Sahara group raised Rs 3,534 cr every month
After the Allahabad High Court effectively put a lid on the money raising operations of two group companies in April 2011, the Sahara India Pariwar’s net outstanding went up by a whopping Rs 14, 286 crore, according a Business Standard analysis of two financial statements published by Sahara group for period ending April 30, 2011 and September 30, 2012. The first statement is available on the group’s website while the latter was put up in newspaper advertisements on December 1.
In the 17-month that separates the two dates, the Sahara group raised Rs 60,091 crore from various sources, small investors in North Indian states forming a significant portion. During this period, it refunded Rs 45,805 crore, thus giving a net inflow into the group coffers of Rs 14,286 crore. This sum gives for the first time a glimpse of the power of Sahara’s million-strong money raising army,that operates in over 4618 centres across the country.
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According to the first statement, the book value of “total fund received /raised from public since 1978 till 30/4/2011, outstanding balances of secured loans from banks, advances against various projects, Life Insurance policy holders fund and mutual fund etc" stood at Rs 164,909 crore. The recent statement says “total fund received/raised from public since 1978 till 30/9/2012 with accrued interest including life insurance policy holders fund, mutual funds, Credit Cooperative Q shop customers advance, bank loans in India and overseas etc" stood at Rs 2,25,000 crore.
Similarly, “Net outstanding liability of public deposits, OFCD, secured loan from banks, advances against various projects, Life insurance, MFs" stood at Rs 40,078 crore on April 30,2011. This swells to a “net outstanding liability(including accrued interest)" of Rs 54,364 crore, according to the latest advertisement.
The key difference between the two statements is that advances against various projects, OFCD get replaced by Q shop advance and Credit co-operative.
On a gross basis, Sahara raised a whopping Rs 3,534 crore every month, despite the various legal proceedings initiated by Sebi. On an average, each member of the million strong workforce raised some Rs 35,000 per month from their investor base. The group’s land bank also increased considerably during the period according to its statements.
In the 2011 statement, the group said, “Sahara India Pariwar is having total land bank majority owned and some under MOU (sic) is around 33,633 acres. Additionally, we are in the process of buying around 11,000 acres."
The land bank has grown by 2,998 acres to 36,631 acres as per the latest statement. As a result value of the “land, inventory and work in progress" grew by 60% to Rs 36,358 crore.