Maharaja Shree Umaid Milla- get the business free with surplus cash of 109 Rs

7th april 2011

PLz share ur comments n suggestions

Maharaja Shree Umaid Mills (MSUM), a LN Bangur group enterprise, was incorporated on August 12, 1939.
It is a spinning-cum-composite textile company with over sixty five years standing in the chosen business of yarns and fabrics
MKt cap	Rs cr	359
CMP	Rs	416.6
Deal with IP Paper
No of shares in AP Paper	cr	0.86
Price per share	Rs	674.94
Total Realisation/ Cash which will come	Rs cr	581.07
Total Cash in company	Rs cr	581.1
Debt	Rs cr	128.0
Total Cash Net of Debt		453.1
Total no of shares of the company	Cr	0.86
Cash Value per share		526
CMP at a discount to Net Cash		32%	109

Rough cut Business Valuation			Total Discount to Fair Value	Per share incremental value
Price/Book of 0.5	Rs per share	53.8	38%	163
Earning Power at a multiple of 5 (5y avg EPS of 11.6)	Rs per share	58.4	39%	168

Nutshell,
You are basically getting the business for free along with surplus cash of Rs 109 per share

However, The utilisation of cash like Piramal case will be a key trigger...

Before ap paper announcement it was a strategic stake for Bangur's n mkt doesn't value holding co's whose inv's are strategic in nature as there is no clarity when they will be realised.
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for excel attachments: Link