Everyone wishes to own a 2-wheeler or a 4-wheeler and every 2/4 wheeler needs a battery. Further, every battery has on an average a life span of 3-4 years and thus one needs to change battery in his/her automobile every 3-4 years. Similarly, it goes for UPS and their batteries. Thus, manufacturing batteries seems like a good and recurring business, so why not look at one of the major companies that deals in Automotive and industrial batteries.
Amara Raja Batteries (NSE Code – AMARAJABAT), in case the name sets you thinking about this new brand in the segment of batteries apart from the well known Exide and Amaron, it would be interesting to mention here that Amara Raja is the company behind the well known AMARON and Powerzone brand in the segment of automotive and industrial batteries respectively.
Yes, Amara Raja Batteries (ARBL) is the second largest battery maker in India, after Exide, and is already challenging Exide’s un-disputed leadership in the automobiles battery segment, while commands a leadership position in the Industrial battery segment.
ARBL was set-up in 1985. The company began commercial production in 1992 and got its first bulk order of 200 sets of batteries from the Department of Telecom (DoT) around 1993, followed by a commercial order in 1995. ARBL was the first company in India to launch batteries based on VRLA (Valve regulated lead acid) technology and back in early 1990s DoT was their biggest client.
Realizing the need to diversify and not be dependent on the Government alone for the business, in Dec’97 the company entered into a Joint Venture Agreement with US based Johnson Controls Inc (JCI), the world’s largest manufacturer of automotive batteries, to manufacture automotive batteries in India with an advanced technology. Thus, in 2000 ARBL entered the segment of Automotive batteries with the launch of AMARON batteries based on Zero maintenance technology for the first time in India, the key differentiator in an otherwise cluttered automotive battery market.
Since the company started business by focusing on the industrial segment, it commands a market leadership in Telecom and UPS battery business with 45% and 32% market share respectively.
In the Automotive battery business, Exide commands the leadership position by a wide margin, however it is important to note here that ARBL started with the automotive battery division in 2000-01, while Exide’s been in the business since 1950s. In the light of the same, we like the fact that on the back of improved technology and a differentiated distribution strategy, ARBL has been able to garner a market share of 25% in OEM and 30% in after market segment in just 12 years in the organized four-wheeler battery business.
Until 2007-08, the company was not providing batteries in the two-wheeler automotive battery segment; however, since the launch of Amaron Pro Bike Ride brand in the two-wheeler segment in May’08, the company has been able to garner a market share of 25% in the organized replacement battery market, despite the fact that they still don’t have any presence in the two-wheeler OEM segment.
It is important to note here that the replacement market has better margins and is relatively insulated from tightening interest rates that tend to affect auto and auto ancillary sales.
As can be observed from the above illustration, the company’s performance has been very good over the years and consistently delivered return on equity in excess of 20%. Ignoring the small base of FY 06, the company has still been able to grow at 23% on annualized basis during the last 4 years and it is important to note here that during the same period the automotive industry went through extreme lows and highs.
Besides, the company achieved the above performance on the back of debt free balance sheet and consistent yet effective capacity expansion. Even during FY 12, the company enhanced its 4-wheeler and 2-wheeler battery capacities to 5.60 million units per annum (4.2 million units p.a. at the end of FY 11) and 4.80 million units per annum (3.6 million units p.a. at the end of FY 11) respectively. For FY 13, the management has indicated enhancing the capacity of 4-wheeler batteries to 6.0 million units per annum.
Despite the above expansion, as at 31st Mar’12, the company continues to be debt free with cash and cash equivalents in excess of Rs 230 crores.
The Indian battery industry commands a certain branding power on account of being duopoly in nature with top players’ viz. Exide and Amara Raja controlling ~90% of the organized market. As I see it, amongst all the components in the automobile, battery probably commands the highest degree of branding power.
Further, companies like Amara Raja and Exide are able to pass on the rise in input costs, primarily lead, in the replacement market. With OEMs, they have a “lead pass through agreements”. These contracts are linked to LME prices, such that a rise in cost of production due to lead is passed on to OEMs, though with a certain degree of lag.
Strong replacement market is another positive for battery manufacturers. At the end of FY 03, there were 6.7 crore registered vehicles in India while the number of registered vehicles are expected to have crossed a mark of 14.5 crore at the end of FY 11. Since the average life span of battery ranges from 2-4 years and since the battery replacement decision cannot be deferred, companies like Amara Raja are expected to benefit immensely from the ever increasing number of registered vehicles on the Indian roads.
