UnitedSpirits-Another ITC in the making?
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Emerging companies - Mid caps that can become large cap
Forum Discription: These are companies operating in growing markets having have certain niches or specific attributes like new sector plays. These are emerging multibaggers with high risks and high rewards.
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=69
Printed Date: 03/May/2025 at 2:40pm
Topic: UnitedSpirits-Another ITC in the making?
Posted By: basant
Subject: UnitedSpirits-Another ITC in the making?
Date Posted: 17/Jul/2006 at 10:55am
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For years investors have latched on to the Indian demographic story, how valuations of Indian liquor companies are pathetically low compared to their global peers. Well, Mallya seems to be waking up at last his flagship company Mc Dowell reported outstanding results. Top line grew by 14.4%and operating margins were up 1100bps to about 20%. On the whole the company reported an E.P.S of around Rs 6 for the quarter( June 06).There was a change is sales mix with the company phasing out low value products and getting into high value labels.Mallya also announced a couple of acquisitions and the setting up of stores and doing away with the dealer concept. This could push margins higher since a major portion of the revenue is split with the dealers.
If Mallya can look after the shareholders the market will look after him. I heard him say that shareholders wealth needs to be protected and raised but if he continues to behave in his own ways as he has done then there could be trouble. We need to see him more on the business channels compared to the lifestyle channels.
Reliance NRI Fund had recently bought a huge stake in Mc Dowell. Other holders of this stock are Kotak, Birla etc.
Over all with an annualised EPS of Rs 24 the stock trades at Rs 490 while it does not look cheap but the chances of the stock retracing substantially is very remote.It commands more then 50% of the domestic liquor market and post the merger with shaw wallace and herbotson the new company United Spirits could be a liquor ITC of sorts (except for the management part) On the other hand if the czar of Indian liquor continues to move on the right track the stock could cross its all time high also. ------------- '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 |
Replies:
Posted By: sajanvm
Date Posted: 18/Jul/2006 at 9:45am
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Since Shaw Wallace will be merged with McDowell eventually, does it make sense to buy Shaw Wallace instead ? I have tried to get some information /data on this but have not been succesfull. Any one has any insights ? ------------- Sajan |
Posted By: basant
Date Posted: 18/Jul/2006 at 9:58am
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Not sure on which stock one should buy you know the problem is that Mallya's corporate gov needs a lot to be on par with the best in business. SO at the time of merger he might tweal things a bit so asto suit him. from what I know Mallya paid a great deal more for buyingSW then what the price is also his stake in SW is larger so it would make sense for him to have the ratio in favor of sw but since Institutions and MF's are with Mcdowell I would suggest staying there because there is a lot of grey matter around and without the inner story it would be prudent to stay with the big boys (where inst. and Mf have invested) as for now ------------- '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: basant
Date Posted: 05/Sep/2006 at 12:04pm
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Mc Dowell is another http://www.theequitydesk.com/forum/forum_posts.asp?TID=261 - big restructuring play . Mallya seems to be getting its act together and if some one can make Mallya realise that Mc Dowell at a current valuation of US $ 800 million could be valued at US $ 3 billion the stock could run up 4 times from here. I woul like to again state that this could be another http://www.theequitydesk.com/forum/forum_posts.asp?TID=91 - ITC in the making .The relative advantages that liquor faces vis-a-vis cigarettes are: 1) Liquor is not injurious to health what a person does after drinking is how ever debatable and could be injurious to every one's health but that is a person's fault not the company's. 2) Liquor does not face any ban per se. No threats of law suits; nothing like a Philip Morris could ever be repeated in liquor. 3) Vijay Mallay's corporate governence practices are adequately reflected in the price so any improvement on that front could call for serious rerating. It appears that Mallya knows what he is doing or rather what he was not doing and should mend ways. 4) Liquor is highly regulated in terms of state duty taxes, movements etc so any derugaltion (unlike cigarettes it can happen) should boost the stock up.
------------- '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: Ajith
Date Posted: 06/Sep/2006 at 12:24pm
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I think medium and high grade liquour consumption will rise tremendously in the coming decade so that even average management will come up with above average financials..Mcdowell will do well after the merger but are they funding Kingfisher Airways?Radico also looks good. |
Posted By: basant
Date Posted: 06/Sep/2006 at 12:27pm
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Funding for Kingfisher (Mallya's senseless dream) will come from UB not Mc Dowell. But yes, Radico could do better. ------------- '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: investor
Date Posted: 06/Sep/2006 at 12:29pm
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I agree completely. I am invested in Mcdowell for the last 2 years, and am also in the same view that Mcdowell could become a blue chip company in liqour, like how ITC is to the tobacco industry. Of course Mallya needs to improve the management, and he has been doing that BIGTIME over the last 15 months, major acquisitions, re-structuring, etc and this is already showing results. Look at how he has turned around his flagship beer company United Breweries, after selling 37.5% stake to Scottish and Newcastle. The results since then are astounding. I am sure he will achieve similar results with UNITED SPIRITS, which is expected to be formed this month(thats the date that he last mentioned) by merging all his liqour companies with mcdowell. It is expected to be the third largest liqour company in the world, and after he adds in a global scotch brand, it will be the second largest!! And if you just compare the valuations of Mcd with Diageo, the worlds largest liqour company, Mcd is going for peanuts... |
Posted By: basant
Date Posted: 06/Sep/2006 at 12:37pm
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I was basing my argument "if Mallya inproves".
If he finds better use for money then swords and night ouit parties then Mc Dowll could go up 4 times from here. The margins could easily diuble if shareholders are provided with better corporate governence measures and there lies the opportunity!
Doubling of margins means Mallya would get a higher PE and that shall do the trick.
While I cannot argue with you on global valuations we need to examine very closely that the companies with whom we are comparing globally show robust earnings. Once that happens we would not need global valuations to ramp up this stock.
