Takeover to unlock Gesco’s value? - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Takeover to unlock Gesco’s value?

Oct 23, 2000

GE Shipping and Gesco Corporation’s shares have been in the limelight over the last few days. Prices of these scrips have hit new highs. However, the rising interest in the stock is not only due to the fact that shipping or construction sectors are riding high. It is because of the take-over bid for Gesco Corporation by the A. H. Dalmia group. As per reports Dalmia’s intimated Gesco’s board of directors on Wednesday after having acquired 5% of paid-up capital through open market operations. The company reportedly has made further purchases on Friday. As a result, Dalmia’s stake in Gesco Corporation has shot up to 10.4% (Sheth’s hold 13% stake in the company). The company reportedly has also increased the offer price to Rs 27 from Rs 23 announced earlier. This is seen as a move to tackle counter-offer, if any, from Gesco’s management.

Gesco Corporation posted a net profit of Rs 51 m in FY00 on revenues of Rs 225 m. It has free reserves worth Rs 1 bn and carries no debt in its books. The book value of the company works out to Rs 44 against the current market price of Rs 21.

Share holdingGesco CorporationGE Shipping
International Investors
(FII's, GDR's, IFC and NRI's)
FIs, Banks and Mutual Funds15%13%
Bodies Corporate10%5%

Rocked by this takeover move, GE Shipping (the parent company) has planned for a share buy-back programme to increase promoters’ stake in the company. Currently, the promoters hold close to 13% in the company. The board of directors of the company is meeting on 31st October 2000 to finalize the share buy-back programme.

So, at what price would GE Shipping be pricing their buy-back programme? Earlier, in an interview with Mr. Bharat Sheth, Managing Director of GE Shipping said that the Net Asset Value (NAV) of the company is around Rs 55 (Rs 65 pre-demerger of Gesco Corporation). Therefore it is likely that the buy-back price to be around this level. Both GE Shipping and Gesco Corporation have hidden value in terms of fleet composition and properties respectively, apart from large free reserves.

Equitymaster requests your view! Post a comment on "Takeover to unlock Gesco’s value?". Click here!


More Views on News

G.E.SHIPPING Announces Quarterly Results (3QFY21); Net Profit Down 46.7% (Quarterly Result Update)

Feb 1, 2021 | Updated on Feb 1, 2021

For the quarter ended December 2020, G.E.SHIPPING has posted a net profit of Rs 2 bn (down 46.7% YoY). Sales on the other hand came in at Rs 8 bn (down 30.1% YoY). Read on for a complete analysis of G.E.SHIPPING's quarterly results.

G.E.SHIPPING 2019-20 Annual Report Analysis (Annual Result Update)

Nov 20, 2020 | Updated on Nov 20, 2020

Here's an analysis of the annual report of G.E.SHIPPING for 2019-20. It includes a full income statement, balance sheet and cash flow analysis of G.E.SHIPPING. Also includes updates on the valuation of G.E.SHIPPING.

G.E.SHIPPING Announces Quarterly Results (1QFY21); Net Profit Up 966.8% (Quarterly Result Update)

Aug 24, 2020 | Updated on Aug 24, 2020

For the quarter ended June 2020, G.E.SHIPPING has posted a net profit of Rs 5 bn (up 966.8% YoY). Sales on the other hand came in at Rs 11 bn (up 36.5% YoY). Read on for a complete analysis of G.E.SHIPPING's quarterly results.

More Views on News

Most Popular

India: Recovery Stalled by Vaccine Games? (The Honest Truth)

Apr 13, 2021

Ajit Dayal on how India's vaccine strategy will impact the markets.

4 Stocks to Make Your Portfolio Immune to the Second Covid Wave (Profit Hunter)

Apr 6, 2021

Rather than predicting the market, successful investing is more about preparing well and placing your bets accordingly.

An India Revival Stock I'm Bullish On... (Profit Hunter)

Apr 9, 2021

This could take India to the position of 3rd largest economy.

Why Did the Market Crash on Monday? (Fast Profits Daily)

Apr 13, 2021

In this video, I'll you what I think is the real reason behind yesterday's market crash.

A Unique Sector for Short-Term Profits (Fast Profits Daily)

Apr 12, 2021

This ignored sector could deliver big short-term profits.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms


Apr 16, 2021 (Close)


  • Track your investment in G.E.SHIPPING with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks