Management concall reply on loan:
Yes. See, the total loan as of 31st March '16 was 185 crores, whereas now it stands at 218 crores. Now out of this 218 crores, 60 crores is the unsecured interest-free loan from the promoters. So that brings it down to 158 crores. So our external borrowing has gone down from 185 crores to 158 crores, that means there is a reduction of 27 crores.
Does anyone have any idea why interest has gone up even though the total loan has reduced…
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My interpretation is that current 158 crores of external debt (per transcript) is consolidated debt (Omkar + Lasa). As part of demerger, Omkar’s debt has gone up for FY17 from 79.22 to 124.60 crores because of which Interest Cost has also gone up.
Omkar Speciality Chemicals - Stock Update - 130617-201706131029058330517.pdf (182.3 KB)
HDFC Research Report after demerger.
Thanks Prit Nagarseth for sharing.
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HDFC securities.pdf (152.2 KB)
HDFC securities has given another BUY call on OMKAR where it says that OSCL has the potential to give returns of 198.8 % , by going up from 81.5 to 244 in 3 quarters. I have attached the relevant pdf file.
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I think somehow the link has tried to calculate upside by taking current “post de-merger” price with earlier prediction of 244 INR which was for “un demerged” entity. Here is the link to old report with 244 as target http://old.hdfcsec.com/Research/ResearchDetails.aspx?report_id=3022360
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A nice write up
@nkgambhir That target of 244 is misleading because of price reduction on account of demerger.
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Board Considering Rights issue for raising Rs200cr
http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/09967c73-71d7-40fa-8a9c-43de6d66221f.pdf
When did the company release these numbers ? In LASA also, they have taken a hit of 30.6 crores as exceptional items. If you exclude that , then the NP works out in the range of 25 crores, and the EPS on the enhanced equity of 20.6 crores would be around 12. I wonder how the market will react to this combined hot of nearly 100 crores for OSCL and LASA.
Hi thx for sharing…notes part is missing…could u plz share
I tried searching…but can find
Does this happen in other cases of demerger as well ? Both the parent company as well a the offspring , taking a huge hit and showing heavy losses ! A hit of 100 crores is not a small thing.
It is on Lasa’s website. It looks as if they are still updating the website.
This hit is not a small thing. But at the same time it will be good in long term. Not sure about short term. But i do not think management is doing anything wrong. Fixed asset cost also includes interest, salary and other installation related costs which are capitalised but are not going to fetch anything if assets are sold. So it is a good thing that management is not going to have inflated books.
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They have not yet updated notes. I think they are in the process of updating Lasa’s website and more details should be available in few days. Will update if i find anything.
On lasa’s website, there is tab “key financial info” which has currently only 1 link right now. You can keep an eye out there. Coming to management integrity, going for rights issue has doubled my faith in management. They could have easily gone for preferential issue. But going for right issue shows that management really cares for minority shareholders.
Can you please explain the difference between the right issue an preferential shares
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I am not sure in my understanding and calculations but I will be pleased to be corrected if I am not. They plan to raise Rs 200 crores through rights issue by increasing the share capital by Rs 3.5 cr of shares with face value of Rs 10, so total 35 lakh shares…which corresponded to around Rs 65/share…
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Rights issue is where all the current shareholders are offered to buy certain number of shares at a predetermined price which is lower than market price. So if you are shareholder, you can get additional shares at discounted price. Preferential issue is also at a discounted price, but they are issued only to promoters or institutional investors due to which minority shareholders are at a loss.
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