Sulzer India. Will delisting happen?

Sulzer India announced its plan to delist the shares from the stock exchanges. Sulzer, Switzerland-based parent company, an 80% shareholder of the company has proposed to acquire the remaining 20% equity shares of the company through an offer and intention to voluntarily delist the equity shares of the company from all the stock exchanges in India.

Read my initial report about Sulzer India here (Specifically read my Note of Caution section)

The company is offering 870Rs/share as an initial offer to its shareholders which will value the company at around 8 times its expected EPS of 110Rs by FY10 March. The company in 2006 also had tried to delist its shares but failed.

Will the delisting happen this time?

The company is really in a Catch22 situation now. I would say this case applies to most of the MNC’s listed in India who has high promoter stakes. Even though MNC companies want to increase their Indian operations, most of them would like to have greater control in their day to day and financial operations.

Skype-Verizon deal, Death bell for the traditional phone business?

The deal struck by Verizon Wireless with the internet calling service provider Skype is a landmark deal in itself. This is also the starting of a new era of internet revolution in to the mobile space. For the last two decades internet has changed the way people share data and information with each other using computers. Now internet is set to change the way you communicate or talk over the phone.

At some point of time, like how internet transformed many businesses over time it is all set to transform the communication industry. Many people describes it has the start of the end of traditional phone business where powerful operators with their closed network dictated terms and conditions on how you talk and what applications you will have over their network. Yes it is slowly happening the “Internet is killing the traditional Phone business”.

Option Strategy Follow-up (Feb -22)

This is the follow-up of the strategy discussed here.(Maximize Your Returns using Options)
On Jan 29 I have these options in my hand (See the post on Jan 29 here)

4600 Put option at a premium of 70Rs (x number) (breakeven 4530)
4500 Put option at a premium of 35Rs (5x number)(breakeven 4465)
4400 Put option at a premium of 23Rs (10x number)(breakeven 4377)

The current value of these options are given as under

25th Feb is the expiry date of all these options and I expect all these options to expire unexercised (i.e. reach the value of zero). Nifty current value is 4856.

What is the strategy for this month?

Geodesic Ltd, Prepare for the next revolution!

Introduction

It is very difficult to analyze a highly innovative company which operates in a highly competitive, fast changing and highly unpredictable business environment. The risk and reward are very high in such a scenario. You could argue that we should be avoiding such companies. However even that could be difficult when the company in question is making all the right moves and has a very innovative, progressive, efficient and shareholder friendly leadership.

The company in question here is Geodesic Ltd a Mumbai based software product and Solutions Company focused on the convergence of media, mobile, and entertainment. The reason why it is difficult to predict what will happen in this field is because of the rapid change in technology and business priorities of the future. The convergence that I mentioned above will be effectively used mostly by new age companies and business whose revenue models are changing very fast.

But what makes the company promising is the fact that so far the company has done very well in managing this innovation led growth and also seems to have the right kind of products which could catapult it to the next level. In all these years the company has done huge investments in making not the right kind of products but to make the right kind of technology stacks using which it could make the right products / offerings which is relevant to the current and future business environments with very little effort.