A true and complete disclosure has never been the forte of Trident group. At the time of the issue, ASCL had apparently misled Sebi into believing it to be a company with a three-year dividend record as evidenced by Sebi's press release of March 4, 1998. Based on "communicated observations", Sebi certified ASCL as "a company having three years dividend paying record". Yet the issue prospectus of ASCL did not furnish any working results for any past year. The company admittedly did not prepare any P&L account as there was no commercial production! Even otherwise, if Sebi had cared to vet the track record of the group, it would have been able to establish that its listed companies are all out of the dividend list.

The stock market performance of the other four listed companies of theTrident group does not provide any inspiration. While the group companies have made a fine art of repeatedly raising public money, the investors have not benefited from being loyal to the group.

Abhishek Industries Ltd (ABIL), a joint-sector project for the manufacture of cotton yarn, is currently languishing around Rs 3 on the BSE. VACL, the major private promoter of ASCL, is trading at Rs 7.50 on the BSE. Worse still, Trident Alco-Chem Ltd (TACL), engaged in the manufacture of organic chemicals has not witnessed any trading at all on the BSE in the recent past! And, similar is the fate of investors in Abhishek Industrial Corporation Ltd (AICL)! Even on the operational front, the Trident group companies have not exactly set river Sutlej on fire. VACL, TACL and ABIL have reported earnings per share of Rs 1.96, Rs 3.16 and Rs 2.35 respectively for the year ended December 1997, while AICL reported losses for two consecutive accounting periods ended December 1996.

What is more, all the four companiesskipped dividend for the last reported accounting period. On another plane, time and cost overruns have perennially plagued the Trident group with VACL and ABIL both being laggards in implementing some of their earlier projects. Another disquieting feature of ACL is its debt-equity ratio of 1.57:1, which indicates high gearing. What is more, ASCL's forex loan component at Rs 55 crore accounts for more than 60 per cent of its borrowings. The accompanying forex risk has the potential to undermine the company's bottomline. Considering all these factors, it will indeed be a major surprise if the ASCL scrip continues to trade consistently above par.

Sun rise awaited: Meanwhile, another development that has gone unnoticed is the quiet listing of the public issue equity shares of the Chennai-based Sun Paper Mill Ltd (SPML) on May 14, 1998. The company, promoted by B Sivanthi Adityan, who also owns the largest circulating vernacular daily in Tamil Nadu, `Daily Thanthi', made its Rs 8.25 crore par issue ofequity shares on March 23, 1998. After excluding the firm allotment of Rs 4.75 crore to the promoters, the net offer to the public worked out to Rs 3.5 crore. Despite poor market sentiments, the public offer attracted subscription 1.41 times. The basis of allotment was finalised in double quick time on April 15. However, it took nearly a month thereafter for SPML to list the new shares on the Chennai Stock Exchange (MSE).

Incidentally, MSE is the only stock exchange where the existing as well as the new shares of SPML have been listed. However, in spite of the listing in May 1998, the shares have not appeared on the trading screen of MSE even once so far.

A scrutiny of the basis of allotment indicates that investors applying for 1,000 shares or less have bid for 22.35 lakh shares amongst them, or nearly two-third of the net public offer, while investors seeking more than 1,000 shares and corporate bodies accounted for the balance subscription of 26.91 lakh shares. The success of the SPML issuehighlights the fact that investors are not averse to extend support to companies with acceptable managements.

Prior to the public issue, SPML had an equity base of Rs 0.62 crore, of which 74.51 per cent was in the hands of the promoters. The total number of shareholders before the issue was 249. Due to its poor liquidity, the company's shares, though listed, were rarely traded on MSE. So much so that at the time of the public issue, the last recorded quote dated back to October 1985, more than 12 years behind! Post-issue, the company's equity base stood at Rs 8.87 crore, of which the promoters held 58.75 per cent and the public, nearly 40 per cent. The public offer has not only resulted in a quantum jump in equity from Rs 0.62 cr to Rs 8.87 crore, but has also witnessed a 20-fold increase in the shareholder base to more than 5,000. Considering the manifold growth in the floating stock as well as the shareholder base, it is indeed surprising that SPML has not even been able to register a tokentrade.

J&K Bank to list soon: Meanwhile, Jammu & Kashmir Bank (J&K Bank), which came out with a premium equity issue in May 1998, has continued to delay its entry into the bourses even though 65 days have elapsed since the issue closed on May 25, 1998. However, since the 70-day stipulation for listing is fast running out, J&K Bank's maiden appearance on the stock market during the next week appears imminent!

(Arranged by Investar -- The Aarthik News & Research Syndicate)