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Not like share "splits" and "bonus issues/capitalization of reserves", investor has to carefully study the "right issues - offer price" as it is upto individual investors whether to accept or ignore, but XR price will be adjusted for many factors. Net Assets Per Share (NAPS) is one of such factors that immediately observable. EPS and P/E adjusted with a lag and the effect also vary based on how the proceeds utilized.
I'm just trying to analysis whether the latest right issue "MAL N & X" is attractive, when compare with some of the recent right issues, using its impact to the NAPS. (May be I'm completely wrong here)
My observations; it is rare that a company fix a "right issue price" below the NAPS (specially where the stock is trading above the NAPS), as such rights issues dilutes NAPS which leads lower valuations. I noticed only CSD, OSEA (please note both of these are trading below the NAPS) & MAL have been offered VOTING right shares at a discount to the NAPS. Also MAL, SEYB & HNB have been offered NON-VOTING right shares at a discounted to their NAPS by 30.38%, 28.82% & 4.43% respectively. (see below table/attached worksheet).
Most of times "Right Shares" has been offered at a discounted to the market price, but premium to the NAPS; e.g. ALUF & LDEV offered at a extremely premium price. The only plantation counter in the sample - KAHA was offered its rights at over 90% premium to its NAPS.
Stock Right Issue Issue Price Pre-BVPS (% of -Discount / + Premium to BVPS)
MAL 01 V & 03 NV for 10 V-6.75, NV-5.50 Rs. 7.90 (V -14.55%), (NV -30.38%)
KAHA 1 for 3 V-15 Rs. 7.87 (V +90.6%)
SEYB 1 for 3 V-75, NV-35 Rs. 49.17 (V +52.53%), (NV -28.82%)
COMB 1 for 14 V-181.65, NV-130.13 Rs. 91.04 (V +99.53%), (NV +42.93%)
HNB 1 for 10 V-219.50, NV-119.50 Rs. 125.57 (V +74.80%), (NV -4.83%)
LDEV 15 for 1 V-25 RS. 1.76 (V +1320.45%)
CSD 1 for 1 V-11 Rs. 45.56 (V -75.86)
ALUF 2 for 1 V-38 Rs. -12.02 premium Rs. 50.20
SMLL 1 for 2 V-25 Rs. 11.28 (V +121.63%)
HASU 1 for 7 V-62.50 Rs. 27.10 (V +130.63%)
CTHR 1 for 55 V-210 Rs. 51.38 (V +308.72%)
CCS 1 for 10 V-300 Rs. 205 (V +46.34%)
ATL 1 for 1 V-1.50 Rs. 0.22 (V +581.82%)
MARA 1 for 4 V-10 Rs. 6.39 (V +56.49%)
OSEA 1 for 2 V-15 Rs. 21.92 (V -31.56)
When it comes to the latest MAL right issue; MAL NAPS - 7.90 (pre-right issue) and it will diluted to 7.30 after the rights issue (whem fully-subcribed). VOTING shares are offered at 14.55% discounted to the NAPS while NON-VOTING offered at over 30%. When it compare with market price the right issue (offer price) is discounted about 30%. Also noted that MAL is trading at PER 4.3x which also very attrective.
In the resent past I accepted CSD rights, but ignored OSEA rights, and now have to decide on MAL as well (MAL represent about 7% of my PF).
CSE is now extremly unpredictable in terms of the fundermental analysis and "Right Issues" are not always attrective in terms of "market price movements".
Therefore I invite fellow members of this forum to discuss, "pricing - right issues" and "predicting-XR Price" in general as well as latest right issue of MAL in specifivally
please refer the attached worksheet for more details...
I'm just trying to analysis whether the latest right issue "MAL N & X" is attractive, when compare with some of the recent right issues, using its impact to the NAPS. (May be I'm completely wrong here)
My observations; it is rare that a company fix a "right issue price" below the NAPS (specially where the stock is trading above the NAPS), as such rights issues dilutes NAPS which leads lower valuations. I noticed only CSD, OSEA (please note both of these are trading below the NAPS) & MAL have been offered VOTING right shares at a discount to the NAPS. Also MAL, SEYB & HNB have been offered NON-VOTING right shares at a discounted to their NAPS by 30.38%, 28.82% & 4.43% respectively. (see below table/attached worksheet).
Most of times "Right Shares" has been offered at a discounted to the market price, but premium to the NAPS; e.g. ALUF & LDEV offered at a extremely premium price. The only plantation counter in the sample - KAHA was offered its rights at over 90% premium to its NAPS.
Stock Right Issue Issue Price Pre-BVPS (% of -Discount / + Premium to BVPS)
MAL 01 V & 03 NV for 10 V-6.75, NV-5.50 Rs. 7.90 (V -14.55%), (NV -30.38%)
KAHA 1 for 3 V-15 Rs. 7.87 (V +90.6%)
SEYB 1 for 3 V-75, NV-35 Rs. 49.17 (V +52.53%), (NV -28.82%)
COMB 1 for 14 V-181.65, NV-130.13 Rs. 91.04 (V +99.53%), (NV +42.93%)
HNB 1 for 10 V-219.50, NV-119.50 Rs. 125.57 (V +74.80%), (NV -4.83%)
LDEV 15 for 1 V-25 RS. 1.76 (V +1320.45%)
CSD 1 for 1 V-11 Rs. 45.56 (V -75.86)
ALUF 2 for 1 V-38 Rs. -12.02 premium Rs. 50.20
SMLL 1 for 2 V-25 Rs. 11.28 (V +121.63%)
HASU 1 for 7 V-62.50 Rs. 27.10 (V +130.63%)
CTHR 1 for 55 V-210 Rs. 51.38 (V +308.72%)
CCS 1 for 10 V-300 Rs. 205 (V +46.34%)
ATL 1 for 1 V-1.50 Rs. 0.22 (V +581.82%)
MARA 1 for 4 V-10 Rs. 6.39 (V +56.49%)
OSEA 1 for 2 V-15 Rs. 21.92 (V -31.56)
When it comes to the latest MAL right issue; MAL NAPS - 7.90 (pre-right issue) and it will diluted to 7.30 after the rights issue (whem fully-subcribed). VOTING shares are offered at 14.55% discounted to the NAPS while NON-VOTING offered at over 30%. When it compare with market price the right issue (offer price) is discounted about 30%. Also noted that MAL is trading at PER 4.3x which also very attrective.
In the resent past I accepted CSD rights, but ignored OSEA rights, and now have to decide on MAL as well (MAL represent about 7% of my PF).
CSE is now extremly unpredictable in terms of the fundermental analysis and "Right Issues" are not always attrective in terms of "market price movements".
Therefore I invite fellow members of this forum to discuss, "pricing - right issues" and "predicting-XR Price" in general as well as latest right issue of MAL in specifivally
please refer the attached worksheet for more details...
- Attachments
Right Issues.xls - 02 worksheets - Comparison of Recent Rights & Latest MAL Right Issue
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Last edited by factFINDER on Sun Jun 12, 2011 10:43 pm; edited 1 time in total (Reason for editing : to attach a worksheet)
