JBF Ind ~ From Rs 300 to Rs 169 ~ KKR Investment destroyed 44% inside two months
In July 2015,it was decided that KKR Private Equity led by Sanjay Nayyar,ex Citi Head would infuse @ US $ 150 m in the JBF Group through a preferential allotment
On Cue on July 31,2015 the 52 Week High of Rs 318 was recorded
It’s been downhill since & is currently at 52 week lows of Rs 169
The Preferential allotment took place in end December 2015 with KKR Jupiter Investors Pte Ltd as below & when the Market Price was yet respectable at Rs 245 :
- Rs 491.23 crs Invested in listed JBF Industries through 16374370 shares at Rs 300(Rs 10 FV + Premium Rs 290) to acquire a 20% stake of post allotment Equity of Rs 81.87 crs
- Rs 500.65 crs Invested in JBF Global Pte Ltd,a wholly owned subsidiary of listed JBF Industries,through 12210527 Compulsory Convertible Preference Shares equivalent to US $ 75649902
KKR nominated Nikhil Srivastava on the Board….would be interesting to be a fly on the wall during Board Meetings now!
JBF Industries also has six step down subsidiaries through it’s wholly owned subsidiary,JBF Global Pte Ltd based in Singapore
Through one of its step down subsidiary, JBF Petrochemicals Ltd, it is implementing a 1.25 m tpa greenfield PTA Project at Mangalore which should be completed in six months although it was expected to be completed in FY 16 as expressed in the FY 15 Annual Report
So what do you think ?
Did KKR pay an inexcusably high Rs 300 per share for it’s 20% stake ?
Do you sense an Opportunity at Rs 169?
Bumped into the Guy whose firm advised on this Placement at Rs 300 & I asked him how did they manage to make a sucker of KKR !
He said it’s a “No Brainer” !
🙂 Wonder if he meant it’s easy to make a sucker of KKR or that it’s a great opportunity to buy now in the secondary markets !
KKR ,you guys should have touched base with me before deciding on this Investment !
Don’t tell me you don’t know who played this Scrip in 2015!
5 thoughts on “JBF Ind ~ From Rs 300 to Rs 169 ~ KKR Investment destroyed 44% inside two months”
Astounding and unbelievable. And if this can happen with a renowned and credible PE firm like KKR, then, it can happen with a large number of other investor/players.
Though, to be fair, market has also crashed after that and currently in the doldrums. Many great scrips have also come down and so too JBF.
Yes,Kamal & to their credit,in December 2015 KKR honored the July 2015 commitment made at Rs 300 even when Price had sharply corrected….my contention is that Rs 300 was itself too high a price to have been committed by KKR…they should have seen through market play up in July 2015 & before….wonder why they ignored this & if they did not then their ‘Value Vs Price’ should have been more diligent an exercise….perhaps in hindsight we all are right
Sir
Another Nakoda? Or only like Garden.
No NRV, JBF is not another Nakoda or Garden….however Value Vs Price Debate on this is an interesting exercise
Same happened with KKR while investing in NCC in terms of share price which tanked soon after the investment.