I can explain what is wrong in the calculation that @richdreamz posted…
Let me try first – from a pure business point of view….
By that calculation – Gruh would be raising 3164 crores of fresh equity. Assuming a 6x debt leveraging – this means that the loan book can potentially grow by 22,000 crores. That is the loan book has to grow from current 9000 crores to 31000 crores. This would take another 5 years at the least… So, why would anybody give so much of equity capital???
Let me now try – from a purely analytical point of view….
Assume that Gruh was today valued at a stratospheric 50x P/BV (or even a 100x P/BV)… Apply this to the calculation – you will find that Gruh is undervalued after the equity raise!!!
I don’t have any calculation to offer from my side – simply because I still don’t know what exactly you meant by the hypothetical situation…
Regarding the tone of my post – I think it is a communication gap. I am merely writing what I am thinking. Nothing more, nothing less.
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