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Delisting Candidates- A Regulatory opportunity !!!!!

Strictly Private & Confidential

Buy Back Ideas

Compulsory regulation to have public holding of at-least 25% by June 2013 which implies an investment horizon of 18 months. This will spark buy back of shares by MNC companies to get their domestic counterpart delisted Screener to find the new ATLAS COPCO (stock appreciated from less than 1000 to 2700 in 12 mths) Depreciation of INR by close to 15% over last 6-7 months have made it cheaper for these MNCs to buy back their shares

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Understanding Regulation
Ministry Of Finance on June 4, 2010 made it mandatory for every listed company to have a minimum level of public shareholding of 25 % instead of the then 10%. To remain listed the companies were given 3 years to comply to the rule. MNCs listed on Indian bourses now have one and half year to comply from the current date. Conclusion is either the MNC promoters have to offload their shareholding (which they are reluctant) or increase their shareholding to qualify for Voluntary delisting. MNC were forced to get themselves listed in 1970 and will take this opportunity to get delisted delisted.

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Companies with Promoters stake >75%

Nag. Agrichem g g Joonktolle Tea Khoday India Wheels India Ind Bank Housing Sundaram Clayton HMT Fortis Health. Best Eastern Hot U P Hotels Mahindra Holiday Jaypee Infratec. Mundra Port Gammon Infra. Vintron Info. DPSC TRIL Essar Ports E P t Piccadily Sugar Batliboi Brady & Morris BGR Energy Sys. Muthoot Finance Jolly Board Shalimar Wires Chettinad Cement

Warren Tea Aunde India Indag Rubber Rama Phosphates Godrej Inds. Marathon Nextgen DLF Omaxe Orient Press Berger Paints Hubtown Modern India Suashish Diamond Wipro English Ind.Clay Vippy Industries D B Corp Sun S TV N t Network k Plethico Pharma. Pentokey Organy Surat Textile Madras Fert. Aroni Commercial Aeonian Invest. India Cem. Cap. L&T Fin.Holdings

Falcon Tyres y Godrej Propert. Bajaj Corp JSW Energy JP Power Ven. Gokaldas Exports Puravankar.Proj. Cimmco Steelco Gujarat IVRCL Assets Sah Petroleums Essar Shipping Monnet Sugar Morgan Ventures Tata Tele. Mah. Oberoi Realty Adani Enterp. Eros Intl.Media E I tl M di Hindustan Media Swan Energy Reliance Power Muthoot Cap.Serv Vaarad Vent. Prestige Estates Windsor Machines Alfa Laval (I) Kennametal India Timken India Fairfield Atlas Hella India Wendt India GMM Pfaudler Ineos ABS (India BOC India Elantas Beck Nitta Gelatin Honeywell Auto Sharp India Oracle Fin.Serv. Gillette India Astrazeneca Phar Saint-Gob. Sekur Thomas Cook (I) Novartis India Blue Dart Exp. Fres.Kabi Onco. 3M India Singer India Neyveli Lignite St Bk of Mysore MMTC STC Hind.Copper Andrew Yule & Co FACT Natl.Fertilizer RCF

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Our selection process

From the universe, we have looked at companies with foreign promoters and screened them on following parameters Parents view on India opportunity Listing of parent companies globally g p p g y Parents financial status vs. amount needed to get delisted On fundamental parameters, how co is trading vs. historical averages parameters vs (Margin of Safety) Companies who have in the past given offer to get themselves delisted

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Key Company Statistics

Company CMP (Rs.) Avg. Price calculated on 26 weeks high & Low (Rs.) Avg. Price calculated on 2 weeks high & Low (Rs.) Cash/Share on Indian Sub. Books (Rs.) Cash per share/ CMP (%) BV (Rs.) P/E (x) P/BV (x) Promoter's Shareholding (%) Cost of buyback as % of the Cash with Parent

Honeywell Auto. Elantas Beck* Timken Fresenius Kabi Onco. Ineos ABS Blue Dart* BOC (I)* Fairfield Atlas* Kennametal (I)* Astrazeneca* A t * Alfa Laval*
Source: Bloomberg.

