Rakesh Jhunjhunwalaaccompanied by veteran investorRadhakrishna Damaniare planning to buy one crore shares, or 20.06% equity, inSterling Holiday Resortsat up to Rs. 75 each.Sterling Holiday Resortsis holding an extraordinary general meeting on 13 August 2011 to obtain shareholdersâ approval for issuing equity shares and warrants on preferential basis convertible into shares in 18 months in 1 or 2 transaction.
Story:Sterling Holiday Resorts pioneered the concept of time-share in the country.This company went through a very bad phase in the late 90s and saw its losses mounting every year.However, in the last few years, the company management has been taking various steps to bring the company back on track.The positive factor about this company is that this company owns 14 mid-sized hotels,The Resort, at various places in the country. These include resorts at Goa, Kodaikanal,Lonavla, Ooty and various other places.Of late, we have been seeing a lot of interest from various Indian and foreign hotel chains.Everyone wants to set up a chain of budget hotels in India, be it the Tatas , ITC or foreign hotel chains. Most of these hotel chains are aggressively scouting for land for making the hotels or ready-made properties, which can be converted into hotels. Sterling provides an excellent vehicle for them to get into the segment at a very low cost and without any gestation period.At the current price, the market cap of the company is just Rs 418 crore.One is getting 14 ready properties for a market cap of just about Rs 418 crore, which could be a juicy valuation for many players who want to enter into this segment So I believe that there is a huge potential within the sector and that is why so many players are getting into this sector.The financials are nothing great to go by, as of now. This company has been making losses but there is a huge potential in the sector. Once this company starts making profits or if the company sells the stake to somebody, it will be at a much higher price. Once that happens, then people will get more convinced about the potential of the company.It looks to be a good hold at present prices.
Ex-MD of Club Mahindra has joined Mahindra Holidays and New UK based fund has stepped in.
The stage is set for Sterling to make a mark as multi-bagger. Yet am cautious about it. Lets see if new team unlocks the value n back it up with
sterling` performance
The new md appointed is the ex md of mahindra holidays. Appointed in July 2011. Old promoters have also left. Makings of a 5 bag ger
AGM ON -13-08-2011
www.sterlingholidays.in/uploadedfiles/file/EGM-Notice-13-08-2011(1).pdf