IFCI a typical speculative stock with a difficult balance sheet: Sandip Sabharwal

In a chat with ET Now, Sandip Sabharwal, asksandipsabharwal.com, shares his view on SREI Infrastructure, IFCI.

ET Now: Since, we are talking of asset sales two financing companies which have done that: one of them is SREI Infra which has done two deals in the last three months and IFCI has come on record saying that they are going to be selling some of the assets as well or some stakes. This be something that could turnaround fortunes for some of these lenders say a SREI Infra, for example?

Sandip Sabharwal: SREI Infra is a typical case of when Indian companies deal with MNCs, and how they extract value out of that. So, we have seen that in so many companies like Arvind, if you see in a separate space textile they enter into JVs with these companies, then they buyout those JVs at a much cheaper price, whereas, the actual value is much higher.

So, I believe BNP bought the stake for Rs 500-600 crore they have sold that for Rs 100 crore, so to that extent it adds great value. So, that is a story but IFCI is different it is difficult to decipher IFCI and its balance sheet and it becomes a typical speculative stock.

ET Now: What about SREI, do you like what they are doing because the stock has also gone up quite a bit so which is why I am asking?

Sandip Sabharwal: To that extent, the strategy a lot of these groups are following they are trying to de-risk their business after taking a big hit. On pure valuation terms, I would not be able to comment on SREI Infra, I have not looked at it deeply but as a strategy it seems to be a good strategy.