Send a Query to Company's Management

Hello Investors,

Many a times, we make an investment in the company without going through much needed information and then after sometime, we realize that we need to get those information from the company's management. 

When I was new, I used to ask the company's personnel directly via email but most of the times, I wouldn't get the reply. Then I researched when are the companies bound to reply. Found pretty interesting and sensible stuff.

Investor Rights: As an investor of any company, we have full right of information regarding that company. Many investor might not know but the company management have to give the reply to any query that is sent via email.  

Company's Rights: The company is not liable or bound to reply to all the queries sent by investors. But they have to reply to the query which has specific information sent. That information is regarding the investment done by an investor.

There are many clauses given in right of Investors by SEBI. While we invest in a particular stock, we have some privileges and I sincerely request that we, as an investor should use those privileges. This makes the management aware that there is hard earned money invested by people in the company that they are leading.

To contact any company's management or regarding any queries, company with string management have formed a department which deals specially with Investor Grievances. You should easily find the email id specially allocated for investor grievances. Go to their website and chec k if the email id is present in the section of 'Investor Relations'. If you are unable to find it, check 'Contact Us'. 

If you are still unable to find it, don't worry. Check who is the Company Secretary of the company. Company Secretary is a personnel who has all the responsibility and rights to attend the investor complaints. If he is unable to reply back to the query, we can register a complaint regarding this to the SEBI. Once you get to know CS of the company, you can ask directly to the Corporate Office regarding his email address.


IMPORTANT Info:
All this stuff was pretty easy. Now the main stuff. The information that you need to send to the company, looking at which they have to reply to the query.

Along with the email you need to send the following info, for confirmed reply.

My investment details are as follows:

DP ID: ________(Your Brokerage Firm)

Client Id:_________

Full Name: _________

No. of shares: _____ qty.

DPID: It is the unique Id given to the depository participant allotted by the depository. Also write the brokerage firm name in brackets for better impact e.g. ShareKhan Limited

Client Id: It is the unique 8 digit code assigned specially to the owner of the Demat Account. All the information regarding the shares that has been traded by you can be obtained by Client Id.

Full Name: The name with which the Demat Account is registered.

Number of Shares: The total number of shares that you hold while sending the mail. (Not necessary but why not send the information if we have it).

Any mistake in the above information provided, the company is not liable to reply that mail.

For any query or doubts regarding the stock, its Corporate Announcement or any other issue, you can contact the company and clear your doubt.
Company with good Corporate Governance will reply to your query soon, in  contrast to some companies which so not bother. 
I am not sure here but this test can be used as a scale to measure the Corporate Governance of the company.
 
Do share the article so that maximum investors can take benefit and clear the doubts with minimal efforts.

Failure of Securities Firm

Its due to research firms shouting the targets that some of the stock don't perform as expected or upto their true potential, especially those that has Low volumes and that are not much volatile.

Due to research reports published by some small financial advisory on shares that has relatively lesser volumes in trade, the stock performs less as traders try to take the benefit out of such reports and stocks.

This is how it goes. I will try to explain it via example:

A research firms gives targets of a stock A to Rs 50.00 in 6 months. Stock A is not highly liquid and it trades with very thin volumes daily. Value of stock A is Rs 30 currently.

Traders know retail investors will buy and have increased interest in the share as it has been recommended publicly by research firm. Millions of users read the research report. Even if 10% of the investors invest in the stock, the volume increases quite significantly,

Traders enter at the time the report is released, say at band of Rs 30.00-35.00 but a huge quantity along with retail investors buying some.

Now, retail investors enter even at a level of Rs 37.00-38.00 sighting the targets Rs 50.00 which is still good and they then have the increased confidence in the share as the share has performed good after few days of report with good volumes.

Traders are ones who even consider profit of Rs 3.00-4.00/share very much due to their holding capacity. Traders tend to Exit at Rs 36.00-38.00 while retail investors is still thinking of Rs 50.00 price target.

Then the stock suffers a bit in that range only for sometime but that consolidation is  long. People start to think that there is not much potential left in the share unless there are some news. 

The retail investors tend to sell at some minimal Loss after a span of 3-4 months. But when the good results come the share will again start the journey as the stock has remained attractive. 

The moral of the story is 'Time is the key'. Don't invest because some research report says, try to figure out on your own after reports, which is the right time to BUY.

Examples of such stocks which I feel were not able to move up due to Research Reports that came out : Sudar Industries, Arvind Remedies, JVL Agro.

