Update on open offer in VIMAL OILS

Good question on VIMAL OIL AND FOOD....No, this just shows that the promoter is trying to increase the stake in the company, which is a good sign...but obviously they will try to get it at the lowest possible price and this is an exercise they need to do to meet regulations. Actually, what happened is: promoters paid Rs 30 crores approx and got 0.6 crores preferential stock, around Rs 50.4 each.  The 0.6 crores preferential stock is above the 15% limit imposed as per a ruling. But there is a catch to the ruling, this limit is not applicable for preferential stock, purchased or issued at a price upto and including a open offer price. And hence to meet the regulation, promoters have put up an open offer at Rs 51. Sort of eye wash you may say, to meet the regulation. But the issue of preference stock and further investment by promoters in the company's future, is a very good sign for investors. No promoter will put in further money if they believe that business will not do well in future.

On Thu, Sep 23, 2010 at 6:57 PM, Diwakaraiah N J <sharesandmore@gmail.com> wrote:

There has been some news about promoter picking up stake at Rs. 51/-, which will trigger open offer at this rate in the near future.

Considering this, is there any change in your suggestion on this stock ?

 

Please reply. Thanks

 

---------- Forwarded message ----------
From: POWERFULPICKS POWERFULPICKS <powerfulpicks@gmail.com>

Date: Tue, Sep 7, 2010 at 3:35 PM
Subject: [pp] VIMAL OILS (one more short term target reached)
To: powerfulpicks@yahoogroups.co.in

Just as I said (refer below email), Vimal Oils reached its short term target of 72 in just 11 days. it touched 71.5 today. Those who had purchased can hold on for 2nd and longer term target of 86.

 

Hope you are enjoying my calls and making money 

 

On Fri, Aug 27, 2010 at 6:34 AM, powerfulpicks <powerfulpicks@gmail.com> wrote:

powerfulpicks short term and long term buy call: Vimal Oils and Foods - Buy at 63.5 for a short term target of 72 and a long term target of 86 (+35%).

 

Going by market cap, this company (VIMAL group flagship) is one of the largest listed companies in edible oil sector, but it is a bit under-valued. Wide range of products include soyabean oil, mustard oil, cottonseed oil, groundnut oil, Sunflower oil and Corn oil. Wide network of 1500 distributors and 50 depots for storage. Presence in 21 states, over 4.5 lacs retail outlets endorse its products. Company regularly invests in ad campaigns in different forms and sells products under 2 brand names 'VIMAL' and 'LIPI' .

 

Interestingly, it has recently entered into Table Margarine and calls its products 'VImal Lite'. Everyone knows what happened to Zydus Wellness, after I had recommended it. The stock just flew. Reason being that companies in the edible oil and food space are going through a re-rating at present. I had also recently recomended JVL Agro (in this same segment) recently and the stock is doing very well.

 

Vimal did well last year, but is doing better this year. Recently, the news is that the company issued 70 lac shares on pref.basis to the promoters. This shows confidence of the promoters in the company and this fund is planned to be used to launch more value-added and unique products and expand the distribution and marketing network. The company also just announced a dividend of 1.5 Rs per share. Which looks quite good to me.

 

All together, this is a RESPONSIBLE company, well managed and in good hands. At the price of 62-63, investment has lesser risk than many other over-priced counters at present. Can be bought and held for 1 year.

 

DISCLAIMER: I do not own this stock, but I may pick this up today morning after I recommended to you.

Posted By powerfulpicks to powerfulpicks at 8/27/2010 06:34:00 AM