I came across this company and putting up some details.
KBIL HOLDINGS IN VARIOUS GROUP COMPANIES
5.54 CR SHARES OF KIRLOSKAR OIL ENGINES
7.39 CR SHARES OF KIRLOSKAR INDS
45.47 LAC SHARES OF KIR PNEUMATIC LTD
2000 SHARES OF HDFC LTD
1081 SHARES OF ICICI BK
60,000 SHARES OF KULKARNI POWER TOOLS
MARKET VALUE IS AROUND 1148 CRORES OF ABOVE INVESTMENTS.
CASH IN HAND IS AROUND 55 CRORES.
Pooja credits has holdings in two group companies kirl oil eng and kirloskar inds worth 300 cr.
Adding all the above total worth of holdings comes to 1148+54+300=1502 crores which comes to per share value of Rs 2800 per share.
Equity is 5.29 crores with around 53 lac shares outstanding.
Total market cap based on cmp is around 319 crores.
This is purely a holding company for the Kirloskars. Promoters have been steadily accumulating shares from the market.
How much holding company discount is justified? Views invited.
This looks interesting.
Usually holding cos trade at 50-60% discount. I have seen that if the discount is 75-80%, its safe to buy the stock then.
Recently there is restructuring announced in Kirloskar Brother Investment Limited (KBIL) (on Board meeting held on September 2 2014). In my understanding, the company hold share of Kirloskar Pneumatic (KPL) and Kirloskar Oil Engine (KOL). The Pneumatic part of shares would be transferred to another holding company from which the existing shareholder of the company would get one share. In addition, as against 5 shares held by investor in Kirloskar Brother Inv, one shall get 72 share of Kirloskar Oil Engine (I assume, the share held by Kriloskar Oil by the company would extinguish after new share being issued to KBIL’s shareholder.) The current price of of KOE is Rs 250. So the ratio of 72/5= 15.2 shares of KOE at Rs 250 per share give value of around Rs 3,800 per share for the KBIL share+ a share in Pneumatic holding company (10 paid) as against current price of Rs 2287 per share. KBIL has hit two circuit since Sep 2, 2014 of 20% each post announcement. I would advise all prospective investor to read the Board meeting notes and get clarity after reading as the above description is my interpretation which may not be correct. Secondly, I have invested in the company before the announcement.
In previous comment Please read KOL as KOE.
As an aside, Kirloskar inspite of being such a great group has not delivered great returns over the last few decades. Why ?
I have always felt when compared to others like Birlas etc. Kirloskars have not done too well.
Just asking the group, why ?
This is more to look at arbitrage opportunities. Have not done so much detailed analysis.
The daily traded volume is around 1500 shares only. Since the stock is going up by 10-20% for the past 2 days, it must be the promoter group buying. The question that comes up is what happens to the price when they stop buying?
@ Bomi, The company hold share in Kirloskar Oil Engine and Kirloskar Pneumatic Limited mainly. As per Board approval, the KBIL shareholder would get 15.2 share per share of KBIL (Swap ratio of 76 share of Kirloskar Oil Engine for every 5 share of KBIL) + 1 New holdco share (which would only non Kirloskar Oil Engine present business). Current price of Kirloskar Oil Engine is around Rs 250 per share. So you get 250*15= Rs 3750 /- per share of KBIL value for Kirloskar Oil Engine holding and plus whatever value you attribute to new holding company. So, there is no promoter buying in my knowledge. It is arbitrage with this news in public domain. Please read the notice of board meeting to confirm my understanding as it is worded with full legal language and I am not a legal expert. Also, I am holding KBIL and hence my view may be positively biased.
Hi, is anyone following this thread. I have done some basic analysis on this share, and I see Promotor’s are buying the shares from the Market. Can someone provide their expert view. I am pretty new to this forum and 1 year old in market, so kindly excuse me for any mistakes.
Disclosure - Not holding, but tracking.