Financial Daily from THE HINDU group of publications
Wednesday, May 18, 2005
Financial Daily from THE HINDU group of publications Wednesday, May 18, 2005 |
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Markets
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Stock Markets SRF Polymers doubles in a month thanks to its holding in SRF Virendra Verma
Mumbai , May 17 The share price of SRF Polymers has been on an upward move and has doubled in just one month due to its large holding in SRF Ltd, brokers said. SRF Polymers along with its subsidiary SRF Polymers Investment are now promoters of the SRF Ltd and hold 33.22 per cent stake in it. The stock price of SRF Polymers has increased from Rs 79.35 on April 18 on the BSE to today's closing price of Rs 163.50, a gain of 106 per cent. During the same period, the stock price of SRF has increased from Rs 102.25 to Rs 147.85, a gain of 44.6 per cent. Brokers said the sudden interest in SRF Polymers is due to high value of its shares in SRF. A look at the holding of the shares and its valuations shows that at current market price of SRF, the value of SRF Polymers on per share basis works out to Rs 488.74. This is comparatively much lower than the current ruling market. The market's bullishness is primarily based on the notional value of the holding. But several brokers have different views on the valuation of SRF Polymers shares. "Globally, holding companies are never valued based on their investment. Since SRF Polymers is the holding of promoters and they will never sell their shares," said an analyst with a foreign broking firm. He said the value of SRF Polymers is more of theoretical in nature and not practical. However, a section of the market has a different view and this is based on the future growth of SRF. "Growth of SRF is expected to be good in the next few years and I'm buying SRF Polymers based on SRF growth," said a broker who has been buying the shares in the current rally. He said the upward move has come after the company acquired 16.71 per cent stake in SRF in December quarter.
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