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Vivek Sukhani
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Joined: 23/Jul/2006
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   Posted: 19/Oct/2006 at 12:23pm |
Basant, I beleive we need to do some complex mathematics.I beleive we need to tamper the expected price on P/E basis with the equity dilution as well.
I beleive we should discount Rs. 650 and not 880. When we are calculating returns we should have the outflow inflow approach. Our outflow is Rs. 650. Also, If warrants are not be given rights, the calculations will change. Also Rs. 50 should be treated differently.
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basant
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Posted: 19/Oct/2006 at 12:32pm |
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Warrants will never qualify for rights. I am discounting Rs 650 not 880. Equity dilution will happen mostly at near market price except for the rights at Rs 500 so with constant RoE over a period of time should not be EPS negative to a very large extent. I am also taking a 40% growth whereas Trent will grow at more then 50% for the next 2 years at least.
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Vivek Sukhani
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Joined: 23/Jul/2006
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Posted: 19/Oct/2006 at 12:38pm |
Basant, Can you throw some light on the following things:
Proportion of Rights issue:
Price of Rights:
Terminating EPS on the post-rights basis:This will help us in arriving at the expected price on P/Ebasis.
I want to model it out mathematically, thats why I am asking this question.
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Vivek Sukhani
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Posted: 19/Oct/2006 at 12:46pm |
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Also, One more question, are warrants eligible for dividends?In my opinion, they are not, as they are not yet shares and will become one on conversion. However, just an academic question.
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chic_1978
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Joined: 10/Aug/2006
Location: India
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Posted: 19/Oct/2006 at 3:36pm |
Hi Basantjee
Excellent explainations on long term warrants. Something new to learn from you SIR..
Can you please list the warrants that are traded in market, infact I am personally interested in buying warrants of your Equity XI stocks..
Please advice which one to buy & at what price in detail.
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happy & wise investing
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basant
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Posted: 19/Oct/2006 at 3:51pm |
Out of our cricket X! only Trent is traded as far as I can recall try and but it below Rs 300 or thereabouts but you would fiund it very difficult to get any meaningful quantity. I did buy a few but it took me more then a month to get a fill and also there I was the only person buying in both the exchanges NSE/BSE.
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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
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BubbleVision
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Joined: 05/Aug/2006
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Posted: 19/Oct/2006 at 5:32pm |
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BasantJi, from now on we will have huge compedition to buy the Warrants of Trent....on NSE and BSE
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You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!
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basant
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Posted: 19/Oct/2006 at 5:36pm |
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Ha Ha Ha! But if we bid up the price too high we will lose all charm. It looked like a steal to me a couple of months back and I was fortunate enough to get quite a few at Rs 225 - Rs 210.
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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
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