Saturday, March 6, 2010

Empower industries india ltd:operator’s interest and speculation


I want your valuable advice in Empower industries india ltd. Should I invest in this stock.pls suggest me.what is it future? ask by shri Anoop kumar from kerala
a. empower industries India is an IT company of 1 rupees face value.
b. this share is related with BSE group T share and free float quantity of this group share is very low so these share get circuit easily. Currently this share is on 5 percent upper circuit.
c. 52 week low for this share is 2.55 only
d. fundamentally it is not sound EPS of FY 08-09 only 0.11 so shares traded at very high very risky P/E. more than 390
e. promoter hold only 7.32 percent in empower industries very low promoter holding.
f. Empower Industries India Ltd has informed BSE that the Board of Directors of the Company at its meeting held on February 12, 2010, inter alia, has approved the following matters:1. Issue of Bonus Shares in the Ratio of 23:2 (Twenty three new Equity Shares for every 2 existing Equity shares held) to the existing Shareholders of the Company as on the Record date.2. Issue of 3,00,00,and 000 Equity Shares on Preferential Basis to various Allotters under Section 81(1A) of the Companies Act, 1956.3. Increasing the Authorized Share Capital of the Company from 2 Crores to 15 Crores.
g. all of above points are bad for share and dilute equity of this share means reduce EPS of company for more information about how bonus reduce EPS of company read following link
http://sharegenius.blogspot.com/2009/10/bonus-issue-gives-only-psychological.html
h. bulk deals happen in this share that so operator’s interest and speculation so I think one can avoid this share .

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