Update: I asked the question to the Management on why CIL sold its share so soon after QIP. Mr. Nath replied along the lines – ‘maybe because the share price rose too fast’ (not verbatim). I was disappointed with the response, I expected a more nuanced response. A QIP investor doesn’t invest hoping for a 10-15% bump in stock price they (generally) do it for the long term because they believe in the long-term growth story. Possible that Mr. Nath deemed the question (why a particular shareholder sold) unfit to be asked to the Management hence the curt response.
Thankfully someone asked a follow-up question stating the above and also added that the sell transaction by CIL seems to be a negotiated trade with a big investor. He asked if the Management is aware of who the new investor is. This time round Mr. Nath spent more time answering – (i) CIL has been a long-term investor, even prior to QIP (ii) yes the trade was a negotiated trade (iii) during the QIP the interest from investors was far more than the QIP amount on offer ( what I understood was – seems some interested investor(s) who didn’t get an allocation in QIP, entered into a negotiated deal with CIL).
Disc: Invested and notwithstanding the above, nothing I heard on the call made me doubt my bullish take on Ugro’s future prospects. Management seems genuine and works hard to create a strong institution. They also have substantial skin in the game via ESOPs.
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