Gwalior chemicals came up with an announcement that it will buy back shares at Rs.120 currently trading at 89. What's more interesting is that the promoters would also participate in the buy back offer.
As we all know that it is still undervalued with sitting on Rs130 - Rs 150 / share cash. They are buying back only 25% which is the maximum a company can buy back in a financial year.
Most important questions
- Why the promoters are participating in Buy back? Does that indicate that they do not want to take it Private?
- and the most important question, how are they going to spend the remaining money. They want to get into Power business and Speciality chemicals. I understand he reasoning getting into Chemical business but what core competency they have getting into power business
- What is the catalyst to unlock this value?
Will keep you more updates
Wednesday, November 4, 2009
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