Strangely, the market has not rated the tyre company for the soft options that it is worth. A Ceat share is worth Rs 70 plus a Fujitsu-Icim share worth Rs 72 (a part of the latter though).

Interestingly, the market value of investments of Ceat Ltd alongwith its subsidiary in Fujitsu-ICIM is higher than that of its own market capitalisation. The market capitalisation of Fujitsu ICIM is Rs 262 crore as compared to Ceat's market capitalisation of Rs 245 crore.

The company along with its subsidiary Ceat Ventures acquired 20 per cent of stake in Fujitsu-ICIM, a software company at a price of Rs 16 in April 1998. Ceat owns 11.50 lakh shares while its wholly owned subsiduary Ceat ventures owns 22.22 lakh shares.

The current price of Fujitsu-Icim is Rs 600 per share and if one looks at the average price for the last 10 days the price works out to Rs 777. Based on this price, one can say that this 20 per cent stake in ICIM has given a phenomenally high return of 4856 per cent. The scrip had touched a high of Rs 910 when the software sector had boomed.

This is a notional profit and Ceat Ltd has no plans to liquidate this investment as it gives them management control in Fujitsu ICIM.

Fujitsu ICIM is not the only company that has given returns. Gramophone, another group company which cost the company around Rs 25 per share is traded at Rs 417. All these investments are seen in the backdrop of a falling market. On peak levels, it has been noticed that with every Rs 50 rise in the Fujitsu scrip, the company was earning Rs 16 crore on the total market capitalisation.

The share price of Ceat Ltd trades at a discount to its book value. The book value of Ceat without revaluation reserves works out to Rs 90 and with revaluation reserves the same figure is Rs 156.

The yield on these investments have actually freed all the investment on the tyre plant and when one invests into Ceat, the investor is paying for companies like Fujitsu ICIM and Gramophone. In other words, in addition to buying a Ceat share worth Rs 70, the investor gets Rs 72 worth of Fujitsu ICIM.

But there were also some investments of Ceat that did not generate returns on the stock markets. Companies like CESC, RPG cables and KEC were some of the scrips which did not attract the market's fancy. The notional profits of all the investments are at a comfortable level of Rs 234 crore.

For the year ended March 1999, Ceat Ltd recorded sales of Rs 1,166 crore and a net profit of Rs 16 crore. The company has an equity capital of Rs 35.21 crore.