My sense is that he has started to improve. Seems he is slowly understanding the difference between a 50% stake of a Rs 200 crore company and a 50% stake of a Rs 10,000 crore company. ------------- '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: Ajith
Date Posted: 06/Sep/2006 at 12:38pm
| And United Spirits will be looking at China as well as per todays reports. |
Posted By: investor
Date Posted: 06/Sep/2006 at 12:57pm
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Yes, china has already started partnerships for distribution of his KF brands there, and for importing chinese wine into India, this has been going on for last 4-5 months. Basant, he parties with his own money, so i guess we cant argue with that? (wouldnt u, if ur dad left u so much to play around with?  )But seriously, if u follow all the news of his UB group(as i have been, since i am invested in Mcd and UB holdings) last 12-15 months, mallya has woken up(and how!!) Hope he continues in the same path... And BTW, KF airlines is 100% owned by UB holdings...so dont worry, money from Mcdowell is not going there. And Basant, what is your view on UB Holdings, if any? ... after the creation of USL, it will hold 55% of the worlds second largest liqour company, 100% of KF airlines, it holds 10% in aventis pharma, stake in UB Engineering, Real estate holdings through UB CITY, in the heart of Bangalore, is ready for occupation later this year(expected to bring in 20 cr per annum to UBH through rent)...its a sleeping giant. I am invested in Mcdowell and UBH for the last 2 years. |
Posted By: basant
Date Posted: 06/Sep/2006 at 1:08pm
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UB Holdings is a gold mine but Mallya needs to dig which for the past few months I feel he would. And coming to your question on Partying No one should have a problem if they party withh their own money but when shareholders see the company's profit margin at 4%(that was 2 years ago though) you know what they would think. But all that is history and today mallya seems to have woken up! ------------- '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: investor
Date Posted: 06/Sep/2006 at 2:07pm
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Yeah, its almost like as if all of a sudden he woke up one day and realized that his first priority should be shareholder's interest, and then decided to do something about it.. BTW, speaking of liqour companies, do you track GM BREWERIES? Have a look at it, its mainly into the country liqour space in Maharasthra and North India, its a turnaround story. FY06 sales of 150 cr, and at CMP of 110, its mcap is just around 100 cr, so on a mcap to sales ratio, it does appear very cheap. EPS of 14 last year. Could be another mulltibagger. Do let me know yours views on this.(I am invested in this as well) |
Posted By: basant
Date Posted: 06/Sep/2006 at 2:53pm
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http://www.theequitydesk.com/forum/forum_posts.asp?TID=137&PID=1466#1466 - Have put in my views on the Our stock section ------------- '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: Friend
Date Posted: 10/Sep/2006 at 4:21pm
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You are absolutely right. UB H is available at deep discount. Look at its current mcap . ( 230 x 5.6 cr = 1288 crores ) whereas its assetsa re much higher .
UBH will ahve min. 42% stake in USL : USL at current price of 640 ( Mcdowell will be rechristned as USL and its equity will go up to 85 cr. approx ) = a) USL mcap at current price of 640: 5500 cr.hence 42% will be 2310 cr. b) UBH stake in UB Beer : 17% : 2500 cr x 17% = 428 cr c) UBH stake in Aventis : 10% : roughly 400 cr. d) UBH Stake in UB Eng or Mangolre Chemical etc ; 100 cr. Total : 2310 cr + 428 + 400 + 100 = 3238 cr. = 578 per share So u are getting UBH today at steep discount 63% of its asset value . even if u assume that it should get 70% of asset vale its price should be 404 . Now come to even bigger picture KF Airlines is 100% subsidiry of UBH which at right time would ahve valuation of around 1500 cr which would give 267 / per share on expanded equity post bonus UB CITY : Its another big thing which Mallaya 2 yr said would generate 20 cr per annum which i'm sure will do much more as rentals have gone up in last 2 yrs. Assuming 30 cr. per annum can add 60-70 rs per share seperately Moreover with creation of USL , it will finally be heading for its ultimate goal of stake sale like UB Beer and then it can attain valuation of around 10,000 cr. provided it shows result at 10,000 cr. : USL price would be 1200 and UBH holding mcap would be 4200 cr. from USL . keeping other consyant for conservative purpose UBH total mcap of its holding would be 4200+ 428+400+ 100 = 5128 cr. same rule of 70% : 3590 cr. = 641 per share Plus deregulation of the industry would increase the topline and bottomline of USL as well as UB IN NUT SHELL THIS IS STILL 3-4 BAGGER IN NEXT 1-2 YR POST BONUS ANY VIEWS BASANT 
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Posted By: basant
Date Posted: 10/Sep/2006 at 5:22pm
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Hi,
I still feel that mallya has an option he could change the valuations of Mc dowell UB etc into those of ITC but he would need to think in terms of maarket cap that can becreated. The initiaal vibes on this are very positive though.
But holding companies are always valued at significaant discount since the shares will never be sold out in public. look at http://www.theequitydesk.com/forum/forum_posts.asp?TID=128 - Tata Investments ------------- '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: investor
Date Posted: 12/Sep/2006 at 12:38pm
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hi Friend, i agree with you, me and you seem to have similar views on UBH and the story there. Just out of curiosity, are you also a Ramesh Damani fan/follower? Just one correction, UBH holds 37.5% of UB, not 17% as you have mentioned. I am also holding on since last 2 years, and even though it is already a multibagger for me, i feel over next 1-2 years, it could move up much more. |
Posted By: Friend
Date Posted: 12/Sep/2006 at 1:05pm
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Hi Investor,
Yes I am RD follower . I owe my success to him. Great vision this guy has with lot of patience and conviction U r right it has 37% in UB beer . So its valuation will go up further. U are absolutely right , what other investor are not factoring is huge prospects and valuation which it would get aafter USL is formed . It can go to USD 3 billion provided Mallaya continues his good work and then if he sells stake , if all will make huge money from here also. UBH is definitely linked with USL and UB Beer performace and they both are expected to do good with 10% growth expected in indian liquor industry moreover UBH will have KF and UB City which both in my opinion will be dark horses. Already KF is getting lot of appreciation All in all , If Mallaya delivers , we will enjoy. I'm holding my position in Mcd and UBH |
Posted By: investor
Date Posted: 12/Sep/2006 at 2:22pm
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I couldnt agree with you more. When Damani first started talking about there 2 years ago, the play was always going to be a big bet on "IF mallya delivers". That was the BIG "IF". So far, over the last one year, he seems to be delivering, and that too bigtime. Looking at his expansion plans through acquisitions, and also the way JET has already acknowledged that KF and not Air Deccan will be their biggest threat, is proof enough that KF Airlines is doing very well. Remember how Jet rushed in to buy Air Sahara at such a high premium - that was not because they wanted it so badly, but because they just didnt want it to go to Mallya. It was more of a defensive buy. Now they are suffering because of that deal. Also KF was the first airline to introduce entertainment on domestic flights, and yesterday Jet has announced that they too will start offering inflight entertainment. So definitely Mallya is making some good moves there. Time will tell how this works out, but like you, i am also holding on tight to UBH and MCD. |
