SRF Polymers ruling at higher price: Tulsian

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SRF Polymers ruling at higher price: Tulsian

Investment Advisor SP Tulsian said that, “SRF Polymer is not a pure investment company; they do have their own business but that is a loss making one. The market value is close to Rs 160 and now the market cap is close to about Rs 115-120 crore that means if I go by the yardstick of 50%, this seems to be ruling at a bit higher price.”

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by SP Tulsian See what other Experts & Brokerages are saying about Kama Holdings See messages about Kama Holdings BSE | NSE 01/01/70 Are Mutual Funds betting on ?

Investment Advisor SP Tulsian said that, " SRF Polymer is not a pure investment company; they do have their own business but that is a loss making one. The market value is close to Rs 160 and now the market cap is close to about Rs 115-120 crore that means if I go by the yardstick of 50%, this seems to be ruling at a bit higher price."

Tulsian told CNBC-TV18, "If you look at the market behaviour, if you take a ten year cycle, investment companies have always been ruling at 33% to 50% of the investment value held by them in their books. So they will continue to rule at a discount. Simple reason is that if you see the performance of those companies, they are always receiving just the dividend income, their investments are happily used by the promoters for pledge and there is no distinction between the two companies whether you take the case of Jindal South-West Holding (JSW Holding) or the SRF Polymers. They have all used the investment for making pledge for the financial assistance having availed by the holding company or the investment in which they are holding. So they always have those types of characteristics."

He further added, "SRF Polymer is not a pure investment company; they do have their own business but that is a loss making one. If I take a call on the investments which they are holding, it is one crore shares of SRF. The market value of which is close to Rs 160 and now the market cap of SRF Polymer is close to about Rs 115-120 crore that means if I go by the yardstick of 50%, this seems to be ruling at a bit higher price because right now the market price is Rs 175. So we see these kind of frenzies coming in all these investment companies but ultimately the investors land up by remaining stuck in those stocks because all these investment companies does not have their own legs. They cannot move on their own. If the shares of the companies, which they are holding goes up, the value of this stock also goes up but ultimately the differential will remain same to the extent of 40-50-60%."

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