MUST READ A unique opportunity is just a few days ahead but to grab it we have
to apply our senseAs per our past experience in stock market, we had
been seeing that if bonus is 1:1 than price is reduced to 50%, if
bonus is 1:2 than price is reduced to 33%. So on the same pattern, in
rel power 3:5 bonus, price should be reduced to 5/8x100=62.5%, but it
is not so in case of Rel Power. Dear all in all historical bonus
except in Rel power, this bonus ratio is applied to Total Shares of
company Including Promoter. Anyone can check in bonus history that if
bonus is 1:1, than on ex date total shares of company become double so
price adjusted to 50%.Take a example that if a company have 100 crore share, price of each
is 1000, so total market capital of company is 100x1000=1,00,000 (1
lack ) crore. Suppose bonus is issued 1:1 ratio than on ex date in the
market total shares are 200 crore, if we apply our sense than it is
definitely not possible that with same price 200x1000= 2,00,000 (2
lack crore) just over one night, So on ex date price will be 500 and
market capital is same 200x500=1,00,000 (1 lack) crore. Only
difference is that before bonus company has liability of 100 crore
share of face value 10 each, so total face value(called as Paid up
capital) is 100x10=1000 crore. If company announce bonus of 1:1, than
face value (paid up capital) 200x10=2000 crore. Dividend is given on
face value, if company announce dividend of 20% before bonus, than
company liability is 1000x20/100=200 crore dividend, And if company
announce same dividens after bonus company has liability of
2000x20/100=400 crore.
So practically after bonus total market capital of company remain same
but total face value is increased proportionally and we get more
dividend if announced after bonus.
Now come to Rel power. Here total share are 226 crore before bonus(any
one can check at NSE site). So paid up capital is 226x10(face
value)=2260 crore . Bonus is 3:5 for non-promoter only(which are
having only 22.8 crore share out of 226 crore), so after bonus total
share are not 226x8/5=361.6 crore but 203.2 crore(promoter) + 22.8(non
promoter) + 22.8x3/5(=13.68)(bonus) = 239.7 crore total. Plz go
through 25.02.08 Rel Power NSE announcement on second page 17th line,
that paid up equity shares are increase to 239.7 crore.
So, before bonus and after bonus company capital should be same(if no
big fall in market on ex date). Currently Rel power is quoting around
400, so total market capital is 226 crore x 400=90,400 crore. After
bonus total share are 239.7 crore, so keeping the same market capital
reduced price is 90,400/239.7=377 which in other way 400x226/239.7=377
. Here scene is that Only 10% non promoter are given bonus and out of
10% non promoter, if we leave FII, DII etc general public( retail
investor, HNI )are 4.28%. And this 4.28% common public is unable to
digest this opportunity that how 400x5=2000 can be 377x8=3016 just in
few days. Did anyone see that FII, DII(MF) are crying on this issue,
they are waiting for the opportunity when this common public will
release their bonus share (which they are unable to digest) on ex date
at lower price and they will grab it. Dear investor compare the price
on the basis of total market capital before and after bonus. Some big
fish will try to low the price on and after ex date to compel small
investor to release their stake. Many are creating panic in market
that ex bonus price will be around 300 or even less Than think in way
that 239.7 crore x 300=71,910 crore market capital. Did Anil announce
bonus that company which was of 90,000 crore would become of 70,000
crore. Believe on him he will take care for that but u all have to
keep patience for some time. Controlling price is also in public hand,
if we all don't sell on ex date how price will come down, than only
FII and DII will left and they are enough sensing the situation.
If u all can wait for three-six month than price will come around 500
as project progress happen than imagine 400x5=2000 will be 500x8=4000,
100% return in around 4 month. So don't think of selling but digest
the opportunity with sense(total market capital of company before and
after bonus). Best of luck.
Zerodha (Trading & Demat Account)
RHP
