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Tuesday, March 22, 2011

Invest in this Old Gem

Bombay burmah [ BBTC ] is the 2nd oldest listed co on the BSE . It belongs to the Wadia stable.
Equity : 13.9 cr
Consolidated NP [ 06 ] : 49 cr
EPS : 35
CMP:Rs 423
 
The stock is a pure asset play.
 
It is  into tea, auto ancillaries, dental products, orthopaedics.....and a few other smaller businesses.
 
the interesting part is BBTC through its numerous subsidiaries / associates owns :
 
1] 25% of Britannia valued @ 750 cr at current Britannia market price
 
2]  14% of Bombay Dyeing valued @ 360 cr at current Bombay Dyeing price
 
3] other equity investments+fund holdings + cash @ 400 cr [ equity inv / fund holdings on basis of cost -realisable price will be much higher ]
 
p.s: holding in GO air is just 3%
 
Consolidated debt is 225 cr.
 
I am convinced that the wadia group will see major retructuring over the next 2-3 yrs with major value unlocking. The Sceptic Club may ask why now after so many years ???? I sense that this may be neccesitated by the need to give both the sons Ness & Jeh their own seperate space and direction.
 
At prevailing price of its holdings ,BBTC's holdings are valued @ 1000 / share .
 
Current price is 423 which is under 40% of the  price of its holdings + BBTC businesses are available free.
 
I recommend one must invest at current levels and wait for market to pay the correct price.