Dishman Carbogen Amcis Ltd

I am invested from lower levels.
History prior to 2006 is irrelevant as there was already some relationship b/w Dishman’s Europe entity and Carbogen (owing to JV). In 2003, Solutia filed for bankruptcy and Carbogen+Amics being Solutia subsidiaries were available perhaps for cents on the dollar. So Dishman Europe acquired those assets in 2006. Continued to operate those assets while carrying foreign denominated debt which continued to swell up all through 2006-2017. In 2017, Dishman India entity (holding entity) decided to reverse merge itself with its subsidiary Carbogen Amics. That led the Goodwill to swell up to almost 4000 crore and has been there ever since.

Around 2019 there were IT raids and a massive blow to corporate governance. Company tried calming the domestic institutional investors but failed to do so and thus saw exit from a lot of MF houses.
Then covid happened and costs+debt kept on swelling up. All issues combined+mismanagement of balance sheet, the market started neglecting the company to the point that the company became valuation-wise very attractive. So again saw some interest from institutions (FIIs mainly) around early 2023.

Operationally, they have problems managing employee costs, interest costs, currency fluctuations, operational capex, compliance upgrades owing to which you see one-offs every quarter; essentially any cost structure you look at is poorly managed. Some of the unstated problems can be siphoning off money (I am alleging, don’t have any proof, hearsay from fellow investors).

Coming to Promoters, there are a couple of issues. First is, succession. I think till now the Chairman held shares in his name and only recently there has been some inter-family transfer of shares with stated reason being succession. Operationally, Chairman son Arpit is the Global MD (and you know the story). So I don’t find him to carry rigour (or maybe there is lack of talent) to turnaround the above started issues around, at least effectively. Because he has held the helm for quite some time now but every quarter two things are pretty consistent ; one-offs and assurance that things are turning good.

PS. Aprit’s wedding’s video was put up on Youtube flashing big fat Indian wedding with Rolls Royce exchanging hands and I personally find it a signal of non-serious business people.