something is fundamentally wrong.
If things got pushed out from this quater, was there anything that got pushed in from prior quater?
Should the company not disclose the value of items that got pushed out so that share holders do not get jittery on the number variations?
Godrej Agrovet Investor presentation for Q1 FY 19 results.
See the comment about deferment of sales for Astec. May here more clarification on tomorrow’s concall…
Interview from Balaram Yadav of Godrej Agrovet
They are planning amalgamation of Astec with God.Agro.
https://www.bseindia.com/corporates/anndet_new.aspx?newsid=8072ead1-78cf-4e43-88f5-651da4caf04e
Is it bad or good ?
Depends on merger ratio. Either way management remains the same. Agrovet recently bought Cream line dairy, Israel based biotec firm maxximilk. Company knows to chart its future. Essentially Godrej agrovet is going to be a strong play with backward integration and direct market presence. Merger does help in removing inefficiencies in multi structured company format.
Personally I don’t like it… I purchased shares of company focused on agro chemicals and now I will be forced to become (unless I sold my shares) shareholder of company having multiple business lines (conglomerate). This takes away most of upside in the share price.I like demergers where bigger company splits into smaller units which unlocks value as it brings sharp focus and accontability… This is opposite of that.
In all Godrej Agrovet’s businesses, I think Astec will continue to do very well in future but being part of bigger company, it may not contribute to the shareholder returns as other businesses may dilute the margins. Having said that, I am sure some shareholders will like it as it will derisk the company due to presence in multiple sectors(animal feed, dairy, Palm Oil, pesticide,herbicides etc). But now investment in this company will be like investing in Mutual Fund 
Another view could be Astec will become part of larger i.e better market cap company with Godrej name. So it may increase liquidity in the counter…
Will need to wait to see merger ratio but market reaction says it all… I will be waiting to see what happens next
Disclosure - forms 10% of my portfolio
Seems like market too didnt like the amalgamation ( big fall with huge volume) . Many investors ( including me) would have bought for pure agri chemical play.
If I remember in last quarter conf call or some recent interview , Godrej promoters had mentioned to run Astec as separate company… then why such sudden change in plans.
Market is assuming 1:1 seap ratio which is highly likely. Which also seems to be the reason of fall. Astec was a niche play. Godrej added it at 550 and agrovet ipo was 460. There could be a little tradeoff. Coming up results will determine if the premium is going to be maintained for Astec.
11 shares of GAVL for every 10 shares held for Astec. I would say fair swap ratio.
https://www.bseindia.com/corporates/anndet_new.aspx?newsid=7e02e0d3-7ba2-4069-a2d8-5210ac80e813
Dilution argument remains… so positive for short term for Astec but Negative in long term for Astec as well as GAVL shareholders …
any idea for the timeline for swap or a decision to revert.
As per notice to BSE, company has to get clearance from NCLT and SEBI. They also need approval from majority of public shareholders. So I guess it will take another 6-9 months knowing workload with NCLT as of now.
Public shareholding in Astec is 32.65% out of which only 3.34% is held by MFs/FPI/FII/DII’s. This means majority of public shareholding would be spread across many small shareholders. I hope that majority public shareholders reject this proposal as we can see the market reaction by drop in prices from 700+ in early September to 500+ now, in-spite of excellent Q2 results.
I think this is great news for the shareholders of GAVL and Astec, Amalgamation was EPS dilutive for both the companies with debatable merger benefits. It was clearly driven by the promoter’s need to consolidate its no. of companies to save on admin efforts.
I had written to Astec CS and CFO with my view point. It seems many shareholders have expressed their reservations to the company. But I must appreciate Godrej group for listening to the minority shareholders…My respect for the group has gone up…:
In their conference call they told Amalgamation is just postponed and they may reconsider it after a few quarters. Now this statement can be an overhang for the stock. Management should have taken a decision to either merge or let it remain a separate entity in future.
Also they could not give a clear answer on what they thought earlier on this merger and why they think postponing will help ( gave a vague reply as per my understanding).
Any thoughts on the Q4 numbers from senior boarders who are following this one?
On the face of it, the result looks pretty good.
Promoters areally buying at much cheaper price than would have been the case with merger.
Astec is falling with not so huge volumes (35k at NSE). Isn’t this an indicator of lack of buying interest or maybe operator game?
Promoter buying is very small, just a token quantity. Not sure if they were trying to fool the market by showing promoter buying However someone big knows some inside news about financial numbers and is on selling spree. (Its just my gut feeling. Promoter buying sheet attached for your reference)
Astec.xlsx (13.6 KB)
Even after so many transactions… Promoter stake is up only by 1%…
This is just way to distract…
It may see short term buying from people who are waiting to enter but yes there is more to come I think…
Technically this is wait and watch
Hello All,
Need your guidance,I recently invested in Astec life.But after my purchase it is continuously going down.Now the loss is a staggering 30% in just 10 days.I am a long term investor but don’t know why this happened in such a sort span of time.Being a Godrej group company I am baffled to see such type of negative stock reaction without any news flow.Please guide me.
Thanks,
Deb
With previous quarter results and domestic consumption turmoil it will linger at cmp a little longer. If already invested hang on to it if you are long term holder… It can be unwinding by some key stake holder or by investor not happy with company not merging with GAgrovet…Personally I thought the umbrella was a better shield to market vagaries and nowe present danger of global slowdon
