IST Ltd

Posted at November 16, 2009 written by Ayush

IST Ltd is little known and highly undervalued real estate story.

The company has 28.41 acres of land at Dundehra (Udyog Vihar), Gurgaon, at a distance of 5 Kms from New Delhi International Airport.

The company had tied up with Unitech Developers & Projects Ltd (‘UDPL’) to develop an IT SEZ. The project is designed to have total leasable area of approx 3.75 million sq ft. As per the arrangement, UDPL will develop and market the property and incur all the costs while IST will get 28% of the total rentals.

The highlights of the project are:

Project Progress and plan ahead:

ist

Risks:

Current Valuations:

As the company has already leased out 4.64 Lac sq ft, IST has been already receiving close to 10 Cr as annual rental income. Co is in process of constructing another 12 Lac sq ft by mid of next year. If things go as per plans, IST would be earning a rental income of 35-40 Cr in next 1-2 yr.

At CMP of 100, the company is available at an M Cap of less than 60 Cr. Even on conservative valuations, the company has potential to earn 60-75 Cr of Net Profit every year once the project is totally leased out. So if things play out as per plans, this company has all the potential to be a multibagger in 3-5 years.

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  • Sanjeev Aggarwal
    Standalone EPS for FY2009-10 is Rs. 3.03.
    Consolidated EPS for Fy 2009-10 is Rs. 25.09 as against Rs.16.92 for Fy 2008-09.
    Good going.
  • Abbas Momin
    To,
    Ayush Mittal

    Please e-mail me the annual report of IST Ltd. to my e-mail ID : abbsmomin@yahoo.co.in
    as it will be of great help before i start accumulation the stock.

    Regards,
    Abbas Momin
  • Abbas Momin
    Please e-mail me the annual report of IST Ltd.

    Thanking You,
    Abbas Momin
  • Ayush
    The project is intact and due to policies, SEZs will be back in demand in next few months.

    Yes, you may consider entering at these levels.
  • MoE
    Hi
    Do you think it is a good time enter this at current levels.
    Rs 185-190.
  • Ayush
    With more and more investors understanding this company and buying into this stock i.e.. with better discovery, the chances of any major flip flops should decrease.

    The promoters have an incentive in keeping this company listed - they can approach REITs to raise more money at later stages.

    Lets see how the story unfolds. If it remains like it is - major gains may be seen.
  • rntkota
    With this background it is surprising that the co does not want to keep shareholders in confidence. The annual reports are never sent no question of dividend etc

    Is the association with a former minister entitles them to this irregularity or is this a licence of being a politician's
    protege

    In the transparent govt of Manmohansingh and Soni this is surprising
  • Sanjeev Aggarwal
    1. In the books of IST, the land was given to its subsidiary Gurgaon Infospace Ltd at around 300 cr. This amount is shown in the B/S of IST. Now the Gurgaon Infospace is getting the rental income and paying back the loan to the parent co.,i.e. IST.
    2. Consolidated EPS for FY08-09 is Rs.16/-.
    3. Promoters hold more than 90%. If you check the BSE website, some shareholding was offloaded by the promoters to its unrelated companies so that SEBI guidelines (restricting promoters to hold only upto 75% equity).
    4. The company is promoted by Shri Prem Chand Gupta, former Corporate Affairs Minister. Mr. Mayur Gupta,MD, is his son. You can make this out from the name of promoter companies as well.
  • Vikas
    Thanks for your response. Yes, Papa knows Uncle since 1984-85, I guess.

    I have some holdings with me as of now.I will come to Lucknow only after July.

    Will keep abreast with your blogs.

    Regards,
    Vikas
  • Dear Vikas,

    Thanks for getting in touch. Like my brother mentioned, it would be nice to meet you at our office sometime and explore things further ;-)

    Ayush
  • Hi Vikas,

    came to know about your father, Mr. V.K.Malhotra, who is our very old client of dad and has a good knowledge on stock investing.