If you check the chart patterns of the 3 stocks, they were similar and the stock was in momentum and then came the research report, due to which the stock was unable to go up. So, my advice to all is to pick the stocks very carefully. You can do it by either

1. Selecting the stock with high liquidity and which has huge volumes.

2. The shares which does not have any research report associated to it lately.

Advice: If you have bought a particular share for a short term target e.g. Sudar Industries (when it was very illiquid) which is not much liquid and a research report comes regarding it, better to book profit while its on upmove, else even the profit that you were making will be wiped off.

BEWARE of Spammers.!!!

Hello Investors once again,

       As I told in earlier post, retail investors need to be aware of the spammers, as when they recommend any stock, the stock will move unusually and unexpectedly. Promoters may offload their stake and many other operators can take advantage of such SPAMS.



Now, How to check whether the stock recommendation is SPAM?

Frankly speaking, there is no appropriate way to check whether the recommendation by anyone is spam or not as everyone has different and contradicting views when asked about a particular share. What we, as a retail investor can do is check on Google whether the info provided in a spam message is true or not. But never be greedy and never listen to an unknown source as you are investing your hard earned money. And ya if you have xtra money, you can always contact me for investment related ideas ;)


e.g. Nowadays, Dolly Khanna is considered among the best investors as her investment in past 1-2 years has earned most than any other big investor. Spammers will post a message on MMB saying that Dollly Khanna is buying this stock. Now we cant judge if the message posted by him was true or not. 

Real Life example: I am bullish on Usher Agro stock. Have been accumulating it on dips and I feel that it is a perfect multibagger. It has showed all the signals that is shown in 'Multibagger in the making'. Someone posted a message that Dolly Khanna has started investing in it. As any normal investor would do, I felt that was a spam as there was no way I could get the right information unless the shareholding pattern for next qtr was rolled out. Shareholding pattern for Dec 2014 was rolled out and investors saw that there was no stake of Dolly Khanna. Some investors bought the stock just because Dolly Khanna invested. Now as Dolly Khanna was not ther in shareholding list, they might have sold the stock affecting the technical and chart pattern of the stock. Thus it creates a wave on uncertainty in the message board.

In another case, I track Asian Granito Ltd company from the levels of Rs 30.00 and have invested in it regularly on dips. I am super bullish on the stock even now. As I track AGL regularly, one day I found that there was one guy who wrote that Dolly Khanna is investing. Again I felt that was a spam as there was no way I could get the right information unless the shareholding pattern for next qtr was rolled out. And there it was. I was surprised as the guy was right and Dolly Khanna held 1.69% of stake in recent Shareholding pattern (Dec' 2014). This doesnt mean I am going to believe each and every boarder.

 Many boarders on MMB have successfully fooled investors and poor investors have lost tons just because of SPAM...

e.g. of such shares:
Via MMB: Syncom Formulations, Madhav Marbles, Jagsonpal Pharma.
Via Personal messages/Whatsapp: NHC Foods,Aurum Soft
    
Having said that, if you are an investor and using MMB service, then you might have noticed that in last week(date 20 Jan-25 Jan), the boards were flooded with the recommendation of BUY on 'Richa Industries'. I am not saying that the company is bad or it doesnt have future but if we have spammers activated like that on particular board, the stock movement becomes unexpected due to which investors might suffer huge loss. 

I tried so many times to warn investors on all the boards on MMB where there was possibility of spamming, but there are so many supporters of the Spammer that noone listened me and criticized me. Most of those who comment are his paid followers only but retail investors are unable to see it. Due to this, even retail investors used to ignore my sincere comments. All of them will regret they didn't listen me before when the quarterly results will be out. Once the results are out and its below expectations, The Spammer who has lot of followers will just leave the board. Check Syncom Formulations, a classic example.




Consequences: The main thing to look out for is that if promoters are not trustworthy, they can sell their stake in such conditions when there are many more buyers available than sellers as they sell in chunk. It has been noticed in many of the shares where the share price is inflated with the help of spammers/operators and when the price is High, the promoters sell their stake. Promoters are even known to hire the spammers for similar activity.


Disclosures: I am not against any particular fellow or group but its the black truth that prevails in our share market. Most benefit for the spammers is due to the practice if investment prevailing in Share Market. The investors even in this age of internet buys share without researching.
A sincere request: Always research the stock and look into its future before buying any share. If you are not smart enough, do consult your investment advisor.

Wanted to write this blog from a long time but was really kept busy with work of investments.