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Last Updated : Apr 30, 2013 01:17 PM IST | Source: CNBC-TV18

Hindustan Unilever an arbitrage, not delisting play: Tater

Shares in Hindustan Unilver Ltd rose 20 percent in early morning trade on Tuesday. It was after parent Unilever Plc said it would make an open offer for an additional 22.52 percent stake in the company at Rs 600 per share.


Shares in Hindustan Unilver Ltd rose 20 percent in early morning trade on Tuesday. It was after parent Unilever Plc said it would make an open offer for an additional 22.52 percent stake in the company at Rs 600 per share.  Aashish Tater, Head of Research, Fortunewizard.com says that is was a very big surprise for him. However, he does not see this as a delisting play.


He  feels that this an arbitrage opportunity because whatever a retail shareholder will be having, almost 90 percent would be absorbed by the company.


Below is the verbatim transcript of his interview to CNBC-TV18


Q: What would you advice your retail guys to do?


A: For Hindustan Unilever (HUL) the pattern of holdings is in the way that 22 percent is owned by FIIs and 8 percent odd by domestic institutional investors. Of that 30 percent, I feel 13 percent would come from their side at least. So, the discovery price post today is close to somewhere around Rs 554-561.


This gives an arbitrage opportunity because whatever as a retail shareholder one will be having, almost 90 percent would be absorbed by the company. That’s what my predictors are forecasting right now. I need to run the bigger quant model that we work on and I think we should see at least Rs 575 soon. On the contrary, we were short on HUL right from that 530-540 odd mark, but we think that we will get stopped out today with at least Rs 20 loss. This is one very good story right now from delisting aspects and open offer aspects.


So, this is not going to be delisting play but it’s a very big surprise even for us. We were not looking at any cost, neither the quant models for suggesting that there would be open offer or any pattern which was actually substantiating this particular move from the parent.



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First Published on Apr 30, 2013 10:48 am
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