This is old news and the ED has just requested for attachment now. The P/E of the company seems to factor in this piece of information otherwise it would have quoted at higher valuations given that it is India’s leading basmati rice producer. I think if the company is able to come clean, valuations will reset to higher levels.
Disclaimer: Invested at close to current levels so take my views with a pinch of salt. 
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In December, the world’s biggest rice importer China started buying Indian rice for the first time in at least three decades due to tightening supplies from Thailand, Myanmar and Vietnam and an offer of sharply discounted prices. In 2020 India exported a record 14 million tonnes of rice, provisional data from the trade ministry showed
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Good news on India’s basmati rice exports boom this year continues to flow in from all directions… Though it makes no mention of KRBL as such, this article talks about huge jump in export volumes to Belgium and Netherlands
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I think,LT foods may be beneficiary as it has started new plant in eurpoe
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although LT FOODS will be major beneficiary of this.
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Anil Kumar Mittal with CNBC on Basmati exports
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@roysavio, I agree with you that amount is in questions is very small but it does speak volume about integrity. There was 2 ED charges.
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With regards to Agustawestland scam where KRBL’s subsidiary and independent director was is question so KRBL or it’s management was not party to this case and their distributor was also involved (remember MP’s purchase got cancelled.
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This is regarding Embraer deal case, where one the document was signed by KRBL’s management so here ED made Mr. Anoop Kumar Gupta, Joint MD as one of the party.
Now coming to comparison with ITC, where there have been some case but as it was not family driven business so it was easy replace culprit and make sure you have new people running business smoothly. I suppose in case KRBL, it is hard to replace management if they found guilty.
Can anyone has transcript of concall arranged on 10th Dec or notes would help to understand what is their stand point (I means detailed explanation) or recording as I could not find it. I have asked CDR to provide recordings for the same but yet to get the file.
as Buffet says “You can’t have good deal with bad people”
Views and comment are invited from senior VPs. This is my first post so please pardon me if I missed to follow any format or guidlines.
Thanks!
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KRBL shareholding has some really interesting shareholder: Joint director of enforcement, Central Region
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[https://www.business-standard.com/article/markets/krbl-slips-13-as-ed-attaches-properties-in-embraer-defence-deal-case-119070500346_1.html](https://www.business-standard.com/article/markets/krbl-slips-13-as-ed-attaches-properties-in-embraer-defence-deal-case-119070500346_1.html
ED Attachment
This article is published in July 2019… its an old story. Is there something specific you wished to point out?
that is response to the question asked, why one of the share holder is Joint director of enforcement.
Same is the case with Gland Pharma, Satyam Ramalinga Raju shares attached to ED.
The other point on shareholding is to understand who is this reliance commodities owning 9% of krbl as not seen in any another stock
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Technically it made rounding top around 300 levels based on my basic understanding of techs. Biz environment is robust given the price of commodities and promoters did buy 0.67% stake during the last year. However, it is clear that investors would be hard pressed to understand how much of earnings is due to real profits or due to alleged money exchange biz as investigative agencies suggest. The story is over for long time to come.
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Trying to assess and address the uncertainty in light of this new development. The resultant price movement notwithstanding, this is going to be a testing moment for long term investors of the co.
A brief analysis of the issues (prior to yesterday) so far and its analysis from an investor’s perspective is given in the link below : -
BTW, the link has been shared in the thread earlier, just sharing again for reference.
When we study the developments and management’s response so far, it seems Mgmt so far have denied thr involvements in wrong-doings and have been partially vindicated by courts so far.
Taking this as a base case; the probability of mgmt not involved in any wrong-doing > the allegation levied against them. Hence, the odds are in favor of staying invested or adding more to the position.
However, if ED have got some new and conclusive evidence( which wont be accessible to retail investors immediately) , then this new information changes the odds and has an impact on base case equation. In this case, the probability of mgmt being rightly accused and lying all the way > Base case. Thus, better to take loss and sell as early as possible.
Another point to consider is KRBL and its performance as a business vis-a-vis a mgmt whose bandwidth is absorbed in these non-related issues, thus locking up value in the process. Some of the investors will realise this and might pare up thr holdings accordngly. I wd be interested to know what will eventually lead them to this conclusion now
Or will they also consider the co’s results on 09th Feb before reaching a conclusion?
Disc : Invested. Doing the above exercise to revise and think thru the thesis in light of the recent development.
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Would like to offer a slightly different view point here.
Let’s say for argument’s sake that the promoters are guilty. Does that ruin the company’s earning power? Do consumers of India Gate rice stop eating India Gate basmati?
Dont think so.
The only real problem could be if owners fudged the sales numbers, which, if it were the case, would have been discovered by the ED after 2-3 years of digging. And since ED has not been able to provide such evidence, safe to say there is no revenue manipulation going on.
These allegations even if true, have no impact on the earning power of the company and hence no impact on the valuation of the company.
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