CHI Investments – Update

Posted at September 7, 2009 written by Ayush

ETIG has recommended deep discounted holding companies for long term investment in it’s article: http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&BaseHref=ETM/2009/09/07&PageLabel=19&EntityId=Ar01900&ViewMode=HTML&GZ=T

CHI Investments has topped the list and is still available at approx 84% discount to it’s NAV J. We had recommended CHI Investments at just Rs 25 in our blog post: http://dalaal-street.com/chi-investments-interestingly-mis-priced/

With better discovery by investors, this mispricing should reduce going forward. The gap can reduce to 50% of NAV like in other holding cos. If so, the stock has potential to reach Rs 125-150+ in long term. Another positive factor in this stock is – that it is listed both on NSE & BSE and has decent liquidity unlike other small holding cos (which are illiquid). Also, CHI Investments has investments in cos which are related to power sector and have high growth plans.

With increasing media coverage and shareholders, the risk of unjust merger is also getting reduced.

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  • PRITHVI RAJ MEHTA
    I HAD BOUGHT 3000 SHARES AFTER GETTING SOME SHARES IN LIEU OF CEAT INDIA. SUBSEQUENTLY WITH THE DETERIORATING CONDITIONS ALMOST ALL MY SHARES WERE SOLD OF BY MARCH 2009. I MUST HAVE INCURRED A LOSS OF MORE THAN RS. 1 LAC. I HAVE AGAIN INVESTED AROUND RS.40000/- IN THE HOPE OF RECOVERING MY EARLIER LOSS. I THEREFORE CONDEMN THE UNJUST MERGER RATIO.
  • Gautham
    i fully agree that the merger ratios are unjust and I’m protesting the same. I am new investor in CHI , i intend to file complaint. unless one file complain nobody listens. …will urge other investors in CHI to do the same
  • Dear Amit,

    In last few months many of the stocks have run up while due to the merger announcement CHI is still trading at existing levels hence creating the discounting more attractive.

    I think one may keep the stock and look forward to buying more on decline, if any.

    Regards,
  • Amit Jindal
    I think the merger is going ahead and Feb 4, 2010 has been fixed as Record date for the merger. The stock price has also been rising since last week. What are your views on the valuations now and do you feel its worth keeping the stock now?
  • deval
    i fully agree that the merger ratios are unjust and I’m protesting the same. I am new investor in CHI , i intend to file complaint. unless one file complain nobody listens. …will urge other investors in CHI to do the same
  • KANWAL KISHORE
    i fully agree that the merger ratios are unjust and I’m protesting the same. I am new investor in CHI , i intend to file complaint. unless one file complain nobody listens. …will urge other investors in CHI to do the same.
  • Proposed merger impact has been given here: http://dalaal-street.com/chi-merger/
  • Ayush
    Kumar,

    The author has compiled the list of current value of investments vs MCap of holding cos. Summit Sec has far lower value as compared to CHI Investments.

    The merger ratios are unjust and I'm protesting the same. I have already filed complaints and I'm in correspondence with the company...will urge other investors in CHI to do the same.
  • ankit
    I completely agree with kumar.
  • kumar
    Ayush,

    Author has not studied merger ratios. May be you should send your analysis to the author. He should replace CHI Investments by Summit Securities.
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