How can I calculate that ?
Also is it possible to get historical data ?
@Chandan_Sharma One crude method:
Go to google finance - search SRF price chart of last 5 years - then compare it with Kama Holding - you can clearly see the gap widening. But this will not give you exact discount%.
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Can be done via trading view kama price divided by srf price
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You may track on this sheet
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Does anyone understand what the implication of removing section 80M will be on Kama?
It is eliminating the tax rebate when a holding company directly passes on dividends received. Now dividends will be double-taxed and we can expect payout to reduce
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yupp correct, the discount is near its peak - also it has reverted from 85% types
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What’s the take of the group regarding Kama’s call on sale of 3% stake in SRF by Mar.27 ?
my 2 cents :
- Stake sale shall get ~2400 cr to Kama, turns out to be Rs. 748/- per share of Kama
– Since promoters trust hold major stake 75%, the trigger could be to gather some money; ~1800 Cr in their family trust
currently Kama is trading at 78% discount, if stock prices remain the same (which is unlikely), the discount moves down to 76.6%. At the same time, market may anticipate more stake sales, lowering the discount.
With lower public holding i anticipate safe arbitrage for special dividend of >700 rupees / share.
please see my working below & let me know what i am missing ?
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Your analysis is correct. I bought this stock three years ago based on the thesis that an 80% discount to its underlying holdings is difficult to justify if the company continues distributing the dividends it receives from SRF. Over time, a partial monetization of its SRF stake could act as a catalyst for rerating.
I see two primary risks:
-
Capital allocation risk: Management may choose to deploy cash into non-core businesses rather than distribute dividends, which would dilute the investment thesis.
-
Market impact risk: Any meaningful sale of its SRF stake could create downward pressure on SRF’s stock price. SRF is not inexpensive on valuation metrics, and in a weak market environment, even modest selling pressure could trigger a correction.
I found the risk/reward in this case to be very asymmetric:
These numbers are before accounting for 3% stake sale.
Disclosure: Holding, views are biased. No recent transactions.
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Anyone planning to attend AGM tomorrow ?