Common mistakes and uncommon losses: Real case studies from the Indian market. This presentation covers the case studies of the companies where the investment went down the drain. It was delivered in "Small-Cap Investor Summit 2.0" organized by "The Investment Lab" in Mumbai on 14th Dec 2019.

1. Twitter - @niteen_india 1
Niteen S Dharmawat
Website: https://aurumcapital.in
Twitter: @CapitalAurum / @niteen_india
Email: info@aurumcapital.in
Be a wise
investor…
Common mistakes and uncommon losses
Real case studies from the Indian market

2. Twitter - @niteen_india 2
IMPORTANT DISCLAIMER:
The information herein is used as per the available sources of bseindia.com/nseindia.com, company’s annual reports & other
public/private database sources. Aurum Capital is not responsible for any discrepancy in the above mentioned data. Investors
should seek advice of their independent financial advisor prior to taking any investment decision based on this report or for
necessary explanation of its contents.
Future estimates mentioned herein are personal opinions & views of the analyst. Analyst Name – Niteen S Dharmawat. For
queries / grievances – support@aurumcapital.in. SEBI registration No: INA000011024
Readers are responsible for all outcomes arising of buying / selling particular scrip/ scrips mentioned here in. This report
indicates opinion of the author & is not a recommendation to buy or sell securities. Aurum Capital & its representatives may have
vested interest in above mentioned securities at the time of this publication, and its partners / company have positions / financial
interest in the securities mentioned above.
Aurum Capital, or its associates are not paid or compensated at any point of time, in last 12 months by any way from the
companies mentioned in the report.
Aurum Capital, or its representatives do not have more than 1% of the company’s total shareholding. Ownership of the stock:
may have advised to clients. Served as a director / employee of mentioned companies in report: No. Any material conflict of
interest at the time of publishing report: No
The views expressed in this post accurately reflect the author’s personal views about any and all of the subject securities or
issuers; and no part of the compensations, if any was, is or will be, directly indirectly, related to specific recommendation or
views expressed in the report.

3. Twitter - @niteen_india 3
About OUR company:
Aurum Capital is a SEBI registered investment advisory services company. Started
by Jiten Parmar and Niteen Dharmawat, who together have more than 4 decades
of experience investing in equities and guiding and mentoring fellow investors.
This rich industry background helps us understand companies, complexities of
business and tipping points that make or break a company. Our approach is not
limited to just number crunching but going beyond. We focus on the business,
strategic direction, the competitive landscape, the governance process, the
background of the promoters, turnarounds, to name a few. Often these are more
critical items than just numbers. Jiten and Niteen have successfully waded through
multiple bear and bull market cycles.

4. Twitter - @niteen_india
Which stock would you buy for 5 years?
4
Stock B
Rs 9785
Stock A
Rs 27

5. Twitter - @niteen_india
Price v/s Value?
5
Penny stock mentality:
How much it will fall from here?
Do you know the name of this stock and current price?
Bad Hint: Service industry, tyres and fuel important for this.
Rs 27 in Feb2012
Rs 7 in Aug 2012
Ever high Rs 290 in Dec 2007
Rs 9785 in Feb2012 Rs 11000 in Aug 2012
Expensive stock mentality:
How much it can go up from here?
Do you know the name of this stock?
Hint: Tyres manufacturer and crude is a critical item. 
Ever high Rs 80800 in Jul 2018
Stock B
Stock A
Now 0
Now 63000

6. Twitter - @niteen_india 6
Case 1: Manufacturing and exporting Public Address Systems - Woofers, Amplifiers,
Computer Speakers, Personal Speaker System, Headphones, and Earphones
• Some prominent investors in IPO/Post-IPO
• Widely discussed/pushed in SM/WhatsApp groups
• Promoter absconding now
• Debt taken from Banks/FIs: NPA
Listing At: NSE SME
Issue Open: May 9, 2018 - May 11, 2018
Issue Price: ₹140 Per Equity Share
Issue Size: 46.66 Cr
CMP: Trading banned
• The Company also trading in the fabric???
• Strong presence in African Continent, UAE, South America,
Singapore, Dubai, Bangladesh, Vietnam, Nepal
• Products sold in 56 countries across 6 continents
• In India, 17 States, dealer network of more than 240
• Opened showrooms in Dehradun, Saharanpur, Chomu, Guwahati,
Jeopur, Patna, Raxaul, Bhagalpur, Calicut and Hyderabad which
are run by dealers.
Source: company website, publically available info
Board of directors

