Not commenting specific to Laurus, but would like to point something out wrt promoter stake in a company. We often think promoter does not have enough skin in the game if their holding is lower than 50% in their company. But this is not necessarily true. A promoter’s skin in the game should be seen by assessing how much of their total net worth is contributed by their holdings in their company. If that % is very high, then the promoter has a lot of skin in the game even though their holding % may be low in the company. E.g. RACL Geartech.
Vice versa, a 3rd-4th generation promoter may have enough wealth via ownerships of 4-5 companies, that their holdings in a particular company, even if optically high at 70-80%, amount to only 20% of their total net worth. In such cases, promoter may actually not have enough skin in the game even with such optically high holdings.
Therefore, a Laurus investor must assess how much of Dr. Chava’s networth comes from his holdings in Laurus to evaluate his skin in the game.
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