Even though automobile industry witnessed muted growth in FY 12, over the longer term the industry is expected to maintain the growth rate of ~13-15%. Besides, in the automotive battery business, the unorganized segment still accounts for ~45% market share, however it’s steadily declining in favor of organized segment and thus there lies a good opportunity for ARBL.
What is best about ARBL is its constant search for better technology and these days’ customers are willing to shell extra money in the name of advanced technology.
Areas of concern
For FY 11, ARBL derived ~20% of its revenue from Telecom sector. Off-late ARBL’s been witnessing pricing pressure on telecom batteries as the telecom industry is facing a lot of headwinds and the companies are resorting to cost cutting measures such as sharing of towers, thus bringing down the expansion of telecom infrastructure. However, company has still been able to manage low double digit volume growth on account of good order flow from Airtel’s expansion in Africa and since the company enjoys the “Preferred supplier status”.
Lead accounts for ~85% of the total raw material cost of the company and the prices of lead have been very volatile in the past. Though ARBL enjoys “lead pass through agreements” with OEMs, there’s a certain degree of delay before the company is able to pass on the hike to the customers and thus in a year with a sharp increase in prices of lead, the margins of the company can come under pressure.
Lastly, Mr. Jayadev Galla, the Managing Director of ARBL evinced interest in joining politics and this is a much bigger area of concern for me.
The stock is currently available at a market cap of Rs 2600 crores, i.e. 12 times trailing twelve months’ earnings of Rs 215 crores. The company is debt free (78 crore outstanding interest-free sales tax deferment loan representing a financial incentive by the state of Andhra Pradesh for setting up industry in a backward area. The sales tax collected by the Company in a particular year needs to be paid to the government after 14 years) with cash holdings in excess of Rs 230 crores.
We believe that valuations are attractive given the fact that both Amaron and Power Zone are two major brands in the automotive and industrial battery segment respectively. Further, on the back of advanced technology and the differentiated distribution strategy the company has been able to convert the industry from Exide’s monopoly to ARBL and Exide’s duopoly in just 10 years, which speaks volumes of the management’s execution ability.
The growth outlook is very bright for the battery segment and ARBL has been consistently expanding its capacity and its distribution network in order to sustain the growth momentum.
Note: This is not to say that the stock cannot witness any short term corrections, however 10-15% correction to ~Rs 270-275 will make the stock extremely attractive for long term investment.
Disclaimer: This note on Amara Raja Batteries is only for the purpose of information on the stock. Please carry out your own due diligence before buying/selling the stock. Katalyst Wealth and its members may or may not be holding the stocks discussed on this website.
Ekansh Mittal [firstname.lastname@example.org]
It’s our constant endeavor to look out for opportunities with seemingly high returns and very low risk.
Irrespective of market conditions, Special Situation Opportunities have delivered decent returns for Alpha + members in the past and recently we came across one such similar opportunity which was suggested to our members and seems to offer 20-30% in next 3-4 months with a very low probability of ~10% downside risk from recommended price.
The details on the same are as below:
Chettinad Cement Corporation Ltd (NSE Code – CHETTINAD)
Some important points:
- Portfolio Allocation – 3-4%
- Buying price range – 720-750
- Downside risk – 10-12%
- Potential returns – 20-30% in ~ 3-4 months
Floor price and Indicative offer price:
On 15th May’12, Chettinad Cement in its letter to Stock Exchanges informed about the board’s approval to a proposal from promoter Chettinad Holdings Pvt Ltd to delist shares of the firm from all stock exchanges.
In accordance with the delisting regulations, the floor price has been determined as Rs 540/- per share, while the promoters have indicated an offer price of Rs 575/- per share.
The company is yet to receive the approval from the public shareholders and the stock exchanges.
Basic details on the company
Chettinad Cement is a South based (Tamil Nadu to be more specific) cement manufacturing company. As at Mar’11, the company had a total installed cement manufacturing capacity of 8.5 MTPA (million tonnes per annum) at its three units at Puliyur, Karikkali and Ariyalur. Besides, the company has in all 105 MW of Power generation capacities from its captive power plants installed at all its three units to cater to the entire requirement of power for its cement plants.
