@yashkj : Thanks for checking it. But I see this line item in previous year as well (An amount of 71 cr). Wouldn’t this include the payments other than the money paid for digital content creation as well? Sorry for my ignorance, still trying to catch up in reading ARs and terminology. Also, the transaction of separation HTDSL was done in Dec 2017, so trying to find out how much exactly they are transferring after that transaction , year on year basis. I have two motivations:
- Considering there is a huge cash pile, it is of academic interest as well for me to watch how would this get utilised or vanish.
- I also have a small investment that I made around 250 levels, where I need to cut losses. I am not in hurry since negative sentiments already seem to be priced in. But once convinced that it is a evil play, makes sense to book out at 50% loss also. At this point cash still seems to be in books. Seems like madcap/small caps have lot of incidents where minority holders are kept at disadvantage, today there was another where I came out without much losses fortunately (megmani, there is a VP thread on it). So if I book out at these valuations here and put in another, no guarantee that I won’t loose
Some thoughts I have are
- If it is 68 crores of payment and considering there is also related expenses that HTDSL need to incur, this would not help in moving larger chunk of cash pile out of HMVL? (at least immediately) . They will probably need to come up with more innovative ways
- Is the management/promoter integrity really questionable or is it just that they are unable utilise the cash well? My feeling is that if management/promoter integrity is questionable, they would not allow cash to pile up in the first place like this, they would probably find better ways to manage it low in ongoing basis.
- There is this education venture where they invested recently. Unrelated business, but can that be because of lack of opportunities in newspaper business? Other companies like jagran prakashan seem to be giving dividends or buyback for the same reason of no investment opportunity.
- There are also many other companies where there appear to be similar issue, not a great utilisation of cash, but retaining earnings on an ongoing basis. Unless there is enough pressure (like in case of Infosys) it remains there without good utilisation.
