We are happy that Summit Securities is getting listed today after a lot of persuasion.
Summit Securities is part of the RPG group and is a finance company holding shares of group cos of RPG group. The company got created on the merger of five similar finance companies – CHI Investments, Summit Securities, Octav Investments, Brabourne & RPG Itochu (unlisted).
We have been tracking Summit Securities as we had recommended CHI Investments, which got merged on 2 February 2010.
So what is the value in the company:
Post re-structuring the equity of the company is 10.90 Crore.
Some of the major investments held by the company as per consolidated accounts are:
As per the FY 2010 annual report of the company, here is the extract of their investment schedule (consolidated accounts)
As per above, the Market Value of Quoted Investments was 865 Cr as on 31st March 2010. Hence the market value of investments per share would be close to 800/share.
So what could be the listing price?
It would be important to calculate the cost to the existing shareholders of the company based on the stock price as on record date of the arrangement. The stock prices of the 4 listed cos on the record date of arrangement was:
The record date was 2nd Feb, 2010. The Sensex at that time was 16170.
Most of the other holding cos trade at a discount of atleast 50-60% of the Market Value of the investments they hold. Existing shareholders may take exit if the listing is at say 350+
For investors looking to buy into this stock, I think they should look for a deep discount to Market Value of investments otherwise they can ignore.