Special Situations, Content Strategist, Smartkarma

Crispin Francis

Special Situations, Content Strategist

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Event-Driven

On the 9th of June 2015, there was Media Speculation on the potential merger of Vedanta Limited ("VEDL") and Cairn India Limited ("CAIR").&nbsp;VEDL, CAIR's promoter with a majority stake, made an <a href="http://www.bseindia.com/xml-data/corpfiling/AttachHis/771592E4_ACEF_4F9E_A880_A62A1EEF478F_135856.pdf" target="_blank">announcement</a>&nbsp;with regards to the media speculation, stating that their strategy is to simplify and consolidate its corporate structure.&nbsp;On 14 June 2015, VEDL and CAIR&nbsp;<a href="http://www.bseindia.com/xml-data/corpfiling/AttachLive/3C03EBD1_6CBA_4E94_A2DA_F5000CEDE512_065424.pdf" target="_blank">announced</a>&nbsp;that they would be merging via a share swap scheme of amalgamation under the India Takeover Law.&nbsp;Deal value ~ USD 2.4 BnMinority shareholders of CAIR will receive for each equity share held:<ul><li>1 equity share in VEDL</li><li>1 redeemable preference share in VEDL with face value INR 10</li></ul>Key ingredient needed for the deal is the approval by CAIR shareholders and all that is needed is:<ul><li>Majority of the minority shareholders voting</li></ul>The bar is set low.&nbsp;But the offer is extremely low as well; at 3x EV/EBITDA on forward basis.&nbsp;The offer is at a discount to Indian E&amp;P Comps and also to the previous offer by VEDL back in 2011 for a stake in CAIR.&nbsp;Foreign shareholders are likely to vote against the merger.However, Cairn Energy's decision is difficult to predict.&nbsp;The merger could have possible implications on the restriction by the Tax Authorities on their stake in CAIR. If the implications are largely positive, it could&nbsp;push them to accept the deal at a price lower than what they sold back in 2011.

On the 9th of June 2015, there was Media Speculation on the potential merger of Vedanta Limited ("VEDL") and Cairn India Limited ("CAIR").&nbsp;VEDL, CAIR's promoter with a majority stake, made an announcement&nbsp;with regards to the media speculation, stating that their strategy is to simplify and consolidate its corporate structure.&nbsp;On 14 June 2015, VEDL and CAIR&nbsp;announced&nbsp;that they would be merging via a share swap scheme of amalgamation under the India Takeover Law.&nbsp;Deal value ~ USD 2.4 BnMinority shareholders of CAIR will receive for each equity share held:1 equity share in VEDL1 redeemable preference share in VEDL with face value INR 10Key ingredient needed for the deal is the approval by CAIR shareholders and all that is needed is:Majority of the minority shareholders votingThe bar is set low.&nbsp;But the offer is extremely low as well; at 3x EV/EBITDA on forward basis.&nbsp;The offer is at a discount to Indian E&amp;P Comps and also to the previous offer by VEDL back in 2011 for a stake in CAIR.&nbsp;Foreign shareholders are likely to vote against the merger.However, Cairn Energy's decision is difficult to predict.&nbsp;The merger could have possible implications on the restriction by the Tax Authorities on their stake in CAIR. If the implications are largely positive, it could&nbsp;push them to accept the deal at a price lower than what they sold back in 2011.

Cairn / Vedanta Ltd  - Offer is disappointing, minorities are left with the shorter end of the stick

Ex-Buyside Principal, now doing Independent Secondary Research on Indian Equities

Pawan Sachdeva

Thematic (Sector/Industry)

In preparing this insight, I have tried to compare ACC (as an Indian Cement Sector Proxy) to Holcim and Anhui Conch. &nbsp;<div><ul><li>I discuss Long Term trends of cement pricing in India, environmental issues and relative cost structures.&nbsp; </li><li>I believe that this work might aid fund managers / analysts in deriving a better view on the cement sector.&nbsp; </li><li>Cement Company Managements can also use this as an analysis framework to benchmark their own performance.&nbsp; </li><li>Lastly, I also try to raise thoughts on whether 2015-2020 is like 2003-2008 for the Indian stock market.&nbsp;</li></ul><blockquote>My work examines publicly available data spanning 15 years, going back to 1999.&nbsp;</blockquote></div>

In preparing this insight, I have tried to compare ACC (as an Indian Cement Sector Proxy) to Holcim and Anhui Conch. &nbsp;I discuss Long Term trends of cement pricing in India, environmental issues and relative cost structures.&nbsp; I believe that this work might aid fund managers / analysts in deriving a better view on the cement sector.&nbsp; Cement Company Managements can also use this as an analysis framework to benchmark their own performance.&nbsp; Lastly, I also try to raise thoughts on whether 2015-2020 is like 2003-2008 for the Indian stock market.&nbsp;My work examines publicly available data spanning 15 years, going back to 1999.&nbsp;

ACC, Holcim & Anhui Conch: A Cross-Country Benchmarking Study of Cement Sector Leaders

India

Vedanta Limited mines, produces, and exports base metals. The Company mines and distributes metals such as zinc, iron ore, copper, silver, and aluminium, as well as operates power plants. Vedanta markets its products worldwide.

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Vedanta Ltd (VEDL IN)

Cairn / Vedanta Ltd - Offer is disappointing, minorities are left with the shorter end of the stick

On the 9th of June 2015, there was Media Speculation on the potential merger of Vedanta Limited ("VEDL") and Cairn India Limited ("CAIR"). VEDL,...

Crispin Francis

ACC, Holcim & Anhui Conch: A Cross-Country Benchmarking Study of Cement Sector Leaders

In preparing this insight, I have tried to compare ACC (as an Indian Cement Sector Proxy) to Holcim and Anhui Conch. I discuss Long Term trends...

Pawan Sachdeva

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