Omkar Speciality Chemicals Ltd -- OSCL

(Pdshah) #793

Your calculation would have been right if authorised capital and issued capital was same as of today. But as on date, issued capital is 2.05 cr shares only. Increased authorised capital is 4.5 cr shares. So maximum shares that can be issued is 2.45 cr and maximum amount that can be raised is 200 cr which gives value of 81.63. But we will need to wait to see what is done since both above numbers are maximum and actual no. Of shares issued and amount raised will be less than maximum. I hope i am making sense…

(Ritesh) #794

Very interesting. Referring to Lasa financials - So c. 110 cr short and long term debt is pushed into Lasa. So now Omkar debt will be only 120 cr. (total debt was 230 cr) That is a good thing. And Lasa can easily foot such debt as it is growing crazy with high margin. This should make Omkar more attractive. Plus right issue and equity injection means Omkar would not need to resort to debt any longer. Good from Omkar capital structure point of view.

(Sd) #795

So how minority shareholder like me would be able to participate in Rights issue, date & process… kindly assist.

(nkgambhir) #796

You r right. While a preferential issue is only for promoters and FIs, a rights issue treats all shareholders equall y and further proves the investor friendliness of promoters.

(nkgambhir) #797

From where did you get this figure of 3.5 crore shares ? They have increased the authorized share capital from 41.95 crores to 45 crores and have indicated that they will raise 200 crores additional equity capital on a rights basis. If they issue rights shares in the ratio of 1:1, then they can issue around 2 crore shares and a price of 100 per share will enable them raise 200 crores. I dont think the promoters will like to increase their equity capital by more than 100 %.

(nkgambhir) #798

The latest issue of Capital market magazine is out. They have retained the demerged Omkar in their watchhlist of fundamentally sound companies with potential. The TTM EPS is shown as 17.8. So, this scrip is now available at less then 5 times the FY17 earnings.

(sumitg04) #799

Sorry, I meant 3.05( 45-41.95)…, 200/3. 05=65/share
Not sure it is that simple and straightforward

(nkgambhir) #800

Normally, companies like to keep the authorised capital higher than the actual capital, so that they can raise capital when needed, without any delay. Right now they have 2.05 crore shares and they have very clearly said that they do not have any capital expenditure requirements for the next 3-4 years. They only need this money to replace the money to get rid of debt , pledging etc., which they got into due to the expansion over the last few years. The maximum I expect is 1:1 rights issue, after which their capital will become 41 crores. If they issue 3.5 crore shares, then their equity capital will become 35+20.5=55.5 crores, which they have not even sought approval for.

(nkgambhir) #801

41.95 crores and 45 crores is the equity capital, and not the number of shares.

(Pdshah) #803

They will declare the record date and also decide the rights issue price. Then we will get a form sent to us which we need to submit according to details given in form.

(Akhil) #804

What is that huge CWIP in Lasa’s balance sheet?

(nkgambhir) #807

What is the status of the Unit V ofthe company, whose production capacity equals that of all other units of OSCL combined ? It is dedicated to veterinary API production. So, once this unit gets operational, then LASA will enter a differrent league altogether. When isthis unit expected to go on stream and what is holding it up ?

(Dhiraj Dave) #808

When the promoter need to pledge share to finance restructuring cost, to consider issue of new share as right issue not preferential issue as minority shareholder friend step is bit more extended logic. The promoter has time and again fail to deliver on business. Please be careful and consider all risks before taking any decision.

Discl: Do not hold any share but following the company to improve my understanding of corporate India.

(nkgambhir) #809

If OSCL goes for a 1:1 rights issue at a price of 100 per share, then the entire premium of Rs. 90 will go into reserves and thus boost the BV of OSCL to almost what it was before demerger. Assuming that in FY18, OSCL adds rs 10 to the BV from its earnings and the rights issue premium boosts its BV by 45 per share, then the BV of OSCL in March 2018 will be 40.2 +45+10=95.2. In that case the market price of the share will be at least 2 times BV, that is 190-200. Right now the p/bv ratio is 2.1

(Dhiraj Dave) #811

read thred from beginning on pledge, pledge release, business propsect.

(Ankchandak) #812

Read thread, read their conference call and the below link

(sta) #813

@dhiraj dave. don’t think it fair to say they have failed to deliver on business. It would be more accurate to say they have failed to communicate and failed to keep their word on depledge. Your words make it as if the promoters are crooks. Not fair.and I don’t think they have failed to deliver on business operation front.

(sumitg04) #816

Correct, they have been delivering on business front as per the street expectations, however, they have not kept their words on depledging and selling. Reading it as a crooked management is also bit far stretched. Their inability to depledged as committed is also mentioned in the threads… Basically it’s an ideal example of good business and not so good management…

(saumilshah) #817

yes correct management doesn’t seems to be crooks but they need to act more professionally from now on.
Does someone have any clue why again in lasa labs financials there is an exceptional loss of 30.61 crores.

(Dhiraj Dave) #818

Well I would say that there issue about promoter being not able to achieve what has been promised and also despute in family members which resulted in demerger. In my understanding, management has not performed, some may believe that it was more bad luck and management are good. Finally one need to consider once Risk profile and opportunity to take final decision.

What I was surprised was from conclusion being drawn that management very shareholder friendly as it is proposing right issue and not private placement. Just see last one months disclosure of pledge. As per some informal discussion last pledge was created to fund cost of restructuring! I just wanted to highlight in that context to give high regards to management. Finally, it is individual choice. Wish all the investor all the best for their future!

Nothing more to say. Since not invested in the company, would have limited interest from my side to put more effort on the company.