Probably the overhang of current promoter exiting (they already sold 50% of their last year) and CEO transition. Could think of these two probable causes.
CEO has “retired” before the end of his urrent 5 year term with about 1 year remaining. In his interview in CNBC TV18 in Feb25, he had mentioned that he will continue till the job is done. His sudden departure raises doubts in my mind. May be Indorama has brought in a change in the management? Disclosure: Not invested but following.
I think growth may rise now due to new CEO and growing demand from US. For those still following what seems like a good entry price
Indorama is the new promoter and rigid packaging becoming part of the portfolio….. management has spoken a lot about positives but does someone understand what could be the new risks?
- New promoter landscape / mindset, etc?
- Promoter entity seems to be quite leveraged?
- Indovida seems to be a stagnant business in recent times?
- Rigid packaging business has higher competitive intensity?
- Cultural differences?
- Eventual Blackstone exit looks closer now than ever?
I think EPL is getting into an unchartered zone now and we will have the answers in a couple of years only. Valuations are compelling but will it be a multi bagger from here or a value trap is still not clear to me as this point of time.
Any opinion from forum members who are tracking?
Disc: Invested, 2.5% allocation.
This is a positive, but there are a few headwinds - high crude prices, high aluminum prices + demand impact on B&C products potentially as this war leads to sticky inflation. I don’t see it doing much in the near-term, though I have been invested myself.
Update: Related read on the Indovida acquisition - Mergers like EPL and Indovida are building India’s industrial backbone
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In the recent past, there have been many developments in the Company. These developments may change the strategic direction of the Company.
The Promoter is new though they have been in the Board for some time. The CEO is new and we do not know if he was brought in by the new promoter in advance. It is merging with another operating company and the synergy created needs to be understood. I
I such situations my approach is to track the company for a few quarters before taking my investment decision. This is my approach and in the process I might even miss the entire opportunity.
DisclosureA: NO Holdings in EPL. Not SEBI registered. No Buy, Sell or Hold recommendation.
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The amalgamation and swap is available in epl website when going thru that the price given for EPL limited share shows INE 339 which is very high premium and the merger entity as per auditor report is also profit making Net cash
If SWAP price is 339 and it is eps accredited as mentioned in the report why is market trading at a lower price
Because at 7500 cr epl is trading at its replacement cost
Can any seniors expert in this type of m & a knowledge please analysis and share
Disl have bought tracking qty
After the merger, Indorama will become the new promoter and Blackstone will move out. Market may be giving lower valuation to the former than the latter. Another reason could be that the merged entity will have much lower India exposure than at present. And valuations are high for India businesses than others. These may be the reasons, not sure. Otherwise valuation is indeed cheap and for anyone with a 1 year holding period, this looks like a no-risk play.
(Disc.: No positions)
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I’m curious what underlying assumptions does this valuation exercise make, given the business’ sensitivity to the price of crude oil.
The increase in crude prices will almost fully be passed on, says the management.
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My point was to find why the market is giving only 215 when the IVL Promoter was swapping for 339 even though it is not a cash deal but the cash deal 24 percentage stake was done sr 240
So the anomaly of stock doing 180 to 240 thrice and u know we have three price point here 52 week low 185 and 240 ivl deal 245 recent resistance top and 339 swapping ratio price
All happened when fundamentally the company was improving it’s margins from 15/16 to 6 qtr above 20 percent good OCF conversion and increase in value added packing to 54 percent in cosmetic and lifestyle not regular oral care. The PE may look high but they claim higher Depreciation so evebita market is giving low 8 swapping at 12 Blackstone sale at 10 ev.
I always see as market Mr right which price point is fundamentally or growth wise is good is what iam trying to understand
Found this article explains both
Feed back needed to further understand it more clearly I dont have a confirmation bias because I have only a tracking
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After digging little deep and discussion with m and a knowledge guys
This deal whether it is good for EPL only time will tell but at the moment it looks like a financial engineering play for the benefit of black stone exit and indorama back door entry into the Indian lucrative share market without an IPO or open offer
First u aquire 24 percentage stake from Blackstone at 240 all cash deal get a board member and a ceo change anand kirpalu to executive director and Hemant as new head and Sunil Marwah indo Vida division
Then within just few months indo rama forms a separate entity indo Vida ring fencing it from the indo rama Debt and under indo Vida they increase the share capital and put all the emerging third world plastic pet resin asset this asset they are merging in in African country Thailand Indonesia.
Then announce a very attractive NON CASH swap deal sweeten it with swap ratio with increased share capital of indo Vida
Now after that indo Vida got 51 percentage controlling stake in a global packing firm listed in lucrative indian market just by merging a plastic commodity asset. This will be used in indo rama consolidated results.
On consolidated basis indo rama is struggling under Debt so even if they came to ipo it will not sell in indian public a 51 percentage would have triggered an open offer as per sebi mandate
Now back stone got good exit Now only 16 percentage can exit or engineer another sale thru dilution
Now we have to watch is the trade receivables and inventory whether it get increased by these indovida related party transaction and whether market will view as a mere commodity player
So this is wait and watch story
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