Views on Life & on Equity Investing

Wonder, Wealth & Abundance

Arbitrage Opportunity India – Amal Ltd & Atul Ltd merger

with 4 comments

I am not blind to the fact that multi-fold growth per annum is possible in micro caps. I wrote about few opportunities earlier like Millennium Beer, a 2-3 Million USD company at the time (which merged with United Breweries, a 4 Billion USD market cap company) which wiped out the possibility of multibagger gain. (http://multibaggersindia.blogspot.com/2010/11/arbitrage-opportunity-millennium-beer.html)

Similar fate has struck another company that I had an eye on, for over three years, ever since it was with BIFR. Amal Ltd, a 4 Million USD market cap company.

http://www.amal.co.in

http://www.bseindia.com/stock-share-price/amal-ltd/amal/506597/

The board has decided to merge it with the parent company (Atul Ltd), nearly 800 Million USD market cap, but there is likely to be an arbitrage opportunity closer to the time of announcement of swap ratio.

Real money is in spin offs, not reverse mergers.


Written by amitdipsite

October 20, 2015 at 9:25 am

Posted in Uncategorized

4 Responses

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  1. Hi Amit,
    What tool do you use for screening of companies. How do you select companies for analysis?
    Can you tell me by giving an example of any particular company(good or bad) that you chose for analysis.

    sahil

    October 20, 2015 at 2:42 pm

  2. Dear Sahil

    I like to go through all companies listed on a stock exchange, A to Z in whichever country I invest.

    First I read Annual report, then I checkout its website, then if there is interest call up the company, this is what I did for Amal but now it won't be a doubler let alone multibagger. Sometimes I find companies where promoters are increasing stake, sometimes when the stock is making 52 week high low, I don't use any screener.

    All the best

    Amit Arora

    October 20, 2015 at 5:39 pm

  3. Dear Sir
    the calculation is below
    The Board has approved the proposed
    merger of the Company with Atul Ltd. A
    share swap ratio of 1 equity share of face
    value of ` 10 each fully paid up of Atul
    Ltd for every 50 Equity shares of the face
    value of ` 10 each fully paid up of Amal
    Ltd has been approved at its meeting held

    Gaurang

    October 21, 2015 at 4:54 am

  4. Thanks for your reply Amit,
    It's very interesting to know that you don't use any tool for screening. Do you feel any disadvantage in using screener ? And as there are more than 5000 companies listed on BSE, do you randomly choose any company to start with annual report (other than comoanies with 52 week high/low and increasing promoter's holding)?

    Please reply if you get some free time. It will be helpful

    sahil

    October 21, 2015 at 4:06 pm


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