I hope all the semb shareholders are updated with the warrant conversion rates and the time line. It is 1 rupee for the voting warrant and .8 rupees for the non voting warrant. based on simple mathematics we will do a simple valuation.
closing price 7/9/11 warrant conversion final-price(before the ex-TERP)
semb.n0000 - 2.6 = 2.6
semb.w0015 - 1.2 + 1 = 2.2
semb.x0000 - .9 = .9
semb.w0016 - .5 + .8 = 1.3
some people try to calculate the return by dividing 2.6/2.2. Its not practical.warrant will follow the voting and hence we need to identify the value in the warrant. here from the return wise the most attractive seems to be semb.x. but in technical point of view since we have lot of shares in the market and 10 cents trading mentality of semb.x holders we cant expect huge returns from this share though the price is attractive. always a seller will come .even when the voting price when to 3.6 it the non voting price didn't cross 1.1. so the too much of liquid nature has eaten the share. so the only attractive share remaining is SEMB.W0015....please do mark my wordings. semb.x is attractive in terms of valuation. but not in terms of technical movement. but semb.w0015 is both attractive from both valuation and technical movement aspect as well. yesterday it went to 1.8 rupees within seconds when the money was pumped in to the voting share. I am not aware of whether a deal is going on or not. if something fishy goes on and just imagine in case the voting goes back to 4(it already went to 3.6 yesterday) the voting warrant will be 3 rupees worth. in that example when it is a 54%(4/2.6) gain for voting , if the warrant 15 holders wait until December 12th its 250%(3/1.2) massive gain for them. this is just an example as well. the objective of the example was to carry out a simple mathematical valuation to show the exponential returns given by semb.w0015 for a natural increase in voting price. same happens the vice verca. if semb voting prices come back to 1.5/2 rupees the loss is very high which is a highly unlikely to happen due to people like the famous Dr.Ts. I did a small analysis on dr's shareholding. I hope you all know that when an single investor / or an entity acquires 30% of the said company it is required to go for a mandatory offer at the highest price which they bought the shares. I also found something interesting when i was analyzing this matter and his shareholding percentage. he has 241,572,424 voting shares out of the Issued share Capital of 826,486,514 which is 29.23%. Oh my god. to my astonishment its like dr.senthil owns semb. according to my calculation if he obtains another 6,373,530 shares he will required to give the mandatory offer. still 6.3 million share sis a big deal for most of us.
but do you think its true. my friends i remember the lesson of learning the EPS and the diluted EPS.we should calculate the future shareholdings to tell exactly what is the maximum amount of shares dr.senthil can buy more without facing to the trouble of giving an mandatory offer.so lets calculate . i mentioned about the voting shareholding. lets look at the voting warrants composition . we do not even look about the non voting share and its warrant due to the fact that it doesn't have any controlling power.
dr.senthil had only 2,457,224 voting warrants by end of June 2011.but according to the latest announcement http://www.cse.lk/cmt/uploadAnnounceFiles/2331314355660_445.pdf
he has bought another 1,808,500 shares (73.5% of what he already had- 1808/2457*100) and has a total shareholding worth of 4,265,724 voting warrants out of the total Issued share Capital of 381,455,314. hmmm so lets calculate the voting warrants percentage which dr.senthil holds. its a meager 1.19%(4265/381455*100). so based on the assumption that dr will not sell any voting shares and will convert the warrants he holds shall we calculate his shareholding by December 13th.
total voting shares,warrants holding= 241,572,424+4,265,724=245,838,148 shares
total issued voting shares/warrants = 826,486,514+381,455,314=1,207,941,828shares
so the percentage = 20.35%(245/1207*100)
so my dear friends he is having only 20.35% of the company shares at present. not 29.23%..so keep that in mind and if he wants more.the only way is to buy from the warrant 15 from the market . so earlier we calculated that only 6.3 million voting shares can be calculated by him for the 30% rule. lets calculate the number of voting warrants he can collect max if he had money and interest on the company.after all having 29.23% and buying majority of the warrant 15 at 1.1 he will be happy to enter at 1.2/1.3 or even up to 1.7(voting price 2.7/2.6) .
total number of voting after conversion= 1,207,941,828shares
30% of it = 362,382,548 shares
currently he owns 245,838,148 shares and the maximum he can get would be 116544400 shares(by deducting). which is 116.5 million voting warrants. Oh my god. why didn't i realize this. How come i became this ignorant.its 116.5 million warrants not 6.3 million ...so this is to the people who say that dr.senthil cant buy more of semb shares due to the mandatory offer..Hope all the doubts are over.I don't know whether dr will enter or exit.....but if he has the money people remember he can enter without facing any regulations(We all know that he has money). Now from his point of view if i were him i would sell few of my voting shareholding such that with the money i buy warrant 15 until achieving a 29.99% shareholding leaving the additional money for warrant conversion.if he sells voting .it'll be a massive profit for him. and if he buys warrant 15 still it''ll be a massive profit for him.....and my friend 30% shareholding..don't even think about it.whoever wanting the controlling stake now its a battle between who gets the biggest amount of voting warrants. so all i wanted to tell is the IMPORTANCE OF SEMB.WARRANT 15 for the controlling parties. we don't know the future. tomorrow the warrant might even fall to 1 rupee. but the value remains the same.and plus remember the voting warrant has a Public Holding of 99.36%.so will stop here giving you all a time to ponder about..have done some more analysis as well. will contribute based on interest. as you may have notice i don't generally post a lot. quality matters over the quantity. tc. Happy trading