Unless there is some concrete reason/need from promoters’ side, I am a bit surprised at this move of selling almost 6 % equity in the company without giving any benefit to the company/shareholders. PI promoters are quite rich guys themselves and unless there is some significant charity funding that is to be done out of this, I don’t find any logic in this.
Co.’s business model is sound, growth visibility is good and what I believe is still CSM business is not mature/saturated and hence, if any dilution has to be there it should be via fresh dilution so funds can flow to the company for future expansions. Agreed there is no immediate funding need and internal cash generation is robust but a 1500 cr. Scale in CSM is nothing in the backdrop of global opportunity and based on the history of company where they always preferred growth by judicious use of resources, the rationale strategy should have been to reward minority shareholders handsomely to let them benefit out of robust cash generation now and make fresh dilution when funding need arises rather then raise funds at personal promoter level.
Rgds.
Discl. – Minor investment. Less than 1 % of portfolio.
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