Soros Fund picks up 5.8% stake in GAEL
Soros Fund Management LLC has picked up a 5.8 per cent stake in Ahmedabad-based Gujarat Ambuja Exports (GAEL), which has a market capitalisation of Rs 1,000 crore.
Besides the market cap, GAEL, an agro-processing industrial unit, attracted the foreign insitutional investor with its wide product offerings.
Founded by Hungarian-born stock investor George Soros whose net worth is estimated to be at $8.5 billion, Soros Fund Management LLC has picked up the stake through its hedge fund ‘Quantum Fund’. The fund notes that the company, with a PE ratio of 14 per cent, has “strong fundamentals” and operates in an industry with good prospects.
GAEL Chairman and Managing Director Vijay Gupta said, “Analysts from Quantum had come to meet us over a year ago and did an extensive study of our businesses.
They must have found good value in our company, which explains the reason for such a big exposure. The stake bought by Quantum has surpassed the 3.9 per cent stake acquired by Reliance Mutual Fund, which was the first among major funds to identify the company as a growth-oriented stock.
GAEL’s share price, which was Rs 34 in January this year, has risen to Rs 73 last Friday. Among other things, the company manufactures maize starch, liquid glucose, sorbitol 70 per cent solution, defatted soya flour, deoiled cakes, rapeseed castor, groundnut meals, edible oils, cotton yarn, and wheat flour.
The upcoming projects of the company include greenfield and brownfield addition of capacities in solvent extraction, edible oil refining and maize processing. The Uttaranchal project of maize processing with a capacity of 500 tonnes per day is expected to be operational by the second week of this month.
To be set up at a cost of Rs 65 crore, the project will have the advantage of being near the raw material procurement area and will enjoy the benefits of 100 per cent excise exemption, central sales tax at 1 per cent and income-tax exemption.
On the solvent extraction business, Gupta said that the high prices of many commodities globally had benefited the solvent extraction business and boosted the profit margin up from 2-3 per cent to 8 per cent. “The capacity utilisation has also doubled from 40 per cent to 80 per cent,” he added.
The company, which achieved a turnover of Rs 1,400 crore in 2006-07, is anticipating sales worth Rs 2,000 crore in the current financial year.
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