Posts
BF Investment is
an investment holding company for the Kalyani Group ( flagship Bharat
Forge Ltd.) with investments in related promoter companies.BF Investment
was formed as a de-merged entity that took over the investment
management business of BF Utilities, and was listed on the exchange
starting 14th January 2011.
Most
of the investment value for BF Investment is hidden in its carried at
cost investments portfolio in promotor companies. While it has
significant direct investments in sister companies, its insignificant
investment as shown on balance sheet in its unquoted investment( KSL
Holdings Pvt Ltd 49.99%) is significantly higher. (documents provided
for at the end of analysis, for some documents you might have to send in
a request at pratik.thakkar@valueeinvestor.com)
Objective & Methodology:
To Find per share Intrinsic Value of BF Investments Ltd.
BF
Investment is a core investment company, which shall be viewed and
analyzed as a closed ended Mutual fund, with passive management.For the
purpose of Analysis, most of the assumptions have been made on a
conservative basis.
Operating
and many other unquoted investments have not been considered in the
analysis, which even though lend a significant value per share, some
uncertainty and lack of data on them restrict their inclusion in the
following analysis.
Even
though some investments are not included in the analysis, if their
carrying value were to be reduced down to zero (operating assets have a
net operating asset position, significantly over current operating
liabilities) the investment value of BF Investment wouldn't change , and
even if it does it would on the upside.
Following is a table looking at the Quoted and one Unquoted Investment (KSL Holdings Portfolio) for BF Investments Ltd.
Insiders Buying:
In the recent few months insiders have been buying a substantial portion of the company's shares in the open markets.On aggregate basis, they have bought 4.79 % .
Following the table there is a graph representing, at what levels insiders have been buying indicated by the green pop ups in the whole.
Insider Buying_ValueeInvestor Sheet3
* Data obtained through NSE
Adjusted Balance Sheet:
Adjusted Balance sheet can be found by clicking on the link.
There were 37.7 million shares outstanding as of 31st March-2011.
Giving a per share net operating value( without considering Investment
Portfolio) of around 22.25 Rs/Share.Which for the purpose of
calculation, and in the matter of conservative approach have not been
included in the analysis.
Documents:
Following are the documents that could and would be made available on further request:
1) KSL Holdings Pvt Ltd. (Annual Report Filed with Registrar of Companies)
Disclaimer
Funds
managed by ValueeInvestor and its affiliates own investments that are
bullish on BF Investment’s prospects. ValueeInvestor generally invests
in long positions and did so based upon our analysis of publicly
available documents, general market data and other information.
This
report is based uponValueeInvestor’s own reading of BF Investments BSE
filings from 2010 to the present as well as other public documents.
ValueeInvestor’s views are also informed by its knowledge of, experience
in, and opinions about Investment related companies generally.
This
report is not intended as investment advice to anyone. Others may
disagree with some or all of the opinions expressed here.ValueeInvestor
urges anyone interested in the company to read BF Investments public
disclosures available on its website or on BSE,and to consult whatever
other source they deem appropriate in order to form their own opinions
on the topics covered in this report.
We
welcome any reponse from anyone willing to get more information or
clarification on the claims made inthe report. We are willing to make
ourselves available
This is in no way an advice to buy or sell the shares of the company, and ValueeInvestor takes no responsibility for the same.
Hi,
ReplyDeleteI think one should value the holding co. atlest 35% discount. If co. is going to sale all subsidiary then there would be tax liability which would be around 30-35%. That's why most of the holding co. like AB Nuvo, Bajaj Holding are trading around 30-35% discount.
True, but other thing holding companies can do is turn around and just give the shares instead of selling them in the market. Shares sold this way at individual level would be considered as long term shares for tax purposes and can be sold without tax implications. That act in itself would create a substantial profit for shareholders.
ReplyDeleteComing to your point, even a 30-35 % discount makes it cheap given at Intrinsic Value. Your comments are appreciated.
ValueeInvestor Team
definately enjoy every little bit of it and I have you bookmarked to check out new stuff of your blog a must read blog! stock education
ReplyDelete