BF Utilities – This can be a NICE buy

Dear Investor,
A long time ago, I had researched this firm, BF Utilities/ NICE of Bangalore. Within a short period, the share price plunged. By Aug 2013, it had even fallen by 75% to Rs 118 (from my recommended 444). But I am happy to note that in the last 3 months, it has come roaring back. It may appear to be a trading stock, but there has been a big news that makes the prospects look up. Check this news –

In short, BF Utilities got on Oct 30 2012, approval from the Karnataka High Court (to NICE/NECEL) to develop a residential layout in its project by the BMICAPA (Area Planning Authority). This is in line with their framework agreement signed between NECEL and the state government of Karnataka on 3rd April 1997.

This is a good affirmation for BF Util, and will allow them to start monetizing their terrific land assets. And hopefully their Bangalore to Mysore highway, so badly required, is not far behind.

Today the share is 27% up from the recommended price, and locked on the upper circuit.

Good luck and Happy investing.

JainMatrix Investments

Date: July 6, 2012                CMP: 444               Mkt Cap: 1,674 crore

P/E: 488 times                Advice:  A high risk high gain Investment with 3 year horizon

BF Utilities, a part of the Bharat Forge group, is engaged in developing the Bangalore – Mysore Infrastructure Corridor. The high potential project has been stuck for over a decade due to land handover issues, and the firm is making losses.

However recent reports indicate that it may be close to resolving legal disputes, and is raising a second round of PE funds for project execution. The share has recently crossed its 200 DMA. Investment in BF Utilities is an act of faith in the management, an understanding of how badly this project is needed, and a confidence that the risk return balance is tilted…

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