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Sterlite Industries (India) Ltd. Message Board

  • money_money_more_money money_money_more_money Aug 23, 2013 5:44 PM Flag

    should have closed around 5.8 today...

    with rupee back to 63.4, this is worth 5.54 as per India close on Friday..

    if we do sesa goa math, worth 5.8.. (153*3/5)*4/63.4

    Am I missing anything ?

    should have bought more today...

    Sentiment: Buy

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    • sesa goa ended at 167.7 today... after conversion that would translate to (167.7*3/5)*4/64.5 = 6.24
      Or to simplify, if you had 500 shares of SLT, you will get 300 shares of sesa worth 167.7*4/64.5 = $10.4 each.

      Why are we getting such discount here ?

      • 1 Reply to money_money_more_money
      • I agree with you. I've been seeing this widening arbitrage opportunity from the past one week.

        If we do the math, with Sesa Goa's merger ratio (167.7 INR as of closing 8/26/13) with today's FX rate INR/USD = 64.25, the SLT price should be $6.26.

        Instead, this is *closely* emulating the price considering the merger ratio with Sterlite Industries stock in India (90 INR as of closing 8/26/13) with today's FX rate INR/USD = 64.25, the price is $5.60. And SLT is today trading very close to this calculated $5.6 price.

        I'm wondering why is this closely matching with Sterlite Industries Indian price instead of the Sesa Goa's Indian price, especially with share swap record date being around the corner.

        Even before doing the math for the SLT ADR, if we observe the prices for the Sterlite Industries Industries vs. Sesa Goa's Indian stock prices, there is a wide arbitrage opportunity in the security's domicle country itself..... Just cannot figure out why.

        I wish the SLT ADR price soon catch up to the value calculated above.

        Sentiment: Buy

 

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