I have been studying this company since last week.
One red flag that came up in their RHP was that on page number 100 in second paragraph they said that they conduct business based on oral contracts. This seems risky for a company. I sent them an email seeking clarification about the same, and the reply that came back was “Currently, the sales contracts are largely through written purchase orders detailing the terms of sale from our customers.”
This could potentially (due to the word “largely”) mean that there are still come contracts that are being carried out on the basis of mutual trust and understanding.
Also, at the moment they do not have any plans on entering B2C segment like KEI, Polycab, Havells etc.
I have recently started investing, but doing business based on oral contracts seems risky for a listed company. Can someone with more experience chime in.
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