Friday, March 14, 2014

Time to sell Noida Toll Bridge


Friends - Today, March 14th  is the record date for dividend payment.  The stock price is currently at Rs. 24.35 as I blog. On 15th, post the dividend record date, the price is expected to go down by Rs 1.50 - to Rs. 23.00.

Obviously the price did not meet our expectations of Rs 26-30. If you bought it at around Rs 22 - two weeks back - then you have made a tax free dividend of 6.8%. Assuming you sell it at Rs 23.00, then you have made a pre tax capital gain of 4.5%.


This is far below what we had hoped for - but a 10% return in two weeks not bad.


I am going to exit this stock tomorrow -  But I will keep an eye on it.
Remember, this is an interim dividend and the company may pay one more smaller dividend (I think 5% or Rs 0.5 per share) in June.


However, I do not recommend holding on to the stock - this is election time and there have been issues in toll collections in Maharashtra (http://timesofindia.indiatimes.com/india/Maharashtra-CM-agrees-to-shut-22-toll-plazas-Raj-Thackeray-keeps-up-threat/articleshow/30370142.cms) and in Gurgaon (http://timesofindia.indiatimes.com/city/gurgaon/Delhi-Gurgaon-toll-plaza-to-be-removed-tonight/articleshow/30684231.cms). Plus Noida is in UP (that says it all)


So I am exiting this stock with a 10% gain - and I would recommend that you do the same.
 

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