Controversy laded Innovassynth Investments has listed far lower than expected today with a High of Rs 20 and low of Rs 11….It’s Rs 14 currently as I blog nearer 2 pm….Volumes are over 250000…Market Cap is low at Rs 33 crs
Innovassynth Investments has no Employees or Operations…it was formed to take over Futura Polyesters holdings in Pharma Research Company Innovassynth Technologies
Check out my earlier blog on September 14,2010 with added content on February 3,2011 on this
SEBI needs to take Stern action with Promoters like Ghias of Futura Polyester who seem to be enriching themselves in Innovassynth Technologies at the expense of Shareholders of Innovassynth Investments
Tuesday, September 14th, 2010
A Relevant extract from the above blog is reproduced below…The Poor Quote of Innovassynth Investments of Rs 14 on listing today clearly points to the Valuation of Innovassynth Technologies being significantly under assessed at below Rs 200 crs….Has this been deliberate ?…..To distract attention away from cornering of Rights at Par by Promoters !….or indicates a favourable reverse merger ratio for shareholders of Innovasynth Technologies !
Whatever…… I feel Innovasynth Investments at Rs 14 looks a compelling Buy ,more so if it reacts to Rs 10 or below as I reckon that the Real Value of Innovassynth Technologies is between Rs 750 crs to Rs 1000 crs and Innovassynth Investments holds 32.22% of it….so how can it’s Market Cap be a pathetic Rs 33 crs only even after applying a 50% haircut !
Now everyone wants to know what Innovassynth Investments will list at ?Assuming you got the Futura Polyesters in the Jan 2008 high at Rs 45/46 before it became ex-entitlement for shares of ISI,then 11 shares would have cost you @ Rs 500….you received 5 shares of ISI free on these 11 shares….The current Price three years later of Futura is Rs 7….thus the 11 shares have a value of Rs 77….but they cost you Rs 500…Therefore theoritically the 5 shares of ISI must fetch you Rs 423 for you to break even…that is @ Rs 85 per share !…but will it !?The answer to this lies in the perceived Valuation of Innovassynth TechnologiesAs you know ISI has no employees or any operation.It was set up merely to take over the 2.38 crore shares held by Futura Polymer in IST at par….Therefore it derives it’s value from the value of IST…This investment constitutes 32.22% of the equity of IST
The Valuation of IST is the key here…IST had a networth of Rs 89.82 crs at March 31,2010….Add to this the incremental value over Rs 66.11 crs (last 2009 reval) of 330555 sq meters(over 35 million sq ft) land at Khopoli ( my sense is atleast Rs 150 crs ) + Valuation of the 7% stake in Actis Biologics India (Rs 250 crs assuming that recently Actis placed 10% at US $ 80 Million) + Potential worth of the high end R & D work (Rs 500 crs atleast )
This would compute to Rs 89.82 crs + Rs 150 crs + Rs 250 crs + Rs 500 crs => @ Rs 1000 crs …..My conservative sense is that the value is in the range of Rs 750 crs to Rs 1000 crs….ISI is entitled to 32.22 % of this…Therefore Rs 250 crs to Rs 350 crs is the value of ISI’s investments in IST….but being a strategic stake a haircut of 50% is in order…Therefore Rs 125 crs to Rs 175 crs should be the value range…ISI has a capital of Rs 23.88 crs (FV Rs 10)…thus per share value of ISI after haircut will be in the range of Rs 50 to Rs 75
Ghias and Rahejas will have us believe that IST is a loss making below par value…they are simply talking bullshit and have cornered additional shares of atleast 79 lakhs of IST at par in rights issues and that should have been subscribed to by ISI actually .These rights came subsequent to the Scheme of Amalgamation order of July 4,2008…IST has an Equity of Rs 74 crs….The Valuation range of Rs 750 crs to Rs 1000 crs gives the per share value range of Rs 100-Rs 135
For lower IST Valuation of Rs 250 crs and Rs 500 crs the ISI Share Price after haircut will be respectively lower at Rs 17 and Rs 34….so as you see the key is the Valuation of IST…and that is controversial to say the least…and this is where I feel 38000 shareholders of Futura Polyesters who became the 38000 + shareholders of ISI too have been short changed significantly when ISI,seemingly as per Promoters gameplan, rejected subscribing to the IST Rights at Rs 10
Cheers !…or should I say Jeers !
Neither My Family members that includes me too,nor my companies hold any shares in Futura Polyesters or Innovassynth Investmemnts or Innovassynth Technologies……but some of my clients,associates and friends may do so