• OUTLOOK ARENA
  • VIEWS ON NEWS
  • NOVEMBER 21, 2000

Gramophone: The masterís voice!

Gramophone Company has gone off track. After making a private placement at a price of Rs 1,785 in February 2000, the company merged a group company RPG Music International with itself. For the merger the valuation (done by Price Waterhouse Coopers) worked out to Rs 650 per share for Gramophone Company as against Rs 300 per share for RPG Music International.

We fail to understand how the value of Gramophone could have fallen so drastically and that too in the eyes of its promoters! However, prior to its merger with Gramophone, RPG Music International issued shares to two other RPG group companies Music World and RPG Netcom, which reduced the stake of Gramophone in RPG Music International from 100% to 55%.

And since the stake of RPG group was relatively higher in Music World and RPG Netcom, post merger the groupís stake in Gramophone itself increased from 42% to 47%. A perfect case of having your cake and eating it too!

Not surprisingly, the stock is stagnating at the current levels of Rs 545 (52 week high: Rs 2,316). It is possibly to appraise the analyst community of the rationale for this move that the company has called for an analyst meet today.

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 (Research Analyst) bearing Registration No. INH000000537 (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, Canada or the European Union countries, 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 (Research Analyst)
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