What measures will NBI consider to address the share price’s significant discount to net asset value?
NBI holds a portfolio of high-quality assets, including a substantial stake in one of the most successful cement companies in India (Shree Cement) which accounts for around 95% of the total.
Despite this, NBI’s share price is trading at a very large discount to the value of these assets:
This has been the case ever since NBI moved its listing to the National Stock Exchange in 2016, with the typical discount being around 71-79%:
NBI: average share price discount to net assetsQuoted investments valued at market. Share prices up to 10 July, 2020.
|Year ending March||Net assets per share at start of year (₹)||Average share price (₹)||Average discount to net assets|
Shareholders who wish to sell their shares must therefore accept an extremely low valuation. In addition, the company is restricted from raising equity finance as it would be grossly inefficient to do so with the share price at such a large discount to book value. To our knowledge the company has not carried out any actions to address this.