Southern Ispat's Outcome of board meeting: Be and Make

Southern Ispat and Energy Ltd has informed BSE that the Board of Directors of the Company at its meeting held on November 06, 2010, has approved the following:

1. The Board has approved the resolution of raising funds upto 100 Crores.

2. The Board approved alteration of MOA and AOA for increasing of Authorised Capital upto 160 Crores of the Company.

3. For getting the approval of shareholders for issuing additional shares the Board approved conducting of EGM on December 11, 2010 by way of Postal ballot.

--

Be and Make's views: 

--

1. This is a non event for the market as it already digested by the market. If they come out with some cues, how they are rising the funds will act as trigger. Instead of that again and again talking about the same thing can be said as non-event for sure.

2. In our recent report on Q2FY11 result update, we clearly mentioned that we some more cues regarding the promoter stake. Such cautious note came only because of the Authorized share capital which is raised to only Rs.78cr. If a promoter wants raise their stake beyond the 40% then this authorized share capital will not sufficient. It should be increased and now we got the assurance officially. It confirms our views that promoters going to increase their stake post amalgamations.

Conclusion: We got some clues regarding the promoter stake hike. No road map to the fund rising, till they come out with clear road map to the funds they are going to raise this stock will be a range keep a cautious note.

With thanks

Be and make