BNK Capital is a Kolkata-based company & it is engaged in the business of financials securities. The Group thus under its umbrella is providing multiple services in financial sector, capital markets and commodities exchanges. Its clientele spreads from Institutions, Corporate Houses and High Net worth Investors.
The Group provides various services which includes |
|
The reason why I am mentioning this company here!! Not because of its business, I don’t think they are really doing well in that but because of its investment in other company. BNK capital has done investment in many company in past, and now this investment has grown a lot and created wealth for them. BNK Capital current market cap is only 30 crores where as its investment in other companies is roughly around 190 crores. As per the company’s annual report of 2010, till march’10 the market value of securities was 147.9 crs and which has now gone upto 190 crores. Company has a debt of around 20 crs & if we remove the debt part from its investment it comes 170crs. So considering the current market cap of 30 crs which has an investment of around 170 crs , its available at steep discount of over 80% of its investment. The good thing in this case is that company is not an holding company as it has business of its own.
Company has diversified its investment in 60 companies. Some of its major investment in the companies are :-
SCRIPS | QUANTITY |
CESC Ltd. | 3017351 |
KEC International Ltd | 449255 |
Shree Securities Ltd. | 33000 |
Varun Shipping Co.Ltd. | 14850 |
Zensar Technologies Ltd. | 4200 |
Koyhari Phyto. Chemicals Ltd. | 150000 |
Zydus Weliness Ltd. | 1000 |
Another good reason is that promoters are regularly buying the shares from open cash market purchase. In addition to that on conversion of warrants Company has allotted 18 Lakhs shares at a price of Rs 46 to promoters, this shows the confidence of company being greatly undervalued. By this process company has raised a further sum of Rs 7.45 crores for long term corporate requirements.
While investing in such companies you never know when they are going to unlock their values, only when company unlock its hidden value the number will be altogether different in the balancesheet. Even the dividend from this investment companies can make an significant impact. But in BNK Capital case as the investment are in other company we may see some kind of value unlocking in longer run.
Hitesh@hbjcapital.com
Lead Associate- Reports On Demand
