If the company listed apparel business separately they should have got much higher valuation than what they are getting now .i.e after merging with pantaloon…they did the deal mainly to appease bankers ( to whom they owe money)…in this age of ecommerce…the pantaloon will never make money… It is extremely surprising that they are still expanding business …instead of throwing good money after bad money…if you have to buy abnuvo you have to value that not considering this deal…
You can see the above… Also refer annual reports of pantaloon… They don’t have good brands unlike Madura … And all capex is just maintenance capex not much growth capex… In the ecommerce age it is difficult to see why people buy from these expensive stores … Lot of people might go and try and buy from website… If they keep expanding number of stores losses keep increasing effectively throwing money made from Madura into pantaloon…
They are also in ecommerce. Pls visit http://www.trendin.com/testimonial Trendin.com is an initiative of Madura Fashion & Lifestyle, India’s largest and fastest growing branded apparel companies and a premium lifestyle player in the retail sector. After consolidating its market leadership with its own brands, it introduced premier international labels, enabling Indian consumers to buy the most prestigious global fashionwear and accessories within the country.
Yes that is the point. In my college days back in 1990, wearing a louie philippe shirts belongs to a small segment. Now in 2015, in any place, you can find a shop that sell Products of ABFRL. So I feel it might be a good opportunity.
Update as of 4th August
ABRL - Moved up to 2250+
Pantaloon - 220+ - This translates to ~Rs.1150 of AB Nuvo (Swap Ratio 26:5)
For people who entered ABNuvo at Rs.1800 or below, the bet paid off.
The real long term trigger can come if and when they spin off the Financial Services business. Check out the articles below for how they are slowing creating the right business structure and unlocking value one piece at a time.
Aditya Birla Nuvo Ltd (ABNL), part of the $42-billion Aditya Birla Group, has started talks with private equity (PE) investors to sell Aditya Birla Insulators, according to two people aware of the development. ABNL may sell the subsidiary for Rs.800-1,000 crore, one of the two people indicated.
AB Nuvo sells 23% in Life insurance business for ~Rs.1600 crores which translates to a value of Rs.5000 Crores for AB Nuvo’s holding of 74% in Birla Sun Life. I had initially valued that at Rs.1500 Crores in my conservative estimate.
Post demerger and a major market correction, Nuvo stock is trading at a market cap of 11,500 Cr and debt of ~3000 Cr which brings EV to Rs.14500 Cr which is at a 40% discount to its SOTP valuation
Now that the math is a little simpler putting it down for fellow boarders to comment.
51% in Birla Sunlife Asset Management (AUM ~133k Crores) worth ~ 3000 Crores (@ 4% of AUM)
74% in Birla Sunlife Insurance (AUM Rs.30000 Cr) worth ~ 5000 Crore (stake sale done at this price)
ABFS - Loan book of ~ 20 k Crore - Worth ~ 2800 Crore (net worth)
Upcoming business - Housing Finance / Health Insurance worth ~ 0
Total Value of Finance business - Rs.11000 Cr
23% in Idea Cellular ( Market Cap ~Rs.40k Crores) worth ~6000 Crores (@40% discount)
9% in Pantaloons Fashion post amalgamation (Mcap 15000 cr) worth ~ 900 Cr Holding company value - 6900 Cr ( at 40% discount)
Total SOTP Value - Rs.21000 Cr
Kindly look at this and share your views. I think with further simplification of structure which seems to be clearly happening and demerger of business units, the upside could be much higher.
Appears to be highly undervalued compared to more fancied NBFCs names.
Add a couple of points more:
Their Housing Finance arm has already generated a loan book of about 1000 cr.
NBFC grew almost 40% compared to last year.
Has good presence in brokerage, financial product distribution (zipsip) etc
Launching payment bank operations in 2016 with Idea.
Earlier valuation metrics suggested 2/3 value for existing biz and 1/3rd for fashion biz. But steeper fall in AB Nuvo can be attributed to mispricing, exclusion from indices leading to selling by some funds and general market volatility and some investors trying to book short term capital losses.
Disc: Initiated initial position based on undervaluation.
Can any one help me calculate the short-term capital gains tax on this stock. I had a total holding of 210 shares in Aditya Birla Nuvo (all purchased in FY 2015-16) for which I have been allotted a total of 1092 shares in Aditya Birla Fashion. I booked a short-term loss of Rs 2,14,561/- before March 31, 2016.
Am I allowed to show the entire short-term loss of Rs 2,14,561/- in my tax return or will the shares in AB Fashion allotted to me also need to be taken into consideration while calculating short-term capital loss?
Chartered Accountants on Valuepickr may please help.