June 04, 2011

Innovassynth Investments Limited - Update by Arun

Scripscan:Innovassynth Investments Ltd

Story:I got never fascinated by holding companies but this time the ridiculous valuation of this particular company helped me to pen a note and put a buy call on it.Innovassynth Investments Ltd is the holding company of Innovassynth Technologies where the former owns 32.2% of the later entity.Innovassynth Technologies (I) Ltd. formerly known as Chemicals Division of Indian Organic Chemicals Ltd. came in to existence since 1st August 2002.The company is catering to the needs of customers in the area of 'knowledge based R & D services' which include:-Contract R & D,Custom Synthesis and Contract Manufacturing.The company is still in deep losses but that wouldnt be the prudent way to look at it.So lets evaluate the valuation of the contract manufacturer:-

1)Innovassynth Technologies owns over over 35 million sq ft land at Khopoli which should be worth somewhere around 100-150crs.

2)It owns 7% stake in Actis Biologics India which should be worth Rs 225-230 crs as it recently placed 10% of Actis at US $ 80 Million.

3)Last but certainly not the least would be its high end Research& development work which may worth as much as 250crs to 400crs.

4)Innovassynth Technologies had networth of around 90crs as on 31st March 2010.

So lets add up taking the least conservative figures(100+225+250+90crs=

Conclusion:Thus as we can see Innovassynth Technologies is worth 665crs.So what should be the value of the listed entity,i.e,Innovassynth Investments Ltd?The listed 7rs counter owns 32% of the contract manufacturer which gives me a figure of(32% of 665crs=over 200crs).But Innovassynth Investments is lying low at a horrible figure of 7rs which shows a marketcap of as low as 16crs.Holding companies aren't the fancy of the bourses but even if I give a valuation of 1/8th still it showcases 40crs marketcap(17rs).According to the recent announcement the promoters are allotting themselves warrants at 10rs which in no meaningful way can be the valuation of the company.The promoters are definitely not investor friendly or bothered about the minority shareholders.In past they have a history of making a complete mockery of the shareholders fraternity.Innovassynth Investments is worth a lot but the present market sentiment,the non-friendly promoters may not help it move much in the shorter term.
btw:It lacks volume so dont go gung-ho.Slowly accumulate it in hundreds


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1 comment:

vishwaas said...

If Innovasynth investment is a hidden gem why it is still quoting so low yet? When its rates are likely to improve ? Can anyone elaborate please ?