Expect 15-40% return in Ineos ABS: Tater

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Expect 15-40% return in Ineos ABS: Tater

One can expect 15-40% returns in Ineos ABS from a year angle, says Aashish Tater, Head of Research, Fort Share Broking.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Aashish Tater See what other Experts & Brokerages are saying about INEOS ABS See messages about INEOS ABS

One can expect 15-40% returns in Ineos ABS from a year angle, says Aashish Tater, Head of Research, Fort Share Broking.

Tater told CNBC-TV18, "Ineos ABS recently announced a mandatory buyback because its styrolution business is getting combined. So if we take a call from the perspective of the business, the company's parent is expected to do a sale of over USD 5 billion."

He further added, "A decent chunk is going to come to Ineos ABS India and that's why they made in an open offer Rs 616 and some paisa. So if we take the same call in terms of dollar equivalent, even if they pay Rs 688 for that same floor price of Rs 616, they are not shelling out a single dollar extra."

"If I take a call from my valuation perspective, I check these particular companies form annualised equivalent value. Initially, I felt that the company could easily pay Rs 800 for the stock, given the big potential of styrolution business. Now from that similar angle because of the rupee angle, the company on the higher bank could easily pay Rs 900. This is stock with almost zero downside, decent cash flows and the company looking to delist the stock."

"What else would one want in a market which is jittery and we are not certain about what is going to happen next. So, almost no downside into this particular stock with delisting getting announced even at Rs 688 to Rs 900 range. One will make decent return of 15-40% from a year's angle."