Fair point @Dev_S . Just one more thing last time MPS did dilution at around 840 some eight years back and it wasn’t great for investors. In general the record of companies post QIP hasn’t been great. MPS generates significant cash flows (around 80 cr) holds around 150 cr in cash and investments and gives out significant dividends. If I was a current shareholder I would have wanted dilution at much higher valuations or none at all given the cash flow position.
On the business cycle, it is probably the start of the weak cycle as indicated by Infy results for IT/ITES and can extend significantly. The issue is even if MPS does great with the raised capital in an overall down cycle the exit multiples of the sector goes down.
The price correction from 1100 to 900 in a single day again wasn’t very healthy.
Of course all these are very generic/broad assumptions and should supersede by business knowledge.
| Subscribe To Our Free Newsletter |
