Reliance CMP 897 shall lead the fall once it closes below Rs.850 the next downside level will Rs.750.
Friday, March 16, 2018
Thursday, March 8, 2018
Technical View on BSE Sensex - 8th March 2018
Warning: All views are my personal views and I have the right to be wrong. No conclusions to be drawn from my views.....
Sensex......The current corrective phase should take the sensex close to 31000.....
Sensex......The current corrective phase should take the sensex close to 31000.....
NCLT Companies - Bhushan Steel in particular dt 8th Mar.2018
Bhushan Steel is under NCLT and now it has been formally announced that Tata Steel is the highest bidder. To value any NCLT company two approaches can be adopted
1. Value of Assets per share less Liability
2. Earning Per Share
From Sebi rules two things needs to be understood
1. What is the max. equity percentage the new bidder can take in a listed company
2. What happens to the present equity
The Answer to above are
Q1. What is the max. equity percentage the new bidder can take in a listed company
Ans.1. Max.90% can be taken if certain specific conditions are met ELSE 75%
Conditions under which 90% can be taken are
A. Valuation of the company under NCLT as per valuation report on relevant date i.e. date on which COC approves the resolution is more then 1600 cr
B. Value of public share holding is not less than 400 cr
only if above two conditions are met then the new bidder can take 90% equity with a clause that the same will be brought down to 75% within a period of one year
In all other cases the max. that can be taken is 75% in a listed company.
Q2. What happens to the present equity
Ans 2. The present equity becomes either 10% of new or 25% of new depending the percentage taken by new bidder i.e max. 90% or 75%
In case of Bhushan steel following is the present scenario
Total number of equity shares are 22.65 Cr
Out of which the pledged equity of promoters with Lenders is 9.30 cr,
Un-pledged promoter shares which are with promoters but they have sold the same and have made them look public is 3.80 cr thus
Total with public is 13.35 cr and lenders 9.30 cr Total 22.65 Cr
Tata steel has offered 12.2% equity stake to Lenders that means total shares are 76.22 cr as against earlier 22.65 cr and new equity ratio is going to be
Tata Steel will have 53.57 Cr shares i.e. 70.29%
Lenders will have 9.30 Cr.shares i.e. 12.20%
Public will have 13.35 Cr. shares i.e. 17.51%
Now Tata Steel is offering Rs.36390 Cr. for 70.29% stake (53.57 cr shares) i.e. Rs.679 per share but funding of this 679 is expected to be done as 30% equity and 70% fresh debt in Bhushan steel thus Tata Steel will be infusing Rs.203 per share as equity i.e. Rs.10,875 cr. which they have already raised through recent rights issue of 12000 cr.
Now If Rs.36390 Cr. is for 70.29% then what is the 100% ...it will be roughly 52340 cr which is the net block value of bhushan steel in its last balance sheet thus TATA has valued Bhushan Steel assets at 100% of present net asset value.
Total shares issued are 76.22 cr thus Asset Value per share is Rs.686
Minus the debt per share which 70% of 36390 cr i.e. 25473 cr thus debt per share will be Rs.334
the net value per share will be 686 - 334 = Rs.351
Tata Steel is getting share value of Rs.351 by paying Rs.203
Rs.351 is value of Bhushan steel from Asset Valuation point
Now From earnings point what will be the EPS..??
if plant capacity is 5.6 million tons that can be expanded to 8 million tons and
Tata Steel is having captive iron ore mines thus have better EBIDTA margins which is considered highest for any steel company.........
Total no. of shares being 76.22 cr .........
thus the price depending upon EPS AND what PE the company gets the price can BE..................
Warning: All views expressed are my personal views and anyone reading the same should first verify the facts before making any conclusion.
1. Value of Assets per share less Liability
2. Earning Per Share
From Sebi rules two things needs to be understood
1. What is the max. equity percentage the new bidder can take in a listed company
2. What happens to the present equity
The Answer to above are
Q1. What is the max. equity percentage the new bidder can take in a listed company
Ans.1. Max.90% can be taken if certain specific conditions are met ELSE 75%
Conditions under which 90% can be taken are
A. Valuation of the company under NCLT as per valuation report on relevant date i.e. date on which COC approves the resolution is more then 1600 cr
B. Value of public share holding is not less than 400 cr
only if above two conditions are met then the new bidder can take 90% equity with a clause that the same will be brought down to 75% within a period of one year
In all other cases the max. that can be taken is 75% in a listed company.
Q2. What happens to the present equity
Ans 2. The present equity becomes either 10% of new or 25% of new depending the percentage taken by new bidder i.e max. 90% or 75%
In case of Bhushan steel following is the present scenario
Total number of equity shares are 22.65 Cr
Out of which the pledged equity of promoters with Lenders is 9.30 cr,
Un-pledged promoter shares which are with promoters but they have sold the same and have made them look public is 3.80 cr thus
Total with public is 13.35 cr and lenders 9.30 cr Total 22.65 Cr
Tata steel has offered 12.2% equity stake to Lenders that means total shares are 76.22 cr as against earlier 22.65 cr and new equity ratio is going to be
Tata Steel will have 53.57 Cr shares i.e. 70.29%
Lenders will have 9.30 Cr.shares i.e. 12.20%
Public will have 13.35 Cr. shares i.e. 17.51%
Now Tata Steel is offering Rs.36390 Cr. for 70.29% stake (53.57 cr shares) i.e. Rs.679 per share but funding of this 679 is expected to be done as 30% equity and 70% fresh debt in Bhushan steel thus Tata Steel will be infusing Rs.203 per share as equity i.e. Rs.10,875 cr. which they have already raised through recent rights issue of 12000 cr.
