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Portfolio of promising unlisted Indian companies

Printed From: The Equity Desk
Category: Market Strategies
Forum Name: Comparing Stocks within the same sector
Forum Discription: Here we would discuss the various stocks that are available within the sector and provide insights on the better option.
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=620
Printed Date: 29/Mar/2024 at 6:20pm


Topic: Portfolio of promising unlisted Indian companies
Posted By: jstk
Subject: Portfolio of promising unlisted Indian companies
Date Posted: 27/Nov/2006 at 1:03pm

The market has seen a lot of IPO’s over the last 24 months. Most have been successful in raising the required money. On listing, the market has given the ‘Thumbs up’ to some while many others have floundered. One similarity in these IPO’s has been that these companies, as commercial entities have their own addressable markets which are largely B2B.Very few touch lives of the average Indian on a day to day basis [a la HLL, ITC, Bharti, Colgate, Hero Honda, Maruti] I have tried to list some unlisted homegrown companies, which own brands which are a part and parcel of our everyday lives. The association is so strong that more often than not the brand becomes the company.

 

1] Bennett Coleman & Company: The brand -Times of India. This is the Big Daddy of Media in India and has been a trendsetter by its hardcore bottom line focused strategy. A very large % of urban India wakes up every morning to get some more of the TOI fix. Has other interesting properties like ET, Navbharat Times, Maharashtra Times, Femina, India Times [Times Internet]. I believe they did a NP of approx Rs.550 cr on sales of Rs.1800 cr in 04.

2] Parle Products: The brand-Parle-G. This single brand at a price point of Rs.4 & Rs.2 does more revenue than the combined revenue of all the Mc Donald’s, Pizza Huts & Dominoes in India!! To many underprivileged, Parle-G and a cup of tea is a midday meal / lunch. The brand continues to grow in spite of the launch of various me too products with better packaging like Tiger from Britannia & Sun feast from ITC.Parle-G target market is from 2 years to 80 years. The Company has other brands like Monaco, Krack jack, Hide-n-Seek.

3] Yashraj Films –The brand-Yash Chopra Presents is virtually a ‘money machine’. Their marketing is top of the line, content –above average & presentation superb. They have a success ratio of close to 90%. Even a dud like ‘Neal & Nikki’ managed to recover costs. With their forays into film distribution [national & international], music [Yashraj music] and setting up of a world-class studio, there is nothing in the Movie chain that Yashraj does not do. Every single movie from their stable has a stupendous opening and is known to cover costs within the first week of release. Has a huge fan following pan India.

4] Gujarat Co-op Milk Marketing Federation: The brand-Amul. The Taste of India. They have made Butter, Cheese & Ice cream [all western products] a part and parcel of everyday Indian lives.

5] Life Insurance Corporation of India: The brand- LIC is synonymous with Insurance and safety and the largest Insurance company in India. It is rare to find an Indian who has not been approached by an LIC agent to invest in a policy!!

6] Bharat Sanchar Nigam Limited: The brand-BSNL is the No.1 Telecom service provider in India. Their sheer reach makes them unbeatable. Very strong in the rural / non-Metro places.

7] Enam: They are undisputedly the foremost Investment Manager in the country. They might not be well known outside market circles but their super reach and ability to raise large funds makes them a must include in this list.

8] People Interactive Pvt Ltd: The brand-shaadi.com.This is without doubt the most innovative of all the above.Shaadi.com has changed the way matchmaking is done in India. They have completely transformed the matrimonial market and have made a huge property on the basis of a simple idea. They are taking it further ahead through Shaadi Point. The addressable market is huge & the opportunity size [India + NRI’s] is mind-boggling. They have other portals like fropper.com, astrolife.com. Sister concern People Infocom runs mauj.com.

9] Samant Soma Wines Ltd: The brand- Sula. Sula has been primarily responsible for the revival of the wine market in India. The product is good, they have managed product placement in all the right channels and are currently a ‘must have’ on the menus of most functions. Retail pull has been strong. They are selling everything they produce and fighting to cope with demand. Capacity addition looks imminent. Sula has the potential to become the equivalent of Kingfisher Beer in the wine category.

 

 

Expected Valuation:

 

The valuation is done on the basis of data on these companies available in the public domain and also other listed entities in India / abroad in similar lines of business.

