Disclaimer: 1. Meghmani is currently ~10% of my Direct stocks PF.
2. My understanding of accounting is limited and i am still trying to gather the acumen necessary to verify first hand whatever i’m sharing.
Wanted to add my thoughts on the management integrity:
- Regarding the promoters getting shares at 30 rupees in MFL when IFC exited, I would suggest interested investors to watch this three part videos on YouTube: Part1, Part2, Part3. Another disclaimer (also present in the video) is that this YouTuber is also a shareholder of Meghmani. In general I have found his videos to be quite honest and this is why I trust his judgement. Investors that do not trust him should definitely not be looking to hold or buy this company. The TL;DR of the videos is that when MFL was setup (in 2007-08), the contract between IFC, MOL and promoters promised 50L share warrants to the promoters at the prevailing rate of 30 rupees. In Ravinder’s opinion, this is not unethical, and I agree with him.
- Regarding the fires, I find it unfortunate that we would try to make fun of the a chemical company’s factories catching. We should try to go through other threads about Transpek, Sirca, Syngene and several others as well. We should definitely question management about measures being taken to prevent future accidents.
Although the management quality is suspect in the mind of the investors, as per my own limited deep dive, most concerns are unwarranted. A company with 1 third of its profits coming from agrochemicals and 1 third coming from pigments is trading at a P/E of 5 and growing its earnings and sales is an attractive buy.