    Most of our clients got good success by having a long term prospective and investing saved spare money on good investment ideas provides by us.

    To begin with, start with a token amount, and one can keep increasing the investing amount as the time progresses. Also, whenever you find some spare time, do come to our office and have the discussions. While at other times, a regular reading of The Economic Times and annual reports (along with the updates on blog) should be more than sufficient.

    Regards,
    Pratyush
  • Vikas Malhotra
    Hi Ayush,

    I have just registered on the website for any updates. My father has been investing with you guys for a very long time, apprx 20 years now.

    Is there anything I need to do for the registration. I have not been able to spend much time adding knowledge in this area but then I invest in equities for sure.

    Please let me know about any due diligence.

    Regards,
    Vikas Malhotra
  • KIRIT
    I WAS JUST ASKING ABOUT THE COMPANY MANU. POWER SAVING EQUIP. LIKE L.E.D.BULBS ETC. Thanks for your kind responce
  • Dear Kirit,

    If one has still not made an entry into IST, he can still do so.

    Couldn't understand the second half of your post.

    Regards,
  • KIRIT
    At what level we can accumulate IST stocks ? Another Q. Kindly give me details of small cap co. Doing buss. in power saving equip. Manufacturing & only one indust. doing this buss. Thank you
  • Ayush
    Dear Amit,

    Thanks for taking interest and doing the ground work.

    Yes, there are risks to the minority shareholders in such undervalued unknown small cap stories. But some favourable points are:
    1. Promoters already hold 75%+ shares in the listed entity.
    2. The above details are already mentioned in their annual reports and other documents.

    I believe that by creating awareness among investors, we will be able to protest any possible wrong doing by mgmt in future.

    I'll surely get in touch with you in a couple of days. In the meanwhile please give a few details about yourself, background and interest in stock markets, over my email

    Regards,
  • amit
    this site is 1 km from my home in sector 22 gurgaon.your estimation of construction is correct.spoke with the company officials at unitech.no response from IST.their chairman no. is 9810067041.no pick up.my apprehension is will shareholder value increase?how is management of IST.?no news on anything concerning this on their website.this all appears hush-hush.
  • Puneet,

    I can forward their latest annual report to your email id. Plz email me your ID.

    Don't have clarity over their corporate guarantees. The liability will arise when IST Steel will do some default. Till then there is no liability.

    Regards,
  • Puneet
    Thanks for your reply. Do you have a soft copy of their AR 08-09?

    You are right it is a corporate guarantee for a loan taken by the subsidiary (Steel & power). It seems they are putting money in this company. Is it because it is easier to siphon off money through capital intensive companies or may be it is genuine investment? In Mar 09 they they sought further approval and ratification of additional Corporate Guarantee for further investment in securities of IST Steel & Power Ltd.
  • Hi Puneet,

    Yeah, 10 Cr is the current share of IST from the current rental income of the project.

    To verify this no, you will have to look at their consolidated FY 09 nos ;-). As this project is being done through their 100% subsidiary.

    They don't have a term loan on their B/S. They have provided corporate guarantee for group co.

    No idea.

    IST Power was a subsidiary earlier.

    Regards,
    Ayush
  • Puneet
    Hi Aysuh,

    I had followed this company in past.
    Couple of questions -

    1) 10 Cr is this 28% of IST share of the rental income?

    2) Is this number in some way reflected in the Sep 09 results?

    3) They do have a term loan of 40 - 60 Crs. http://www.bseindia.com/qresann/news.asp?newsid...

    4) If company is generating so much cash why it is not doling out dividends. As per AR - "In Order to conserve the resources for the modernisation and
    upgradation of Plant of the Company. Your Directors express their
    inability to recommend payment of dividend for the year 2007-2008."

    5) What is IST Power and Steel Ltd? Is it a subsidiary of IST Ltd?

    Thanks,
    -Puneet
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