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Microcaps-When will value.be unlocked?
 The Equity Desk Forum :Investment Ideas - Creating winning portfolios! :Microcaps-When will value.be unlocked?
Message Icon Topic: Bombay Burmah-Old Money Smells Good. Post Reply Post New Topic
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jstk
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Quote jstk Replybullet Topic: Bombay Burmah-Old Money Smells Good.
    Posted: 25/Oct/2006 at 10:55pm
Bombay burmah [ BBTC ] is the 2nd oldest listed co on the BSE . It belongs to the Wadia stable.
Equity : 13.9 cr
Consolidated NP [ 06 ] : 49 cr
EPS : 35
 
Before penning down any further comments, i must add that this
co is a " Jack of all Trades & Master of None" . It is a pure asset play.
 
It is  into tea, auto ancillaries, dental products, orthopadecics.....and many other smaller businesses.
 
the interesting part is BBTC through its numerous subsidiaries / associates owns :
 
1] 25% of Britannia valued @ 750 cr at current Britannia market price
 
2]  14% of Bombay Dyeing valued @ 360 cr at current Bombay Dyeing price
 
3] other equity investments+fund holdings + cash @ 400 cr [ equity inv / fund holdings on basis of cost -realisable price will be much higher ]
 
p.s: holding in GO air is just 3%
 
cosolidated debt is 225 cr.
 
I am convinced that the wadia group will see major retructuring over the next 2-3 yrs with major value unlocking. The Sceptic Club may ask why now after so many years ???? I sense that this may be neccesiated by the need to give both Ness & Jeh their own seperate space and direction.
 
At prevailing price of its holdings ,BBTC's holdings are valued @ 1000 / share .
 
Current price is 380 which is under 40% of the  price of its holdings + BBTC businesses are available free.
 
I recommend one must invest at current levels and wait for market to pay the correct price.
 
jayendra
 
 
If you buy for a non-value reason, you will end up selling for a non-value reason.
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Quote jstk Replybullet Posted: 06/Jul/2007 at 1:30pm

As reported by the business dailies, Danone may exit its biscuits business worldwide. They have already done the same in some parts of Latin Americas & Europe.

currently Wadias ( through Bombay Burmah & its subsidiaries ) & Danone both hold 50% stake in Associated Biscuits intl which holds a 45% stake in Britannia.
 
The effective Bombay burmah stake including its  subsidaries is around 25% in Britannia .
 
if Danone does sell its stake in Associated biscuits, Wadias will have the 1st right of refusal.
 
A twist in the tale could be if ( as reported by newspapers )Danone sells its worldwide biscuits business to Kraft but then again this would not be possible in case of britannia due to the Wadia 1st right of refusal.
 
If wadia's buy the Danone stake, the price could be anywhere between Rs.1000-1500 cr .It is very difficult to make any kind of an informed estimate at this point. If it does happen, Bombay Burmah will be able to consolidate Britannia earnings in its results and the Ness ( Bombay Dyeing )  & Jeh ( Bombay Burmah / Britannia ) division can be smoothly effected.
 
Bombay burmah is cash/asset rich and can easily raise the funds including debt ,if required to manage the purchase.
 
Although it is a bit pre mature to make a precise conclusion on the impact of this development,  Bombay Burmah & Britannia should be in the limelight in the near future.
 
jayendra
 
If you buy for a non-value reason, you will end up selling for a non-value reason.
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Quote shrikantkarwa Replybullet Posted: 22/Jul/2007 at 8:19pm
hello sir ye bombay bru. ka rate kya ? buy kare currnt market prize pe ?
shrikant
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Quote jstk Replybullet Posted: 06/Sep/2007 at 11:43am
1) BBTC is to invest 300 cr in pref warrants of Bombay Dyeing. Post conversion of these warrants, BBTC holding in Bombay Dyeing would be around 26-27%.
 
2) Wadia / danone dispute seems headed for an amicable solution and it seems that BBTC will exercise its 1st right of refusal and buy Danone equity in Britannia, in which case its holding in Britannia would be around 51%.
Danone has been using the Tiger brand in the Far east and the brand has been very succesful there. There has been a dispute with the Wadias on this front as the brand is owned by Britannia. My feeling is the Wadias will leverage this to extract a good ( low) price from Danone for buying their stake in Britannia
 
 
jayendra
If you buy for a non-value reason, you will end up selling for a non-value reason.
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Quote jstk Replybullet Posted: 19/Sep/2007 at 4:53pm
the gap between the value of BBTC's holdings ( around Rs.1000 / share ) and its share price ( Rs.720 ) has reduced considerably on the basis of some group restructuting happening and expectations that  BBTC will emerge as a sort of holding company for the group.
 
going ahead, how the Britannia - Danone story unfolds should provide good pointers to the BBTC stock path.
 
If you buy for a non-value reason, you will end up selling for a non-value reason.
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msjala
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Quote msjala Replybullet Posted: 12/Sep/2008 at 4:29pm
BBTC rose to 1000 and now is back in sub 400 range.

Danone is too kind of done-deal. Is there still some juice remaining or is the party over?
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Quote jstk Replybullet Posted: 14/Sep/2008 at 11:04am

BBTC’s core business is going nowhere and on that front it is a bits and pieces company .

 

The Danone deal ( todays ET front page ) when it happens will result in BBTC owning majority holding in Britannia. The terms of the share purchase from Danone (when it happens) should be interesting and something anyone invested in BBTC must keep a close watch on.
If you buy for a non-value reason, you will end up selling for a non-value reason.
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Quote jstk Replybullet Posted: 06/Apr/2009 at 11:49am

Today's ET reports that BBTC through its subsidiary Leela lands is buying out Danone's stake in Britannia for USD 200 mn. Post this, Britannia will become a subsidiary of BBTC.
If you buy for a non-value reason, you will end up selling for a non-value reason.
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