Golden chance to buy BPCL shares today, company may give big dividend before divestment, says Anil Singhvi
Zee Business Managing Editor Anil Singhvi said that today there was a Big Block Deal that went through on BPCL. The company is going to sell 16 cr shares worth Rs 7000 cr via Block Deal. Treasury shares means the company that has its own shares, explains Singhvi. Generally, companies sell Treasury shares and try to avoid keeping them. So, while investors get the shares, the company gets cash, says Singhvi.
Zee Business Managing Editor Anil Singhvi said that today there was a Big Block Deal that went through on BPCL. The company is going to sell 16 cr shares worth Rs 7000 cr via Block Deal. Treasury shares means the company that has its own shares, explains Singhvi. Generally, companies sell Treasury shares and try to avoid keeping them. So, while investors get the shares, the company gets cash, says Singhvi. BPCL share price today is Rs 444, down Rs 23 or 4.9%.
The key issue is, what will be the purpose of generating this much cash? Anil Singhvi said there is a big possibility that ahead of Divestment, BPCL may announce a big dividend from the cash generated via selling Treasury shares. The amount left after deducting tax from Rs 7000 cr will be used by the company to distribute dividend to BPCL shareholders.
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Anil Singhvi recommends that investors should buy the shares when the Block Deal happens. Singhvi says it is a golden chase for investors who intend to invest in BPCL. Sellers are giving a good buy opportunity to investors. The floor price for the deal is Rs 435. Investors should buy BPCL for Dividend and Divestment.
This is for investors who will stay invested in the stock and reap benefits of Dividend and Divestment.
The share price of BPCL may fall below the floor price of the Block Deal and market risk will remain, the same as with any other stock, explained Singhvi.
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