Can anyone please upload the latest Annual Report of this company on Google docs and share the link.
I got to know of this company because of Ador fontech interview that was posted here. I tried to find out as much as I could and sharing it here. This information is not otherwise available or directly apparent:
1.The company is located at A-13 &14 III Stage, Peenya Industrial Estate,Bangalore 560058. As per the balance sheet of the company it does not own any leased land. The company also has factories in Pondycherry and Coimbatore apparently and an office in Chennai.From Getit.com it seems the Plot size in Bangalore is about 75000 sq ft. The plant is 5 km from Railway station. On real estate sites much smaller plots are being quoted at about Rs 23 crore in the same area.
Can anyone please confirm the exact plot size and potential rates. Info about other cities would be useful too.
2.The company’s business is sluggish but dividend yield is 6% in last few years except current year when it reported a loss.
3.Promoters have a minority stake at 31.3% of which 3% has been acquired by issuing warrants to promoters at Rs 16. Book value is listed as Rs 19+. there have been more than 3 instances of non promoter shareholders claiming directorship of the companies. There are about 5000 shareholders in the company and hence average minority shareholders holding size should be 1000 shares
4.The company used to manufacture telcum powder for HLL and that was its main product before HLL apparently discontinued that relationship. It has supplied telcum powder to Wipro. Its other products have included contract manufacture for Denim after shave lotion, creams, mositurizer, ayurvedic products, baby products etc
5.From unclaimed dividends it seems 10% of the Shareholders are dormant.
If Sharholders get active and force the management to sell the surplus real estate, capital released would be more than 20 times the current market cap of the company. Promoters being in a minority cannot short change the investors except by fraud. That risk is mitigated by the presence of two other listed companies of the group Ador welding and Ador fontech. Any adventurism on the part of promoters will backfire on their much larger business.
Please contribute your thoughts around this and add any other info if available. Please refer detailed balance sheet for more info
I took a small position in this stock and have recently exited. Reasons:
1.Corporate governance: The company did not send me the annual report despite my being eligible for it. I sent an email and called up the company for the annual report without any success. I complaint to SEBI for which the response I got was that one needs to contact MCA for such complaints.
3.Opportunity Cost: This was taking too much time tracking and I did not hold a meaningful position to justify it. Because of ‘1’ and ‘2’ I would not increase my position and in the meantime I have found other investment opportunities that are much more valuable than this with considerable certainty.
I did look at the other two business Ador Fontech and Welding and found this one to be more undervalued of the three. Though I have read that Advanis are known for following good corporate governance practices, this company puts a question mark on the integrity of the promoters and should make investors in their group companies wary too. Hiding information and not following the law are certainly not prudent business practices.