TATA Investment Corporation
Hi Friends,
Consider investing in Tata Investment Corporation at current levels of 460 levels.
This is like holding a Mutual fund, What this company does is it invests in Group companies of Tata across all verticals Big and Small. Current NAV as per Sep'09 was 700plus levels & with significant rally in Tata Steel, TCS, CMC, Tata Elxsi... NAV of this holding company should be roughly at 850 to 900 levels.
It's good dividend pay company.
My Target price for this company is Rs850 within 1year timeframe..
If you are short term investor then don't invest as this stock is not volatile.
If you remember Asian Hotels from my earlier blog story is somewhat similar to that.
Market looks good supported by GDP and IIP numbers. This script further gain momemtum when Ratan tata hunts for his successor nxt year....
Holding & Investment companies usually recover or gain momentum when Economy is upbeat. Their source of revenue include dividends; equity holdings in subsidiaries and associate firms; non-strategic equity holdings; dividend on preference shares; interest on bonds; and dividends from mutual funds.
The market price of a holding and investment company is primarily influenced by the net asset value (NAV) of equity holdings in its balance sheet. Calculated is similar to that of Mutual Fund NAV.
Tata Investment Corp had NAV of 515 per share as on Mar’09 & current NAV for Sep’09 stands at 720.
Key difference between holding company & Investment company is that, holding companies have greater control over the board of companies that they have invested. Holding companies have the powers to appoint directors on the board and decide the future course of action of companies, if they hold a controlling stake. Investment companies usually lack say on corporate affairs of firms which they have Invested.
Tata Investment Corp has invested in following companies. But holds controlling stake in some of Inhouse (Tata Group).
Tata Tea, Titan Industries, Tata Chemicals, Tata Consultancy Services, Tata Elxsi, Tata Steel, Tata Motors, Tata Tea, CMC, Trent…..
State Bank of India, Syndicate Bank, Bank of Baroda, ACC, Mangalam Cements, , National Thermal Power Corporation, Bharat Electronics, Emco, Bharat Heavy Electricals, Punj Lloyd, Pidilite Industries, , GIC Housing Finance, LIC Housing Finance, Indian Hotels Co, Infosys Technologies , Hindalco Industries, Amara Raja Batteries, Cairn India, Reliance Industries, Century Textiles & Industries, Container Corporation of India, Great Offshore ….
Calculation of NAV Value
The NAV of a holding and investment company is calculated as the total market value of listed equity shares divided by the number of outstanding shares.
Example: Monk has invested in two listed companies. The combined market value of these two companies is Rs 1000. If the outstanding shares are 2 qty, NAV of the holding and investment company will be Rs 500 per share.
Drawbacks:
Company has issued 6888343 Zero coupon bonds for Rs650 each convertible to 2 equity shares which will dilute the NAV to extent of Rs610.. as Zero coupon bonds get converted to 13776686 qty of Equity shares.
Limited upside for capital gains in Listed companies in year 2010(Upside of 30% max).
Advantages:
My Assumption is that before Ratan Tata retires he would like to unlock value of some of unlisted companies within the Tata group to reflect his achievements over his tenure of managing the empire. Markets looks stable for launch of IPO's in year 2010 & that set's unlocking value to Tata Investment Corp...
Who should invest:
People who want steady income & don't have sufficient time to monitor stocks on daily/qtryly basis.
What ratio's to be looked at when investing in this company
A) Dividend Payout Ratio & Dividend yield as it's similar to Mutual Fund.
B) Operating Mgn will depict a wrong picture, as it's Finance company.
C) Book Value is another aspect to look into
D) Long term return on Investments also helps investor to decide return on there investment.
Year Dividend (%)
200903 150
200803 150
200703 150
200603 120
200503 120
200403 101
200303 60
200203 60
200103 60
200003 80.
I have just attached for last 10years however company has been paying dividend in 1990's too.
Year Ratio Ex Bonus Date
2005 0.043055556 22-Aug-05
1994 0.043055556 26-Aug-94
Year Ratio Ex Right Date
2008 0.045138889 10-Sep-08
2001 0.045138889 3-Dec-01
1991 0.045138889 23-Dec-91
I have used Dividend discount model for arriving at Target price..
I have recommended this script to my friends, Family & wellwishers at currentlevels..
Consider investing in Tata Investment Corporation at current levels of 460 levels.
This is like holding a Mutual fund, What this company does is it invests in Group companies of Tata across all verticals Big and Small. Current NAV as per Sep'09 was 700plus levels & with significant rally in Tata Steel, TCS, CMC, Tata Elxsi... NAV of this holding company should be roughly at 850 to 900 levels.
It's good dividend pay company.
My Target price for this company is Rs850 within 1year timeframe..
If you are short term investor then don't invest as this stock is not volatile.
If you remember Asian Hotels from my earlier blog story is somewhat similar to that.
Market looks good supported by GDP and IIP numbers. This script further gain momemtum when Ratan tata hunts for his successor nxt year....
Holding & Investment companies usually recover or gain momentum when Economy is upbeat. Their source of revenue include dividends; equity holdings in subsidiaries and associate firms; non-strategic equity holdings; dividend on preference shares; interest on bonds; and dividends from mutual funds.
The market price of a holding and investment company is primarily influenced by the net asset value (NAV) of equity holdings in its balance sheet. Calculated is similar to that of Mutual Fund NAV.
Tata Investment Corp had NAV of 515 per share as on Mar’09 & current NAV for Sep’09 stands at 720.