 

Life Insurance corporation of India

Rs.1, 75,000 crores

Bharat Sanchar Nigam Ltd

Rs.1, 50, 000 crores

Bennett Coleman & Company

Rs.30, 000 crores

Gujarat Co-op Milk Marketing Federation

Rs.10, 000 crores

Enam

Rs.7, 500 crores

Yashraj Films

Rs.6, 000 crores

Parle Products

Rs.4, 500 crores

People Interactive Pvt Ltd

Rs.2, 500 crores

Samant Soma Wines ltd

Rs.3, 00 crores

 

 

Some of the above like Bennett Coleman, Yashraj, Enam & Parle Products have huge cash surplus and probability of them approaching the market is not very high. People Interactive & Samant Soma Wines IPO is a possibility within the next 12-18 months. LIC & Gujarat Co-op will require a change in their status, as one is a Co-operative  & LIC / BSNL will require Parliament approval.

 

Notwithstanding the above, whenever these companies do hit the IPO market, they should see huge investor interest & participation.

 
request views from everyone, jayendra
 
p.s have intentionally left out Hutch, Samsung, LG, Hyundai, Star - included only homegrown cos. 


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If you buy for a non-value reason, you will end up selling for a non-value reason.



Replies:
Posted By: basant
Date Posted: 18/Jan/2007 at 9:30pm
The best part of these companies is that all of them have very strong brands. I think that within the sectors there is no styronger brand then LIC, ENAM,PARLE. What about BISLERI? This is also a generic name for mineral water in India.Ramesh Chauhan has the ability to create some really powerful brands, Thums UP, Frooti are  two of them that come instantly to mind.

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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in


Posted By: deveshkayal
Date Posted: 19/Jan/2007 at 10:10pm
Two more to be added to this list.They r not strong brands but they r leader in their sector.
Serum Institute: Pune based Serum Institute of India dislodged erstwhile leader Biocon from the number one position in The BioSpectrum-ABLE Biotech Industry's annual ranking in 2006.Founded in 1966,The company manufactures life-saving immuno-biologicals at reasonable costs which range from anti-tetanus to Hepatitis to Measles,Mumps and Rubella vaccine.Today,Serum Institute is the worlds largest manufacturer of measles vaccine and DTP vaccine which r sold across 145 countries.
 
IFFCO: Indian Farmers Fertiliser Cooperative Ltd (IFFCO) has turnover of Rs 9943 crore, net profit of Rs 341 crore.Started in 1967,with 57 farmers its membership today stands at 37700 and it is already the biggest producer of fertiliser in Asia.
 
I dont know whether Genpact should be added to this or not because 60% stake is held by private equity firms General Atlantic and Oak Hill while rest 40% by GE Capital.


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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett


Posted By: MuKeShHaRlAlKa
Date Posted: 09/Nov/2007 at 2:07pm
Some of the names that come to my mind are :

1. Karvy Stock Broking: Karvy is definetely one of the leading brokerage houses of India. It has the highest number of demat accounts and is registrar for most of the blue chips including RIL.

2. Mahanagar Gas : The largest supplier of gas in Mumbai. It has partnership with British Gas.

3. Kingfisher Airlines : The reputed name in the aviation sector. A part of the Vijay Mallya group and a leader of its sector

4. Bharat Hotels : one of the biggest players in the hotels and hospitality space space with sales of over 300 crore.

5. Vijai Electricals : One of the market leaders in the transformers space with sales of around 850 crores.

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In Cricket & Stock Markets, everyone seems to be an expert but only a few really are.


Posted By: pramodjain
Date Posted: 09/Nov/2007 at 10:59pm
one more is khadigram udhyag

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"We simply attempt to be fearful when others are greedy, and greedy only when others are fearful."


Posted By: MPD05
Date Posted: 09/Nov/2007 at 11:26pm
If you also consider holding companies, one of the names at the top of the list would be Tata & Sons. 


Posted By: kg
Date Posted: 09/Nov/2007 at 2:00am

after seeing the queue at haldriram , bhikharam and tewari ...i dont hv words



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Lets rock


Posted By: basant
Date Posted: 09/Nov/2007 at 9:12am
Originally posted by kg

after seeing the queue at haldriram , bhikharam and tewari ...i dont hv words

 
High margin, low capex, brands, moat, secular growth, pricing power. What else do we need?
 


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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in


Posted By: MuKeShHaRlAlKa
Date Posted: 09/Nov/2007 at 11:36am
one more:

IMS : well reputed name in MBA tuitions. It has turnover of over 350 croe

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In Cricket & Stock Markets, everyone seems to be an expert but only a few really are.


Posted By: shivkumar
Date Posted: 09/Nov/2007 at 11:37am
While we speak of holding companies, what do you think of the prospects of JSW Holdings?

The stock's closing price on moorat trading was Rs 750 while one analyst pegged its real value at Rs 4500 or so.


