X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
IBP: Riding on disinvestment - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Oct 11, 2000

    IBP: Riding on disinvestment

    IBP, the pure marketing company, has been gaining ground in the market. The stock is up 33.6% in the last month. It seems to be riding on the expectations of a Government disinvestment in the near future.

    According to the latest announcement the Government is close to putting IBP under the gavel. It plans to divest 33.6% of it stake in favour of a strategic investor. This will bring down the Government's equity holding to 26%. It proposes to divest through the inetrnational bidding route. This will help the Government achieve maximum realisation from the asset sale.

        Holdings
    Company Shareholding (m) No. of Shares Old New
    Government of India 13.2 59.6% 26.0%
    Financial Institutions 5.1 23.0% 23.0%
    Free Float 3.9 17.4% 17.4%
    Strategic Investor     33.6%
    Exp. Realisation from sale (Rs m) 1,081.6    

    The earlier guidelines laid down by the Government permitted private sector entry into retailing of transport fuels only if the entity had invested a minimum of Rs 20 bn in refining activity or in production of at least 3 MMTPA of crude oil. These stipulations are now said to be relaxed to include petroleum infrastructure development companies e.g. pipelines, terminals.

    (Rs m) FY99 FY00UA Change
    Sales 57,322 65,690 14.6%
    Other Income 359 441 22.8%
    Total Income 57,681 66,131  
    Operating Profit (EBDIT) 930 1,065 14.5%
    Operating Profit Margin (%) 1.6% 1.6%  
    Interest 708 703 -0.7%
    Depreciation 167 326 95.2%
    Profit before Tax 414 477 15.2%
    Tax 61 62 1.6%
    Profit after Tax/(Loss) 353 415 17.6%
    Net profit margin (%) 0.6% 0.6%  
    No.of Shares (eoy) 22.2 22.2  
    Earnings per share 15.9 18.7  
    CMP   145  
    P/E   7.8  

    However, certain issues still need to be ironed out. The Government has yet to decide on IBP's subsidiary, Balmer Lawrie. It plans to acquire IBP's stake in Balmer Lawrie and offload the same to either Hindustan Petroleum (HPCL) or Bharat Petroleum (BPCL). These companies, though, are not favourable to such a move.

    Over the last month the oil majors have taken a beating at the bourses, as their earnings have been jeopardised by high feedstock prices and the oil pool deficit. IBP should have suffered similar fate. The disinvestment news has resulted in possible speculative holding in the stock.

     

     

    Equitymaster requests your view! Post a comment on "IBP: Riding on disinvestment". Click here!

      
     

    More Views on News

    GAIL: A Good Show (Quarterly Results Update - Detailed)

    Mar 27, 2017

    GAIL (India) Ltd has announced results for the quarter ended December 2016. reported 9.4% year on year (YoY) decline in sales, while bottom-line grew 45.4% YoY.

    ONGC: Higher Realisations on Crude Support Performance (Quarterly Results Update - Detailed)

    Mar 17, 2017

    ONGC has announced results for the quarter ended December 2016. The company has reported 9.2 % year on year (YoY) growth in sales, while bottom-line grew 197% YoY.

    Mahanagar Gas Ltd (IPO)

    Jun 21, 2016

    Should one subscribe to Mahanagar Gas IPO?

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    TRACK I.B.P. LTD

    • Track your investment in I.B.P. LTD with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    MARKET STATS