Further, around 2 years back, the company had initiated the process of setting up a Greenfield cement manufacturing unit with a capacity of 2.5 MTPA and a captive thermal power plant with a capacity of 30 MW.
By Jun’11, the company had completed its entire land acquisition, had placed orders for major machineries and civil works had commenced. Both the cement and captive power plants are expected to be commissioned in next 3-4 months.
As can be observed from the above illustration, the company has been reporting a decent operating performance and has been reporting very good cash flows from operations, especially considering the cyclical nature of the industry.
Besides, the company could sell only 4.5 Million Tonnes of Cement for FY 11, while within the next few months the company will have an installed capacity of 11 MTPA. Further, the company has not announced any expansion plans and thus it is very likely that over the next 2 years the company may repay back most of its accumulated debt of 1000 crores from the cash flows from operations and still not face any capacity crunch.
The last 2-3 years have been very tough on the cement industry on account of huge capacity build up and the demand remaining subdued. The companies that carried out capacity expansion during the downturn are likely to reap benefits during the next 3-5 years on account of planned expenditure on infrastructure.
Cement industry being cyclical in nature; it is difficult to value cement stocks on the basis of conventional methods. We would therefore use replacement cost approach.
Given the oversupply situation in the domestic cement sector and also with no significant reforms in the end user segment around the corner, companies in the asset based sectors like Cement tend to trade near their replacement cost or below. On the contrary, an indication of expectation of pick up in volume or a sharp price increase in the near term, takes the valuation of cement business above their replacement cost maintaining a gap of premium between the companies.
As per the various reports, the current replacement cost of cement plant is around $120-125 per tonne. At Rs 50/$, it amounts to Rs 600 crores for installing 1 MTPA capacity. Recently, Orient Paper indicated setting up a 3 MTPA capacity and they too estimated an investment of Rs 1700-1800 crores. Further, it costs ~ 5 crore per MW of thermal power plant.
Now, as at Mar’11 Chettinad had 8.5 MTPA cement manufacturing capacity and 105 MW of thermal power generation capacity. Besides, in next 3-4 months the company will be commissioning a 2.5 MTPA cement plant and 30 MW captive power plants.
Assuming Rs 550 crores/MTPA to be the replacement cost for cement plant and Rs 3 crores/MW of thermal power plant, we arrive at the following replacement cost for Chettinad Cement:
- Cement Plant replacement cost: 550 * 11 = 6050 cr.
- Thermal Power plant replacement cost: 135 * 3 = 405 cr.
- Total Replacement cost: 6455 cr.
At our suggested buying price range of 720-750, Chettinad is available at a market cap of Rs 2800 crores. As at Sep’11, the company had Rs 1107 crore outstanding debt (including Rs 214 crore interest free sales tax loan) and 43 crore in cash and cash equivalents. So, the company is available at an enterprise value of Rs 3865 crores. To the same, adding 300-400 crores of debt on account of new plant, the company is available at an enterprise value of ~4250 crores against the replacement cost of Rs 6455 crores i.e. a discount of 35%.
There’s a huge variation in the EV/tonne valuations of different cement companies listed on the exchanges. While some are trading at a discount of 50% to the replacement cost, a few like Ambuja, ACC are available at par or a premium of 10-15% to the replacement cost.
As far as Chettinad is concerned, there’s no thumb rule for us to suggest the fair de-listing price, however we believe that management would be more than happy if they are able to acquire 100% holding in the company at a discount of 10-25% to the replacement cost.
Fair delisting price range (As per our assumption of 10-25% discount to replacement cost)
Yes, considering the size of operations and operating performance history of the company, we believe that at 10-25% discount to the replacement cost, management might accept the tendered shares. So, what would be the fair price range?
At 10% discount: Enterprise value should be 5800 crore
- Debt: 1500 cr.
- Market cap: 4300 cr.
- Stock price: 1125
At 25% discount: Enterprise value should be 4834 crore
- Debt: 1500 cr.
- Market cap: 3334
- Stock price: 873
There’s still fair amount of time and a few milestones (shareholders approval and approval from exchanges) before the acquirers will come out with a delisting offer to the public shareholders. In this case, shareholders approval does not seem to be a major concern as corporate bodies and institutions hold close to 7.95% stake in the company.
In case the shareholders or exchanges do not approve the de-listing proposal, the stock will correct all the way down to 625-650. Here, since the promoters have indicated an offer price of Rs 575 per share, we don’t expect the stock to fall beyond 625 odd levels. Thus, at the moment we have suggested the buying price range below 750 in order to limit the downside to 10-15%.
