Its not even over analysis but hyper analysis. Same points, same arguments and clearly this thread is on path of getting closed again!!
My points:
Cash Issue
Yes, timing the exchange rate is extremely difficult. It seems management is wasting time trying to find the right rate to transfer. However, those who think that they should just transfer are also guilty of the same crime which is wasting their own precious time. If if seems so obvious that any USD should be converted to INR because of interest differential, your obviousness contradicts a host of global fund managers head on. Everyone in the world today wants to just buy USD and sell all other currencies including high yielding emerging market once. Interest rate parity is what should be considered and not the interest rate differential. Based on interest rate parity, the rate differential should be compensated by currency movements in long run.Merger
I think this is the best move by the management to get KCL listed first. As they said, any valuations given to KCL would have been treated as cheating to minority shareholders unless it was free of cost. Best to let market discover it.Other way to think about this is trust should be mutual. Management would probably have given better then fair valuations to the minority shareholders, but because people have started questioning their every small move, they stopped trusting the market and have decided to list it focusing more on transparency ( intangible benefit) than giving a tangible benefit. To me, (with my presumption that management is brilliant), this has been a negative news today and the benefits would go to management as well as the KCL Ipo applicants.Growth
One thing which is not clear is whether the guidance is to double volumes or the value in next 3-4 years. I thought it was to double the production, which translates to higher sales growth and margin growth if branded business is successful. But today, they mentioned 525 crores getting doubled to 1050 which seems a tab bit lower growth for the company trading at slightly richer valuations.And yes, I too feel the valuations are bit richer.Corp Governance
With a history of growing sales by approx 5 times, profits by approx 20 times and dividends by 10 times in last 10 years without raising a Rupee from the market, I do not have reasons to doubt management integrity. Just that the management is not very polished, and gets carried away by the analysts who try to extract too much information. To me transparency is good, but it seems there would be lesser questions on corporate governance if they stopped disclosing or explaining things....Some Fun
Just to give something to discuss for the Kitex's critics. How about a conspiracy theory that they have cooked all the books for so many years and given the dividends etc. to make KCL ipo successful. There was no ENY advice, no three alternatives, the end goal was always KCL listing!!
Admin: Sorry for the taunt, could not resist myself after reading so many repetitive posts. No intention of being disrespectful to the points raised by anyone, but to the fact that same points are being discussed again and again.
Disclosure: Invested less then 5% of portfolio.
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