Kalindee Rail has target of Rs 153.50: Irani

Irani told CNBC-TV18, "I have selected a stock which I am quite sure over a period of time should end up giving good returns to investors; it is Kalindee Rail. All other railway stocks has gone out of favour post the railway Budget but what struck my attention was the fact that just yesterday the company sent a press release saying that it is issuing 12 lakh warrants to themselves at a conversion price of not less than Rs 199 per share. Now 12 lakh warrants you pay 25% upfront, which will be used by the company for various projects and it is the premium of around 30-32% from the present price.”

He further added, “The government has laid out 41,000 crore for investment in the railway projects. There is a plan to set up 1,000 kilometers of railway lines, which should be beneficial to companies like Larsen & Toubro and Kalindee Rail. The companies like Kalindee ultimately make money when the projects get executed. So you should not see the performance of the company on a quarter-to-quarter basis.”

“The development of high speed corridors which the railway minister announced should be beneficial to the company like Kalindee. So all said and done I think this is a stock which is bound to give you 50-60% returns maybe - if not now - in the next railway Budget but much before that I think as and when the company announces plans, shareholders should be making money.”

“At the present price honestly there is nothing to lose, the fact that warrants have been issued at a price of minimum Rs 199 per share conversion itself is clear testimony of the fact that there is decent money to be made by the investors in the present price. My immediate target is Rs 153.50 for the day.”