Target 650 for Karur Vysya in 3-6 months
With a holding period of around 3 to 6 months, we should see a price band of around Rs 650 in the stock.
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| Ganesh Shanbhag, SMS Financial Services, in a chat with ET Now talks about Karur Vysya.
ET Now: What do you like about Karur Vysya?
Ganesh Shanbhag: It is a bank with no core promoter and what normally happens is every 4 years, the company normally rewards its shareholders with a bonus and a rights issue. The stock has just turned ex-bonus.
They gave bonus shares in the ratio of 2:5. So we have seen that rally over the last 3 months where actually company declared a bonus and the stock now is ex-bonus also at a decent price. The rights issue now is expected in the ratio of 2:5 at a price of Rs 150. Normally that is a good point actually to get into the stock in the rights issue at a substantial discount to the market price. So with a holding period of around 3 to 6 months, we should see a price band of around Rs 650 in the stock.
ET Now: What do you like about Karur Vysya?
Ganesh Shanbhag: It is a bank with no core promoter and what normally happens is every 4 years, the company normally rewards its shareholders with a bonus and a rights issue. The stock has just turned ex-bonus.
They gave bonus shares in the ratio of 2:5. So we have seen that rally over the last 3 months where actually company declared a bonus and the stock now is ex-bonus also at a decent price. The rights issue now is expected in the ratio of 2:5 at a price of Rs 150. Normally that is a good point actually to get into the stock in the rights issue at a substantial discount to the market price. So with a holding period of around 3 to 6 months, we should see a price band of around Rs 650 in the stock.
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