Tuesday, April 6, 2010

Innovative Foods - Money for Nothing, Sequel 2

I had written earlier about a special situation opportunity in Innovative Foods. The link is enclosed below.

The interesting part in this opportunity arose post the closure of the delisting offer that the promoter made at Rs 34.5. As per SEBI laws a company has to provide the last open offer/ delisting price to all the remaining shareholders post delisting of the company for a period of 6 months.

So you are assured of Rs 34.5 for your holding even if u hadn’t tendered it in the delisting offer. Typically it takes around 45-60 days post the closure of the delisting offer for the actual delisting to take place. It should on the outside take about a month more to tender your shares to the company and get your money.

So the opportunity arose bcos post the closure of the offer, I was able to buy the stock in the market between Rs 31.75 and Rs 33 with a average acquisition cost of Rs 32.05.

It took me about 4 months in the entire transaction. Part of the delay was bcos I went on a vacation and hence missed one of the redemption cycles. But overall it gave me risk free return of about 7.5% in a four month tenure. Might not excite too many ppl but I love risk free return like this.

2 comments:

Vic said...

Hey Ninad,

You haven't posted on Gwalior Chemicals yet.

Can u please give us an update on that? I mean what should be good exit price and the timeline.

Thanks,

Vikas

Ninad Kunder said...

Hi Vic

Will put out a post on it. The buyback offer at Rs 120 is currently open.

Trying to get some inputs in terms of whether management has finalised any operating plans for the business.

Cheers

Ninad