This is an important question which I too have been thinking about in recent times. So, penning down a few thoughts on AGMs in general. Writing about individual events and experiences will make this too long a post.
Indeed, in some cases the answer to your question is quite straightforward. When a company does not hold quarterly concalls, AGM provides the only formal opportunity to interact with the management and learn more about the business. The utility of AGM in such instances is unquestioned. Some managements are very forthcoming, even appreciate others taking interest in their business. Others may not speak on their own, but we as investors need to ask relevant questions and make them speak. Some may not speak even then, but we have to take our chances.
From that perspective, life was much better in the era of physical AGMs. Investors & managements could meet face to face, interact and even know each other. Besides the formal Q & A sessions, a lot could be gained by meeting the managements on the sidelines of the event – over high tea or lunch, or simply by walking up to the stage after the event and starting a conversation. I attended several AGMs during the period 2017-19 and most of them were fruitful. On several occasions I had long – even 30-to-45-minute conversations with promoters / managements of companies which gave deep insights into the business and the industry in general – the kind of opportunity I would never have got otherwise. Some notable names I remember are Vinati Organics, Ambika Cotton and Orient Refractories.
Your personality and style of investing also matters. I like to get a “feel” of the management, use my intuition and instinct. In doing so, there is nothing like meeting the management in person and talking to them. Of course, friendliness and niceties can be faked but the key lies in not losing your objectivity, being able to link confirming & contradictory evidence and join the dots. I have many occasions where such intuition has helped – not just to invest, but even to stay away from or exit the stock.
With AGMs going online, this opportunity is unfortunately gone forever. AGMs are short and crisp, more structured, and formal. But even here, it is upto the investors to put managements to test. Many of them do respond in the right spirit – see this, for example. But yes, the power equation is now decisively in favour of managements.
Managements can reduce the AGMs to a farce, if they want to. Some do not let shareholders speak, while many others avoid answering select questions. But there is a learning in this too. It still tells you something about the management, and so I would rather have an AGM than not. After all, not every management is like that. For every Indiamart, there is a Pricol out there.
So, for companies holding quarterly concalls, the utility of an AGM is less but not entirely zero. You can always have some questions to ask, you never know everything that is there to know.
Unfortunately, I find serious investors shying away from attending AGMs, leaving the field open for Yusuf Rangwalas and Lekha Shahs of the world. This has given the managements an excuse to belittle the event and reduce it to mere formality. I personally don’t think spending an hour or two with your shareholders (partner owners) once a year is too much to ask for. But the onus to prove the relevance of the AGM lies with the investors, not with the managements. I therefore try to attend as many AGMs as possible, and ask questions wherever I have some. I wish others did the same.
For the AGMs you attended, what was your contribution – that is what you should think of.
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