I agree corporate governance standards have been poor. Especially with regards to excess cash reserves which ideally should have been distributed to shareholders. So far, they have not addressed the interests of minority shareholders convincingly.
These are legitimate concerns but are these concerns overblown? Is it rational to discount cash to such an extent. After all, cash is money in the bank.
They also have investments in tech companies like Mobikwik, Oyo and Snapdeal among other startups. Management has stated that they are not long term holders and they will sell out during liquidity events. They have invested 81 Cr in Mobikwik, 44 Cr and 31 Cr in Snapdeal which totals upto 156 Cr. As per FY 22 balance sheet, the company has financial investments worth Rs. 1514 Cr.
So the question is does questionable corporate governance standards warrant such a huge discount on financial assets? Book value mostly consists of liquid investments amounting to 1,500 cr but it’s market cap is less than 380 Cr. Is there any merit to such a steep discount? What am I missing??
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