Update on Narmada Chematur

I have got few queries from the readers of this blog to provide an update on the Investment Idea given in July on Narmada Chematur Petrochemicals Ltd (NCPL). The request was in view of the fall in the stock price pursuant to the news that NCPL will be merged with its parent company GNFC.

You can re-read the article on Investment Idea by Clicking Here

The stock was recommended at a price of Rs. 38 with a time frame of 12 Months and a target of Rs.70
The stock reached a high of Rs. 49.85 after the recommendation , however, fell down to Rs. 34 after the news of the merger.

GNFC is the promoter of NCPL and if the company is mulling a merger of NCPL to itself, I do not see it a s a setback to NCPL. Also, the announcement says that a merged possibility is being explored. Since the idea is at its initial stage , it would be difficult to predict what the management finally decides and what will be the swap ratio for the merger.

Looking at GNFC, with whom the company is getting merged, the financials looks good. The company has posted a 40% jump in the net profit in Q2 of this year. Even NCPL has registered good results. At this stage, Investment Guru is of the view that the merger may create synergies for GNFC and in turn should be eventually good for the shareholders.

However, it terms of share prices, a lot depends on the swap ratio for the merger.

Investment Guru is of the view that investors should hold on to the stock and watch for further developments in terms of the merger. The blog will keep you updated with any change in the outlook for the stock based on further developments. A new target price would be published on the blog once further visibility comes to the development on merger.

Happy Investing !!

9 comments:

Anonymous said...

Dear Rajesh,
Thanks a lot for the update. I will hold on to the stock till your further update.
Your blog is simply wonderful and inspires confidence.
Thanks
Sumeet

Anonymous said...

One can buy
1. IndusInd Bank

2. SQL Star (EGM on 30th Nov) - -

3. Escorts (current may look weak.. but will go up ...)

4. Sunflag

5. Vishal exports-

100% sure tips ... wait time is minimum 2 months

mohit.tp said...

Would u recommend entry into this stock at current levels (33-34) for long term perspective 10-12 months ??
Please respond.

spi_spot said...

Dear Guru,

It is a good follow up on your recommendation. I appreciate. It should have increased the confidence of your followers on your investment ideas.

I am holding on to stocks picked up at Rs.43/-

Let's all hope for a favourable swap ratio.

rishi said...

Hi Rajesh,
We are looking forward to you for an investment idea. It's long since you provided the one on Gujarat Ambuja.

Thanks
Rishi

Rahul Munjal said...

Dear Rajesh,

I bought the stock @ 34 and then sold it out for 42 in some profit as i needed money that time. I found that before the market crashed, this was one of the stock that has the calliber to move up very fast and very soon.

Now as it is down, can i enter the stock again? It's again at around 35. Please analyse the merger story and guide me whether it is the right time to enter this stock??

I've also invested some of the amount in ur new Idea Aksh Opt...

Please guide me regarding Narmada Chem..

Thanks and Regards,
Rahul Munjal

Anonymous said...

Dear Rajesh, what is the latest status of Narmada Chematur. Should we still hold it ?

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