Tube Investment may slip to Rs 142- 145: SP Tulsian

Tulsian told CNBC-TV18, “Very expensive acquisition by Tube Investment. It has happened at a price to book of 2.7 and PE multiple of 24. If you see the financial position of Tube Investments, they have to entirely go for the borrowing of about Rs 450 crore which they have to take out that kind of money for acquiring 70% stake in the company, 44% from promoters, 26% in the open offer. So, that will definitely be EPS decretive.”

He further added, “It is good for the share holders of Shanthi Gears, because once the market will understand these all things probably we may see the corrections happening in Tube Investments and the share can fall to about Rs 142-145.”

“In Shanthi Gears , there is lot of Euphoria, we see about 14-15 lakh shares standing on the upper circuit and if you take the acceptance ratio of one share out of two shares tendered and I am expecting the price to settle at about Rs 50 after this open offer process gets over at Rs 81. So, the effective price where it can really move works out to about Rs 65-66. So, tomorrow will be the final price where we will be seeing the Shanthi Gears share getting topped out and there I will advice everyone to book profits, those who are not willing to tender it in the open offer and avoid fresh buying. In fact buy call is not being given on both the stocks from the current levels.”