Did You Know: McDowell Holding has over Rs 800 cr investment value

We went a step ahead and also thought of just taking the unpledged shares or clean shares of the company which means that the promoter pledge is not on those shares. Even if you take out all the pledged holdings of the group, you will see that they are still nearly 34 lakh shares of United Breweries which this company is holding and the value of that is nearly Rs 255 crore, which is still nearly 5 times the value of the market cap.The important point here is the shareholding. The promoter holding is nearly 30 percent and the pledge is nearly 45 percent.

However, the one important thing that we have found out is that if we just see the last one year, the promoter holding has been consistently coming down and the institution or other non-institution promoter holding has been going higher.The promoter holding, which is going down from 43.5 percent to 37-30 percent, is only because most of the pledged shares have been taken up by the lenders and have been sold in the open market. This is clearly putting the pressure on the stock that is where the promoter holding has been going down.

There are three big names which are there in the non-institutional category which are there in this company, ACACIA Partners – US-based FII, Route One Fund (FII) and SBI Emerging Business Fund. All of them collectively hold nearly 30 percent stake in the company, nearly 10 percent each. There are talks in the company that if you could even see that pledged holding of that 45 percent getting with these three biggest non-institutional players and if this happens, you could even see that the non-institutional or the non-promoter holding in this company could be higher than the promoter holding going ahead because of the way it is going down but clearly even after doing anything and everything deducting the debt, deducting the pledged holding, the company still is available for nearly four times the market capitalisation of the company.

Mallya Holding Company Discount

There are few people in the market who have been buying stake or buying shares in this company at a low level. Clearly, if you see some of these three institutions which I have mentioned ACACIA, Route One Fund and SBI, they hold 30 percent stake in the company, which is equivalent to the promoter holding.

Of course, even going by Mallya discount or going by holding company discount, a Rs 50-crore company which has assets worth Rs 800 crore and with institutions maybe they will go ahead and buy more because there is still pledge of nearly 45 percent of the 30 percent.

So if that 15 percent comes to these non-promoters, you could even see, as said earlier, that the non-promoter holding could go much higher than the promoter holding and eventually one day it could even happen that this company would go away from the Mallya hand thus there could be no Mallya discount prevailing in the future.