BHAGYANAGAR INDIA

Bhagyanagar India (BSE: 512296 NSE: BHAGYNAGAR ISIN: INE458B01028)

BHAGYANAGAR INDIA LIMITED, a part of Surana Group was incorporated in 1985 with the main object of carrying on business in Ferrous and Non-ferrous metals. It commenced its business by acquiring a Copper Rod Unit (India Extrusion) in 1985. In 1990 it took over Gangappa Cables Limited for expansion of business activities. In 1994-95 it started manufacturing Jelly Filled Telephone Cable. In 1998-99, it acquired Harinam Wires engaged in manufacturing of Copper Allied Products.

The company has multifarious activities in various divisions.

The company has a share capital of 14.90 Crores made up of 7.45 crore equity shares of Rs.2.00 each. Promoter group hold about 55 percent shares and institutions, FIIs & Bodies corporate together hold about 20 percent shares. Remaining about 25 percent are the floating stock. The company has free reserves of 171 Crores, thus commanding a very good book value.

The company split the face value of its stock from Rs.10.00 to Rs.2.00 in Feb. 2005 and issued bonus shares in 2006. The company is showing decent profitability and may end up the FY 2007-08 with an eps of around 5.

The company’s shares are attracting lot of attention of late, for the following reasons :

Bhagyanagar India Ltd is planning to go ahead with the preliminary activities regarding setting up of Solar PhotoVoltaic Cell Project in Joint Venture with M/s. Surana Telecom and Power Ltd.

Bhagyanagar India Ltd held Extra Ordinary General Meeting (EGM) of the Company held on January 31, 2008, wherein, inter alia, the following decisions have been taken : For the issue of Equity Share warrants on preferential basis to M/s. Consolidated Securities Ltd, M/s. C S K Realtors Ltd, M/s. Trimurthi Drugs & Pharmaceuticals Ltd and Mr. Sunil D Parakh not exceeding Rs 55,00,000 warrants of a face value of Rs 2/- each at a price of Rs 90/- per warrant, each warrant convertible into one equity share of the Company at the option of Warrant holder for cash.

The Company has formed a SPV called Bhagyanagar Entertainment Infra & Development Co Pvt Ltd along with IL&FS Infrastructure Development Corpn for undertaking, various infrastructure and entertainment projects. The Special Purpose Vehicle will conceptualise various infrastructure projects such as Theme Parks, Special Economic Zone, Industrial Parks etc. on a large scale basis.

The company is diversifying into infrastructure related projects and has successfully raised money by issuing convertible warrants of Rs.2.00 at a price of 90.00 per share. M/s IL&FS infrastructure, needs no introduction to investors.

The share price touched a high of about 79 and low of 33 in the last 12 months. It is now being traded at around 51.00. Delivery percentage is quite high for the last few trading sessions and was over 95 on 01.02.08.

This share can be considered by long term investors with a clear holding of 2 years. We see a target of Rs.100.00 in two years. (View this in the back drop of various entities purchasing convertible warrants of Rs.2.00 at Rs.90.00).

The share has also been recommended by various analysts with short term targets etc. but I stick to my above long term target.

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b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.

c) We expect investors to have a time horizon of at least one year and more.

d) We do not advise for short term investing, which is risky.

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(AJAY SINGH RATHORE)
KASHIWALA