Why Kalyani Group companies rallied a whopping 13% as BJP emerges largest party in Karnataka

The Sensex and Nifty may have lost momentum after initial joy on BJP's likely victory in Karnataka state assembly election 2018, but there is one stock that rallied a whopping 13 per cent as power change in Karnataka is all set to unlock value for not just this company, but an entire group of companies. 

The group is none other than Kalyani Group, a $2.5 billion diversified Indian multi-national business conglomerate, and BF Utilities is the company that stand to gain the most. BF Utilities share price rallied as much as 12.90 per cent to Rs 444 on the BSE. Other Kalyani Group stocks that advanced include BF Investment (up 13 per cent), Kalyani Investment Company (up 5 per cent) and Kalyani Steels (up 7.4 per cent). 

Sanjiv Bhasin, EVP-Markets & Corp Affairs, India Infoline is bullish on BF Utilities as it is a big land owner. Bhasin advised investing in a basket of four companies - Godrej Properties, Sobha, Prestige Estates and BF Utilities - with major part being invested in BF Utilities. 

BJP win to trigger re-rating of Kalyani Group

Kalyani Group works on multiple projects via its subsidiary Nandi Infrastructure Corridor Enterprises (NICE). Most of projects are running on Mysore-Bangaluru highway and are stuck. BF Utilities owns 74.5 per cent stake in NICE. 

Major projects

Link road project (9.1 km)
Hosur link road (41 km)
Express way project (111 km)
Elevated road (3 km)
Five townships on Bangaluru express way

Value-unlocking for Kalyani Group

88 per cent of toll business completed
Allocation of 7290 acre land completed
More land allocation expected
Existing land value comes in at Rs 15,000 crore
Rs 5000 crore compensation expected soon 

Here is why BF Utilities to see a re-rating

NAV for company's land value at Rs 3800 per share
Land bank value at Rs 2800 per share after factoring in discount 

Key Kalyani Group companies in focus

BF Utilities
BF Investment
Kalyani Investment Company
Bharat Forge

Kalyani Group is an Indian multi-national business conglomerate with high technology, engineering & manufacturing capability across critical sectors such as Engineering Steel, Automotive, Industrial, Renewable Energy, Urban Infrastructure and Specialty Chemicals. Babasaheb Neelkanth Kalyani is the chairman of Kalyani Group.