Besides, the other risks being same as in any other de-listing case:
- We buy in the range of 730-750 and the majority of shareholders tender their shares at Rs 700 or below.
- Not enough shares get tendered for the promoter holding to exceed 94.22%.
- The promoters/acquirers do not accept the discovered price.
As mentioned above, allocate 3-4% of your portfolio in the suggested range.
We also suggest booking complete profit in the range of 900-925.
For any queries, please feel free to drop a mail
Ph.: 0120-4109766, Mob: +91-9818866676
You may have heard about Pan-wallas (People running road-side Pan Shops) offering tips on which stocks to buy. Pan-walla is a general term used for all those who have no direct interest in equities or have never invested in stocks. However, if you know what to really make out of their views, they are probably the best advisers.
It is not very often that one gets advice from such people; but there are times of irrational exuberance, times when every stock moves up irrespective of fundamentals, and times when everyone (including your mother/wife/sister/mother-in-law) knows about the next Infosys.
You may now be thinking that what makes me remember the periods of irrational exuberance, because the current market conditions are almost the exact opposite of what is described above;
- falling stock prices (even after reporting good performance),
- brokerage houses pulling down their shutters,
- leave out Pan-wallas, even the so called experts of stock markets wary about recommending any stock, knowing that it might be available 10-15% lower the very next day.
Well, I recently attended a day-long family function and met many close friends and relatives. Knowing well that I invest and advice on equities, some casually ask for TIPS (I hate this word, especially in the context of stocks), however I noticed a stark difference in their approach this time.
It was like as if they were feeling sorry for me and my investments in equities, presuming that they should be in a very bad state. And rather than asking for advice on stocks, almost all of them offered their piece of mind on GOLD.
Yes, all of them had the same opinion that GOLD is a very good investment and one must buy GOLD for prosperity (Statutory disclosure: These are not my views, but what I learnt/heard most people speak. Rather, I don’t find myself competent enough to have any view on GOLD).
A look at the above chart makes me wonder that where these guys were when GOLD was languishing at 600-800 USD per ounce in 2007-08 and before. Probably, recommending equities in similar functions at 20-21K in their lust for 24K (Read 24,000) and now recommending real 24 Karat GOLD for reasons obvious from the above chart.
Besides, they also made some general comments on stocks, though they were not really interested in speaking much on equities:
- Market bekar hai (Markets are bad)
- Kuch nahi ho sakta market ka (No one can help markets)
- Maine to CNBC dekhna hi band kar diya (Stopped watching CNBC)
All in all, there were two main takeaways from my encounter with friends and relatives:
- Pan-wallas and retail investors are gung ho (read bullish) about GOLD, and
- Do not make a mistake of mentioning equities to them at this point of time.
Frankly, besides being a good day in general, it was really pleasing to meet friends, relatives and get their un-intended help in choosing the right asset class. Do I need to mention that?
Note: My views towards equities could be biased, so please draw your own inference from the views shared by my friends/relatives.
Ekansh Mittal [email@example.com]
Dear Alpha + Members,
We would like to share with you an interesting special situation opportunity. Please check your mailbox for a detailed note on the opportunity.
Before we proceed with the details, please make a note of the following:
- This is not a conventional special situation opportunity. It has an element of speculation to it.
- The potential gains could be ~40-60%, while the loss could be to the tune of ~15% in approximately 2 months.
- Though it is difficult to quantify the probability of each case, we have already outlined our reasons for optimism in the below note.
- In case you participate, please do not over allocate.
As you may understand that corporate transactions and regulatory proceedings are not under our control and thus it’s difficult to suggest when an opportunity may be initiated, however the best we can do from our end is to keep a regular tab on the announcements of the companies, interact with the management to get the finer details and act on them as and when we find an opportunity with seemingly high returns and low risk.
These days the valuations of some of the India companies are so low that many multinationals are scouting for acquisition targets in India and they are finding plenty such opportunities with many listed companies quoting at a substantial discount to book value. In such cases, the acquirers, plush with billions in their coffers are willing to pay a hefty premium (sometimes 200-300%) to the current price of the listed company.
