I was very lucky to exit Manpasand Beverages before it went downhill. Thanks to red flags I noticed while doing research. Here are some more red flags:
- In Sep 2016 Manpasand had come out with a press release saying “Manpasand Beverages ‘Mango Sip’ brand emerges as one of the fastest selling fruit drinks at SPAR’s retail outlets”. SPAR is a supermarket chain. I visited a SPAR Supermarket in Gurgaon in Feb 2017 and did not find a single Manpasand product on the shelves. The employees had never heard of their brands like Mango Sip. I posted about this experience on the Manapasand thread.
- Motilal Oswal, the largest MF shareholder in Manpasand Beverages, came out with a very bullish buy rating on their portfolio company. They mentioned no downside risks. I posted about this on the Manapasand thread. I am not accusing Motilal Oswal of wrongdoing, but merely pointed out that they had not presented a balanced view. It seemed investors, including institutional ones, were behaving irrationally.
- The AR showed that they were playing very low salaries to their employees. In some cases people were paid 1/3rd or 1/5th of the salaries that they would otherwise get.
- Advertisements in Economic Times. For a brand whose customers mostly came from tier 2/3 cities, it made no sense to advertise about Manapasand in Economic Times.