South Indian Bank

Stock Opportunities Untested - but worth a good look
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I would like to consider that option because in the case of India bulls the RE was selling for up to Rs 46 and with the RE I could buy for Rs 150. So, I could sell the RE for say 42 and buy the shares from the open market for Rs 180. However, we get taxed on Rs 42 one receives on selling the rights, if I am not mistaken.

In the case of South Indian Bank, I have the following options:

  1. Maintain my proportional ownership in South Indian Bank at a discount of Rs 8 from the CMP
  2. Decrease my proportional ownership in South Indian Bank, sell the RE at around Rs 7.50 or whatever the current traded price is for the rights buy any share which I think is undervalued
  3. Not do any of the above in which case my ownership in South Indian Bank gets diluted anyway without the income from selling the RE.

Since 3 is not a good option, I might as well go with option 2 if I don’t want to do option 1.

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