have come in the past three months when Geometric spurted 67% from Rs. 69 to Rs. 116. If you ignore the past three months gains, Geometric has been a poor show.
In contrast, Titan Industries, which was the other stock pick of Rakesh Jhunjhunwala on that fateful day of 6th November 2003, has given investors a cumulative return of 4125% to date.
The problem with Geometric is that its original promoters, the Godrejs, appear to have lost interest in it and want to palm it off to the highest bidder.
Anyway, with today’s purchase of 28.26 lakh shares, the cumulative holding of Rakesh and Rekha Jhunjhunwala in Geometric has risen to 14.55%.
Maybe, now that Rakesh Jhunjhunwala has a big chunk (he was already the single largest shareholder of Geometric with a 8% shareholding), he will be able to whip the management of Geometric into shape and get them to perform like Titan Industries. Lets’ hope for the best.