As per screener.in, cash is only 7 Rs per share (9.38 Cr divided by 1.32 cr shares) and investments about Rs.9 per share. Fixed assets seem to be major portion of book value.
You need to also consider the 100 cr worth of investments which they have kept in mutual funds…which are liquid in nature…there is error in the screener as it is not showing the same in consolidated report…pls see the half yearly balance sheet below…
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It depends on what they do with the cash. If they are not having any expansion plans, why not return more dividends, etc.
You are right that they are having considerable cash wrt their market cap but that would only be useful for you as an investor if they are returning it to you or generating a high ROI by keeping it in the business.
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This is definitely a good deal if I was buying the whole business. I am getting almost the entire business for the amount of cash they possess. But they have de-grown in the past year. This is probably because of cheaper imports from China and other Asian countries.
I have two questions:
- I read that they had asked for an anti-dumping policy for Chinese imports. Is there any progress on that?
- Are there prices and quantity comparable to others? If so, will they be able to increase exports (or at least benefit from Atma nirbhar Baharat initiative)?
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Requesting experts to comment if below hypothesis is good for the company -
a. Recent govt direction to bar foreigners from participating in tenders below 200 crores.
b. Recent govt direction that low quality imports like printing ink and toners will be subject to quality controls and other curbs
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@rkoti and fellow boarders.
I am doing a deepdive on this as ADD on Chinese exports seems to be a positive for the industry. Would like to know some details:
-
How competent is the management to take advantage of this opportunity? Did the industry had ADD on chinese products in past, if yes then how were the margins during that time?
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What management intends to do with the high cash balance? Has anyone interacted with the management about this?
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Hows the demand for their products shaping up in Covid times?
Any inputs would be very helpful.
Thanks
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@fundoo I am a novice and not so adept and analyzing companies.
My impression is the following -
a. Company products are commodity and cannot survive without market protection. This is written in the annual report.
Opportunities Going forward -
a. ADD on chinese products.
b. Govt reserving contracts below 200 crores to local companies.
Can the company bag orders of this kind? - https://etenders.gov.in/eprocure/app?component=%24DirectLink&page=FrontEndViewTender&service=direct&sp=SDEdxX11s4MjlAfj4SGrOng%3D%3D
Since the company products are not original equipment products, how does govt view them?
meeting for buyback
This seems like an interesting development. Earlier, promoter were known to not reward minority shareholders but know their willingness to reward minority needs serious appreciation.
They have announced buyback @160 and that too 18% of equity!
I feel this way they have used 1/3rd of their cash equivalents to very appropriate use!
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if they dont participate in buy back then public shareholding will go below 25 % and their increases above 75% . and ultimately again they have to offload that stake as per regulation . so nothing wrong in tendering shares in buyback by them too
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Anti dumping duties for 5 years on tonner
There is talk going in the market that toner prices will rise more by end of the month.
Few interesting development in buy back. As per my knowledge till last day promotor had not tendered share in buy back . So acceptance ratio was 100 % . Now the scenario is such … company’s total share capital 13.15. Cr. ie 1.35 cr shares. Promotor holds 91.15 lacs share approx 70 % . Remaining public holding is 40.50 lacs shares. Open offer was for around 26 lacs shares. Wich was subscribed by public. So total market float is now 14.5 lacs shares. Here 8.8 lacs shares are physical and not demated since years so market float is around 6.5 lacs shares only.
Copmpany made wise move their holding increases to 75% easily by not tendering shares in buy back wich is perfectly legal. . Extra 15 % they will have to offload in market in I think one year time frame as per sebi
Disc invested
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Do u have information that 26 lakh shares were actually offered for buyback? Unless that information is there one cannot confirm the above as it is highly possible the number of shares received in buyback was lesser than 26 lakhs and thus the Acceptance Ratio was 100%.
Secondly, if they have actually received 26 lakh shares in the buyback can’t they opt for an open offer to increase their holding to 90 percent and delist from the exchanges?
Till last day of offer I had tracked the no of shares offered and it was if I remember correctly 103 % was subscribed at close of offer
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And they can opt for buy back but then they have to reverse book build . Wich I don’t think they will do. I think they know that value of company is far more then 160 and after anti dumping for 5 years they are more optimistic. So they will easily place extra shares above 15 % at better rates.
This all are assumption. So better wait till they file new shareholding pattern after buyback
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This information is not available now?
.
It mean there were enough people (who tendered above their minimum entitlement) for 18% buyback offer to get fully subscribed in-spite of large physical holding!
They could have chosen to subscribe till their holding touches 75% and avoid all later on hassles, or it is greed? Till now institutional or large shareholder holders has not been interested in this stock, how they will offload? I do not mean to say it is difficult but strange that again they will try to offload to same small-medium shareholders.
5 yrs anti dumping came after the opening of buyback. They must have decided not to subscribe after that. Let official shareholding come so it will be clear