1. Nirma Limited-Nirmas Stock ValuationShare capital details-

2. Salient Points:1. The Authorised Share Capital of the Company has increased from Rs.100 crores to Rs.150 crores fromMarch 2007 to March 2008. 2. 56.80% of the Authorized Equity shares have been issued, subscribed and paid-up. 3. The Promoters have around 77% of the issued Shares. 4. Institutional investors like Mutual Funds/UTI form the largest portion of the institutional investors, whilethe FIIs form 33%. 5. Foreign promoters have no shareholding in the firm. 6. For the non-institutional investors, individuals with nominal investment of above Rs. 1 lakh form themajority with 75 %. 7. The non-institutional non-promoters shares have gone up by 8% since September 2007. Type of shares- The following types of shares have been issued: Equity shares of face value is Rs. 5 (Nos.= 15.91 Crores)Preference shares of face value Rs. 100 each (Nos.= 2.79 lacs) 3. Valuation of shares-Nirma Ltd (all fig. in Rs. Crore)Mar '08Reported Net Profit229.73 Preference Dividend0 Equity Dividend63.83 Corporate Dividend Tax 10.85 Total Dividends74.68 Retained Earnings155.05 Shares in issue (Crores) 15.91 Return on equity (ROE)8.89 Dividends/share 4.69 g (Retention Ratio x ROE) 0.06 R (pg. 191, RWJK)14.50%Clearly, D0= Rs. 4.69 g = 6% R= 14.5% D1=D0(1+g)=4.97Hence,Internal Value of a Share of Nirma Ltd, P0=D1/(R-g)= Rs. 58.52Current Value in the Market (as on 30/1/2009)= Rs. 97.65 Since Current Value > Internal Value,Nirma is a Good Sell 4. Appendix:Equity holding by type of investors Nirma Ltd. (No. of shares) Sep 2007Dec 2007 Mar 2008 Jun 2008 Sep 2008 Dec 2008 Total Shares 15,91,42,28215,91,42,282 15,91,42,282 15,91,42,282 15,91,42,282 15,91,42,282 Promoters12,28,15,92012,28,15,920 12,28,15,920 12,28,15,920 12,28,15,920 12,28,15,920 Indian 12,28,15,92012,28,15,920 12,28,15,920 12,28,15,920 12,28,15,920 12,28,15,920 Individuals & HUF4,07,29,620 4,07,29,6204,07,29,6204,07,29,6204,07,29,6204,07,29,620 Central & State Govt. Corporate Bodies 2,00,06,500 2,00,06,5002,00,06,5002,00,06,5002,00,06,5002,00,06,500 FIs & Banks Others 6,20,79,800 6,20,79,8006,20,79,8006,20,79,8006,20,79,8006,20,79,800 Foreign 0 00000 Non-promoters3,63,26,146 3,63,26,3623,63,26,3623,63,26,3623,63,26,3623,63,26,362 Institutions 47,31,110 29,47,97622,62,56022,61,13521,13,52721,41,015 Mutual Funds/UTI 37,90,210 21,17,70815,09,14815,05,69813,65,79813,66,391 Banks, FIs,Insurance Cos.2,84,7881,74,248 70,107 60,332 60,432 58,964Insurance Companies 30,02555,025 55,025 55,025 55,025 55,025Financial Institutions & Banks2,54,7631,19,223 15,0825,3075,4073,939 FIIs 6,56,1126,56,020 6,83,305 6,95,105 6,87,297 7,15,660 Venture Capital Funds 0 00000 Foreign Venture Capital 0 00000 Non-institutions 3,15,95,036 3,33,78,3863,40,63,8023,40,65,2273,42,12,8353,41,85,347 Corporate Bodies 1,36,96,189 1,57,55,8401,56,99,78478,85,82728,92,33527,95,416 Individuals1,78,19,536 1,75,40,2271,82,82,0182,60,97,4343,12,34,1233,13,01,951Nominal invest. Upto Rs. 1 lakh 58,07,294 57,62,39758,05,70858,15,70159,55,42658,92,356Nominal invest. Over Rs. 1 lakh 1,20,12,242 1,17,77,8301,24,76,3102,02,81,7332,52,78,6972,54,09,595 Others 79,31182,319 82,000 81,966 86,377 87,980 Custodians 216 References: 1. CMIE-PROWESS 2. http://www.moneycontrol.com/india/stockpricequote/detergents/nirma/N 3. Nirmas Annual Report 2007-08