If any one is tracking this company, is this company a clear case of promoter riding on to retail individual investors?
Rationale -
Company has net cash of 1050cr . Out of cash flow of 350cr last year, they gave dividend of 45cr net (3 ruppes per share). The company is debt free.
When asked about dividend declaration, they said that they need money for investments and acquisitions.
Following are the places where they invested money.
- 137.12 cr in Whirlpool Corporation senior notes. I am pretty sure they must not been getting more than 3-4% dollar returns. It has a lock in period of 3 yrs. Note that rupee has appreciated since November 2016 (When they invested in the parent).
- 350 cr in Whirpool S.A. Brazil (Subsidiary of parent). When asked the rationale, management said they will be getting better returns than bank FD. He did not disclose the return rate and contradicted his statement of needing money for expansion. This also has a lock in.
Note 4
@ashwinidamani _ tagged you here for more understanding of corporate governance. I respect your analysis.
Thanks
Kanv