IMO, they have possibly done the right thing as things stand today.
- Lower VC appetite for funding
- The earlier you go to VC – the more equity you give away
- Interference of VC
- Cosmo has literally no use of cash it already has and generates every quarter. Even the buyback they should have done double, if not max. What will they do with the cash? Already there is capacity glut – they can’t put more capacity.
- If they are able to push it to 15-20 Crore monthly sales runrate by end of FY24, they can raise capital relatively cheaply and in good quantum. Hope they distribute the shares (at least partially) to shareholders in the hived-off entity, rather than keeping it all in the corporate.
- And finally as you said, it saves taxes too , bsedies giving the operating team freedom to operate without bothering where the next cheque is going to come from. Start up founders spend a hell lot of time raising finances and are continually in that mode.
Bottomline for me – till Cosmo figures out what to do with Cash, it should keep investing in Zigly and ramping it up. Much more aggressively then they are doing at present. At an opportune moment, when it is ripe to be priced well in the market then hive it off.
| Subscribe To Our Free Newsletter |