We have been tracking one such opportunity for about a month and believe that takeover deal should be announced in next 1 month or a maximum 2 months time period. As per the information available with us, the suitor in this case is a big multinational firm and the largest company in the related field of operations with close to 1.8 billion Euros in sales. The price being negotiated is ~60-70% higher than the prevailing stock price, while there’s a fair chance of it being revised upwards.
The two companies have been in talks since the past few months and the target Indian company has already taken a major leap in the entire process by de-merging and listing the unit to be acquired by the MNC.
We believe it’s a very high probability case and derive our optimism from the fact that:
- The Indian company de-merged the unit when in fact there was no real need from the point of value unlocking. Rather, the operations of the company were pretty much related to each other and were not entirely different line of businesses.
- Besides, the company has a history of divesting its one or the other unit, as they did in 2006-07.
- The insider buying during the last few days, further bolsters our optimism.
- CEO of the MNC has confirmed the news of a probable takeover of an Indian company.
Risks/Concerns: Any investment operation is not completely risk free and here too one of the major risks is the collapse of negotiations between the two parties. Since the deal has not been publicly announced by the company, there’s an element of speculation to this investment operation.
Now, what will happen in case the two parties do not reach a consensus (on any matter) and the deal is called off?
Luckily, the company has a long standing history of decent operating performance and the current valuations restrict the downside, though there will obviously be some correction in case the deal does not happen. Besides, on interim dividend alone the stock is offering a dividend yield of ~3%. In case the company announces a final dividend, it will offer a strong downside protection.
Conclusion: With a decent upside (could be more than 50%) at a fairly high probability, we believe the opportunity is worth the risk of 10-15% downside, though we would refrain from over sizing our holding.
Ekansh Mittal [firstname.lastname@example.org]
What if I were to tell you that you can take currency notes worth Rs 1 lakh for just Rs 50,000, today, with just one condition that you can sell those currency notes worth 1 lakh only after 24 months and not before ?
Note: This article is for investors serious about wealth creation. If you don’t look at stocks/equities as an investment option beyond a day, week or month, then don’t read beyond this line.
Ok, let me give you another option. I may offer those same currency notes worth 1 lakh for 40,000, one week or maximum two months down the line, however there’s no guarantee.
It all depends on my state of mind at that point of time.
What would be your reaction?
I believe most of you reading this would first think of me as a complete fool (assume that I am depressed) and secondly almost all of you would capitalize on the opportunity and go ahead and buy currency worth 1 lakh for just 50,000 i.e. a 50% discount.
You would also bet against taking a chance of waiting for 40,000 because that is not a sure shot case and most importantly if you miss out, you will miss out on the 100% gain in 2 years time frame (36% annualized) that is already there on your platter.
At least that’s how I would think and act if given a chance and if someone comes across with the above offer.
Well, I am sure that no one would come up with such an offer, however I am glad that Mr. Market is one such thing which goes through mood swings and time and again comes up with such offers.
At this point of time i.e. @ 4900 on NIFTY, he is offering us a pretty similar offer as above. The market is shouting loud and clear that in case you missed out my 2009 offer, here’s another opportunity for you. I may go down to 4400-4600 i.e. down 10% from current levels, however as always my ultimate fate is to go up because I am following Indian economy which is growing at 7-8% and since I am constituted of some of India’s best run companies, I will grow at 15-18% over the next many years.
Besides, if you are not so sure of my promise, check my history. Be it 1992, 2000, 2006, 2009, I have always lived up to my words of rewarding you more than what I had guaranteed.
Moreover, if you don’t like my offer, I have something still better, i.e., a select few small and mid cap companies that are available at almost 50-60% discount to fair valuations and growing at a scorching pace of 30-35%.
Well, we have outlined the analogy for you. Now, it’s up to you to take a decision. Remember, the time is on your side, so you may still take up Mr. Market’s offer in a phase wise manner as long as he is depressed. You never know when he may have his change of heart.
Ekansh Mittal [email@example.com]
Please find below the note on EPC Industries Ltd (BSE Code – 523754): Rights Issue, special situation opportunity shared with Alpha Plus members on 22nd Apr’12.
Our members sold their holding in EPC Industries today at Rs 115 and have thus positioned themselves for a further gain of ~100%.
It’s similar to the previous case of Arihant Superstructures Rights Issue (LINK). The probability of excess allotment is not very high, however there’s not much to lose, and in case we get extra allotment, that would be a bonus.
Who would mind losing Rs 100-500, when the potential returns could be enormous?
At least not me and our members, don’t know about you.
