ValuePickr Forum

Harita Seating Systems Ltd. (M. Cap 510 cr)

A larger trend in auto components industry is about having higher content per vehicle progressively from a supplier perspective. So the consolidation in that direction keeps happening. In this case it could be a combination of factors for tvs group to sell the business as put forth by some boarders. It is a bit surprising that management has not explained this along with the news of acquisition. Minority investors seem to have been short changed.

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Thanks for clarifying this. Very disappointing indeed. No proper communication or explanation at all, as you said. I discovered Harita on this forum, and having studied it a bit, I bought into it and was optimistic about the prospects. Did not expect such an event transpiring at all. Minda Industries’ share price has also fallen a fair bit (though it’s still at the higher end of historical valuations) - so the only hope of being in the money here is if Minda Industries valuation recovers. But I am not optimistic. Corporate Governance in India truly sucks.

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You can try your luck by opposing resolution by E voting.Though we are minority share holders,we should always exercise this right given to us. Remember, Kennametal India’s resolution for delisting was defeated by few hundred shares.

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Any idea when does this share swap come into effect? I haven’t seen any communication about the special resolution. No dates have been confirmed yet, right?

Nothing yet @asarun - have bought a nominal number of Minda Industries shares to receive their copy of the COmposite Scheme too. Minda share has been up sharply in last two trading sessions - HSSL share is already following in sync though not exactly

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There has been absolutely no news about the merger after the initial announcement. What is going on here? Aren’t companies duty-bound to provide some concrete update at all?

I have largely exited at a loss, and just retaining a few shares to see how this plays out.

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These things usually take atleast 3-6 months to go through. Don’t think so there’s anything to worry about.

Hmm…ok. It is over 6 months now, it doesn’t seem quite right there has been no communication.

Good part is its merger with very dynamic Minda ind who have superb execution track record n growth mindset unlike laid back promoters of harita.

buy n hold for next 3 years.cheaper way of buying Minda ind tks to mergers.

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Exactly. I hold both, and have added some more of Harita as a arbitrage for getting Minda at ~10% odd discount.

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I have finally received the postal ballot form and explanatory memorandum for the NCLT convened shareholder meeting to approve the merger with Minda. Still offers an opportunity to buy Minda at an implied discount of over 10%.

Can you please explain what is the arbitrage opportunity here? Thanks.

It isn’t an arbitrage opportunity, because Minda Industries cannot be shorted. if MIL could be shorted, an opportunity would exist to buy HSSL and wait for the merger, and simultaneously short MIL for 10% riskless profit - classic merger arbitrage as Greenblatt would write about which is common in US markets.

Here unfortunately if you want to buy Minda today and are confident the merger will go through, holding on to HSSL is not a bad idea. I would not recommend buying HSSL for this reason alone.

Disclosure: Holding HSSL and in the red

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Please check the swap ratio it’s not 1:1 .

Approx 1.5 : 1 - which implies HSSL is undervalued by slightly more than 10% assuming merger goes through

best is to buy harita . if by any chance minda price goes gown, u are secured as one can opt for prefrence shares wih will be given at the value of 481. please check previous my post in minda forum

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Any idea when the share re arrangement is going to happen. I have not seen any notification from Haritha on the choice the shareholder makes for either options

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Where can I find the Q4 results and audited financials of FY 2019-20? Cant find it in the company’s site or in the site of exchanges.

Any updateon merger with Minda Ind??

Tarikh Pe Tarikh

As per Harita’s Annual Report “The approval of the shareholders of the Company for the said scheme was obtained at the National Company Law Tribunal (NCLT) convened meeting held on 4th December 2019.
Hon’ble NCLT, Chennai by an order dated 19th February 2020, has directed the Company to call for representations, if any, in connection with the proposed scheme from regulatory authorities.
The Scheme is pending for the Final Orders of NCLT, Chennai and NCLT, New Delhi.”

Next hearing in New Delhi NCLT is on 16-November-2020.

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