1867 1465 187 109 598 1613 304 79 812 1552 2760

2315 1761 209 108 592 1578 290 72 746 1284 1609

1771 1482 176 98 594 1588 284 70 705 1363 1865

240 19 0.5 2 60 15 7 2 9 34 29

13% 1% 0% 2% 10% 1% 2% 2% 1% 2% 1%

603 208 60 17 190 230 131 20 135 72 233

14 36 21 94 15 40 25 10 16 49 38

3 7 3 6 3 7 2 3 5 22 10

81% 89% 80% 90% 83% 81% 89% 84% 88% 90% 89%

3% NA 6% 3% NA 3% 7% 0.8% 19% 0.6% 0 6% 25%

*The company has already made an open offer attempt for delisting in p p y y p p g past. # BV, P/E, P/BV , cash/share, promoters holdings and cash with parent are based on CY10 Ann. Rpt. for all the companies mentioned above.

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Honeywell Automation
Honeywell Automation- market leader in Electronic Instrumentation and Process control
6000

CMP: Rs

1867

equipment industry- is exhibiting sales growth of ~20% p.a. over last 4 yrs. Strong Fortune 500 parentage- Honeywell International Inc. listed on NYSE- hence probability of delisting Indian Op.s is high. Cash rich parent- Honeywell International Inc.- with about $ 2.65 bn (Rs 13714 cr) cash; the cost of acquisition of the minority shares as per the formula comes to be around Rs 389 cr (just 3% of the cash held by parent). Acceptance of higher buyback price cannot be ruled out post the reverse book building exercise. exercise Fundamentally, the stock is quoting at high discount to the 5 yr avg. PE, thus indicating that the stock is a safe investment bet with decent margin of safety.
Financial Summary Fi i lS
Year End CY06 CY07 CY08 CY09 CY10
Source: Bloomberg.

5000 4000 3000 2000 1000 0

Ja nMa 0 6 ySe 06 pJ a 06 nMa 0 7 ySe 07 pJ a 07 nMa 0 8 ySe 08 p0 Ja 8 nMa 0 9 ySe 09 p0 Ja 9 nMa 1 0 ySe 10 p1 Ja 0 nMa 1 1 ySe 11 p1 Ja 1 n -1 2

Close -Unit Curr

10.0 X

15.0 X

20.0 X

25.0 X

30.0 X

Source: Capitaline.

Amt required. for Buyback (Rs cr) Cash on books of Parent (Rs cr) Cost of buyback as % of the Cash with Parent

389 13714 3%

Sales 644 868 1002 1175 1355

EBITDA 89 114 118 196 146

PAT 58 65 82 133 105

EPS 66 74 93 150 119

BV 204 265 358 496 603

P/E 39 12 23 16 14

P/BV 13 3 6 5 3

EV/EBITDA 17 19 6 9 13

ROCE (%) 37 31 30 35 22

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Elantas Beck
Elantas Beck- the subsidiary of Elanta Gmbh and operating in Electrical Insulation field. The parent Elantas Gmbh- the member of Altana Gr. is unlisted along with all its sister concerns and parent. Fundamentally, the stock is trading at stretched valuation, The company has made a delisting attempt in Jan 2010 at an floor price of Rs 219.10/share, which failed to enthuse the minority shareholders. Further the board had approved an enhanced price of 330 as the offer price, which would have been the minimum price paid to the shareholders, The open offer failed as the requisite shares (50% of the Non promoter shareholding) were not tendered. Moreover, the discovered price through reverse book building was at Rs 600.
2500 2000 1500 1000 500 0

