WEST COAST PAPER MILLS
West Coast Paper Mills belongs to the famous S.K Bangur group. The promoters are holding substantial shares and the shares are also held by institutions like Insurance Companies.
West Coast Paper is a profit making dividend paying company engaged in manufacture of paper and packaging products. The equity of the company is about 9 crores made up of equity shares of Rs.2 each. The reserves are more than 100 crores.
The Company has issued 41,73,400 Global Depository Receipts (GDRs) at the rate of USD 2.164 per GDR (equivalent to Rs 85/- per GDR, including premium of Rs 83/- per GDR) amounting to USD 9031237.60 to various investors. Each of the GDR will be convertible into equity share of Rs 2/- each at the option of the GDR holder.
The company has further allotted 58,80,880 Equity shares of the face value of Rs 2/- each @ 85/- per shares (including premium of Rs 83/- per share), amounting of Rs 49,98,74,800 to Qualified Institutional Buyers under Qualified Institutions Placement (QIP) route.
With the above two placements, the equity may rise by Rs. 2 crore but the reserves will rise by 160 crores. This will substantially shore up the book value of the company. The company has substantial expansion plan and with the above funds deployed properly, the company’s interest outgo etc. are expected to come down, thereby increasing the profitability.
Considering all the above factors, the share is going pretty cheap at the present price levels of 89 – 91. We, therefore, give a call to accumulate with a price target of 150 in one year, 200 in two years and 240 in three years.
In due course, with substantial reserves, the company may also be a bonus candidate.
STATUTORY WARNING
Investors are requested to do their own studies and our advice is only for long term investing. Investors are investing with their own risk and responsibility
West Coast Paper Mills belongs to the famous S.K Bangur group. The promoters are holding substantial shares and the shares are also held by institutions like Insurance Companies.
West Coast Paper is a profit making dividend paying company engaged in manufacture of paper and packaging products. The equity of the company is about 9 crores made up of equity shares of Rs.2 each. The reserves are more than 100 crores.
The Company has issued 41,73,400 Global Depository Receipts (GDRs) at the rate of USD 2.164 per GDR (equivalent to Rs 85/- per GDR, including premium of Rs 83/- per GDR) amounting to USD 9031237.60 to various investors. Each of the GDR will be convertible into equity share of Rs 2/- each at the option of the GDR holder.
The company has further allotted 58,80,880 Equity shares of the face value of Rs 2/- each @ 85/- per shares (including premium of Rs 83/- per share), amounting of Rs 49,98,74,800 to Qualified Institutional Buyers under Qualified Institutions Placement (QIP) route.
With the above two placements, the equity may rise by Rs. 2 crore but the reserves will rise by 160 crores. This will substantially shore up the book value of the company. The company has substantial expansion plan and with the above funds deployed properly, the company’s interest outgo etc. are expected to come down, thereby increasing the profitability.
Considering all the above factors, the share is going pretty cheap at the present price levels of 89 – 91. We, therefore, give a call to accumulate with a price target of 150 in one year, 200 in two years and 240 in three years.
In due course, with substantial reserves, the company may also be a bonus candidate.
STATUTORY WARNING
Investors are requested to do their own studies and our advice is only for long term investing. Investors are investing with their own risk and responsibility
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