Desperate Help Needed Reg Essar Steel

#1
hii
>
> plz need help.....
>
> today my broker informed tht i one of my intraday delivery didnt get
> settled tht being of essar steel..so i hv [email protected] ... now for past 3
days
> its hitting -ve circuit...iam at 7000 rs loss.....not small amount as
i am
> a small time investor....
>
> they r saying its getting delisted,... and someone said might not get
> listed at all
>
>
> what shld i do ... i can hold it for a longer time ..thats no issue
but
> only if its worth it..
>
> please senior and learned memebers plz advice as its very very urgent
and
> i hv 2 take a call asap..
>
> please i am very tensed cuz of same can u kindly reply
 
#2
Hello Ntin

The shares you have Essr Steel at higher price but block deals are being done at 44. The share is not bad but you have entered at uptown when the global scenario about steel is still awaited.Hope as the result of leader cos of steel cos emerge u shall have to wait uptil then and best of luck and hold script as the company is not delisiting for good.
 
#4
Read this. Maybe of some help to you.

Quote---

Essar Steel Limited CMP: Rs 41.8 as on 21-04-2005

Capital Reduction as per CDR scheme

As per the approved Corporate debt restructuring (CDR) scheme, Essar Steel recently announced reduction of equity capital by 40% in lieu thereof issue 0.01% cumulative redeemable Preference Shares.

In layman terms, existing 10 equity shares will get reduced to 4 shares of Rs 10 face value. In addition to this, four 0.01 per cent Cumulative Redeemable Preference shares of Rs 10 will be issued to the shareholders. These preference shares will be redeemed at par in four quarterly installments starting October 1, 2017.

Possible impact analysis

Presently, the equity capital stands at Rs 507.3 crore. This would have expanded to Rs 1420 crore on the back of Rs 912 crore equity dilution over the next 18 months, taking into account the conversion of preference shares to promoters and other companies.

However, the reduction of 40% of existing equity capital of Rs 507.3 crore essentially means that the equity capital will expand to Rs 1217 crore only now.

Taking these facts into account and the estimated net profit of Rs 1200 crore (excluding extra-ordinary items) for FY06. Theoretically, the announced reduction in capital will result in around 30% loss to existing shareholders. Thus, the scrip should correct by 30% from the price of Rs 60 per share from the date of announcement of the CDR scheme, which give a value of Rs 42.

The impact is explained below:-

Without equity reduction, With eq. redn. of 40%
Diluted equity capital - Rs.1420 crore, Rs.1217 crore
Net Profit(FY06E) - Rs.1200 crore, Rs.1200 crore
EPS (A) - Rs.8.5, Rs.9.9
No. of shares held (B) - 10, 6
EPS Value (A x B) - Rs.85, Rs.59
Erosion of value (%) witheq.redn. - 30%


Valuation:

Given the recent steep downward correction, most of the adverse impact of equity capital reduction seems to have been factored in the share price. In terms of valuations, at Rs 45; the stock is trading at 3.9x FY05 earnings (undiluted equity and inclusive extra-ordinary items). And mind you, huge extraordinary items dented FY05 net performance. PAT before extraordinary items stood at Rs 1055 crore.

However, one should keep in mind that trading in equity shares of Essar Steel scrip shall be suspended with effect from April 25, 2005 (i.e. closing hours of trading on April 22, 2005) on account of Reduction of Share Capital. Thus, traders need to exit the stock.

But investors with long-term investment horizon could hold on to the stock and accumulate in case of further declines. Especially since, the CDR scheme and consolidation of business will result in internal accruals of Rs 1000 crore in FY06.

Deepak Jain

---Unquote
 
Last edited:
#5
thanks jaideep.

but wht does tht translate to.. i mean i dont know all the mumbo jumbo of the technical words...

is it ging to b relisted again in 2017???????????/ and the 30% decline ????

its not tradeable
whts all this
plz explain and wht u feel i shld do
 
B

bhavana

Guest
#6
Hello Traderji,sh50,cv and all forum members,

My question is going empty.

If share delists from exchange ,then how to sell it?
What are provisions for it?
 
#7
Dear Friends

Plz clear the status of essar steel to me also I am not able to undrestand the technical language. Just tell me whether this scrip is going to be listed again or not and when it will start again.

thanks
with regards

anita
 

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