CMP: Rs

1,465

Financial Summary Fi i lS
Year End CY06 CY07 CY08 CY09 CY10
Source: Bloomberg

Sales 144 170 181 195 251

EBITDA 26 29 28 45 48

PAT 17 20 20 32 32

EPS 21 26 25 40 41

BV 98 117 138 172 208

P/E 19 7 19 21 36

P/BV 4 1 3 5 7

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Ja n M a -0 6 y -0 Se 6 p J a -0 6 n M a -0 7 y Se -07 p J a -0 7 n M a -0 8 y -0 Se 8 pJ a 08 n M a -0 9 y -0 Se 9 pJ a 09 n M a -1 0 y Se -10 pJ a 10 n M a -1 1 y -1 Se 1 pJ a 11 n -1 2

Close -Unit Curr

Source: Capitaline.

10.0 X

15.0 X

20.0 X

25.0 X

30.0 X

EV/EBITDA 11 10 3 7 13

ROCE (%) 24 24 19 26 22

Timken (I)
Timken India- 80% subsidiary of Timken Inc., is a niche player in bearing segment with strong support from the parent. It manufactures tapered roller bearings for MCV/HCV/Tractors/Railways etc and supplies to OEMs plus meets the global requirements of Timken group. The cash outgo on account of the buyback offer at the floor price calculated will be just around 6% of the cash chest available with the parent. Hence a higher price above the floor price cannot be ruled out. Fundamentally, the stock is trading at slight discount to average P/E of last 5 years.
300 250 200 150 100 50 0

CMP: Rs

187

Source: Capitaline.

Amt required for Buyback (Rs cr) Cash on books of Parent (Rs cr) Cost of buyback as % of the Cash with Parent

Financial Summary Fi i lS
Year End CY06 CY07 CY08 CY09 CY10
Source: Bloomberg

Sales 319 324 387 297 443

EBITDA 64 61 72 43 71

PAT 38 37 53 33 51

EPS 6 6 8 5 8

BV 32 38 47 52 60

P/E 27 10 17 38 21

P/BV 5 2 3 4 3

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Ja n M a -0 6 y -0 Se 6 p J a -0 6 n M a -0 7 y Se -07 p J a -0 7 n M a -0 8 y -0 Se 8 pJ a 08 n M a -0 9 y Se -09 pJ a 09 n M a -1 0 y Se -10 pJ a 10 n M a -1 1 y -1 Se 1 pJ a 11 n -1 2

Close -Unit Curr 10.0 X 15.0 X 20.0 X 25.0 X 30.0 X

266 4538 6%

EV/EBITDA 15 4 20 16

ROCE (%) 20 17 20 10 14

Fresenius Kabi Oncology

Fresenius Kabi Onco. (erstwhile Dabur Pharma) is one of the leading companies for cancer research and anti-cancer products. The Parent Fresenius with cash chest of Euro 769 mn (Rs 5173 cr) is listed on German Stock exchanges, hence chances of delisting are high. The cash outgo on account of the buyback offer at the floor price calculated will be just around 3% of the cash chest available with the parent. Hence a higher price above the floor price cannot be ruled out. Fundamentally, the stock is richly valued.
350 300 250 200 150 100 50 0

CMP: Rs

109

Financial Summary Fi i lS
Year End CY06 CY07 CY08 CY09 CY10
Source: Bloomberg

Sales 336 269 307 478 516

EBITDA 34 3 (48) 34 102

PAT 20 99 (112) (33) 16

EPS 1 6 (7) (2) 1

BV 21 28 18 16 17

P/E 66 6 (19) (59) 94

P/BV 4 1 8 8 6

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Ap rAu 06 g -0 De 6 c A p -0 6 r-0 Au 7 gD e 07 c A p -0 7 r-0 Au 8 gD e 08 cAp 08 rAu 09 gD e 09 cAp 09 r-1 Au 0 gD e 10 cAp 10 r-1 Au 1 gD e 11 cAp 11 r-1 2

Close -Unit Curr

10.0 X

15.0 X

20.0 X

25.0 X

30.0 X

Source: Capitaline.

