Temasek Will Cause Mega Value Unlocking Gains For Vijay Kedia’s Fav Stock: Adi Godrej

Inquisitorial minds behind charming faces

Lata Venkatesh and Sonia Shenoy, the charming ladies of CNBC TV18, are both battle-hardened journalists with razor-sharp minds. The duo knows that when eminent celebrities walk into the studio, all efforts have to be made to extract maximum actionable information from the celebrity.

Forget GST, demonetization; talk about value unlocking

Adi Godrej, the visionary founder of the Godrej group, came prepared to talk about mundane issues like GST, demonetization and their impact on the FMCG business.

However, Sonia Shenoy deftly side stepped the core issues and instead asked Adi a question which he had least expected.

“There is a lot of talk in the market that at some point Godrej Industries may look to demerge Godrej Agrovet and eventually list it separately. Is that a plan that you would be looking towards?” she asked in her sweet voice, with wide eyed innocence.

Adi was momentarily taken off balance though he quickly recovered his composure and pretended as if nothing was amiss.

“Godrej Agrovet is a separate company. There is no question of demerging it. Godrej Agrovet is a subsidiary of Godrej Industries and yes it is possible that we may look to list it. It is currently a private company with 20 percent shareholding from Temasek as a private equity investment. And we may look to list it after studying the situation” he mumbled in a gruff voice.

Lata Venkatesh was quick to seize the initiative.

“So, could we be looking at a 2017 listing? Are you targeting something in the next calendar year itself?” she asked, pinning down Adi and leaving him with no room to escape.

“It is difficult to tell ….. Temasek has a clause that we should list when they want us to list. So, it will depend on their requirements also …. if we get large acquisition opportunities then even from a financial point of view there will be need to list,” Adi reluctantly replied, with grudging admiration in his voice at the inquisitorial abilities of his interrogators.

Listing of Godrej Agrovet means huge value unlocking for Astec Lifesciences

At this stage, I have to compliment myself because unlike other novice investors who stared blankly at the TV screen, I was immediately able to connect Godrej Agrovet’s listing to mega value unlocking potential in Astec Lifesciences.

It is a matter of common sense that the easiest way for Godrej Agrovet to achieve the objective of listing itself is to reverse-merge into Astec Lifesciences, its subsidiary.

Obviously, if the reverse merger does happen, Astec Lifesciences will overnight be transformed from a micro-cap to a mega-cap.

Reverse merger of Godrej Agrovet into Astec Lifesciences contemplated by Gaurav Parikh

It is notable that Gaurav Parikh of Jeena Scriptech had foreseen the possibility of a reverse merger of Godrej Agrovet into Astec Lifesciences when he called the latter his “best pick for 2016” and recommended a buy.

His words were prophetic:

“With its impressive pedigree, it’s a given that the fortunes of Astec will be closely intertwined with that of the Godrej group. And in due course of time, one can also expect Godrej Agrovet to get listed either through a reverse merger with Astec LifeSciences or in a restructuring exercise in order to add value to the shareholders of both companies. In short, here’s a multibagger that has got a new shot at life.”

Temasek is bound to demand listing of Godrej Agrovet sooner or later

Adi Godrej candidly revealed on the prompting by Sonia Shenoy and Lata Venkatesh that Temasek, the private equity giant, has the right to demand the listing of Godrej Agrovet at a time of its choosing.

So, the listing of Godrej Agrovet is inevitable given that it is in Temasek’s own interest to demand it.

Astec Lifesciences is a great buy on ‘CAN SLIM’ principles: Girik Capital

Charandeep Singh and Varun Daga, the whiz-kid founders of Girik Capital, revealed in an interview with Ramesh Damani, that Astec Lifesciences is a textbook example of a stock which fulfils the ‘CAN SLIM’ approach of buying stocks.

The ‘CAN SLIM’ approach is formulated by William J. O’Neil, a stock market expert. It requires investors to pay attention to seven specific issues while evaluating a stock.

Any stock which fulfils all the criteria is a must buy, says the formula.

The duo of Charandeep Singh and Varun Daga pointed out that the ‘CAN SLIM’ method had enabled them to also home in on Ajanta Pharma which it was available at a throwaway valuation of 1,800 crore. Ajanta Pharma’s valuation today is Rs. 15,000 crore.

Massive holding of Varun Daga in Astec Lifesciences

Varun Daga of Girik Capital revealed in the interview with Ramesh Damani that he is only 31 years old and that he started investing when he was only 18 years old.

Varun Daga has a massive holding of 308,642 shares in Astec. Two other individuals named Kaushik Daga and Nilaykumar Daga, who appear to be related to Varun Daga, also hold similar amounts. The collective holding of the three Dagas in Astec Lifesciences is 925,925 shares which is worth Rs. 57 crore at the CMP of Rs. 617.

Vijay Kedia also has a massive holding in Astec Lifesciences

Astec Lifesciences came into our radar only because Vijay Kedia entrusted it with his capital. He presently holds a chunk of 200,000 shares which is worth Rs. Rs. 12.34 crore at the CMP of Rs. 617.

Blockbuster results by Astec Lifesciences, Godrej Agrovet also doing well

Astec Lifesciences reported blockbuster Q2FY17 results with the sales surging 31%, the operating profit surging 173% and the net profit surging a mind-boggling 463%!

Adi Godrej confirmed that Godrej Agrovet is also doing “very well” thanks to the good monsoons.

Massive gains have already gushed in, more are expected

Astec Lifesciences has been a mega multibagger already. Over the past 24 months, the stock has given an eye-popping gain of 523%. The gain on a YoY basis is 162%.

Obviously, these gains will look like peanuts if the reverse demerger with Godrej Agrovet does take place!