Key difference between holding company & Investment company is that, holding companies have greater control over the board of companies that they have invested. Holding companies have the powers to appoint directors on the board and decide the future course of action of companies, if they hold a controlling stake. Investment companies usually lack say on corporate affairs of firms which they have Invested.
Tata Investment Corp has invested in following companies. But holds controlling stake in some of Inhouse (Tata Group).
Tata Tea, Titan Industries, Tata Chemicals, Tata Consultancy Services, Tata Elxsi, Tata Steel, Tata Motors, Tata Tea, CMC, Trent…..
State Bank of India, Syndicate Bank, Bank of Baroda, ACC, Mangalam Cements, , National Thermal Power Corporation, Bharat Electronics, Emco, Bharat Heavy Electricals, Punj Lloyd, Pidilite Industries, , GIC Housing Finance, LIC Housing Finance, Indian Hotels Co, Infosys Technologies , Hindalco Industries, Amara Raja Batteries, Cairn India, Reliance Industries, Century Textiles & Industries, Container Corporation of India, Great Offshore ….
Calculation of NAV Value
The NAV of a holding and investment company is calculated as the total market value of listed equity shares divided by the number of outstanding shares.
Example: Monk has invested in two listed companies. The combined market value of these two companies is Rs 1000. If the outstanding shares are 2 qty, NAV of the holding and investment company will be Rs 500 per share.
Drawbacks:
Company has issued 6888343 Zero coupon bonds for Rs650 each convertible to 2 equity shares which will dilute the NAV to extent of Rs610.. as Zero coupon bonds get converted to 13776686 qty of Equity shares.
Limited upside for capital gains in Listed companies in year 2010(Upside of 30% max).
Advantages:
My Assumption is that before Ratan Tata retires he would like to unlock value of some of unlisted companies within the Tata group to reflect his achievements over his tenure of managing the empire. Markets looks stable for launch of IPO's in year 2010 & that set's unlocking value to Tata Investment Corp...
Who should invest:
People who want steady income & don't have sufficient time to monitor stocks on daily/qtryly basis.
What ratio's to be looked at when investing in this company
A) Dividend Payout Ratio & Dividend yield as it's similar to Mutual Fund.
B) Operating Mgn will depict a wrong picture, as it's Finance company.
C) Book Value is another aspect to look into
D) Long term return on Investments also helps investor to decide return on there investment.
Year Dividend (%)
200903 150
200803 150
200703 150
200603 120
200503 120
200403 101
200303 60
200203 60
200103 60
200003 80.
I have just attached for last 10years however company has been paying dividend in 1990's too.
Year Ratio Ex Bonus Date
2005 0.043055556 22-Aug-05
1994 0.043055556 26-Aug-94
Year Ratio Ex Right Date
2008 0.045138889 10-Sep-08
2001 0.045138889 3-Dec-01
1991 0.045138889 23-Dec-91
I have used Dividend discount model for arriving at Target price..
I have recommended this script to my friends, Family & wellwishers at currentlevels..
i m having a track of it....luks gud...will let u knw at wad price i bought...keep posting such tips...they are very helpful!!
ReplyDeleteHi
ReplyDeleteu have a good knack in proposing scrips that are not written much abt, recently i read ICSA, now this one. thanks and keep up the good show. you are good in entry points, so keep us updated with exit points too !!
regularly read your blog. How will search for Ratan tatas successor affect TATA Investment Corp positivily? Infact, the change may just lead to a downside, hopefully temporary.
ReplyDeletesame doubt came to my mind... it will all depend on whom he selects as successor. An aggressive candidate with good credentials to his name may increase the speculation of the stock. However, what i wonder is how come this stock is never discussed or not even mentioned about by anyone of the so called "experts".
ReplyDeletedear prashant, I had posted a few queries about some of the stocks under comment to your posts. However, I have not yet received a reply. Probably because you were busy last month or so with your exams. Nevertheless, keep up the good show.
One more question... how can one calculate NAV of a company. It would be a good learning to understand how actual NAV of a particular MF is calculated so as to assess our own investments.
ReplyDeleteHi as far has successor goes he will just run the show but control will be with Tata trust & Tata sons. But true value unlocking will be of unlisted firms which are valued mostly via conservative approach of Book value method. Berkshire Hathway is most expensive stock is world & is a Holding/Investment company. I shall talk abut NAV calculation in depth in coming days..
ReplyDeletehi perknlife,
ReplyDeleteTIC is good company and i have been tracking it for some time.
I am unable to find the list of companies,mutual funds,debt funds it has invested in.even on the website there are only results but no mention of the holdings.
I see that you have mentioned some companies which it has invested in.Could you please let me know from where you got this information.How can i get the entire list.
Thanks
All the above is ok but the fact of the case that history tells us is that all investment/holding compnies normally quote at a 40-60 percent discount to NAV. This is the case with Tata Investment and there is no reason to believe that it will be different. It will broadly perform like a index tracker and rise and fall in line with the markets over a longer period. In the short run it can rise or fall like any stock does.
ReplyDeleteYes very true with holding companies in past wuld have underperfomed & remained undervalued.
ReplyDeleteMy reason for that was lack of visibility from Market players(Brokers). If one observes Nifty & Sensex they to started behaving differently with Introduction of F&O. There is strong reasoning why SEBI forced BSE to come with Mid month expiry & not follow same as Nifty(last thrusday of month). For details of Holdings we need to get Balance sheet hardcopy. Which I have as I invested in this script long ago.
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