Interesting Development for Bharati shipyard.

Have you looked at the anouncement dated 19th February 2010 by Great offshore. Here is the link for you (Great offshore). I will come to what it means in a moment. But before that let me give you the background.

Bharati Shipyard is one of my favorites stocks. I bought it first at Rs 700 way back in 2007. It was then the darling of the stock markets and FIIs like Goldman Sachs had invested in the company. Subsequently the value of this stock fell to Rs 50 levels in March 2009. However the financial performance remained unchanged. What changed was that the orders stopped coming and hence the stock continued to languish at sub Rs 100 levels until lady luck struck. After a bidding war it acquired Great offshore which to my mind was the greatest thing to happen to this stock. Not many of us small investors still realise the implications of the deal. The large amount of debt on Bharati's books is what concerns us and that is probably due to what "the analysts" tell us on TV.
But let me lead you to what is actually happening. If you look at the shareholding patterns for the months of September 09 and December 09 there is something noticeable which has happened. The holding of "Shareholders belonging to the category "Public" and holding more than 1% of the Total No. of Shares" has increased from 21.57% to 24.45% which is about a 3% increase. About 39% is still held by the promoters. Which means 63% of the shareholding is with pretty strong hands with about 10% holding still with insurance companies.
Now the interesting bit. We all know that the problem with Bharati is the orders having dried up. But times they are a changing. It should soon be getting orders and thats what the first line of this post means. Great offshore board has decided "To seek the approval of the Company in general meeting to raise funds not exceeding Rs 1750 crores in the from of equity shares, bonds or debentures, or other securities to augment the resources of the Company to provide for offering broad spectrum of services to upstream oil & gas producers to carry out exploration and production activities.". This decision comes just after a month of Bharati shipyard acquiring Great offshore.

So how is Great offshore going to do so. By expanding capacity and who better than Bharati shipyard to do so. So grab your share of Bharati shipyard before it gets those orders and the announcement flashes on bse and Bharati Shipyard hits upper circuit.

However this is no insider information and hence I might be wrong. Please do your due diligence before investing.

Points to note: Read somewhere on the internet that Bharati shipyard is due to get Rs 1000 crores as subsidy payment. If this is true then what happens to the debt on its books is very easy to guess.

N:B: Am working on the projected financials for Bharati shipyard.......will post them soon. Till then happy investing.