Posted By: investor
Date Posted: 06/Dec/2006 at 11:57am
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Mallya to guzzle 10% of global spirits market Liquor baron Vijay Mallya is set to end 2006 with over 10% share of the global spirits market. With this, United Spirits (USL), the world’s third-largest spirits marketer by volume, could emerge as the first branded Indian consumer products giant to control 10% of any worldwide business. Outside the branded consumer play, Mr Mallya could join the likes of LN Mittal and the Munjals, joint owners of two-wheeler major Hero Honda, in commanding 10% share of the global market in their respective businesses. The other pure-play Indian consumer products behemoth, Tata Tea, has an estimated 5-6% share of the global tea market by volume. However, unlike Mr Mittal and the likes, Mr Mallya has stayed away from global consolidation moves, with his volumes mainly locked in the domestic market. In November last year, Impact International, a leading digest on the worldwide spirits industry, pegged Mr Mallya’s 2004 market share at 8.5%, behind Diageo (14.7%) and Pernod Ricard (12.9%). Since then, USL has seen robust double-digit growth and is currently sitting on a 20% volume jump in the first half of FY’07. This is likely to peg USL’s global market share at 10-11% during 2006. On an annualised basis, USL is expected to end the current financial year with 65 million cases (of 9 litre each), up from 55 million cases in the previous year. In just over a decade, USL has added a jaw-dropping 50 million cases to its kitty. In 1994, its market share stood at 2.8% with volume depletions of about 16 million cases. USL, with over 50% share of the domestic consumption, is riding on a booming economy and changing lifestyles. The company, with over 95% sales coming from the front-line brands, has seen its flagship whiskies — No.1 McDowell and Bagpiper — reporting 42% and 28% jump, respectively, this year. To put USL’s volume in perspective, the company’s brands sold close to 2 billion bottles (44-45 million cases) across various pack sizes in the first six months alone. While USL declined to speculate ahead of the confirmed global industry figures, sources said the stirring volume growth in the domestic market contrasted with modest to stagnant 3-4% rise in the matured markets. Interestingly, unlike its global peers Diageo and Pernod Ricard, USL mops up its volume mostly from the Indian market, and also has a brand portfolio that is largely regional (read IMFL). But this could change with Mr Mallya setting eyes on leveraged buyouts globally. It must be mentioned that USL is in the reckoning to acquire Scotch major Whyte & Mackay, which will give him a firm footing in the scotch whisky industry apart from adding about 6-8 million cases to the annualised sales. USL’s overseas buyouts are also aimed at revamping the portfolio and developing a better volume spread across the global markets. Source: today's ET |
Posted By: investor
Date Posted: 02/May/2007 at 10:25am
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Check out the fantastic results - the effect of the consolidation is very evident!! EPS is Rs. 52.57 for FY07 At CMP of 850 odd, there is some serious re-rating waiting to happen, as this should easily get a PE of 25, considering it is one of the fastest growing consumer market stories. Not to mention that it is just a few cases of sales away from being the world's no:2 liquor company. There is a report in ET that sometime in the next few months, they will become no:2 in volumes. If you just look at valuations of Diageo(world's leading liquor company) and this, there is huge scope for improvement. Plus everyone including Diageo themselves have recognized that India is the only remaining liqour growth market left in the world as everywhere else its almost saturated. That is why they themselves are entering India this year. All this points to some re-rating required in this scrip's price over next few months, or even sooner. Watch this space!  ------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: basant
Date Posted: 02/May/2007 at 10:29am
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I agree company has really come a long way both in terms of price and fundamentals!
Slowly this is becoming a company as one where the time to sell is "never". ------------- '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: investor
Date Posted: 02/May/2007 at 10:37am
Couldnt agree with you more!
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: tigershark
Date Posted: 03/May/2007 at 9:58pm
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on every dip i suppose we need to add this one,only oneningling point how much will he pay for whyte and makay and how will he recover the costs will he list WM on the global mkts UNITED SPIRITS SHALL REMAIN VERY INTERESTING OVER THE NEXT 12 - 24 MONTHS ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: basant
Date Posted: 03/May/2007 at 10:36pm
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I think Mallya has discovered the power of market cap. I did not buy this in the 40's when RD introduced us to this because I was not sure of the time line but today it does appear that Mcdowell could become big or rather huge just if Mallya carries on under the influence of market cap!!! ------------- '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: Mr. V
Date Posted: 03/May/2007 at 11:25pm
| What is the ROE of United Spirits ? |
Posted By: Mr. V
Date Posted: 03/May/2007 at 12:04pm
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Please note that the net profit of 497 crores includes a one time sale of treasury investments worth 256 crores.
If one were to exclude it then the EPS works out to be Rs 25.63 and is currently trading at a PE of 33-34.
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Posted By: xbox
Date Posted: 03/May/2007 at 5:55am
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Well!! ITC is such a stupid stock, why will somebody wants to compare others with it. ITC don't know how to use it's cash efficiently. This statement is chota muh aur badi baat but it is true.
Everyone knows what is capital return in paper, hotels, agri businesses. They are capital incentive and highly cynical businesses. Expecting windfall return is nightmare.
Foray into FMCG is another such example. We all know margins in FMCG at this stage. HLL, P&G are FMCG companies so they have no choice and they made years and years of profits in past but expecting handsome margins in FMCG is day-dreaming.
Foray into Garment retailing & IT are few sensible steps.Let's wait and watch on this front.
Worst thing.. ITC has done such things despite having country's best brains.
McDowell ke liye apsabd to nikal hee nahi sakte. Sector call. Kya kare ... ------------- Don't bet on pig after all bull & bear in circle. |
Posted By: basant
Date Posted: 03/May/2007 at 9:03am
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Everyone knows what is capital return in paper, hotels, agri businesses. They are capital incentive and highly cynical businesses
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YOu are right but they have wasted only a small part of their incremental cash flows - that wastage does not disturb their brand loyalty, pricing power etc. They really took shareholders for a ride in the 90's with their diworsifications(in Lynch parlance)!!! ------------- '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: basant
Date Posted: 03/May/2007 at 9:08am
If Mallya continues in the way he has been over the past 2-3 years then Mcdowell could be a stock which would reflect a high PE for ever!!!
