Can somebody tell me if these are concerning red flags or am I missing something?
CONCENTRATION OF EXECS
- The company is run by Dr. Abburi Vidyasagar, who is the managing director and his family.
- His wife is the CFO. His son is also a director in the company.
- Dr. Abburi Vidyasagar and his son are entitled to 2% of the company’s profits each. The family has high compensation in relation to the business.
CS ISSUE
The Company Secretary's compensation is significantly lower at only 11.67 lakhs compared to that of the Promoter familyESOPs ISSUE
The median employee salary is 5.62 lakhs, raising the question of why the company is issuing ESOPs when the salary component is so low. The company has 274 employees and 28 workers. A total of 38,95,300 options have been issued, averaging approximately 12,898 option contracts per employee. With the fair value of options at the measurement date being 127 (source: AR), the value of the options is approximately 16,38,084, which is 2.9 times the median salary. Considering that the options were issued at 50 rupees, the profit from the ESOPs amounts to 9,93,184, which is 1.7 times the median compensation.This calculation does not account for the exponential rise in share price.
I am of the opinion that this leads to Short-term Focus and Retention Issues as stock profits have been so high.
This can also lead to extreme dissatisfaction among those who didn’t receive ESOPs.
LACK OF COMMUNICATION
- I was not able to find any Conference Calls and Presentations.
THE JUNE QUARTER WAS TERRIBLE COMPARED TO VALUATION
Please tell me if anyone has similar concerns and if I am wrong in my concerns.
DISCLAIMER: INVESTED
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