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Power rush: After IPOs, midcap cos up the ante
With lot of power IPOs lined-up, brokerages are pushing mid-cap companies with power play in them. Daiwa and Emkay are conducting road shows for HEG. HEG, a graphite specialist, holds nearly 36% stake in Bhilwara Energy.
With a lot of initial public offering (IPOs) lined-up in the power sector, brokerages are pushing mid-cap companies with power play in them. Daiwa and Emkay are conducting road shows for HEG Limited. HEG Limited , a graphite specialist, holds nearly 36% stake in Bhilwara Energy. CNBC-TV18's Varinder Bansal tracks the trend.
Below is a verbatim transcript of Varinder Bansal's report on CNBC-TV18. Also watch the video.
If you think that the market is thinking it is only Sterlite and Adani Power are in the limelight, there are many companies on the midcap which are buzzing. What we learn is that Daiwa Securities is conducting a road show for HEG today. Emkay Shares will be conducting the show for the same company tomorrow.
Emkay is very aggressive on the stock and has a price target of Rs 240 per share. HEG is a graphite specialist but holds nearly 36% stake in Bhilwara Energy. The stake is valued at nearly Rs 450 crore depending on the deal what the company got through last year and the current market cap of HEG is only Rs 900 crore. So the valuation if we just see or the value of Bhilwara Energy is half of what the current market cap of this company is. Talking about the core business of the company, Emkay has a FY10 EPS target of nearly Rs 53 per share and FY11 EPS of Rs 76 per share. So on the current market as well, the stock is trading around four times FY10 and around three times FY11 earnings estimate. The stock is trading below their book value per share and the company has done a buyback at a maximum price of Rs 350 per share. FCCB were also buying back so both the brokerages are bullish. This is one idea is been circulated in the market.
