Mumbai, Jan 3: SBI Capital Markets Ltd, the merchant banking arm of the State Bank of India (SBI), has pegged the valuation the Credit Analysis & Research Ltd's (CARE) Rs 10 equity share at around Rs 50-55. The valuation report was submitted to CARE's principal promoter Industrial Development Bank of India (IDBI) last month. The valuation exercise is expected to be a precursor to IDBI selling part of its stake to a strategic investor."The valuation report puts CARE's equity within a range of Rs 40 to Rs 100 per share depending on various business and market scenarios.
However, the category-I merchant banker has given a more specific price of between Rs 50 and Rs 55 per share if the current market share and the present level of competition in the industry continues," an IDBI official told The Financial Express. The rating agency presently has a net worth of Rs 14 crore and IDBI, Canara Bank and Unit Trust of India (UTI) are its principal shareholders, collectively holding in excess of 60 per cent stake in the company.
Meanwhile, the rating agency is learnt to have suggested IDBI a value of around Rs 25 per equity share of Rs 10, significantly higher than its book value which was a little more than Rs 17 as on March 31, 1999. IDBI sources said the valuation will be used by IDBI and Canara Bank, both of which are expected to divest part of their shareholding in Care in favour of LIC, GIC and Exim Bank and Fitch IBCA.
International rating agency Fitch IBCA presently has a technical tie-up with CARE. It is in talks with Care to pick-up around ten per cent stake.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.