Q3 results out, excellent numbers. Story playing out very well. Also budget expectations favorably for caustic soda producers with anti-dumping duty on the cards. This would ease pressure on sale realization. Short-medium term outlook looking very positive for this small debt free company with honest management. Also front runners on the technology side to adopt high energy efficient machinery reducing their production costs by ~20-30%.
Stock spiraled quite a lot in last one year; markets correcting before the next leap forward. No reason I could think of looking at the numbers and expansion plan.
Good question,let me write a mail to IR and get back. By now they should have received the approvals but let me check. For expansion from 100 to 125 tons/day they donāt need additional capex so sales can start immediately after approvals. For further expansion to 200 tons/day, additional capex required is 50 Cr to be met through internal accruals,gestation period of 15 months after Govt approvals.
Stock has fallen by small volumes only. Looks to me like an operator play, not sure though. I think on the merger we would need to watch out for more info when becomes available.
I hope with this acquisition Chemfab is able to turn around TEAMEC as this acquired company has negative net worth and poor earning record as per this document on their website
Chemfab declared results today and as per results EPS for current equity base is 10.23. Before this EPS of Chemfab was 22.64.
Even if we get 10 shares for ever 7 held we are in loss. Because EPS is down by 50 %.
New BV = 125 and Old BV was 167, there we gain a little however now they have got some Long term borrowing on books.
However as per company they are issuing shares of new company with FV 10 and premium 252. If these actually get listed at this premium then its very good for us.
There is quite significant Other expenses to the tune of 20 Crores. I assume that would be one off. If we take that one out, Profit is actually 15+20 = 35 cr with EPS >22. Yet to figure out though what are those other expenses. Note 5 as mentioned doesnt talk about it.
Good thing though I noticed, in the merger Chemfab shareholder would get 1,31,0,24,24 shares and TCL would get 7,28,080. Implying equity dilution of ~5% in exchange for TCL assets. The numbers doesnāt tally fully in my calculations. Can somebody else shed some light?
728,080 is the shares issued to TCL shareholders as per the scheme. Given below is the extract of the scheme , which is self-explanatory.
REDUCTION OF PAID UP CAPITAL OF TCL
4.1 Pursuant to the Scheme becoming effective and with effect from the Appointed Date, the paid up share capital of TCL of Rs. 7,28,08,040 divided into 72,80,804 equity shares of Rs. 10 each shall, without any application or deed, be reduced to Rs.72,80,804 divided into 72,80,804 equity shares of paid up value of Re. 1 each to the holders of such paid up capital.
4.2 Simultaneously, 72,80,804 equity shares of the reduced face value of Re. 1 each shall stand consolidated into 7,28,080 equity shares of Rs. 10 each fully paid up. Thus, the reduced paid up capital of the Transferee Company will be Rs. 72,80,800 divided into 7,28,080 equity shares of Rs. 10 each.
any details on when new listing will happen and listing floor price
as per my understanding - existing shareholders of chemfab will be given shares of teamac+chemfab (new entity combined and named as chemfab) in ratio 7:10 and listing floor price is 252.
Is my understanding correct?
It should happen, within three months from the date it got delisted as per guidelines . My guess it will get listed by end July or early August-17 . Hopefully , by that time if Q1 results of 2017-18 is declared irrespective of the floor price , the stock will perform based on the PE valuation . I am not sure on the floor price , however it can move up or down by 20 % , depending on the how the market sees its valuation. My estimate is of eps of 18-20 for FY-2017-18 , on the expanded equity of 13.8 crs. Once the annual report is available it will throw more light on the higher expenses in last qtr, whether it was exceptional in nature.
talked to CS - shares expected to get credit in account in next 10-15 days
After that they will apply for listing in NSE+BSE and it will take around 30-45 days to get listed.
I casually asked for performance and he was like june results will be out before listing - you will see the performance and sounded quite optimistic