Sunday, March 3, 2013

Aeonian Investments Company Ltd

Aeonian Investments Company Ltd was incorporated in 1981 by one branch of the 3 founding families of Asian Paints viz. Choksey’s.
The company invests in shares - both quoted and un quoted and Units of Mutual funds. Investments in capital market is mainly through reputed Portfolio Managers and to some extent on its own. The Company is managed by the Board of Directors, with Mr. Amit Choksey as its non executive Chairman.

Some recent updates:
Aeonian held 23,55,847 shares ( 32.04% ) in Sunshield Chemicals ltd and must have realized approx Rs.12.04 cr from the sale of the shares to Rhodia

The Choksey Group (in personal capacity) held 21.14 lakh shares and must have realized  approx Rs.10.78 cr from the sale of the shares to Rhodia

Aeonian Snapshot:

Equity : 0.96 cr ( FV Rs.2 )
Debt : Nil
CMP : Rs.148 
Market Cap : Rs.71.04 cr
Promoter holding: 86.96%

Dividend record:

2011-12: Rs.4 per share
2010-11: Rs.4 per share
2009-10 :Rs.4 per share
2008-09:Rs.3 per share
2007-08 :Rs.7 per share
2006-07:Rs.7 per share
2005-06: Rs.7 per share

Valuation of investments:

Listed investments :  Rs.76.62 cr ( as of March 31, 2012)
For the sake of current valuation, we’ll maintain the inventory valuation at same level as of March31, 2012. Some investments like Asian Paints ( 42,245 shares as of March 31, 2012) have grown by nearly 40% over the last 10 months while others like Cox & kings, S Kumar have performed poorly.

MF Investments : Rs.9.2 cr ( as of March 31, 2012)

Loans/advanvces: Rs.6.5 cr

Investment in other unlisted companies:

1)      Mazda colours : 5.36 lakhs shares ( approx 31.71% of the paid up capital) valued at Rs.7.95 cr
Current financials of Mazda:
Past financials of Mazda ( see page 15)
Aeonian Annual Report for 2004-05 also shows the investment in Mazda as 5.36 lakh shares, so it is safe to assume that Aeonian holds about 31.71% of Mazda’s paid up capital. Last years EPS for Mazda was about Rs.95 ( approx) , so applying a PE of 5, one can assume a price band of about Rs.450-475 per share of Mazda
Hence we’ll value the Mazda investment at  about Rs.24 cr

2)      Cybele Paradise Pvt Ltd : 5.07 lakhs shares  valued at 0.67 cr
Cybele Paradise is into the business of Leisure and Entertainment and runs Orama Family Entertainment Centres which offer 4D / 5D movies &  gaming areas

More about the company:

Since no information about the financials of Cybele are available, we’ll value the company at its holding cost i.e. Rs.0.67 cr

The Annual reports for 2002-03, 2003-04, 2004-05 speak about premises at Worli given on leave and licence and that the licencee has not been paying rent since May 2000. We’ll not factor these premises into the total valuation in absence of details about the current status.

In 2003, the company had invested Rs.5.65 cr in Office space. Considering the movement in property rates over the past 10 years, it can safely be assumed that the property should be worth not less than Rs.15 cr

Total value in the company: :  Rs.76.62 cr + Rs.9.2 cr + Rs.6.5 cr + Rs.24 cr + Rs.0.67 cr + Rs.15 cr = approx Rs.132 cr ( approx Rs.275 per share)

Promoter holding is 86.96%. They have 3 options in order to comply with SEBI regulation for minimum shareholding:

1)      Reduce stake to 75% through OFS on BSE or
2)      Issue bonus to non promoter shareholders. Bonus issue would need to be in the ratio of 7: 3 or thereabouts or
3)      Delist the company.
Option 1 is a strong probability.
Option 2 would amount to a direct wealth transfer from promoter to non promoters and unless quasi promoter holding ( in the non promoter category) is very high, this seems unlikely.
Option 3 , assuming a delisting price of about Rs.225 – 250 per share, will entail a payout of about Rs.14 -16 cr. Promoters have recently realized about Rs.10.78 cr from Sunshield Chemical stake sale. So this possibility too cannot be ruled out.

All in all, an interesting stock to follow.

At the time of writing this report, the author /his family have an investment interest in the stock mentioned above. Under no circumstance does the information in this report represent a recommendation to buy or sell the above-mentioned stock.  This report has been prepared and issued on the basis of publicly available information, internally developed data & other sources believed to be reliable. This is just a suggestion solely for information purposes and does not constitute a solicitation to any person to buy or sell a security. While the information contained therein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Readers using the information contained herein are solely responsible for their actions and are advised to satisfy themselves before making any investments. 


  1. Quite interesting one... Will come back to you once I do some more study.

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