A Bajaj group company Maharashtra Scooters (MSL) is a classic case of value investing.
This company earlier use to make Priya scooters. As scooters went out of fashion this company closed its entire operations. The company being a Bajaj group company has been cross holding shares of other Bajaj companies like Bajaj Finance, Bajaj Auto, Bajaj Finserve, Bajaj Holdings and Bajaj Hindustan.
Now if we consider the current share price of all the above mentioned companies and multiply it by the respective number of shares held by MSL and then equate the calculated value to per share of MSL(Total share of MSL is 11,428,568.00 ), add unquoted(Land, machines etc) investments(Per share of MSL) it gives a value of 7100 per share of MSL . But currently MSL market price only 2400 i.e close to 65% discount to the value. This a classic case of Value Investing..! ( Value > Price)
The company also declares a dividend of 30 Rs per share so there no holding cost as well.!
When you invest in such stock(asset) the down side gets protected due to the huge difference between the market Price and Value.
| Maharashtra Scooters Investments (MSL) | CMP – 2400 | Company | No Of Shares | Mkt Price @ 26th Feb 18 | Value( No of Shares X Mkt Price) | |
|---|---|---|---|---|---|---|
| Share Capital | 114 Cr | 1 | Bajaj Finance | 18,974,660.00 | 1,663.00 | 31,554,859,580.00 |
| 2 | Bajaj Auto | 6,774,072.00 | 3,006.00 | 20,362,860,432.00 | ||
| No of Shares | 11,428,568.00 | 3 | Bajaj Finserv | 3,725,740.00 | 5,135.00 | 19,131,674,900.00 |
| 4 | Bajaj Hindustan | 1,255,000.00 | 12.90 | 16,189,500.00 | ||
| 5 | Bajaj Holding & Investments | 3,387,036.00 | 2,740.00 | 9,280,478,640.00 | ||
| 80,346,063,052.00 | ||||||
| Per Share Of MSL | 7,030.28 | |||||
| Unquoted Investments | 905,523,053.00 | |||||
| Per Share Of MSL | 79.2333 | |||||
| Total Per Share Of MSL | 7,109.5159 |