This is regrad to Valuation of Holding company’s shares i have several doubt and concerns in my mnd .I am just starting a thread so that to learn more throgh colloborating leraning and with the expereince of Value contributors .
A holding company: A holding company typically does not have ongoing operations other than the retention and management of assets in anticipation of future sale or trade
How to value a holding company such as Balmer Lawrie Investments or similar?
What will be the growth prospects or such holding companies?
They are mostly being high dividend giving companies and always available at discount.
The thing which attract is as their investments were more than their market capitalisations.
I need Vp’s help from the experts Is it safe to invest in such companies
Point in favour
• They don’t have any sales eventually not paying tax . only tax they have to pay is dividend distribution tax .
• There is low cost of operation only employee cost .
• OPM is >90%
• Dividend pay-out >75 average last 10 years
• In Indian scenario the holding companies are in the range of 25 to 70% discount rate , if you compare the value of the holding shares by the company
The best part they purelly financial vehicals
A few companies
• Balmer Lawrie Investments
• Kama Holdings Limited
• Tata Investment Corp
• Bajaj Holdings and Investment
• Jindal South West Holdings
• Rane Holdings
• Pilani Investment
• Inherent risk of possessed equities passed on to the holding company
it offer better return than most of the mutual funds and index returns but i am not able to find the Missing link That How to Value a holding comapny ? I need your help
Ref 1 http://www.balmerlawrie.com/files/1504261982annual_report_2016-17.pdf
4 regarding valuation discounts : https://www.sagefa.com/forensic-accounting-articles/valuation-discounts-for-holding-companies
Disc; Not having any stock owned I am not an analyst and this is not any investment advice .one may find their own rational to invest in the stock mentioned in the post. This is for study purpose