Bombay Dyeing's market capitalisation is just Rs 205.21 crore, though it holds cash and investments worth Rs 435.74 crore. Besides Bombay Dyeing, even Indian Rayon and GMDC hold more cash and investments than their respective market caps, as can be seen in the table.

For some other stocks, like HDFC and Trent, these holdings account for 66 per cent and 54 per cent respectively. Previous market favourites, such as Telco and Bajaj Auto, too have significant holdings in these forms.

Another discovery is in the valuations of companies whose subsidiaries are valued higher. For example, HDFC, which owns over 25 per cent of HDFC Bank, has a market capitalisation that is lesser than that of its subsidiary.

While HDFC Bank has found favour with market players because of its e-initiatives, the market seems to have forgotten completely that some of the benefits are going to trickle up to the holding company as well.

Strangely, this problem is found even in the valuations of software companies with Internet/e-commerce subsidiaries, as is the case with Satyam Computer and Satyam Infoway.

On being asked how long the craze for Internet stocks would continue, an analyst in one of India's leading brokerages replied that it would last as long as no profits were declared by these companies. That's because, you cannot measure the rate of growth of negative earnings. As soon as these companies started making profits, people would realise that the rates of growth expected cannot be sustained!

Even as the valuations of Internet/e-commerce companies seem highly stretched, what surprises one is the extremely low valuations of some of the old-economy stocks. In fact, some of these stocks have seen selling pressure just to provide funds for buying more technology stocks. This phenomenon has resulted in a further fall in the valuations of these old-economy stocks.

A glance at the balance sheets of some of these battered stocks shows that some of them hold more cash and marketable investments than what they are worth on the bourses. In other words, anyone buying these companies would find more cash embedded in them to make the acquisition worthwhile.

The use of cash and investments was preferred to the usual comparison of market cap to book value, as these can be hawked in the market even in the worst-case scenario of liquidation. In The Financial Express' sample, none of the companies is anywhere close to liquidation. Hence, the high amount of cash and cash-like holdings offers an excellent opportunity to buy into companies whose real worth in terms of cash is more than that indicated by their market prices.

In any other country, such companies would be considered ripe takeover targets, but most of the firms mentioned in our sample may not be easy to take over in view of the high promoter holdings in them. Even so, they may well offer investors an opportunity to buy in.