Ravinder Heights-Unlocking Potential or Stymied?

Even after having been in the Capital Markets for 4 decades I am sometimes stumped by the opportunity that stands in front of an entity, but for a variety of reasons which include Management apathy growth does not cystallise.

I will not make any recommendations but would like students, professionals and traders alike to ponder over the following points:

Ravinder Heights, named after it's late founder is a spin-off of the Real Estate business of Panacea Biotech. The Equity is 7 crore shares of Re 1 each, the cmp is Rs 42, the market cap about Rs 280 crore.

RVHL (NSE) is run by Mrs. Sunanda Jain and her son Sumit Jain. Mrs Jain owns 74.6 per cent of the RVHL Equity, while Serum Institute and Adar Cyrus Poonawalla own give or take 12 per cent equity. Which leaves about Rs 30 crore worth of float in the markets.

What is the structure?

RVHL, owns Radhika Heights (named after Ravinder's daughter), which in turn owns 6 WOS.

Interestingly, Radhika Heights through it's own subsidiaries own 108 Acres of land in Sec 89A, Harsaru, Pataudi Road, near Gurgaon, Haryana. Transactions of large land banks between DLF, Max Estates and other big developers is now going at Rs 20 crore an acre. In addition, Radhika Heights owns 35 Bighas of Agricultural Land in Alwar.

Any operations

RVHL-Radhika Heights has entered into a Joint Development Agreement with a marquee Gurgaon Developer named Bestech, to develop a mere 12 Acres of land under the Centre's notified Deen Dayal Scheme. This could be plotted or group housing high rise but RVHL documents make no further disclosures.

That still leaves another 96 Acres of land to be developed.

Tentative Value

The land alone should be worth Rs 2000 crore. In addition to which the company got some compensation from the Haryana Government for land acquired to widen some roads. About Rs 12 odd crore rests in Investments. On a consolidated debt of Zero, there is no further visibility on this front, the entity appears a pure land bank play.

Dissecting

Diligent market professionals need to look seriously at this entity. Smal cap market cap Rs 280 crore, Clean Assets Rs 2000 crore. The 12 Acre Bestech-Radhika JV has HRERA approval.

Derive your own logic.