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Case 2: one of the fastest growing private sector dairy companies with a new range of
innovative products and enjoys a large presence in Northern India.
Mar
2007
Mar
2008
Mar
2009
Mar
2010
Mar
2011
Mar
2012
Mar
2013
Mar
2014
Mar
2015
Mar
2016
Mar
2017
Mar
2018
TTM
Sales 149 329 577 1,048 1,604 2,394 3,692 4,578 5,268 5,658 6,131 6,725 556
Interest 2 5 12 21 37 65 93 114 136 151 172 235 68
Depreciation 1 1 1 2 4 8 10 13 25 23 22 126 86
Tax % 34% 34% 33% 40% 24% 2% 11% 16% 17% 34% 30% 51%
Net Profit 4 5 9 18 46 91 97 127 141 135 164 71 -2,073
Mar
2007
Mar
2008
Mar
2009
Mar
2010
Mar
2011
Mar
2012
Mar
2013
Mar
2014
Mar
2015
Mar
2016
Mar
2017
Mar
2018
CFO -1 -11 -42 -96 -139 -135 -71 19 192 9 238 55
Mar
2007
Mar
2008
Mar
2009
Mar
2010
Mar
2011
Mar
2012
Mar
2013
Mar
2014
Mar
2015
Mar
2016
Mar
2017
Mar
2018
Sep
2019
Share
Capital
18 18 18 18 20 20 20 20 22 22 24 24 24
Borro
wings
15 34 91 219 425 667 881 1,072 1,098 1,335 1,508 1,699 1,829
Recei
vables
24 64 154 261 414 656 930 1199 1151 1419 1373 1700 49
Gross
Block
17 19 21 32.2 59.74 89.14 108.31 147.38 119.3 146.16 532.31 667.23 -
• Very low depreciation number, small gross
block, no major change YoY
• Still company’s debt going up, equity
dilution happening, receivables numbers
going up, company showing huge revenue-
profit growth
• Promoter pledging going up….
• CFO consistently negative
• Now a NCLT case
Milking the investors

8. Twitter - @niteen_india 8
Case 3: A vertically integrated multinational medical technology Group
From Rs140 to
now Rs3
Rs 244
on Jan 4 2008*
As on Dec 2007
• FII holding 25.49%
• MFs holding 4.3%
Rs 221
on Feb 17 2012*
As on Dec 2012
• FII holding 37.34%
• MFs holding 0.07%
• Strong FII holding
• Increased holding by 12% in 5
years (equity dilution)
Year Mar 2008 Mar 2009 Mar 2010 Mar 2011 Mar 2012
Share
Capital
94 161 183 186 242

9. Twitter - @niteen_india 9
Case 4: A Small Cap company operating in Gas & Petroleum sector
TIPs take you to PITs: after reading Google news/Forums
• Someone I know bought few lac
shares, despite my warning,
believing Google news with a target
price of 100 in next few years.
2006 2007 2008 2009
CFO 0.12 1.12 -27.87 112.69
2006 2007 2008 2009
Capital 5.03 5.03 794.00 794.00
2006 2007 2008 2009
Sales 0.02 0.03 0.08 0.03
• Corporate Insolvency filed
• SEBI barred 8 entities from securities market for 10
years in the case of manipulations related to GDR
issuance, while two have been asked to return
'unlawful gains' of $92 million

