JINDAL POLY INVESTMENT AND FINANCE CO LTD : CMP Rs 86. Book Value Rs 647

 

JPIFL, belonging to Jindal group, is engaged in business of Investment  and Finance. JPIFL does not have any manufacturing or trading activities.

 Stock is recommended for investment as stock is quoting just 0.15XBook  Value. Book Value is Rs 647 but Cmp is just Rs 92.

For FY 13-14, JPIFL had earned NP of Rs 7.38 crores which transalated  into Eps of Rs 7.02. However, during FY15, JPIFL had incurred loss of 16 lacs.

INVESTMENTS:

 Name of Company                           Amount Rs/Crores      Instrument

Jindal India PowerTech                     154.10                      Equity

Jindal India PowerTech                     372
 Preference Shares

Jindal Poly Film Investment                86.65                      Equity

JPIFL also has some small investment in quoted companies.

COST OF TOTAL INVESTMENTS IS Rs 616 Crores.  Equity is 10.51 Crores. Thus, value of investments works out to Rs 586 PER SHARE.

VALUATIONS AND MAIN TRIGGER:

1.  Investment companies  get lower valuations on the bourses  (compared to Book Value/Value of Investments). However, in case of  JPIFL, CURRENT MARKET PRICE IS JUST 15% OF BOOK VALUE.  If JPIFL  deserves valuation of at least 0.30XBook Value. It translates in STOCK  PRICE OF Rs 190+

2.  Out of total investment, amount of Rs 526 crores is invested only  in JINDAL INDIA POWERTECH. Jindal India Powertech is setting up  1200 MW Power plant. It is reliable learnt that Jindal India PowerTech  is being taken over/bought by JSW Energy. TALKS ARE ALREADY UNDERWAY.  Deal should be closed any time in 2016.

As per our estimates and information, JPIFL's sale of its investment  in Jindal India Powertech should fetch CASH of Rs 700 crores+.  It  means there is likelihood of JPIFL GETTING nearly Rs 700 PER SHARE AS  CASH IN ITS BOOK. Once it happens, stock price of Jindal Poly  Investment and Finance can cross Rs 250 (in 2016)