Agre Developers is a new company which came into existence just about 20-25 days back. It is a Pantaloon group company where there was a scheme arrangement wherein the mall management and mall development business of Pantaloon Retail was demerged and put into a separate company called Agre Developers. Shareholders of Pantaloon Retail were given one share of Rs 10 of Agre Developers for every 20 shares of face value of Rs 2."

He further added, "As things stand today, the equity of Agre Developers is about Rs 11 crore and the shareholders of Pantaloon Retail became the shareholders of Agre Developers via the scheme of arrangement. The idea behind this demerger was to enable growth of the mall development and mall management business as a separate entity."

"The current price is about Rs 48-49, equity of Rs 11 crore which means that the marketcap of the company is about Rs 50-55 crore. So you have a Pantaloon group company available at a marketcap of about Rs 50-55 crore. Now, if you see the financials, for the first six months of the current financial year, the revenues are about Rs 45 crore, the company made a net loss of about Rs 1 crore. With annualized revenues of about Rs 90 crore, the marketcap is just about Rs 55 crore, which is not even one time of revenue."

"If you take a look at the balance sheet, the equity is about Rs 11 crore and reserves are close to Rs 250 crore, which means a book value of about Rs 240. As against the book value of Rs 240, you have the stock available at less than Rs 50, which is just about 20% of the book value."

"If you see it in totality, they have a debt of about Rs 85 crore on the balance sheet, which means an enterprise value of about Rs 130-140 crore. As against the enterprise value of Rs 140 crore, the company has got a gross block of about Rs 215 crore and also capital work in progress of Rs 40 crore. Out of this gross block of Rs 215 crore, about Rs 80 crore is hard asset in the form of land and building. This is something which gives a lot of comfort as far as the downside in the stock is concerned."

"They also currently manage about six malls while they have about 24 malls, which will be operational in FY12. In the next one-two years, you can see a massive scalability of operations. Now, this is probably the only listed company involved in mall management business, which is a niche business. Being the only listed company and not having any peer group comparison, the valuation, I believe, is just a perception."

"From these levels, the downside looks extremely restricted but given the scalability and the management behind it, this could indeed turn to be a real multibagger if held on for maybe three-five years. If you see the shareholding pattern of the company, promoters hold close to 44%. There is a huge amount of institutional holding in the company - institutions hold close to 37% of the company. A lot of these institutional investors may not be interested in a Rs 50-55 crore marketcap company."

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Mall Management