Triveni group has strong tie ups with industrial sector and with General Electric for technology and exports.
Triveni Engineering has announced demerger of its loss making sugar & allied business, along with all related assets and liabilities into a separate entity.
Market Cap - Rs.600 Crores,
CMP - Rs.22
Debt - Rs. 1258 Crores (mainly owing to sugar business working capital)
Holding in Triveni Turbine Ltd (@21.8%) = ~ Rs.700 Crores
Shareholder having 1 share of Triveni Engineering will receive
- 1 additional share of Triveni Industries Limited . The loss making sugar business Triveni Sugar Limited having a turnover of ~Rs.1900 Crores will be a subsidiary in this business.
What is interesting, of course is the Engineering business that remains. Make in India and strong relationship with GE at the start of the capex cycle should provide a good upside with low downside.
FY 2015 Engineering business
Sales - Rs.300 Cr
PBIT Rs.25 Crore
Order book of 600 Cr+ (mainly in Water business)
- Tie up with GE Lufkin
- 60% market share uses technology from GE for higher power gears
Excerpt from BSE Announcement : The major boost in exports is expected to come from the sourcing drive of major OEMs including from GE–Lufkin, GE Oil & Gas and the business is having good enquiries under this arrangement.
Not strictly comparable but Triveni Turbine which has similar arrangement with GE is quoting at 5 times Sales
This business is focused on providing world-class solutions in water and waste-water treatment
to customers in industrial and municipal segments.
Latest management update link below
Views invited for forming a better opinion on this special situation.
Disc : Invested @ Rs.24