The detailed note shared with Alpha + members has been produced below for your reference:
Alpha Plus: 3rd Special situation for Apr’12 – 22nd Apr’12
Dear Alpha plus members,
Please find below the details on the 3rd Special Situation opportunity for Apr’12.
Like the previous case of Arihant Superstructures Ltd, this too is a case of Rights Issue; the only difference being that the probability of excess allotment is slightly higher in this case.
EPC Industries Ltd (BSE Code – 523754): Rights Issue
EPC Industries Ltd is a company promoted by Mahindra and Mahindra Ltd and is involved in the business of Micro Irrigation. M&M acquired control and management stake in the company in 2011.
For the nine months ending Dec’12, the company has recorded a turnover of Rs 86 crores and a net profit of Rs 4 crores while it is currently quoting at a market cap of Rs 258 crores. The valuations of the company are exorbitant to say the least.
Rights Issue details
EPC Industries Ltd is currently quoting at a price of Rs 150/- per share.
On 20th Apr’12, the Rights Issue Committee of the company approved the following:
Investment operation and Rationale
As you may have already noticed, the issue price of Rs 40 is substantially lower than the current market price of Rs 150 and since the valuations are very high we would like to approach it as a pure case of excess allotment, like the previous case of Arihant Superstructures Ltd.
On Monday, 23rd Apr’12, buy small quantity (minimum 5 shares) of EPC Industries Ltd.
Note: If one buys only 5 shares of EPC Industries, he would still receive the Rights Issue application form (CAF) and is eligible to apply for as many additional shares, as he/she wishes over and above his entitled rights of 3 shares. The allotment of such additional Rights Equity Shares is made on an equitable basis with due regard to the number of Equity Shares held by the shareholder on the Record Date, provided there is an under-subscribed portion.
To put it simply, for two investors applying for equal number of additional shares, higher allotment is made to the one who had more number of shares in his account on the record date.
At the moment the record date and therefore the ex-date has not been announced by the company.
We will update you on the ex-date as soon as it is known to us; however the exit strategy remains the same:
Sell your holding in EPC Industries Ltd (assuming one bought 20 shares at Rs 155 on 23rd Apr’12) on the ex-date.
On the ex-date the stock will get adjusted to lower levels. We expect the stock to correct to Rs 100-110. So, on selling 20 shares at Rs 105 on the ex-date, one will incur a notional loss of Rs 1000 and he/she will be entitled for minimum 12 shares of EPC Industries at Rs 40 while the maximum depends on a combination of factors beyond our control.
Best and Worst Case Scenario
Assuming one applies for a total of 500 shares and gets full allotment:
- Notional Loss (as described above) or more specifically the cost of creating an opportunity – Rs 1,000
- Cost of Investment of 500 shares at Rs 40/- per share – Rs 20,000
- Total Investment – Rs 21,000
Meanwhile, by the time the Rights issue shares get listed, the stock may either remain at Rs 100-110 or correct further to Rs 60-80. An investor can lose only if the stock corrects all the way down to Rs 42 and below, the probability of which is very low.
While if the stock remains in the range of 50-100, the investor makes a decent gain of 20-138% in just about 2 Months.
Assuming one applies for a total of 500 shares and gets only his Rights entitlement of 12 shares:
- Cost of creating an opportunity – Rs 1,000
- Cost of Investment of 12 shares at Rs 40/- per share – Rs 480
- Total Investment – Rs 1,480
Meanwhile, by the time the Rights issue shares get listed, if the stock corrects to Rs 40-50 per share, one will lose ~ Rs 1,000.
Probability of excess allotment
EPC Industries Ltd has relatively less concentrated holding in comparison to Arihant Superstructures Ltd and thus the probability of excess allotment is higher in this case. Moreover, Schroder Credit Renaissance Fund and the erstwhile promoters Trenton Investments together hold 46% stake in the company.
In case any of the two or both decide to dilute their holding by not subscribing for their Rights issue, the probability of excess allotment will increase drastically. We have no firm reason to believe that they will dilute their holding; however it’s being shared as one of the possibilities.
We believe the Risk reward ratio is skewed highly in favor of reward and would therefore suggest all our members to participate in this Special situation opportunity, like the previous one on Arihant Superstructures Ltd.
In case of any queries, please feel free to drop a mail or call us.
Ph.: 0120-4109766, Mob: +91-9818866676