The "If" in this case is really a big condition because MAllya has been known for being more on Page 3 then on the business page. ------------- '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: investor
Date Posted: 04/May/2007 at 12:19pm
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That was 2-3 years ago where he used to be seen ONLY on Page 3. Since then he has woken up and made all the right moves, first turning around United Breweries(the beer company), and then doing the same with Mcdowell/United Spirits. So now even though he continues to be figure prominently in page 3, he is very much on the Business pages as well, be it the KF arlines spectacular launch and now planning to buy stake in Air deccan, or the White and Mackay buyout, etc. BTW, latest issue of BT has a list of top 10 fastest growing Indian companies in each of the three categories - large, mid and small cap, and United Spirits is listed as one of them in the midcap segment. BT lists are very famous for the year end issue in which they come out with top 10 companies for the next year and it is very popular. What makes them unique is that their lists are always TOP 10 COMPANIES and not TOP 10 stocks like the other magazines or TV shows. They focus on how the company is doing and not on stock price. It may be also be recalled that BT had identified United Spirits as one of the companies to look out for in it 2005 edition itself, even though the company itself was not even formed yet, it was still Mcdowell at that time.
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: basant
Date Posted: 04/May/2007 at 12:45pm
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Yes, You are right on.What were the other companies discussed in BT. ANyything that we discuss in TED that featured there? ------------- '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: investor
Date Posted: 04/May/2007 at 12:50pm
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Not to able to recollect the entire list. The mag is at home, i will post the details from home this weekend.
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: investor
Date Posted: 15/May/2007 at 9:45am
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Mallya set to unveil Ł 615 mn mn W&M buyout MUMBAI/BANGALORE/LONDON: UB Group chairman Vijay Mallya is set to unveil the acquisition of Glasgow-based Scotch giant Whyte & Mackay on Wednesday with the final payout to exiting shareholders pegged at around Ł615 million. However, this is not likely to include a payout to bridge the privately-held W&M’s deficit pension fund, sources said. The deal is debt-funded equally by Citibank and ICICI Bank (UK), with each bringing in over $500 million. Besides putting in their own cash, these two banks will also syndicate the loan to their counterparts, sources added. It is learnt that three banks—UBS, ICICI and Standard Chartered—advised Mr Mallya on the acquisition. The deal is perhaps the biggest M&A ICICI Bank has advised after deciding to make an aggressive play in the advisory space recently. It is understood that the acquisition will be a partially-leveraged buyout. The debt financing will be broken into two parts—recourse and non-recourse. The pricing for recourse financing is expected to be 200-250 bps above Libor where UB is likely to execute corporate guarantees. The non-recourse financing is expected to be about 400-450 bps above Libor. The UB brass is already in Glasgow with Mr Mallya expected to unveil the deal to the media late afternoon India time. Group CFO and key strategist Ravi Nedungadi United Spirits president Vijay Rekhi, company finance head P A Murali, internal auditor Ashok Roy and senior executive president Alok Gupta form the team that is currently with Mr Mallya. Mr Roy and Mr Gupta are likely to take up key assignments with Britain’s largest producer of own-label Scotch post-acquisition, sources added. The UB boss is expected to host a dinner party at Glasgow late on Tuesday night after unveiling the deal, which marks his entry into the power corridors of the Scotch whisky industry. UB group’s proposed acquisition of Whyte & Mackay at a potential enterprise value of $1.38 billion will come at a 25% premium to global peer group average. This reflects scarcity premium for sizeable Scotch assets. The potential acquisition is seen as pre-emptive to impact of likely reduction of import tariffs on liquor in India. UB would look at pre-empting rising competition at the highly profitable top end of the market through entrenching its own scotch brands. The deal will fit into UB aspirations to expand into Russia and China, provide access to EU markets and secure UB’s long-term bulk scotch supply. According to a Citigroup report, the acquisition seems a good fit despite potential high valuations as it suits United Spirits’ (the spirits arm of UB Group) strategy to cater to the fast growing high-end Indian whisky segment and enhance its brand portfolio. “While on a near term basis, the valuations do not seem cheap, it reflects a scarcity premium on scotch assets. There are not too many available acquisition options, especially in the context of the large size of Whyte & Mackay’s scotch inventory,” it says. It says Whyte & Mackay seems a good strategic fit and will significantly enhance United Spirits’ plans to expand into fast growing Chinese and Russian markets. United Spirits has set up joint ventures to distribute its brands in Russia and China, two other important and fast growing markets, besides India. Whyte & Mackay brands will provide a significant leg-up to its growth strategy in these markets. In addition, it will provide United Spirits access to the European market though its focus is expected to remain on the Indian market. The primary benefit to United Spirits will be instant access to a large inventory if scotch and secure long-term scotch supply. This will make United Spirits self sufficient for its scotch requirement, which is likely to increase significantly, as demand for higher-end blends and scotch whisky in India increases. Globally, scotch prices have started to increase, mainly driven by strong demand from Asia and declining inventories of scotch. The European Union has been lobbying with the Indian government for a reduction in import duties and also taken this up with the WTO. According to the report, “Chances of import duty reductions are fairly high. Duty reductions would make imported liquor more competitive and it is likely that imports of bottled scotch into India will increase significantly. United Spirits would look to pre-empt a rising competition by entrenching its own brands and create brand loyalty before foreign imports start to increase. Whyte & Mackay has a wide array of brands that United can market in India.” United Spirits will also be able to enhance the profitability profile of Whyte & Mackay by driving a shift in product mix favourable towards branded bottled whisky by driving sales in India and China. Indian is emerging as a Scotch destination as rising incomes and preference for high end brands are driving 30 % growth in scotch whisky demand in India, against overall liquor market growth of 12%. Source: ET ------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: tigershark
Date Posted: 16/May/2007 at 2:24pm
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mallya will then probably list whyte and makay on one of the int bourses. ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: investor
Date Posted: 16/May/2007 at 2:45pm
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Yes, its highly likely that he will. Two reports that i read today said that one of the main reasons he is having the is press conference to announce the takeover in Glasgow, Scotland and not in Mumbai is because he wants coverage there as he is planning a listing on the London or Luxembourg stock exchanges. CITI has re-rated the strock today to a strong buy with a target of 1114 - what a joke!! As basant mentioned in the TV18 thread - the analysts always come in at the end!!!  ------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: tigershark
Date Posted: 16/May/2007 at 8:00pm
|
mallya has proved that he is smarter than what many thought hewas.with the int listing he will probably settle part of bthe debt he has raised from icici.we should not forget that WAND M IS A $50 MILLION co in profits projected tomaintain bottomline growth at 20% per annum. for the next 4-5 yrswhat is a joke is how do they imean citi etc come up with such exact figures1114 to be precise simply beats me!fundamentally the price of 1114 is just 17 % from the current price i feel US can maintain a growth rate of 25% for some yrs to come. ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: investor
Date Posted: 16/May/2007 at 9:11am
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Exactly, everyone knew for the past few months that Mallya was in talks with them to buy them out. After everything is official, CITI comes out with a call like this. What is even more funnier is that the EPS they have mentioned in their report for FY07 is totally wrong from what US have reported(even after removing the one-time gains due sale of treasury stock). It looks like an amateur report. BTW, W&M's profits for FY07 was GBP 50 million and not $50 million. So that comes to almost $100 million at current exchange rates. Also look at the profit margins - they made GBP 50million profit on sales of just GBP 200 million.
