If one were to guess a discount threshold, we will have to look at similar holding companies in terms of capital allocation (non-core operating activities, how the company is investing it’s dividend yields etc). Bajaj Holdings is one which comes close and the market gives it a discount of 56%. If one was bullish about Kama Holdings to converge to that same discount levels, the marketcap should be inching towards 18k-20k.
Here is a slightly older report that tries to estimate Kama’s discount convergence in bull, bear scenario.
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Last Friday, 15 Dec 2023, the scrip plummeted and saw the second biggest volumes for the year. Couldn’t find any data under bulk/block deals or insider trading on the BSE website, does anyone understand what happened?
Last Friday was the biggest volume.
After the buyback, promoter stake went to 75.15% and they’ve shared in exchange filing that they’d sell in open market. So, I assumed that the sale was done on Friday. But there’s no exchnage filing.
May be they’re yet to sell some quantity and they’ll release an exchange filing after that.
But the volume traded is > 70k, which is a concern.
I’ve added some shares as I found it to be a good opportunity as the Hold Co discount became attractive and also it seems that the chemical cos are bottoming out. Only time will tell
@Amnesiac@praveen_potnuru I can’t name it, but an advisory issued a SELL call on Kama holdings. That might be one of the contributors of the Friday volumes.
SRF is approaching 52 week high and rebounding. Parent company Kama Holdings is not reflecting the value in its price action yet. Kama Holdings alternatively is closer to its 52 weeks low.
Historically, whenever SRF is uptrend HoldCo discount in Kama has increased & whenever SRF is stagnant or in downtrend ; HoldCo discount has decreased.
Couldn’t get the logic, have back tested for last 9 years this pattern has emerged.
Another tranche worth ~Rs.30 Cr sold today, taking the total to ~Rs.200 Cr. There are 3.2 cr of total equity shares of Kama. That means each share gets ~Rs.63.
Seems not a big deal, have raised query with them asking for funds utilisation, don’t expect a reply. sale of shares of subsidary.pdf (308.5 KB)
i understand, but many Promoters prefer to do a buyback to avoid taxation, rather than Dividends which will put them at highest tax level. Also they tender at last minute, just enough shares to keep at the 75% limit, based on shares that are tendered by other shareholders.
