Vijay Mallya quietly sells shares of his holding company
The sale of shares in a United Breweries group holding company by promoter and chairman Vijay Mallya has raised eyebrows in financial circles for the low-key manner in which the shares were offloaded. Mallya is fighting to get Kingfisher Airlines, struggling under debt, back in air after employees unpaid since April struck work and India’s aviation regulator raised questions on air-worthiness of its planes.
The three Mallya companies that sold stake in UBH are Kamsco Industries, Gem Investment and Mallya Pvt Ltd. The exact amount realized is not clear but the sale of 5.26 million shares at could have yielded anything between Rs 28 crore and Rs 82 crore.
United Breweries: Expensive valuations, sell
United Breweries is cushioned by the twin bulwarks of near-secular demand and high entry barriers. Although demand has been a robust ~15-25% yoy in the past 3 quarters, we built in a conservative 13% volume cagr over FY13-14. Stable raw material costs and control over packaging expenses through patented bottle initiative would drive margin expansion. Even with an allowance for some deserved premium, current valuation at 25x FY13 EV/E packs in too much of a premium and is more than double of that ascribed to global brewers.
Big Trouble land protest against United Breweries.
A group of farmers today staged a protest against setting up of a brewery by Vijay Mallya’s United Breweries over land settlement.The farmers staged the protest at the company’s site at Kopakalan village in Naubatpur, around 25km from Patna. The police had to use force to suppress the protesters.
Senior company representatives says they were hopeful that the land settlement would be done within 10 days. An official of UB Group said there was no question about the company withdrawing from the Rs 200-crore project.
The Bihar Industrial Area Development Authority (Biada) had handed over 42 acres to the company for the beer factory, which after becoming functional, would be the largest in eastern India.
Company sources said things were not in a very good shape at present. “The court has passed a judgment in our favour. We have still gone a step ahead and paid the farmers. The project should have been completed within this year. But a delay is a major cause of concern,” said the official.
Banks free to sell Mallya’s pledged shares, says court
Mallya-owned UB Holdings had asked Bombay High Court to restrain banks from selling shares of subsidiary companies worth Rs 100 cr
UB group’s lenders recently decided to begin the process of recovering their loans through sale of securities pledged with them amid huge accumulated losses and soaring debt levels of KingfisherBSE -3.43 % airline that is grounded since October 2012.
Promoters — United Breweries Holdings, United Spirit and McDowell HoldingsBSE -0.43 % — together held a stake of 30.44 per cent in MCFL by the end of December 2012, nearly 70 per cent of their shares were pledged with various lenders.
Last week, SBIBSE 1.98 % group entity had sold over one crore shares (nearly 10 per cent stake) in the MCFL, which was bought by rival Zuari Fertilisers.
TECHNICAL RESEARCH REPORT
Date:- 12/4/2013
Positional dual call (buy/sell)
Script name – UNITED BREWERIES LTD.
Technical call – Sell UBL @ 750-760 sl 825 target 650-550 if break 825 and close above 825 then buy above 825 sl 700 target 950-1150
Holding period – 2-3 months
Technical view – UBL is having 100MA at 770 level but till now it has not able to give any positive close above its 100MA. Latest on 06/02/2013 it has touch its 100MA moving average at 775 level and sharply fallen down till 580 level. So now again its not able to sustain above its 100MA level so we expect some reverse fall from here.
Even RSI has also touched its oversold zone level of 70 when it made high of 819 and from that level its not able to give any positive signs and turn negative. Its giving us signal of possible reversal in stock price.
STOCHSTIC also started reverse movement from its oversold zone its also a good indication of reversal in price.
Technical explanation of dual call – as far as technical study concern we already mention that its facing resistance and possible reversal in its uptrend with the help of above given indicators. So if it’s a real fall in a stock then we ma say that it will get till our target levels in sell side. But if its not able to sustain in its downtrend and if started to move above its 100MA level then we can see its upside targets. So technically we are presenting all the reasons for its possible down trend and uptrend. Investors and traders are requested to follow proper entry and stop loss levels on closing basis.