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: investor
Date Posted: 16/May/2007 at 9:36am
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Vijay Mallya gets global acceptance, finally In an interview to BBC in September 2005, UB Group Chairman Vijay Mallya had said, "I think that the poorest of the poor look up to wealthy and successful Indians with some degree of respect." Respect in India is something that Mallya had already earned. He inherited his father's $100 million business in 1983, when he was just 27. At that time, many were sceptical, given Mallya's reputation as a playboy. However, in the ensuing two decades, he turned it into a multi-billion dollar enterprise. The acquisition of Shaw Wallace in 2005, the second largest Indian liquor manufacturer at that time, made UB the dominant player in India with nearly 60 per cent share of the market. Last year, Mallya formed United Spirits by combining McDowell & Co, Shaw Wallace & Co, Herbertsons and other liquor makers of the group. The company, with 145 brands and 69 factories, became the world's third largest spirits company after Diageo and Pernod Ricard. Yet, Mallya was not spoken of in the same breath as Ratan Tata, Mukesh Ambani and Kumarmangalam Birla, who had a far bigger presence overseas. Wednesday's acquisition of Whyte & Mackay for $1.18 billion puts Mallya in this hallowed bracket and promises to enhance his position in the Forbes' list of billionaires, which placed him 746th in 2006. More importantly, it gives Mallya what he had been missing all this while: global acceptance. The UB Group, which was founded by Scottish gentleman Thomas Leishman in 1915 and which first made an impact by manufacturing bulk beer for the British troops, has had its products panned overseas, most notably by Europe's Scotch Whisky Association, as not real whisky since it is distilled with molasses rather than malt. On Wednesday, the same association said: "We look forward to working closely with Whyte & Mackay's new owners on matters of mutual interest to protect and promote Scotch whisky in India and other international markets to the benefit of all Scotch whisky distillers." It seems Mallya knew the huge intangible gain that would accrue. 'As you know, Scotch whisky can only be produced in Scotland. The only missing link in our portfolio has been Scotch', he said in a statement on Wednesday. The eponymous brand of Whyte & Mackay, founded by James Whyte and Charles Mackay on the docks of Glasgow in 1844, where they blended 35 selected malts to produce a 'special' whisky, holds around 3 per cent of the UK whisky market. The company also owns Dalmore Single Highland Malt, Jura Single Malt, Vladivar vodka and Glayva liqueur. These will give Mallya the arsenal to take on the likes of Seagram and Bacardi overseas, mostly notably in the booming markets of Russia, for which UB has just formed a pact with Russian Standard, and China, where UB this month announced the launch of five of its brands. Source: http://www.business-standard.com/"> ------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: investor
Date Posted: 16/May/2007 at 9:41am
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Basant, a small request - can you change the name in the title of this thread to United Spirits? Thanks. ------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: tigershark
Date Posted: 16/May/2007 at 10:08am
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investor thanks for correcting me now pound sterling that sounds even better.regarding citi and their brothers and sisters the less we talk aboutthem the better this web site will be.also notice how soon the white man has changed his perception they fought tooth and nail to prevent indian whiskey from entering the EU now they want to do mutual business with us.all i can say is cheers! in whyte and makay mallya did bet on the right horse ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: investor
Date Posted: 17/May/2007 at 11:01am
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The CITI report on UNITED SPIRITS Citigroup Research report on United Spirits: Company In-Depth Buy United Spirits; target of Rs 1250: Citigroup Citigroup Research is bullish on United Spirits and has recommended a buying rating on the stock with a target price of Rs 1,250. Buy: Whyte & Mackay Acquisition - Positive Surprises Galore UNSP’s Whyte & Mackay acquisition is full of positive surprises 1) Deal value of USD 1.2 million lower than our estimate of USD 1.4 billion, 2) inventory valuation at USD 800million higher than estimates, 3) EPS accretive from year-1 and put options on inventory, securing future profits. Good strategic fit at reasonable valuations: W&M provides access to secure long-term scotch inventory and fits UNSP’s aspiration to cater to high-end segments in India, China and Russia. More important, it has been acquired at reasonable valuations at 11.8x FY08E EV/EBITDA, at a significant discount to peer group average and cheaper than recent deals in the liquor space. Over 60% of W& M’s future profits underwritten: W&M has put options for the next 4-5 years on large scotch players for selling its bulk scotch. This will underwrite over 60% of W&M budgeted profits over next 4-5 years and de-risks cash flow profile. Management expects W&M to be debt free over next 4 years. Bullish outlook on scotch: UNSP management has a bullish outlook on scotch prices. Rising emerging market demand (22% yoy) and resurgence in US markets is fuelling 10% global scotch volume growth and has resulted in 75%-120% increase in bulk scotch prices over the last few months. Incorporating W&M, raising target price: We are incorporating Whyte &Mackay into our EPS estimates and raise FY08E-FY10E EPS estimates by13.6%-37%. We raise our target price to Rs1250, not as aggressive as our EPS upgrades, as we now discount for dilution on potential sale of treasury stock. ---------------------------------------------- BTW, SSKI also has come out with an OUTPERFORMER rating on United Spirits!! ------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: basant
Date Posted: 17/May/2007 at 11:04am
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Thanks for that post. Makes McDowell(we are used to that name) very interesting. ------------- '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: jack
Date Posted: 11/Aug/2007 at 8:49pm
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Basant ji,
Whether United spirits have reached its terminal value?
