Multibase India Ltd

My analysis of this company is as below
Positives

  • Strong parent company - Dow Dupont USA
  • 75% ownership with no pledge
  • Higher operating margin suggests pricing power related to competition
  • Low capex requirement (as fellow VPer mentioned above - 9Cr fixed asset generating 109 cr of sales)
  • Good auditor - BSR
  • Cash rich company, no debt
  • Long growth runway due to large product portfolio
    Negatives
  • No dividends in-spite of regular cash generation
  • Related party purchases - Purchases from Multibase SA and Dow Europe GMBH - Total 25 Cr
  • Presence of fully owned entities in India in similar businesses as highlighted by fellow VPers
  • Lack of communication from management - No investor presentation, no result concalls, annual report lacking information is managment discussion and analysis

Lack of dividends is the biggest mystery knowing company is sitting on pile of cash and business does not need any major capex. (mainly required for working capital)
So I feel biggest risk is delisting by the company and merging the listed entity into any existing fully owned entity (may be shortchanging minority investor in the process)

Disclosure - tracking, no investment

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