A P Paper may see buying activities today: Fortune Financial Services India
The fact that they are acquiring a majority stake and there is going to be an open offer falling which is likely to be at a higher price, the stock will see some amount of buying and stipulation happening in the market.
By 
| Updated:
| Updated: In a chat with ET Now, Abhijit Chakraborty, Sr. VP, Institutional Equities, Fortune Financial Services India Ltd., shares his investment ideas.
What is your view on the AP paper deal and how the market is reading into it because the valuation seems really at a high premium?
When an acquirer completely takes over a company the valuation cannot be compared with the rest of the market or industry valuation because there is always a strategy premium or a non-compete premium that is attached to it. So, this kind of deals cannot be benchmarked against the rest of the peer group valuation. It is not fair whenever an acquirer is acquiring a company he needs to get in to, he is looking at short-term gains which is basically eluding his gestation period of making an entry to the markets.
The fact that they are acquiring a majority stake and there is going to be an open offer falling which is likely to be at a higher price, the stock will see some amount of buying and stipulation happening in the market.
What is your view on the AP paper deal and how the market is reading into it because the valuation seems really at a high premium?
When an acquirer completely takes over a company the valuation cannot be compared with the rest of the market or industry valuation because there is always a strategy premium or a non-compete premium that is attached to it. So, this kind of deals cannot be benchmarked against the rest of the peer group valuation. It is not fair whenever an acquirer is acquiring a company he needs to get in to, he is looking at short-term gains which is basically eluding his gestation period of making an entry to the markets.
The fact that they are acquiring a majority stake and there is going to be an open offer falling which is likely to be at a higher price, the stock will see some amount of buying and stipulation happening in the market.
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
