Wednesday, September 22, 2010


I have received lot of queries regarding the open offer made by the existing promoters of Vimal oil and foods @ Rs.51/-. As per the prevailing law, promoters can hike their stake through creeping acquisition method upto 5% in each financial year .But in this case they have  pumped an amount more than  Rs.30 Cr by subscribing 60 lac equity shares at a price of Rs.50.16/- through preferential issue . This is  way above the limit of 15%(upto open offer not applicable).Hence as per the rule ,it is a mandatory open offer. Since the market price is above open offer price ,chances are low to get shares in this offer till market price ruling above the open offer price . This means ,open offer @ Rs.51/- is not a reason to come down the share price to this level in any way.On the other side ,this development is really a positive one.Promoters are bringing huge money to the company itself is a sign of their confidence .This amount is expected to partly used for reducing debt  and balance for further business development ,which is positive for the company in the long run

This is to clarify some doubts raised by some readers as comments and through e-mail.


  1. Sir,

    Your view on BAG Film and Media? It is tarding at year low Price. Can i invest with 6 months timeframe


  2. For significant improvement in financials ,you may need to wait atleast two years.May get only a small bounce in share price from current level- in short term

  3. Thanks..for the quick response...sir.

  4. hello sir. i am following your blog for some time now. i must say that this is a finest blog in this genre.
    thank you so much for educating and directing all of us.

  5. sir can i buy this stock



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