The stock has been languishing in the range of 400-420 since a long time now. Breakout looks eminent, and when this happens stock would rise minimum upto 500.
The company is about to pass a special resolution to raise 1750 crs of funds.
It is expected that before this fund raising exercise begins share price will start shooting up.
Moreover ABG Shipyard has bought shares of the company at Rs 510 in open offer and Bharti Shipyard too in open offer has bought the shares at 590.
Bharti Shipyard which is the biggest shareholder in the company is continuously mopping up shares of the company at prices above the CMP in off market transactions.
Speaking from a fundamental perspective too, stock looks attractive. For FY10 it is expected to generate EPS of 50 Rs on a consolidated basis.
It is trading at PE of 8 and P/BV of 2.2.
Hence there is every reason for the stock to rise to higher levels from here.
The latest shareholding pattern is something like this :-
Bharti Shipyard-49.73%, ABG Shipyard - 12%, FIIs-6%, MFS/FIs/Insurance - 3%. Public 23%
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