Over 75% of the trades were foreign buys. When the foreigners are done buying ....

LOL... Seems these 'foreign' buyers are probably the few they convinced in the road shows OR are part of the owners of TCL... I would not buy at this point.

BTW, TCL plans to raise cash so expect a Rights Issue in 2 years!

@Vituvingisana where did you get such facts, if at all they are. A rights issue early next year is within two years, and you know what everyone would be thunking if that happened.

Interesting.

Indeed TCL needs a lot of cash, but the cash they're raising is largely going toward non performing assets (RVR). What part of there business generates cashflows, I think that's the biggest concern going forward. You just have to look at eacl's results to see that they are struggling with working capital and profit margins are much lower than the 2009 comparable period becoz of costs of production (i'm sure that's why they opted not to publish Q1 results). This is the flagship unit of the TCL group.

The valuation seems to be based on the NAV, but market price is almost 3x NAV ... if you valued it based on cashflows, it should be maybe 25. Centum is trading below NAV, so the options now seems to avoid both eacl and tcl and go for Centum (Disclaimer: I'm a shareholder at Centum). TCL is probably the hardest company to analyse becoz u don't know which business unit generates profit in any given year ... their funds of funds contributed to almost 50% of ebit last year (look at its track history).

I'm not so sure whether price discovery was really the underlying motive for listing considering the whole convertible bond issue. They needed a market to effect the conversion. The convertible bond carries exchange rate risk, so most foreign investors have lost close to 4 bob already pre-conversion. If the listing was for price discovery, then the fact that they've come in hot and heavy (50-66) means they're likely profit-taking (empty-shell).

On the issue of foreign participation on both the NSE (shares) and semdex (convertible bond), we have to remember the definition of a foreign investor given TCLs funds of funds. who are the foreign buys buying tcl at the nse and who are the foreigners buying the bond in mauritius. Aureos? Helios? The arbitrage opportunity is all to clear ... founder shareholders sell tcl stock, by squeezing supply or supported by "foreign buyers", then buy the convertible bond which gives you the right to buy back over 34% of issued capital at a discount.

You'd have to be a sucker to see that the game is rigged.

my 2 cents.

@scubidu - I am not buying at the moment but when it is closer to 30, I will look at it...