SP Tulsian of sptulsian.com is positive on Tata Communications.
Tulsian told CNBC-TV18, "There is an interesting move, in fact this is a long overdue the hiving off of the 773 acres held by the company. If we all recall in 2002 when the company was divested to Tata Group at that time it was part of the agreement that 773 acres held by the company will be hived off to a separate company and all the shareholders prevalent of the company at that point of time will be given the benefit in that company. So even the public shareholders those who have tendered the shares in year 2002 pursuant to that open offer of 20% made by Tatas will also be entitled for the shares which will be either the sale proceeds or the company which will be created on hiving off the 773 acres but this is very unfortunate that the public shareholders those who have tendered their shares nine years back, havent heard anything. But if you now come on the point that it is likely to happen very soon because now it has all been there is lot of controversies on part of the present management, government and the regulators and all sort of things."
He further added, "The 773 acres land is located in Kolkata, Pune, Chennai and Delhi and if you see the land parcel held by the company in Delhi its about 128 acres of which 70 acres in Chattarpur and 58 acres in the Greater Kailash and that are the most valuable parcel of the land out of the 773. If you take the valuation of that that parcel alone held by the company in Delhi region in Chattarpur and Greater Kailash, it is learned that the valuation of that parcel alone is about Rs 5,000 crore and even if you take a valuation of about Rs 2,000-2,500 crore for remaining 600 acres or maybe 650 acres held at three other places gives a total valuations of about Rs 7,000-7,500 crore."
"If we recall in the past maybe four-five years back the Tatas have written a letter to the government that hiving off the process will attract a stamp duty of close to about Rs 500 crore and who will bear that burden of Rs 500 crore or implementing this whole process. So even if we take that as a benchmark four-five years back, Rs 500 crore stamp duty now translates into a valuation of about Rs 6,000-8,000 crore prevalent at that point of time and since then in fact we have seen a significant increase in the valuation of the real estates held at all the locations."
"I wont hesitate to give a valuation of about Rs 8,000-10,000 crore also to this land parcel but even if I presume it to be at Rs 6,000 crore and the present number of shares issued by the company at Rs 29 crore shares. So it gives a valuation of about Rs 200-220 per share and I think thats a very attractive sum of part held or embedded in this present share price and the public shareholders those who will be buying shares now from the open market will be entitled for benefit of this because whatever sale proceeds will come 51-52% will go to the government because 25% is held now by the government, 26 they have divested at that point of time, 20% will go to the old shareholders those who have tender their shares and 26% to 28% shares which are presently held by the public shareholder in the company will be given to them."
"Tatas wont be entitled for any benefit of this land hiving of benefit. So I think this is going to be a big trigger. Once you see the process getting initiated, once the roadmap or the blue print of the hiving off or the benefits or the sale plans getting crystallised, share can move to about Rs 350 because this has a huge value lying on account of that and even if you give a valuation of about Rs 150 for the core operations of the company share has all the potential to move up to 350 maybe in six months time. So for this reason I am holding positive view on the stock."
Powered By iWebRSS.com
investing in silver bullion investing stocks markets investing