|
Posted By: basant
Date Posted: 11/Aug/2007 at 9:57pm
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I think with the results that mallys is shoing in terms of profitability it is still evolving into a consumer play. ------------- '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: tigershark
Date Posted: 16/Aug/2007 at 9:55pm
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the subprime lending mess will not hurt ub groups aquisitions including that of whyte and makay. mr mallya said that the ub group has managed to pay off its debt to the exposure wont bite. ub borrowed for 5 aquistions which we have managed to pay off and even managed to improve shareholder value.as for united spirits he said we borrowed for shaw wallace but repaid in just one yr .we had a fccb of 250$ million which has got conv into shares so debt dissapeared.the group he said has treasury stock worth 2000 crs apart from that buffer the other option is to list WM or invite a stategic investor. we can go for a float on the lse or invite a str investor it all depends which option offers the best share holder deal.the group is not looking at any more big ticket aqusitions in the next 12 months.ET ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: investor
Date Posted: 16/Aug/2007 at 10:02am
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CLSA maintains buy on United Spirits Aug 14, 2007 at 12.26 PM CLSA Research is bullish on United Spirits and has maintained buy rating on the stock. CLSA research report on United Spirits
Inventory value of Whyte & Mackay (W&M) rises further Since
the acquisition by United Spirits in May07, the scotch prices have
risen by 10-15%. This increases the value of the value of inventory
with W&M to GBp400million (earlier about
GBp350million) adding Rs40/share to UNSP’s value. The group is looking
to expand the W&M brands in other potential markets like China,
Taiwan, Korea etc and has already drawn plans to launch W&M brands
in India by around Nov’07. High debt levels – not a major concern The
company has a net debt of Rs 60.2billion (including Rs 51.4billion for
W&M acquisition). The Company (and its subsidiary) has 10.8million
treasury shares (attributable to United Spirits) worth Rs15.5billion
which it could sell and lower the debt burden. Mr Mallya mentioned that
the company could look at listing W&M on London Stock Exchange and
raise capital. Wine business to be launched soon Currently,
the wine market in India is about 500,000 cases and the market is
growing at 50%. With the growing consumer preference for wine, the
company is planning to set up a winery at Baramati to be commissioned
by Oct’08. The company is also planning to launch various wine brands
in India including Zinzi by Sep’07, Bouvet Ladubay by Sep’07 and Four
Seasons premium brands by Oct’08 No major threat from competition (esp. foreign brands) The
central government has recently withdrawn Additional Custom Duty (ACD)
on imported brands. The company expects state governments to levy
equivalent taxes (in line with the WTO directives). Maharashtra
government has already levied the taxes which have led to increase in
prices of imported brands by around 20%+. Also, UB group has entered
into an exclusivity arrangement with its distributors / wholesalers for
handling UB products. By doing this, UB group has raised huge entry
barriers for competition. ------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: deveshkayal
Date Posted: 26/Aug/2007 at 11:06am
|
Sources say Mallya will sell UB groups 31% stake in Mangalore Chemicals and Fertilisers. The sale could fetch the UB group Rs.250 crore. Cash from this will be deployed in the airline and liquor businesses. ------------- "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: investor
Date Posted: 26/Aug/2007 at 11:43am
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Very interesting news. Was always expecting him to sell his stake in MCFL and also AVENTIS PHARMA at some time to raise cash. Can you tell where you came across this news?
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: tigershark
Date Posted: 27/Aug/2007 at 3:33pm
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investor citi has come out with a new report on us can yu get it.small part of it can be read on et investor guide. key highlights are since the take over of wand m scotch prices have moved up further , wand m will have ebitda of at least uk p st 50 million, and us will reduce debt earlier than thought so ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: investor
Date Posted: 27/Aug/2007 at 4:03pm
I think pretty much the same content is there in CLSA(scotch prices have gone up since the buyout, etc). Will anyways try to get my hands on that report contents and post it here. Cheers!
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: deveshkayal
Date Posted: 27/Aug/2007 at 12:06pm
Sorry ! My http://www.theequitydesk.com/philip_fisher.asp - scuttlebutt approach is working here. What i can say is that i read a lot of newspapers,magazines..so find out yourself !!! ------------- "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: investor
Date Posted: 13/Nov/2007 at 10:34am
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Buy United Spirits, target Rs 2164: Citigroup Citigroup Research has come out with report on http://indiaearnings.moneycontrol.com/sub_india/comp_results.php?sc_did=US - United Spirits . It has recommended buy rating on the stock with a price target of Rs 2164 in a report dated on November 08, 2007. "Our target price of Rs2164 is based on 18x FY09E EV/EBITDA. We have benchmarked our 18xEV/EBITDA target multiple against the regional and global liquor companies. Our 18x EV/EBITDA target multiple is at about a 15% discount to the Asian peer group average, which we believe is conservative, given that UNSP EBITDA growth CAGR is significantly higher than the peer group average. However, we attribute a premium of about 20%-25% to UNSP to the global FY09E average valuation multiples in recognition of: 1) United Spirit's dominant position in India's liquor market; 2) strong demand growth of 13%, driven by rising incomes and market-share gains at the expense of the unbranded sector; 3) high barriers to entry; and 4) a 51% two-year EPS CAGR, almost 2x higher than the global peer group average." according to Citigroup research report. ------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: tigershark
Date Posted: 29/Nov/2007 at 1:19pm
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in talks with global spirits majors for minority stake sale vijay mallya ET 29-11-07.TO REPAY DEBT RAISED FOR WM TAKE OVER BEFORE MAR09.UBHOLDING PLANS RIGHTS ISSUE OF 425 CRS,and may unlock value of its properties by relocating some of its plants in mumbai and other cities the group will look at acquisition oportunities in 08-09 also.COMBINATION OF ORGANIC AS WELL AS INORGANIC ROUTE TO GROWTH TO CONTINUE.we want to raise capital and retire all the debt by mar 2009 said mallya.hindu bussinessline 291107 any idea what treasury stocks are US seems to hold large amount of treasury stocks which it can use to raise capital and retire debt ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: investor
Date Posted: 29/Nov/2007 at 1:30pm
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tigershark, i dont know whether there is different general meaning for "treasury stocks" but in the context of United Spirits, i know what it is. Before the consolidation of all the other companies to Mcdowell to form United Spirits, a lot of crossholdings were there(Shaw wallace and herbertsons holding mcdowell shares, Mcdowell holding Shaw wallace and herbertsons shares, etc). As part of the consolidation, the cross holdings got cancelled and the remaining shares were kept in United Spirits as treasury shares, to be sold whenever the company requires funds. They hold a huge amount of shares as "treasury shares" and at the time of White & Mackay buyout itself they said that they would use this treasury shares to pay for a portion of the buyout. Early this year, they sold a small fraction of it to raise some cash - the buyer was Fidelity and CLSA. So now looks like they plan to sell the rest of ths shares before March 2009, based on this article.