Amt required for Buyback (Rs cr) Cash on books of Parent (Rs cr) Cost of buyback as % of the Cash with Parent

172 5173 3%

EV/EBITDA 40 415 73 20

ROCE (%) 6 26 (31) (13) 6

10

Ineos ABS
BASF and Ineos has transferred their styrenics business in a 50:50 JV named Styrolution. The new promoters of Ineos ABS had announced an open offer at Rs 606.81 in Oct 2011 under takeover code. Operating in the ABS resins business widely used in Automobiles, Home Appliances, Business machines and office automation segments, Ineos ABS is poised for growth. With current promoter holding of 83 33% we feel that the company will have come up with 83.33%, another open offer to comply for the MPS norm if the current open offer fails to tender 100% of the non promoter shares. Since, the new JV is still in formation stage, the cash position and the growth plans of the parent are yet not clear. Fundamentally, the stock is trading at slight premium to the 5 yr avg. PE. The benefits of restructuring and new parent are yet to be accrued in the stock price.
Financial Summary Fi i lS
Year End CY06 CY07 CY08 CY09 CY10
Source: Bloomberg
2500 2000 1500 1000 500 0

CMP: Rs

598

Source: Capitaline.

Sales 492 557 604 559 742

EBITDA 54 64 50 87 115

PAT 27 35 18 49 70

EPS 15 20 10 28 40

BV 108 124 131 155 190

P/E 14 5 18 14 15

P/BV 2 1 1 3 3

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Ja n M a -0 6 y -0 Se 6 p J a -0 6 n M a -0 7 y Se -07 p J a -0 7 n M a -0 8 y -0 Se 8 p J a -0 8 n M a -0 9 y Se -09 p J a -0 9 n M a -1 0 y Se -10 p J a -1 0 n M a -1 1 y Se -11 p J a -1 1 n -1 2

Close -Unit Curr

10.0 X

15.0 X

20.0 X

25.0 X

30.0 X

EV/EBITDA 6 7 3 3 4

ROCE (%) 15 17 8 19 23

11

Blue Dart
Having acquired Blue Dart in 2004, the parent DHL has enhanced its presence in Indian logistics industry. The logistics industry in India is still in fledgling state with tremendous scope for growth. Blue Dart had embarked on delisting process of the stock way back in Aug. 2006 @ Rs 550/share but failed to get a consensus. The cash cost of buyback at calculated price comes to be ~3% of the cash held by the parent. Derive Trading Pvt. Ltd (5.5% stake), SBI Mutual Fund (4.72% stake) and IDFC Equity Fund (2% stake) hold key to success of open offer, if any. Fundamentally, the stock is richly valued as it is trading at premium to 5 yr avg PE.
1800 1600 1400 1200 1000 800 600 400 200 0

CMP: Rs

1,613

Source: Capitaline.

Amt required for Buyback (Rs cr) Cash on books of Parent (Rs cr) Cost of buyback as % of the Cash with Parent

Financial Summary Fi i lS
Year End CY06 CY07 CY08 CY09 CY10
Source: Bloomberg

Sales 671 811 976 907 1149

EBITDA 103 131 126 104 156

PAT 51 71 78 61 95

EPS 22 30 33 26 40

BV 106 135 166 191 230

P/E 34 15 22 43 40

P/BV 7 3 4 6 7

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Ja nMa 0 6 ySe 06 pJ a 06 nMa 0 7 ySe 07 pJ a 07 nMa 0 8 ySe 08 pJ a 08 n M a -0 9 ySe 09 pJ a 09 n M a -1 0 ySe 10 pJ a 10 n M a -1 1 ySe 11 pJ a 11 n -1 2