10. Twitter - @niteen_india 10
Case 5: Education and training company based in Chennai
 ‘Darling’ of punters
 Several stories around the business model
 FII holding close to 28%
 Some prominent names on the board could also not save it
 CBI caught one of the directors of the company in a bribery case
Parameter Mar-11 Mar-10 Mar-09 Mar-08
Net Profit 67.64 45.45 22.08 13.8
CFO 16.01 25.13 -8.98 13.31
Signal
In INR Crs
Poor
shareholding
pattern
From Rs350 to
now Rs0
The company has gone into liquidation in 2016

11. Twitter - @niteen_india 11
Case 6: a leader in the Security Surveillance domain, the first company of its kind
 “Big names” leaving dangerously
 Promoters holding 21% (unpledged 8.4%)
 Big stories =>
poor cash flow & receivables numbers
In INR Crs
Parameter March-08 March-09 March-10 March-11 March-12 March-13 March-14 March-15
Net Profit 1.45 19.36 15.03 44.46 16.84 30.32 41.94 50.59
CFO -9.02 -40.41 0.46 -114.28 -15.53 -42.34 2.87 -51.66
Signal
Parameter March-12 March-13 March-14 March-15
Share Capital 12.7 17 17.6 20.2
Borrowings 160.37 318.3 436.82 555.7
Equity dilution
+
Borrowings
From 185 to 3 in no time

12. Twitter - @niteen_india 12
Case 7: A specialist across the varieties of cables
Parameter Mar 2010 Mar 2011 Mar 2012 Mar 2013 Mar 2014 Mar 2015 Mar 2016
Net Profit 10.59 15.22 23.81 57.91 100.09 159.99 163.48
CFO 4.81 4.47 14.81 31.12 20.89 -46.69 21.57
Signal
 Fast growing cables manufacturer
 High double digit growth in Profit and Sales
 High 20s ROE and ROCE numbers
From Rs235 to Rs29 in one month
• Promoter holding 41.19%
• 100% pledged 
From Rs6 to now Rs235 in four year
From 235 to now Rs0

13. Twitter - @niteen_india 13
About OUR company:
Aurum Capital is a SEBI registered investment advisory services company. Started
by Jiten Parmar and Niteen Dharmawat, who together have more than 4 decades
of experience investing in equities and guiding and mentoring fellow investors.
This rich industry background helps us understand companies, complexities of
business and tipping points that make or break a company. Our approach is not
limited to just number crunching but going beyond. We focus on the business,
strategic direction, the competitive landscape, the governance process, the
background of the promoters, turnarounds, to name a few. Often these are more
critical items than just numbers. Jiten and Niteen have successfully waded through
multiple bear and bull market cycles.

14. Twitter - @niteen_india
Thank you
Email:
info@aurumcapital.in
Twitter:
@niteen_india
@CapitalAurum
14

15. Twitter - @niteen_india
IMPORTANT DISCLAIMER:
The information herein is used as per the available sources of bseindia.com/nseindia.com, company’s annual reports & other
public/private database sources. Aurum Capital is not responsible for any discrepancy in the above mentioned data. Investors
should seek advice of their independent financial advisor prior to taking any investment decision based on this report or for
necessary explanation of its contents.
Future estimates mentioned herein are personal opinions & views of the analyst. Analyst Name – Niteen S Dharmawat. For
queries / grievances – support@aurumcapital.in. SEBI registration No: INA000011024
Readers are responsible for all outcomes arising of buying / selling particular scrip/ scrips mentioned here in. This report
indicates opinion of the author & is not a recommendation to buy or sell securities. Aurum Capital & its representatives have
vested interest in above mentioned securities at the time of this publication, and its partners / company have positions / financial
interest in the securities mentioned above.
Aurum Capital, or its associates are not paid or compensated at any point of time, in last 12 months by any way from the
companies mentioned in the report.
Aurum Capital, or its representatives do not have more than 1% of the company’s total shareholding. Ownership of the stock:
may have advised to clients. Served as a director / employee of mentioned companies in report: No. Any material conflict of
interest at the time of publishing report: No
The views expressed in this post accurately reflect the author’s personal views about any and all of the subject securities or
issuers; and no part of the compensations, if any was, is or will be, directly indirectly, related to specific recommendation or
views expressed in the report.