The promoter has given the parent company an interest free loan, which in turn has given interest free loan to Humro. At some point in future, Humro will convert that loan to equity and the parent company will get additional shares, so ARAPL’s holding will increase in Humro. Further, ARAPL will also convert the loan given by promoter in equity shares, here the retail/non-promoters will get diluted. Its going to be a difficult jouirney holding ARAPL. Their legacy business is not growing, is pretty lumpy, they are now attempting to export car park solutions (not sure if that is a good move, is there really scope/demand for it?), surprisingly robotic welding business is not growing. Turning profitable is good, but should stay profitable.
Humro has struggled to scale up.
Another “soft signal” which I didnt like was that this time they limited the call to striclty an hour, whereas previously Milind always used to ensure that all the paticipants queries are addressed, even if meant going beyond an hour.
Disc: hold small position