Close -Unit Curr

10.0 X

15.0 X

20.0 X

25.0 X

30.0 X

689 22874 3%

EV/EBITDA 12 13 7 15 17

ROCE (%) 23 25 22 14 19

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BOC (I)
BOC (I)- subsidiary of Germany based Linde Gr. is the largest Industrial gas stock supplier in India. BOC India had unveiled buyback offer at Rs 225.29/share in Jan, 2011 but failed to garner sufficient response The discovered price of the shares, determined through a reverse book building process was Rs 600/share in the Jan, 2011 open offer. With cash chest of Euro 580 mn (Rs 3902 cr) the parent Linde Gr is in strong wicket for carry cr), Gr., out the delisting of the stock. At current buyback floor price, the cash outgo happens to be just 7% of the total cash holding of the parent. Higher buyback price in the range of the book building price near to 2011 open offer cannot be ruled out.
600 500 400 300 200 100 0

CMP: Rs

304

Amt required for Buyback (Rs cr) Cash on books of Parent (Rs cr) Cost of buyback as % of the Cash with Parent

Financial Summary Fi i lS
Year End CY06 CY07 CY08 CY09 CY10
Source: Bloomberg

Sales 522 456 533 804 986

EBITDA 97 72 70 127 174

PAT 76 45 80 53 94

EPS 16 9 10 6 11

BV 61 67 122 124 131

P/E 13 14 20 57 25

P/BV 3 2 2 3 2

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Ja n M a -0 6 y Se -06 p J a -0 6 n M a -0 7 y Se -07 p J a -0 7 n M a -0 8 y -0 Se 8 pJ a 08 n M a -0 9 y -0 Se 9 pJ a 09 n M a -1 0 y Se -10 pJ a 10 n M a -1 1 y Se -11 pJ a 11 n -1 2

Close -Unit Curr

10.0 X

15.0 X

20.0 X

25.0 X

30.0 X

Source: Capitaline.

260 3902 7%

EV/EBITDA 9 10 14 12 19

ROCE (%) 28 14 12 5 9

13

Fairfield Atlas
Fairfield Atlas- an automobile and transmission gear manufacturer supplying to large OEMs. The promoter TH Licensing holds 83.91%. Reliance Capital Trustee company (minority shareholder) holds another 5.51%. The company had made an unsuccessful buyback attempt in July 2007 @ Rs 81/share. The parent Oerlikon who controls Fairfield through TH Licensing is cash rich with cash and cash equivalents of USD 0.7 bn (Rs 3762 cr). The cost of acquisition of the minority shareholders at the floor price arrived is less than 1% of the cash held by the promoter. The stock is currently trading at steep discount to 5 yr. avg. PE, hence a safe bet bet.
350 300 250 200 150 100 50 0

CMP: Rs

79

Amt required for Buyback (Rs cr) Cash on books of Parent (Rs cr) Cost of buyback as % of the Cash with Parent

Financial Summary Fi i lS
Year End CY06 CY07 CY08 CY09 CY10
Source: Bloomberg

Sales 111 155 113 89 163

EBITDA 17 27 20 11 26

PAT 7 14 2 15 18

EPS 3 5 1 6 6

BV 2 7 8 14 20

P/E 37 5 55 12 10

P/BV 41 3 5 5 3

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Ap rAu 06 g -0 De 6 c A p -0 6 r-0 Au 7 g D e -0 7 c A p -0 7 r-0 Au 8 g D e -0 8 c A p -0 8 r-0 Au 9 g D e -0 9 c A p -0 9 r-1 Au 0 g D e -1 0 c A p -1 0 r-1 Au 1 g D e -1 1 c A p -1 1 r-1 2

Close -Unit Curr

10.0 X

15.0 X

20.0 X

25.0 X

30.0 X

Source: Capitaline.

31 3762 0.8%

EV/EBITDA 15 7 5 13 7

ROCE (%) 107 10 50 38

14

Kennametal (I)
Operating in highly lucrative and high growth tungsten carbide tool making segment, Kennametal (I) has created a niche for itself. The US parent Kennametal has attempted an unsuccessful bid to delist the Indian subsidiary in Jan 2011 @ Rs 514.98 but could not get the requisite support from the minority shareholders. Since, the cash with US parent ($204 mn) happens to be ~5x the cost of delisting at the calculated price, very high delisting price would be ruled out. Fundamentally, the stock is trading at slight discount to the 5 yr avg. PE, hence it happens to be another safe bet for investment investment.
1600 1400 1200 1000 800 600 400 200 0

CMP: Rs

812

Source: Capitaline.

