Elcid Investment came out with a delisting offer of Rs 1.6 Lakh/share for the share’s intrinsic value of 6 Lakh/share. So Elcid is willing to buyback at 0.25 times intrinsic value. But shareholder rejected the offer expecting probably 0.5 times. Elcid last traded price is Rs 3 and no trading at all for many years. Those who hold the shares are fortunate and it is not that they are trapped.
If one have patience to the extent of taking the stock to the graveyard (i mean leaving these shares to the next generation. There are people who invest with such philosophy), then holding companies like BBTC, Summit Securities, Kalyani Investment, Pilani Investment, etc., are good buys at 0.1 to 0.2 times intrinsic value. But one should ensure that its subsidiary business do well. If no one thinks value unlocking is not possible in future, then these stocks should be trading at zero (if one go by Discounted dividend flow analysis to arrive at Net present value) but BBTC has gone up 10 times in last 8 years in spite of such huge discount available right now.
Having said that, i still prefer a company like Maharastra Scooters that pays dividend yield of 2%, underlying business prospects looks good, diversified and available at 0.25 times NAV.
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