Hi Prash – Please see attached Tree House.xlsx (15.1 KB)
Promoter is not as innocent as it sounds. Negative cash flow from investing (to support expansion) + rising receivables means either resort to debt or dilute equity. Debt is “dirty” and can impact net profit so promoter here diluted equity by 25% since mid 2012. However, to keep its stake constant at ~ 30%, it started to buy shares via borrowed funds and this resulted in rising pledge shares. Thus even after buying 2.7 mn shares since sept 2013, promoter stake in the company is close to the june 2012 levels i.e. ~ 30%.
So promoter now have to fix the receivable problem and generate more operating cash to strengthen its fundamentals.
| Subscribe To Our Free Newsletter |