Direct investment holdings (listed):
17.83 million shares of JSW Steel @ Rs928 p.s. = Rs16,548 million
1.23 lakh shares of Jindal Steel & Power @ Rs12,156 p.s. = Rs1,493 million
4.61 lakh shares of Jindal Stainless @ Rs165 p.s. = Rs76 million
0.25 lakh shares of Nalwa Sons Investments @ Rs2,312 = Rs58 million
TOTAL Rs18.176 billion

Indirect investment holdings:
29.12 million shares of Sun Investments (representing 40.73% stake)
11.00 million shares of Jindal Coated Steel (representing 50.00% stake)

Effective stake held in Sun Investments is as under:
Held directly - 40.73%
Held through Jindal Coated Steel - * 5.57%
Total - 46.30%

* 50%*7.71%+50% *(40.73%+ 3.855%)*7. 71%=5.57%
Sun Investments holds 50% of Jindal Coated Steel, which owns 7.71% of Sun Investments

Valuations:
Direct investment holdings (listed):
2.90 million shares of Jindal Steel & Power @ Rs12,146 = Rs39,141 million
3.03 million shares of JSW Steel @ Rs928 = Rs2,813 million
9.30 million shares of Jindal Stainless @Rs166 = Rs1,539 million
0.50 million shares of Nalwa Sons @Rs2312 = Rs1,167 million
0.63 million shares of Jindal Saw @Rs756 = Rs475 million
0.36 million shares of JSW Holdings @Rs748 = Rs273 million
16,500 shares of Shalimar Paints @Rs385 = Rs6 million
TOTAL Rs41.517 billion

Unlisted investment holdings:
JSW Energy:
Sun Investments holds 102.16 million shares of JSW Energy, which translates into 35.35% stake. It holds further % stake indirectly through Vrindavan Services Pvt. Ltd. (which holds 29.69 million shares or 10.27% stake  - 21.71% held by Sun Investments directly and another 5.42% effective stake held through Gagan Trading) and Gagan Trading Company Ltd. (which holds 12.66 million shares or 4.38% stake - 39.4% held by Sun Investments) .
Calculations as under:
35.45+(0.2171+ 0.0542)*10. 27+0.394* 4.38=39.96%
Therefore, JSW Holdings' effective stake in JSW Energy is determined as under:
46.3*0.3996= 18.5%

At the minimum IPO valuation of Rs100b (likely number is Rs125-150b), this works out to Rs18.5b or Rs1667 per share of JSW Holdings.

5.21 lakh shares of Jindal Equipment Leasing & Consultancy Services (representing 6.74% stake) - listed investments worth Rs22.10 billion
32,350 shares of Nalwa Investments (representing 7.19% stake) - listed investments worth Rs5.14 billion
67.60 lakh shares of Gagan Trading (representing 39.40% stake) - listed investments worth Rs13.58 billion
78.80 lakh shares of Vrindavan Services (representing 21.71% stake) - listed investments worth Rs11.85 billion
Proportionate share of above - (6.74%*22.10) +(7.19%*5. 14)+(39.40% *13.58)+( 21.71%*11. 85) = Rs9.78b

The stakes held in the above four companies indirectly have not been considered for the sake of simplicity. Further, value of 5% stake in Abhinandan Investments, which owns stakes in most of the unlisted investment holding companies has not been considered, for ease of calculation.

Value of stakes, if any, in JSW Aluminium, JSW Cement, JSW Logistics and Infrastructure will be incremental.

Summary valuation

Value of direct stakes held - Rs18.2 billion or Rs1,638 per share
Value of JSW Energy stake - Rs18.5 billion or Rs1,667 per share
Value of Sun Investments stake - 39.96% of Rs(41.5+9.8) billion or Rs20.5 billion or Rs1,347 per share
Value of investments in JSW Aluminium, JSW Cement, JSW Logistics and Infrastructure - unknown

Total Valuation Rs4,652 per share



Posted By: kumardiwesh
Date Posted: 11/Sep/2008 at 7:36pm
Subhiksha can be added to the list

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"History does not tell you the probability of future financial things happening" - Warren Buffett


Posted By: Ajith
Date Posted: 11/Sep/2008 at 10:40pm
Synthites Industrial Chemicals,Kochi(and group companies),India's leading manufacturers of natural food ingredients(the listed AVT Natural is a bachha),oleoresins,essences is a hugely profitable and enormously cash-rich company-but unlikely to go public.


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Ajith


Posted By: absolut
Date Posted: 11/Sep/2008 at 11:12am
 
 I think the mother of all unlisted companies would be - INDIAN RAILWAYS . Debate is not whether they sholuld get listed or not but WHAT IF THEY GET LISTED ? What should be the mcap ? If you are a shareholder , it wont be wrong to say - Look thats my train . I mean just thinking about it makes me mad with ideas .


Posted By: karn
Date Posted: 02/Jul/2010 at 2:13pm
I'll add few from my side

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