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THE RPG Life Science stock on Monday closed at its 20-per cent circuit breaker on a lively increase in the traded quantity on the bourses. According to market sources, the company is understood to be on the block.

The merchant banking sources maintained that a due diligence process is on by some overseas entities. The debt and interest burden has been a drag on the company's profitability.

However, according to analysts, the total debt has been decreasing through repayments. Apart from the enterprise valuation, the company's investments in other RPG group outfits are considered as an important, but hidden, valuation element, as there had been a sharp appreciation in the market prices of these stocks in the last couple of years.

RPG Life Science holds 9.96 lakh shares of CESC, 6.75 lakh shares of KEC International, 5.14 lakh shares of Harrison Malaylam, 8.33 lakh shares of Philips Carbon, 11.98 lakh shares of RPG Transmission, 2.49 lakh shares of Saregama, 90,000 shares of Spencer and 36,774 shares of Ceat Tyres.

Profit hopes trigger buying

THE counter of Hindustan Industries, the only listed meat (lamb) product manufacturer and exporter in the country, was on a roll on Monday.

It shot up by around 15 per cent with around four times jump in the traded volume on the prospects of increase in profitability after completion of corporate debt restructuring of its 100 per cent subsidiary, Hindustan Agro, which is also in the same business.

The companies are understood to be on a strong turnaround path following the recent CDR with the lenders - IFCI and IDBI.

Interestingly, the subsidiary has a higher turnover and debt figures than the holding company. In 2003-04, it had a turnover of Rs 291.75 crore and a total debt of Rs 121 crore. The annual income of Hind Industries was Rs 96.92 crore for 2004-05. It had a debt of Rs 45.95 crore on an equity base of Rs 45.95 crore. The book value of the stock is Rs 53.77 crore.

It today finished at Rs 26.24, after touching its new 52-week high at Rs 27.46 on the BSE.

Cashing in on casino

THE Advani Hotels stock is on a pleasure trip on the Dalal Street, courtesy strong interests shown by certain overseas investors and a group HNIs.

According to market sources, the uniqueness of the stock is more in its wholly-owned subsidiary, Advani Pleasure Cruise (P) Ltd, which runs the only (and highly profitable) casino in the country on a luxury liner. The latter is operated by an Austrian company, beyond the Indian territorial waters (as running a casino is illegal in India).

The Goa resort hotel-cassino liner business model is understood to be working wonders for the company and fetching a premium valuation over the other resort/hotel stocks.

The company has reported a PAT of Rs 2.94 crore profit during 2004-05, while the subsidiary is said to have raked in a net profit of Rs 15 crore. The stock moved up 10 per cent with a traded volume of 1.68 lakh shares on the BSE against its two-week average volume of 57,480 shares.

Jayanta Mallick

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