Nicco Corporation is one of the companies in which I had invested a few months ago. My observations on the company can be read here and here.
However, recently, I came across some very interesting bits of information in the bulks deals data released by the stock exchanges. One of the large investors Niraj Realtors (stake: 14.75%) has been continuously selling in the open market and the buyer on the other side has been a rather unknown company by the name of Rapid Estates Private Ltd. Infact, the latter has now cornered more than 5% stake in Nicco Corporation.
While one might be wondering as to why is Niraj Realtors selling....I am more keen to know who is Rapid Estates Private Ltd.
Now, according to this link (dated: 4-Dec-06), Rapid Estates Private Ltd. is a subsidiary of Anant Raj Industries, one of the fastest growing companies on Dalal Street in recent years, from being a rather unknown tile company to becoming a full-fledged real estate company with a mcap of close to Rs.9,000 crore.
The question :
1). Are the two companies (i.e. the one that has acquired more than 5% stake in Nicco Corporation and the one that is Anant Raj Industries' subsidiary) same??
2). If yes, why is Anant Raj Industries cornering a stake in Nicco Corpn?
The answer could be this:
- Nicco Corporation hives off cable business to Prysmian Cables for Rs.130 crore
- It then hives / divests its engineering business into a separate company or to some other company
- what will be left is a holding company with plenty of cash and lot of land (at book value) in Kolkata
- Anant Raj Industries may possibly take a strategic stake in the company and form a JV to develop that real estate.