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: tigershark
Date Posted: 29/Nov/2007 at 3:10pm
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thks for the info. ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: investor
Date Posted: 29/Nov/2007 at 4:13pm
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According to their annual report, they have 1.36 cr shares as "treasury shares". That itself works out to around 2500 cr at CMP. So thats a lot of money that can be simply used to wipe out loans without affecting the balance sheet in any way. I think Mallya is just waiting for the valuation to go up before disposing of them. My feeling is that he will list W&M on the London or Luxembourg bourses, which will automatically drive up valuation of United Spirits(since post listing, it could hold around 80 to 85% of W&M, and hence that will get priced in) and then probably dispose of these shares to Diageo or some other interested party, and use that money to clear most or all of the debt used for buying W&M. Thats why i feel United Spirits is still cheap and has lot of hidden value, which is going to get unlocked bigtime in the next few years.
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: tigershark
Date Posted: 29/Nov/2007 at 6:31am
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not to forget the land he plans to dispose of in mumbai and other cities by relocating his breweries. ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: investor
Date Posted: 29/Nov/2007 at 7:01am
|
Yes. I was at the AGM on Wednesday and a lot of questions were asked about future plans. He is very serious about clearing all debts by March 2008. Can you imagine what that will do to the bottom line? Interest on loans paid is such big part of the expenditure of USL for the last many years, once that is wiped out, EPS should zoom. Also W&M earnings will have to get factored in, as well as Shaw Wallaceboard approved merger into USL yesterday). There is only way for this stock to go in the next few years!
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: tigershark
Date Posted: 30/Nov/2007 at 1:48pm
thxs investor your hard work will really pay off on the lighter side of life were shareholders offered atleast a peg of good wm scotch ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: investor
Date Posted: 30/Nov/2007 at 2:29pm
i perfectly agree with you, though i am hoping for atleast a bottle, not just a peg!
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: tigershark
Date Posted: 30/Nov/2007 at 2:43pm
|
mkt has reacted posiitvely to all the news coming out of agm. ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: India_Bull
Date Posted: 30/Nov/2007 at 2:45pm
|
I am going to celebrate this spurt in MCdowell with Shivas Regal this weekend !!
Few more pegs for the consolation of Religare and Mundra ------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: investor
Date Posted: 30/Nov/2007 at 2:50pm
or maybe they read this thread on TED!
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: tigershark
Date Posted: 30/Nov/2007 at 3:00pm
|
india bull yuo are a bloody traitor you own united spirits and you drink shivas regal? pl go and buy a bottle of isle of jura and get drunk or try pinky vodka which mallya will soon be launching ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: India_Bull
Date Posted: 30/Nov/2007 at 3:06pm
|
Tigerjee,
I cant wait till it launches the vodka, BTW I learned how to make Capiroska, a Brazilian drink made from Vodka.
Kingfisher is quite popular with Firangis and they enjoy Whisky Rum in moderatation, but I dont know why Mallya is slow in pushing his products across Europe , there is a gr8 demand for wines and if he captures , nothing like it !! ------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: tigershark
Date Posted: 30/Nov/2007 at 3:11pm
|
never tried that brazilian cocktail but a friend of mine has vodka with a chillie inside and a dash of lime . and a couple of drops of angostura bitter. ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: kulman
Date Posted: 30/Nov/2007 at 3:23pm
|
... a friend of mine has vodka with a chillie inside and a dash of lime . and a couple of drops of angostura bitter.
-------------------------------------------------
For Dark Rum lovers ...I strongly reccommend:
60Ml Dark Rum
A large Green Chillie cut in 2 pieces
A slice of lemon
Lots of ice cubes
Pepse or Coke to top it all....
Note: Chillie is only for flavour...don't eat it.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: investor
Date Posted: 30/Nov/2007 at 3:35pm
|
yes, that is one of my favourite as well. Vodka, lime and 2-3 fresh green chillies...its amazing...just burns your throat! Somehow different restaurants have different names for this same cocktail... 
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: investor
Date Posted: 30/Nov/2007 at 3:37pm
Thanks kulman, will try this out this weekend(have tried something similar but not exactly the same thing!)
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: basant
Date Posted: 30/Nov/2007 at 3:52pm
Kulmanji kuch soda sikanji aur nimbu paani wale ke liye bhi bata do ------------- '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: kulman
Date Posted: 30/Nov/2007 at 3:59pm
|
....kuch soda sikanji aur nimbu paani wale ke liye bhi bata do
---------------------------------------------------
ha ha ha....Actually now I'm in your camp.
Here's a a great recipe for a Fruit juice Cocktail which would make m/s BM & DK very very happy....
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: deveshkayal
Date Posted: 30/Nov/2007 at 6:22pm
|
Actually now I'm in your camp.
------------------------------------
What do you mean by "now" ------------- "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: kulman
Date Posted: 30/Nov/2007 at 7:05pm
|
I had already disclosed that I've become a teetotaller after 40.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: tigershark
Date Posted: 30/Nov/2007 at 8:40pm
|
now you all know why he visits goa so often! ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: basant
Date Posted: 30/Nov/2007 at 8:54pm
|
Isn't there more to/in Goa then just hard drinks? ------------- '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: kulman
Date Posted: 30/Nov/2007 at 9:07pm
|
I feel hurt when mere pavitra charitra ko expose kiya jaata hain!
