Sell Sterlite Industries: Dipan Mehta

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Sell Sterlite Industries: Dipan Mehta

Sell Sterlite Industries, says Dipan Mehta, Member, BSE/NSE.

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ See previous views by Dipan Mehta See what other Experts & Brokerages are saying about Sterlite Ind See messages about Sterlite Ind Sterlite Ind BSE | NSE 10/02/12 Are Mutual Funds betting on Sterlite Ind?

Sell Sterlite Industries , says Dipan Mehta , Member, BSE/NSE.

Mehta told CNBC-TV18, "Not completely comfortable with this round of dilution by Sterlite Industries, now I have lost count of Sterlite has graduated its equity, this has happened a number of times over the past few months maybe in the past few years as well and I think this is becoming a bit of a habit to the management that perhaps they are raising equity first and then trying to find projects to finance. I don't think this particular move of the company. which is entirely beneficial for minority share holders and I think that puts a bit of a question mark on the capital utilization policy of the company if it is going to keep on diluting every few months and then looking at global ambitions or large size extremely ambitious projects where it clearly means that it is driven more by the size, then actual value creation or trying to create a value for minority share holders. So with this kind of an approach, I am not sure that Sterlite would be an outperformer or atleast deliver the kind of returns which have better capital utilizations policies would be able to deliver and in any case we are negative on commodities given the kind of volatile nature as well as the fact that commodity prices have run up and underlying demand doesn't justify that kind of a run up. The minute you see some kind of slowdown or even flattening of the growth rates, the commodities would be hit first, so keeping that in mind I think that even at these levels, Sterlite is a sell."