Amt required for Buyback (Rs cr) Cash on books of Parent (Rs cr) Cost of buyback as % of the Cash with Parent

Financial Summary Fi i lS
Year End CY06 CY07 CY08 CY09 CY10
Source: Bloomberg

Sales 357 390 305 372 507

EBITDA 66 93 50 87 138

PAT 42 54 28 52 89

EPS 19 25 13 24 40

BV 89 114 127 135 135

P/E 26 6 22 28 16

P/BV 6 1 2 5 5

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Ju l N o -06 v M a -0 6 rJ u 07 l N o -07 v M a -0 7 rJ u 08 l N o -08 v -0 Ma 8 rJ u 09 l N o -09 v M a -0 9 rJ u 10 l N o -10 v M a -1 0 rJ u 11 l N o -11 v M a -1 1 rJ u 12 l- 1 2

Close -Unit Curr

10.0 X

15.0 X

20.0 X

25.0 X

30.0 X

193 1056 19%

EV/EBITDA 18 4 4 11 11

ROCE (%) 24 24 11 18 30

15

Astrazeneca Pharma
The parent had initiated the Voluntary delisting process way back in June 2010 @ Rs 586/share but failed to get Sp. Resolution through postal ballot. Astrazeneca (I)- part of the US listed company Astrazeneca is a successful Pharma co. with flourishing business, good growth outlook in future. The parent holds cash of the tune of $ 11 bn and the cost of acquisition of the minority shares of the Indian arm comes to be about $64 mn (0.6% of the cash chest). Although, fundamentally the stock looks to be richly valued, high delisting price cannot be ruled.
1600 1400 1200 1000 800 600 400 200 0

CMP: Rs

1,552

Source: Capitaline.

Amt required for Buyback (Rs cr) Cash on books of Parent (Rs cr) Cost of buyback as % of the Cash with Parent

Financial Summary Fi i lS
Year End CY06 CY07 CY08 CY09 CY10
Source: Bloomberg

Sales 270 297 340 397 459

EBITDA 75 92 114 90 83

PAT 49 61 74 58 51

EPS 19 25 30 23 21

BV 57 64 46 58 72

P/E 39 20 32 57 49

P/BV 13 8 20 23 22

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Ap rAu 06 g D e -0 6 c A p -0 6 r-0 Au 7 g D e -0 7 c A p -0 7 rAu 08 g D e -0 8 c A p -0 8 r-0 Au 9 g D e -0 9 c A p -0 9 r Au -10 g D e -1 0 c A p -1 0 r Au -11 g D e -1 1 c A p -1 1 r-1 2

Close -Unit Curr

10.0 X

15.0 X

20.0 X

25.0 X

30.0 X

319 56925 0.6%

EV/EBITDA 17 10 10 25 -

ROCE (%) 41 54 54 44 -

16

Alfa Laval
Alfa Laval has already embarked on delisting process of the stock. It had informed the exchanges on Sept. 16, 2011 about the parent Alfa Laval AB, Swedens decision of seeking voluntary delisting. Sp. Resolution for voluntary delisting of equity shares has been passed with requisite majority. The parent has communicated the minority shareholders about their willingness to accept equity shares tendered in the delisting offer at a price of Rs 2850/share The cash cost of acquisition comes to be 25% of the cash held by the parent. We feel that the stock is richly valued as far as fundamentals are concerned. Only upside that can come is if the Reverse Book building price discovery is way high from the floor price and the company accepts it.
2500 2000 1500 1000 500 0

CMP: Rs

2,760

Source: Capitaline.

