Book value per share (BVPS) is the ratio of equity available to common shareholders divided by the number of outstanding shares. This figure represents the minimum value of a company's equity and measures the book value of a firm on a per-share basis. --------------------------- Here I am explaining you one of the reason why Book value per share exceed the CMP, the reason is related to , company's portfolio current valuation.
It is been very common that one company buys shares of other company , the dividend income is reported as other income, and the current valuation of these stocks is added to company's Book value. ---------------------------- For example Let us study this share name : Maharashtra Scooter
A well known brand of Geared scooter in early days. I think every body has a childhood memory attached to it's scooter . Now from a well known established scooter manufacturer to a holding company the journey is very different from usual.
Some interesting fact about Maharashtra scooter , that I found reading it's fundamental
Market Cap : 4,204 Cr ( opp .. That is not so great finding ✏️✏️✏️) Book Value of Company : 22702 Cr (That is interesting)
Story is not over yet , wait 👇🏻👇🏻 Maharashtra scooter is holding 🫴🏻🫴🏻🫴🏻
💵💸💸💵💸💸💵💸 1) Bajaj Finance Ltd Number of shares : 18974660 Holding Percentage : 3.13 % CMP : 5519 Current Value : 10472.11 Cr .
🅱️🅱️🅱️🅱️🅱️🅱️🅱️🅱️ 2) Bajaj Holding & Investment Ltd. Number of shares : 3387036 Holding Percentage : 3.04% CMP : 4640 Current Value :1571.58
🛵🛵🛵🛵🛵🛵🛵🛵 3) Bajaj Auto Ltd . Number of shares : 6964277 Holding Percentage : 2.41% CMP : 3607 Current Value :2512.01Cr These three stocks announced dividends recently where ex date was 30 June , Dividend of 20 , 25 , 140 per share Respectively.
If I multiply and calculate the dividend earning of Maharashtra scooter that it stands at 143.92 Cr .
When I checked it's shareholding than I found more interesting things
1) All these companies are Bajaj Group Companies where Chairman is Mr. Sanjeev Bajaj . 2) Bajaj Holding has 51% stake in Maharashtra scooter and Maharashtra scooter has 3.04% stake in Bajaj Holding. 3) Company's ( FY 21-22) Sales : 17Cr while Expense : -20 Cr But, EBITA : +174CR (because of the dividend income got the point ? Comment Below)
If I add current portfolio value of these three stocks only (According to CMP) it it around 9605 Cr.
That is Why the book value of this stock is exceeding its cmp.