Thank you all for this insightful thread. Studying this company for sometime now. Need to understand the logic of raising funds to the tune of Rs 1000 crores by diluting equity when :
- Co. has been constantly generating good cash flow from operations year on year
- Co. also has track record of great ROCE which in my opinion means that the company should have used debt if required and pay it off to generate greater returns for their shareholder due to the financial leverage effect.
In my opinion if the sole reason was to meet working capital then it could have been met through debt and it would have been better for the shareholders and if it was to get good set of investors such as mutual funds to boost the confidence of other shareholders then they could have done the same by selling some portion of promoter shareholding to these funds just like Sharda Motors did recently.
Please enlighten.
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