Stock of the Day: Anil Singhvi says invest in Federal Mogul, valuations are attractive

Zee Business Managing Editor Anil Singhvi said that Federal Mogul is the best preferred out of 3 offer for sale (OFS) today. He said that the company did try OFS 2 times but failed both times. Singhvi said that the stock has fallen from Rs 660 to Rs 250. He said that Valuations of this MNC Company are extremely attractive. The 10% stake has to be reduced and the 10% Green Shoe option is there. OFS is of 55 lk shares and they can give additional 55 lk shares as well.

Singhvi said that the key point to understand is even after reducing stake by 20%, these MNC company promoters will be holding 75% stake. This implies they have 95% stake currently. The response for the OFS is extremely strong. All funds are finding valuations attractive at current levels. Institutional Investors book was subscribed 4 times yesterday.

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Singhvi said there is a high chance that promoters will sell 20% via OFS. He said this would be good as once and for all, the promoter will bring down the stake and hence no fears of further reduction in stake and this will ensure that stock price moves up.  Singhvi said promoters must exercise the Green shoe option. Bids have been received for 1.1 cr shares. Financials of the company are extremely strong and they have good cash on their books. It is a debt free company and profitability of the company is strong. Singhvi said after stake sale, stock will see good moves going forward.

आज रिटेल निवेशकों के लिए खुलेंगे 3 OFS…

फेडरल मुगल, शैल्बी और हैथवे केबल में से किसमें लगाएं पैसे?

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Singhvi said that the Federal Mogul should be bought with a target of Rs 280 – Rs 285 today and Rs 295 – Rs 300 in 3 to 4 sessions. The stop-loss for the trade is Rs 260. Investors should hold this stock in their portfolio for long term.

Singhvi said Investors can bid in OFS as well. Investors should invest for a timeframe of 1 to 3 years. The stock can see targets of Rs 500 – Rs 600 – Rs 650 in long term. Singhvi said it is No.2 auto ancillary company in its area of business.