Couple of things
Market being so volatile these days, why should anyone subscribe to rights issue at Rs.60? If market corrects we might get it at lesser price in the spot itself? With this, can we extrapolate that rights not subscribing fully?
Since demonetization, i think Management has become conservative on the growth side. But still not out of woods and are being haunted by one or the other like high concentration, floods, riots etc.But being in the unsecured space, NPAs are expected.
With diversifying across the states, pledge getting released, promoter share getting increasing, their decision of subscribing to rights as well indicate there might be light at the end of the tunnel.Going through the concall transcipt, i feel like they are walking the talk. On the one hand, highly concentrated MFIs are quoting at top of the valuations and on the other we are getting this at the fraction of the BookValue. Luckily, none of the institutions booked out losses yet even though they have subscribed at premium to the CMP. Street reactions to the rights as well as the Q1 commentary might give hint at how the future looks like for the company