Amt required for Buyback (Rs cr) Cash on books of Parent (Rs cr) Cost of buyback as % of the Cash with Parent

Financial Summary Fi i lS
Year End CY06 CY07 CY08 CY09 CY10
Source: Bloomberg

Sales 593 695 799 888 836

EBITDA 112 130 154 207 164

PAT 70 91 90 123 108

EPS 38 50 50 68 60

BV 128 149 169 208 233

P/E 29 19 25 18 38

P/BV 9 6 7 6 10

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Ja n M a -0 6 y Se -06 p J a -0 6 n M a -0 7 y -0 Se 7 p J a -0 7 n M a -0 8 y -0 Se 8 p J a -0 8 n M a -0 9 y Se -09 p J a -0 9 n M a -1 0 y Se -10 p J a -1 0 n M a -1 1 y Se -11 p J a -1 1 n -1 2

Close -Unit Curr 10.0 X 15.0 X 20.0 X 25.0 X 30.0 X

327 1286 25%

EV/EBITDA 13 15 11 10 13

ROCE (%) 31 36 31 36 27

17

Caveat
The stocks are volatile given the illiquid nature, hence it is advised to accumulate over a period of time. As A most of th stocks are richly valued, any attempt b th parent t dil t th i shareholding i remain t f the t k i hl l d tt t by the t to dilute their h h ldi i.e. i listed, could lead to change in price. The report is dependent on the regulatory deadline, any extension of which can alter the investment hypothesis.

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18

Appendix
Few highlights of New Voluntary Delisting Norms are as follows: The floor price for delisting shall be determined by calculating the average of weekly high and low of closing prices during past 26 weeks and 2 weeks preceding the date on which the recognized stock exchanges were notified. The higher price among the above two would be taken as delisting price. The open offer would be considered a success only when the share holding of the promoter with shares accepted through eligible bids crosses 90% of the total shares issued or when it reaches higher than the total of aggregate % of pre-offer promoter shareholding and 50% of the offer size. The shareholders approval should be sought from the shareholders via postal ballot in case the exit opportunity be given to the shareholders. The votes cast by the public shareholders in favour of the delisting proposal should be at least 2 times of numbers cast against it. Under the Regulations, the Promoters are not bound to accept the Offer Price, as may be determined by the Book Building Process. If the promoters do not accept the price arising out of bidding, then the promoter will be required to comply with the clause 40A of the Listing agreement (i.e. MPS of 25%) within 6 months of closing of bidding process).
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Appendix
We have covered those MNC stocks where the promoter shareholdings have more than 80% and hence the probability of them increasing it further increases. The stocks like GMM Pfaulder, Cambridge Soln., 3M, Singer, Novartis loose out. Nitta Gelatin being co- promoted by Japanese Nitta Gelatin and KSIDC also moves out. Wendt India is a disputed case as Carborandom owns about 40% stake in the company. Gillette (I) and OFSS are also excluded, although they can be delisting candidates. We calculated the expected target price as per the formula discussed above (i.e. Average of weekly high and low for last 26 weeks ending Jan. 06, 2011) and compared with the CMP to decide whether it is worth investing in the stock. The other condition (Average of weekly high and low for 2 weeks preceding the date on which the recognized stock exchanges are informed) will be contingent g g g on the event. Hence, this condition becomes Not Relevant (NR) as on date for arriving at the floor price of delisting.
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Alfa Laval (I) Astrazeneca Pharma Blue Dart Exp. BOC India Elantas Beck Fairfield Atlas Honeywell Auto Ineos ABS (India Kennametal India Fresenius Kabi Onco. Timken India

20

Disclaimer
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E h of th f d to in this t Each f these entities f ti titi functions as a separate, di ti t and i d t distinct d independent of each other. Th recipient d t f h th The i i t should take this into account before interpreting the document. This report has been prepared on the basis of information that is already available in publicly accessible media or developed through analysis of ENAM Securities Direct Private Limited. The views expressed are those of the analyst and the Company may or may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. Neither this document nor any copy of it may be taken or transmitted into the United State (to U.S. Persons), Canada, or Japan or distributed, directly or indirectly, in the United States or Canada or distributed or redistributed in Japan or to any resident thereof. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject Enam Securities Direct Private Limited to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. Note: All views are based on the understanding and study of Enam Fundamental Research and may or may not match with the Alternative Research Team Team. Copyright in this document vests exclusively with ENAM Securities Direct Private Limited.