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: smartcat
Date Posted: 30/Nov/2007 at 10:53pm
| I believe kulmanji. I heard he never touches drinks after going to sleep in the night and before waking up in the morning. |
Posted By: omshivaya
Date Posted: 30/Nov/2007 at 11:20pm
Ha Ha Ha! Ab yeh Charitra kaun aa gaayi! ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: kulman
Date Posted: 03/Dec/2007 at 8:40pm
|
CNN has uploaded entire transcript & video of interview with Vijay Mallya...
http://edition.cnn.com/2007/WORLD/asiapcf/11/28/talkasia.mallya/ - http://edition.cnn.com/2007/WORLD/asiapcf/11/28/talkasia.mallya/
Story Highlights
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: kulman
Date Posted: 03/Dec/2007 at 9:21pm
|
In that CNN interview Vijay Mallya talks about his Father .....Dhandho investing principle at its best.......
Question: Just around here, I noticed earlier that there's a picture of your father. How important are his teachings to you today? Vijay Mallya: I respect him for his shrewdness. I remember in 1977 when Morarji Desai was prime minister of India, he advocated prohibition for all of India, and obviously the values of all liquor companies and breweries collapsed. My father actually went out and acquired these companies at pretty cheap values, which propelled UB into being a significant player in the industry. So he bucked the trend and had the guts and the foresight to buck the trend. I remember having asked him why he was doing it, and he said government revenue depends too much upon this industry, particularly at the state level, and we are very large contributors. So prohibition has never succeeded anywhere in the world, not even in the United States. It's not going to succeed in India, and so I'm going to decide to grab the opportunity when I can. So I guess a bit of the sort of confidence that I have to take businesses stems from his example.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: investor
Date Posted: 03/Dec/2007 at 9:43am
|
He bought air deccan at 140, increased fares, and changed colours to that of KF, and now talking about a reverse merger with KF, and his investment has already doubled (air deccan at 280 today) BTW, anyone knows what is reverse merger and how it is done?
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: basant
Date Posted: 03/Dec/2007 at 10:24am
|
Reverse Merger: Air deccan shareholders will be given shares of Kingfisher and the entity of air deccan will not exist ! ------------- '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: investor
Date Posted: 03/Dec/2007 at 10:54am
|
Thanks basant. But KF is not listed. Will they be given shares of the unlisted entity, or does it mean that he will be have to list KF airlines first and then do the reverse merger?
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: basant
Date Posted: 03/Dec/2007 at 11:01am
|
UB holdings could be the route since it holds KF. ------------- '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: investor
Date Posted: 03/Dec/2007 at 11:34am
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just trying to understand clearly - air deccan shareholders will get UBHolding shares in a swap as part of the reverse merger? If so, sounds reasonable, coz UB holdings holds 78% of KF, while Mallya holds the rest in his personal capacity.
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: basant
Date Posted: 03/Dec/2007 at 11:40am
|
That looks like a surer possibility because no one would like to trade his shares for an unlisted company.
------------- '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: tigershark
Date Posted: 04/Dec/2007 at 1:12pm
|
whether we beleive it or not this guys fortunes turned once he built this mansion in candolim goa and started visiting his deity near ponda goa.as i say may be just coincidence or may be something else ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: kulman
Date Posted: 04/Dec/2007 at 1:17pm
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....he built this mansion in candolim goa and started visiting his deity near ponda goa
--------------------------------------
Which one Mangeshi or Mhalsa?
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: investor
Date Posted: 04/Dec/2007 at 1:26pm
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Just for information, is that even allowed(swapping listed shares for an unlisted entity)? Or do they have to open a SPV or something like that (how Reliance created Reliance Comm Ventures) and go through all that procedure?
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: basant
Date Posted: 04/Dec/2007 at 1:30pm
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You can swap anything for anything as long as shareholders agree.
------------- '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: tigershark
Date Posted: 04/Dec/2007 at 1:34pm
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take a look at mcdowell holdings to play this it holds a HUGE chunk of ub holdings even at todays price there appears to be a 50%upside even after deducting a 40% discount for holding cos. ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: investor
Date Posted: 04/Dec/2007 at 1:42pm
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yes, you are absolutely right. after a long consolidation between 200 and 240, today it seems to be breaking out.
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: Mr. V
Date Posted: 04/Dec/2007 at 3:06am
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According to Wikipedia:
A reverse merger/takeover results when a smaller private held company becomes a publicly traded company without going through the usual route of IPO. The shareholders of the private company sell all their shares in the private company to the public company in exchange of shares of the public company.
So, in this case Air Deccan will issue fresh equity shares of the post merger Kingfisher-AirDeccan company to acquire the privately held Kingfisher airlines. Since, UB group controls Air Deccan, they will make sure that Kingfisher airlines is valued at a big premium and UB group ends up controlling a big chunk(possibly 80%) of the post merger company. The only people who will get shortchanged in this entire deal are the original promoters/investors of Air Deccan.
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Posted By: basant
Date Posted: 04/Dec/2007 at 6:37am
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Ok. Got it but in india this term has been used rather loosely when two listed companies have merhed . For example we keep talking of the reverse merger of HDFC with HDFC bank.
------------- '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: tigershark
Date Posted: 22/Jan/2008 at 9:04pm
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np 88.1cr compared to 76 crs last yr .has paid a highertax of 50 crs as compared to 35 crs. sales up from 773 crs to 889 crs. these appear to be standalone numbers and dont include shawwallace,zelinka, or whyte and makay. 9 monthly net at 255.8 compared to fullyrs net07 of 231 crs ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: investor
Date Posted: 22/Jan/2008 at 9:41am
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i didnt understand why they are not releasing consolidated numbers, after all it is now "united" spirits and not just mcdowell, isnt it?
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: tigershark
Date Posted: 23/Jan/2008 at 1:50pm
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i suppose you need a court order first to ammalgamate all cos it looks like that part is pending then they can release cons numbers.just check this out ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: investor
Date Posted: 23/Jan/2008 at 1:58pm
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Yes, but without the court oder you cannot even begin amalgamation of companies formally, so that is not the problem. They got approvals for all except Shaw Wallace, which is why only that was left out. About 4-5 months ago, even the approval for Shaw Wallace came through, and they have said that will get done before March 2008. Will try and contact company secretary about this.
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: wise_man
Date Posted: 16/Feb/2008 at 3:27pm
| where is the Treasury Stock in the balance sheet?where do i find the Treasury Stock of a company in a balance sheet in our indian companies ? |
Posted By: romanov
Date Posted: 06/May/2008 at 11:08pm
| Correct me if I am wrong United sprits and United Breweries are two different companies...UB is from Vijay Mallya?DO we have thread on UB,I tried searching for it but couldn't find it. |