Stalwart Advisors

Crompton Greaves goes ex-demerger

Crompton Greaves' stock went ex-demerger today and closed at Rs 44, close to what we envisaged (Refer to page 44 of Initiating Coverage Report).

For the purpose of record-keeping, we are assuming our buy price in CG at Rs 44 and balance Rs 102 for CGCEL (total we paid Rs 146 for the combined entity).

Implied allocation to CGCEL would be ~5.5% and to CG ~2.5%; total we had allocated 8%. If you could not buy on 14th March, you may allocate 3% of portfolio to CG at current market price and buy CGCEL once it gets listed, however only if it lists closer to our indicated buy price.

We expect allotment of CGCEL shares within a month, subsequent to which it should get listed on Stock Exchanges.


Privacy policy
Mobile Analytics
Exact weightage will depend on each subscriber’s risk appetite & comfort. However, as a thumb rule, any position size under 3% is little insignificant to move returns at portfolio level whereas beyond 10% it gets riskier from a concentration standpoint. Accordingly, low could indicate 3-4% weightage, medium 5-7% and high 8-10%.
Structural are those portfolio businesses where earnings are relatively stable (less volatility) and further are expected to rise in a steady fashion. Cyclicals are businesses which experience periods of upcycle followed by downcycle and have large variation in their reported earnings based on industry demand and supply. The mix between the two depends on available opportunities and respective valuation of the two pockets.