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Disclaimer
Disclaimer of Axis Securities & Sales Ltd. The document has been prepared by Enam Securities Direct Private Limited (the company). Axis Securities & Sales Limited (hereinafter referred to as ASSL) has been permitted by the company to use the same and circulate it to its clients. This document is not, and should not be construed, as an offer to sell or solicitation to buy any securities in any jurisdiction. This document may not be reproduced, distributed or published, in whole or in part, without prior permission from the Company. ASSL does not guarantee that the document is complete or accurate and it should not be relied on as such. Investors should make his/her own research, analysis and investigation as he/she deems fit and reliable to come at an independent evaluation of an investment (including the merits, demerits and risks involved), and should further take opinion of their own consultants, advisors to determine the advantages and risks of investment. ASSL, its affiliates, group companies, directors, employees, agents or representatives shall not be held responsible, responsible liable for any kind of consequential damages whether direct indirect special or consequential including but not limited to losses lost revenue lost profits notional losses that may arise from or in connection with the use of the information in the direct, indirect, losses, revenue, profits, document. Registered office address Axis House, 8th Floor, Bombay Dyeing Mills Compound, Pandurang Budhkar Marg, Worli, Mumbai 400 025. Axis Securities and Sales Limited SEBI Registration no : NSE (CM)-INB 231387235, (FO)-INF 231387235, (CDS)-INE 231387235,BSE(CM)-INB 011387330,(FO)-INF011387330, ARN No. 51485 Main/Dealing office: Solaris,"C" Bldg., 6th floor, Opp. L&T Gate No. 6, Saki Vihar Road, Powai, Mumbai-400072, Tel No.-18001030808, Compliance Officer Details: Name: AnandShaha, E-Mail ID: compliance.officer@axisdirect.in,Tel No: 022-40754152. Copyright 2011 - Enam Securities Direct Private Limited and Axis Securities and Sales Limited.

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Disclosure of Interest Statement

(As of January 13, 2012)
CONFLICT OF INTEREST DISCLOSURE
We, at ENAM, are committed to providing the most honest and transparent advice to our clients. However, given the nature of the capital markets, from time to time we are faced with situations that could give rise to potential conflict of interest. In order to provide complete transparency to our clients, before we make any recommendations, we are committed to making a disclosure of our interest and any potential conflict IN ADVANCE so that the interests of our clients are safe- guarded at all times. In light of this policy, policy we have instituted what we believe to be the most comprehensive disclosure policy among leading investment banks/brokerages in the world so that our clients may make an informed judgment about our recommendations The following disclosures are recommendations. intended to keep you informed before you make any decision- in addition, we will be happy to provide information in response to specific queries that our clients may seek from us.

Scrip Name Alfa-Laval (India) Ltd Astrazeneca Pharma India Ltd Blue Dart Express Ltd Elantas Beck India Ltd Fairfield Atlas Ltd Gillette India Ltd Honeywell Automation India Ltd Ineos ABS (India) Ltd Kennametal India Ltd Fresenius Kabi Onco Timken India Ltd BOC India Ltd

Grey List/MBD Relation No No No No No No No No No No No No

Broking Relationship No No No No No No No No No No No No

Firm Holding No No No No No No No No No No No No

Director Holding No No No No No No Yes Yes Yes No No Yes

We are committed to providing completely independent and transparent recommendations to help our clients reach a better decision.

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ENAM Securities Direct Private Limited S t P i t Li it d Thank You iti Di

Sunil Shah | sunil.shah@enam.com Pankaj Bobade | pankaj.bobade@enam.com