Not demerger specifically, but here are few open special situations currently in progress : -
IDFC reverse merger with Bank - Expected completion by end FY22
GFL demerger into IWEL & GFL & subsequent reverse merger - The first part of this is thru with listing of IWEL; second part probly by H1 FY23
Indiabulls Real Estate : - This merger expected to complete by this year end vl see re-rating of the stock due to merger into a bigger entity & new promoters. Thr’s an excellent thread regarding this for reference.
Request fellow pickrs to share views regrdng above & any other special situation opportunities in sight.
The promoters of the Elcid investments ltd require the company to voluntary delist from both the exchanges. CMP is around Rs. 17 and the floor price has been set at Rs. 1,61,023. Highly illiquid share.
Minimum number of shares for successful delisting: 90%
Shares held by Bhavook Tripathi: 36.93%
Given the background of Bhavook, he is unlikely to offer at this price and will ask for higher prices. But it will be wholly dependent on the Black stone (Acquirer) to accept or reject (influential side of the trade).
Currently, the company trades at a premium and does not offer any margin of safety.
What if bhavook offers at 245/- Maximum loss of 15/- ( Probablity 10%)
What if bhavook offer at higher prices (say Rs. 350) and the company accepts that price? (0%)
What if bhavook doesn’t offer at all and the blackstone back off (Probability 90%)
Blackstone prima facie doesn’t seem to be desperate to buy and therefore there is little chance of acceptance at higher prices. There can be only one reason for R System acquisition i.e merger with mphasis limited for potential synergy gain.
Has tendering process for R Systems opened? My broker Upstox is not showing R Systems in it’s delisting tab. Also where can we can check the status of tendering process, such as how many shares have been tendered etc.?
I remember BSE website shows it somewhere. But I couldn’t find it now, any help will be useful.
Much of the move happened through insider trading in last 5 days. Will need detailed study specially when larger move have already happened. The reasoning needs to be strong for delisting to actually happened and sometimes the reasoning is actually different than disclosed. So let’s find out.
Have also gone through their financials, and it seems a business with moderate margins and facing strong competition as highlighted in the ICRA’s credit rating report.
The Current Market Cap is 1840 crores.
The amount of Cash Equivalents on the books is 744 crores.(mainly from giving off of Human Pharma Division)
The amount of current investments on the books is 208 crores (as of 30th September 2022)
The Non-current investments include 177600 equity shares of TTK Prestige and 1000 shares of Apollo Hospitals. The combined market value of these investments as of date is 13 Crores.
So Market Cap Excluding the cash and investments is actually Rs. 876 crores.
Actual capital employed - Value of Investments and Cash:
Short-term borrowings are 24 crores. Annual Interest expenditure will be around 10% i.e 2.4 crores.
TTM Sales is 704 crores and operating margins are only 3%.
Net profit from operations (21.12 crores- 2.4 crores interest)-tax@25.17% comes out to around 14 crores only.
So, the question is if the delisting offer fails, what will I get If I Buy the whole business at the current market Cap?
As mentioned above ex-cash and investments I’ll have to pay 876 crores and in turn, I’ll be getting 14 crores only.
Am I missing something? Let’s discuss this.
Right now this doesn’t look worthy to take bet as their is thin margin of safety at current prices.
I remember somewhere on the website of BSE we can check how many shares have been tendered at the end of day. I could find the location of the link on the website.
If anyone could point me the right direction I will be thankful.
TTK’s Result hangover is over. The floor price is 1051. CMP is around 1280. The last date of the Postal ballot was May 22, 2023. If this goes well. Delisting is given. However, a delisting above 1500/- is still not in sight.
