https://www.alphainvesco.com/blog/reliance-capital-anil-ambani/
I had written a long article on reliance cap on alpha invesco. Referencing it here instead of copying and pasting.
Discl : Hold a big part of my PF at an average price of 530.
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The major problem I see with this is the promoter quality. I know Anil ambani is a big name and i may not be competent enough to comment on his capabilities but Anil ambani group management has miserably failed to take care of investors interests.
- The reliance natural resources and reliance power merger is known to everyone
- The way in which reliance communication carried on its business is no less than a disaster. I agree that the telecom sector went through a bad phase , but even the bare minimum efforts were missing.
- Debt handling has been poor as well for this group.
As a result even if this group enters a high growth/ exponential growth business ,i dont trust this group. Am sorry if i sound too crticial ,but a management with clean intentions and care for shareholders interest is one of the basic aspects i consider before investing.
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It’s mutual fund and insurance business is doing very well. Sad story about anil ambani doesn’t enthuse confidence, but at the same time the stock is reasonably valued and some if it’s arms are doing very well and hold good potential and long runway. Demerger will unlock some value for sure.
Your point about his son joining this business certainly holds merit.
Disclaimer: invested, very small qty
I have read that full article and really liked the logic behind it. But here I iked most is the buy price that you have mentioned as most of the members only mention that they hold the share but do not disclose the buying price. So really liked this transparency from you.
Disclosure :: not invested
Following Reliance Capital since several decades. You know what happens to NIFTY when 'price of ’ and 'interest in ’ Reliance Capital touches a high. People close to me lost most of their money in this in 1992 and afterwards, whatever they made in almost all other stocks selected PF.
Well i am no expert but my 2 cents as value investor would be Management : Not Good, on profitability part its very difficult to justify any financial firm without looking at its RoE : all we are looking at is PBT which i think is a little skewed indicator specially for financial institutions, and to add to it, the inability to look at the risk and liabilities of the financial company specially one of the group which is always mired in one financial war or another ( reliance power, reliance communication etc etc.) . I will give it a pass, there is not enough margin of safety for me here.
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@varadharajanr You don’t see Madhusudhan Kela quitting as Chief Investment Strategist as a significant negative?
Disclosure: Not invested.