Tuesday, November 4, 2014

Hovs Limited : Second Update and some discoveries pertaing to Hovs Ltd.

Further to my Blogs on Hovs Limited (Here), (Here) .

When we mine in the unknown / Unlisted companies, we try to deduce and infer based on facts and material available in public domain. Also at times it may happen the some more facts are there in public domains but are not discovered by the person finding the details. Sometimes it may happen that related news are glanced and discarded as non - essential for inference. Also some facts about unlisted companies are known only after some statutory filings are done by companies. Before such filings are done, it is very difficult to discover the facts.

I accept that I did not come across some facts about SourceHov and some news which were there in public domain were discarded as unrelated. But I would share what has transpired to me now.

Some more facts about SourceHov.

a) Citi Venture Capital International (CVCI) does not hold shares of SourceHov but now it seems the shares are held by The Rohathyn Group (Here), (Here), (Here).

(This inference is based on above mention link.)

b) Shares held by Rohathyn Group has been sold by them to HGM (The fund promoted by promoters of Hovs Limited) today i.e 4th Nov, 2014.(Here), (Here), But no Release on Sites of Bantec or SourceHov yet.

This fact that CVCI is not the share holder and there is a new shareholder named Rohathyn Group leads us to change our hypothesis on some deal structure of Hovs LLC with SourceHov.

a) The transparency in valuation for SourceHov can be compromised.

b) The deal between Rohatyn and HGM is closed but valuation of the deal is not known.

c) The postal ballot of Hovs Limited also takes permission to sell stake to parties other than the promoter group, but now the deal is already closed by promoter so no question of better price by some competitor.

d) Now the only question in postal ballot remains, can Hovs LLc sell its stake in SourceHov to promoters ?

e) The last question still remains , if the shares held by Hovs LLc are sold, what is to be gotten by shareholders of Hovs Limited ? A very Hefty Dividend ?

I had also raised the issue of corporate governance with SEBI regarding voting of non - promoter shareholders  who are also associated with HGM ? The CFO of HOVS Limited replied that

" In any case, we further state that , any shareholder who is not entitled to vote on resolutions proposed in the postal ballot notice dated September 30, 2014 under applicable law, will abstain from voting or such shareholder's vote will not be taken into account"

From the above we can at least infer that such votes may not be counted in final postal ballot now.

I also expect some announcement by Hovs Ltd to Stock Exchanges for us to get further clarity on slae of Shares of SourceHov and also postal ballot.

This is not a recommendation to anybody whatsoever to buy OR sell this share, but it is my thought process and views on this company.

I welcome your critical comments and suggestions.

PS : I have some position in the stock, So I can be Biased



    1. Hi,

      The residual shares of four soft was named as palred tech.

      After big dividend, the company said that they will declare another div of 29 per share out of two share by way of reduction of capital.

      Then the company applied for the same with various authorities for the same, but in the midst the original promoter came with open offer @16.70 ( at the same price as div+ share of residual value).

      I guess the shares were tendered in open offer was by Kotak and Et al, by which they got the exit, now the company is in need of fund for growth and so they have reduced the amt for the value to be paid to share holders for reductoin of share capital. (The propmoters will also take back the money)

      The only question is the propmoters did not speak of reduction of capital during the open offer. Also there wont be pressure to be transperant from institutional shareholders like Kotak.

      Also I guess the promoters in the past were sucessful and also transperant to declare huge dividend. I hope the new funding requirement will bring higher returns to share holders. Also Investors like Aashish Dhawan is still invested in the company.


  2. Hi,

    The HOVS's announcement in stock exchanges about increase of stake to 44% in sourceHOV has been pulling down the price of HOVS. Is this price fall due to the fact that investors feel that they are kept in dark about happenings inside?


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