Now If Rs.36390 Cr. is for 70.29% then what is the 100% ...it will be roughly 52340 cr which is the net block value of bhushan steel in its last balance sheet thus TATA has valued Bhushan Steel assets at 100% of present net asset value.
Total shares issued are 76.22 cr thus Asset Value per share is Rs.686
Minus the debt per share which 70% of 36390 cr i.e. 25473 cr thus debt per share will be Rs.334
the net value per share will be 686 - 334 = Rs.351
Tata Steel is getting share value of Rs.351 by paying Rs.203
Rs.351 is value of Bhushan steel from Asset Valuation point
Now From earnings point what will be the EPS..??
if plant capacity is 5.6 million tons that can be expanded to 8 million tons and
Tata Steel is having captive iron ore mines thus have better EBIDTA margins which is considered highest for any steel company.........
Total no. of shares being 76.22 cr .........
thus the price depending upon EPS AND what PE the company gets the price can BE..................
Warning: All views expressed are my personal views and anyone reading the same should first verify the facts before making any conclusion.
Tuesday, February 9, 2016
Removing levels
I have deleted my last post on mkt. levels......
Shall be soon updating......
Very Interesting stock market.......
Shall be soon updating......
Very Interesting stock market.......
Monday, March 31, 2014
View on Gold - 31st March 2014 - USD 680
I wrote on 13th Sept.2012 when Gold was around 1750 to 1800 levels that it will go down to 1150 levels and it went down and made low of 1180 on 28th June 2013 i.e. correction of 33% in Ten months. It has bounced from there and today i.e. on 31st March 2014 when I am writing my blog it is around 1295 and now I predict that it will go down to USD 680 Levels i.e. downfall of 47% from here and fall of 65% from its all time high of USD 1920
Monday, February 4, 2013
Thursday, September 13, 2012
13th Sep. 2012
Gold in USD is at 1730 and made its final high yesterday i.e. 12th Sep.2012, I am of the opnion that the recent up move in Gold from 1590 to 1747 was fake and Gold is going to correct and will go down to USD 1150 i.e. correction of 33%
Monday, April 23, 2012
23rd April 2012 - Market poised for big upside Move
Market has started for next big move and equity markets would give the best returns amongst all asset class for next five years. Expect market to cross 30000 soon...
Wednesday, January 7, 2009
7th Jan.2009 - Satyam Collapse far reaching effect
Warning: The way market has reacted today after the satyam news has made the technicals that were pointing to take the market above 11870 by 5th Feb.2009 has made them two edged i.e. by or before 5th Feb.2009 the market can even break the Oct.2008 lows of 7697. Now the key is what the International Markets do specifically S&P 500. If it does the same in one or two days i.e. fall by 5 to 6% in a day then a new decline has started.
Tuesday, January 6, 2009
6th Jan.2009- Short Term Target before or by 5th Feb.2009 - Above 11870 and final target 13335
I mentioned in my market view on 13th Nov.2008 that market has started the move towards the zone of 12000 to 12500 AND now I forecast that before or by 5th Feb.2009 the market should cross 11870. Today i.e. the market as on 6th Jan.2009 has closed at 10335 i.e. a move of 1535 points or about 15% increase from present sensex level in less than one month.
The final target for the current upmove is 13335.
The final target for the current upmove is 13335.
Thursday, December 18, 2008
General Comments 18th Dec.2008
Three Good things are happening
1) Prce of Crude oil is falling - Has come to $40 from $147
2) Rupee is appreciating - Has come to Rs.47 from recent high of above Rs.50
3) Inflation is falling
If this trend continues and Crude falls to below $30 per barrel levels and Rupee appriciates upto Rs.40 against dollar due to which Inflation goes below 3% which ultimately makes RBI getting the interest rates on Fixed Deposits upto 7.5 to 8% and Lending rates upto 9 to 11% then expect the economy to start recovering.
1) Prce of Crude oil is falling - Has come to $40 from $147
2) Rupee is appreciating - Has come to Rs.47 from recent high of above Rs.50
3) Inflation is falling
If this trend continues and Crude falls to below $30 per barrel levels and Rupee appriciates upto Rs.40 against dollar due to which Inflation goes below 3% which ultimately makes RBI getting the interest rates on Fixed Deposits upto 7.5 to 8% and Lending rates upto 9 to 11% then expect the economy to start recovering.
Thursday, November 13, 2008
Market View on 13th Nov. 2008
As mentioned on 18th Oct. 2008 that market is into making the bottom, The level of 8799 zone that I expected to be as the weekly low actually became the last lowest weekly close at 8701 for sensex. Sensex touched the intraday low of 7697 but closed the same week at 9788 which again was very close to my expectation of 9779 for the week in which the market touches the lowest point.
As per my analysis the market has made the bottom and now market should move towards 12500 zone from where a strong corrective wave can re-start and if this wave is not able to take the market below the recent low of 7697 then it will be a confirmation that market has made the bottom and the next big up move has started.
Saturday, October 18, 2008
Market View 18th Oct. 2008
Sensex WEEKLY close 9975 on 17th Oct. 2008. It is very close to 9779 the worst case scenario as described in my market view given on 15th Jul 2008. In my opinion the market has either already made a bottom or is very close to making a bottom. My view is that 8799 the June 2006 low should be the bottom zone for the sensex with a weekly closing figure of 9779. I would advise start of buying from present levels.
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