Summary
of Contents
SHAREKHAN SPECIAL
Tamil Nadu joins the VAT club
VAT, or the value-added tax as it is
popularly known, is clearly gaining ground, with Tamil Nadu state
government also deciding to implement the new taxation system in the
state from the first day of the next year. VAT, which seeks to
simplify the tax structure and create a uniform common market within
the country, replaced the sales tax in India on January 4, 2005. It
was adopted by all but three states though: Tamil Nadu, Pondicherry
and Uttar Pradesh. Now even Tamil Nadu has jumped on the VAT
bandwagon. The development calls for a relook at the new taxation
system.
STOCK UPDATE
Television Eighteen India
Cluster: Emerging
Star Recommendation: Buy Price target: Rs500
Relisting of
TV18 India
Key points
-
As per its
ongoing restructuring process, TV18 India will list on December
27, 2006. Based on the valuations of the various properties within
TV18 India and the new businesses ventured into
post-restructuring, we have revised the price target for TV18
India to Rs500 per share (implied value of Rs700 in the market
price of TV18 pre-restructuring).
-
Network 18,
the holding company of TV18 having a ~39% holding in Global
Broadcast News (GBN), is expected to list later in January 2007.
Our fair value for Network18 after the revision in TV18 India's
price target works out to Rs290 per share (implied value of Rs348
in the market price of TV18 pre-restructuring).
-
In due course,
we also expect the initial public offering (IPO) of GBN in FY2007
and this, we believe, will unlock further value for both these
companies.
-
We continue to
have a positive outlook on TV18 India, given the strength of its
broadcast and Internet properties as also the ability of the
management to monetise each of the businesses. We maintain our Buy
recommendation on TV18 India with a revised price target of
Rs500. |