Investors seem to be seeking a value meal in Westlife Development, which recently merged one of its indirect companies running the McDonald’s outlets with self.
Investors seem to be seeking a value meal in Westlife Development, which recently merged one of its indirect companies running the McDonald’s outlets with self.
But much like the toys that come with McDonald’s Happy Meals, the Westlife shares seem to be in limited supply.
Exactly one share changed hands on Tuesday.
The stock closed at the upper circuit band of `150.90 with no sellers to be found.
In fact, the share, which has run up by more than 330% over the last one year, has seen very low volumes over this period.
That’s because the non promoter (or public) holding is just 14.29% or close to 22.86 lakh shares out of which foreign investors own 4.84%. The promoters own the balance 85.71% shares. The company has just 30 individual or retail investors and 47 investors in all.
These retail investors whoever have invested in the stock would now see double benefit.
That’s because the company on Friday had announced that Hardcastle Restaurants Pvt Ltd, a master franchisee for west & south India operations of McDonald’s Restaurants, will become a direct subsidiary of Westlife Development.
This is likely to provide great fillip to the stock with its consolidated earnings rising substantially. The company if it consolidates McDonald’s franchisee results with itself will see its net profit (for fiscal 2012) rise to `31.40 crore as against its standalone earlier reported loss of around `0.99 crore.
Also the company had announced a bonus issue some time back for its non promoter holders in the ratio of 1:1 whose ex-date was on December 7, 2012.
These shareholders would stand to gain as there shareholding will become double while the stock price readjustment post the bonus issue has not been halved (which is the case with 1:1 bonus issue) but just gone done fractionally from its pre-bonus issue price.
BSE in reply to DNA’s query on the matter said that since the bonus issue was only to public shareholders and not the promoters, they had placed a ticker on its trading system informing members relating to the re-adjustment of the price for Westlife Development on December 10. “Pursuant to the same, base price of Westlife Development was reset to Rs147.95 for the imposition of price band w.e.f. December 11, 2012.”
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