Mismanagement, poor allocation, confused strategy- the promoter group has become a joke. Aurore was part of the investment thesis for a diversified Api co- now it’s back to a commodity only. Group debt is at alarming levels, more than the combined market cap of listed companies.
5 Likes
What co-relation does this news opinion video has with Solara? The article is also very generic and do not point to anything distinct.
New CRISIL report about Solara May11 2022
Ratings downgraded to 'CRISIL BBB+/Negative/CRISIL A2 from ‘Watch Developing’
A good detailed report about current distressed state of Solara.
3 Likes
Agree , they have indeed picked up pain points. Sales needs to stabilize , Under absorption of overheads at Vizaj needs to be fixed (need FDA validation as well), New Product Pipe line to absorb annual R&D costs (this happed only once in history of Solara i.e. 2021-2022 , they couldn’t do it ) , Raw material costs needs to fall in (if not consider partial price increase , depends on customer contracts) , working capital needs to be reduce … All these will take lot of hard work and focused approach… Execution is the key. Lets wait for next 3 to 4 Qtrs… FY 2022-23 is a turnaround year… even if they completed 60% of what they have planned it will be good… till that time dont look at Stock price. it was almost available at BV yesterday…
2 Likes
Investors seemed to have lost faith in this group. The stock price is not far from the demerger price in 2017. Company has to show a very strong performance to get the market confidence back. Narratives will not go far in a bear market.
3 Likes
Doesn’t it seems strange that all CEO’s in Strides + demerged entities (Sequent + Solara) have quit over the last year? Does that speak something larger about the group or was it just a coincidence?
2 Likes
I think these were decisions from Arun Kumar, rather than them quitting. I believe the founder is trying to take this malfunctioning by the horns and steer it in the right direction, something the professionals were unable to manage.
Also understand that they will be merging all the associated entities like Stelis and Steriscience together with Strides Pharma now.
Is there any source for this ?
This is big bold claim. Need a source.
1 Like
it is not possible shareholders annd bankers wont approve of the merger and there is also a pledge. Also what synergies will the merger offer or the additional capabilities.
Can someone pls update on Solara - what is going wrong in this company? Is there any possibility of them coming back on track?
There are multiple things that are not going well for this stock apart from the timing:
- They changed the business model when their primary product ibuprofen was coming under pressure. The quarterly revenue dropped by 75%
- The top management either got fired or resigned and the promoters never explained it adequately.
- They initiated the Merger and then dropped the plan.
- This caused the market to tumble, further deteriorating their debt-to-equity ratio.
P.S.: I am still invested as I do hope that mgmt experience will come in handy to ensure that they are able to get back their mojo.
4 Likes
Vizaj plants got European Union regulatory approval for Ibuprofen. Expecting better results this qtrs vs previous 2 qtrs extremely disruptive numbers…I am giving 2 more qtr before I make a decision on this script…as such all bad news are factored in CMP.
3 Likes
Arun Kumar and Karuna business solutions (owned by Arun kumar) have done a off-market transaction with other promoter and reduced their holding in Solara in past two days. Together they have reduced their holding by 5.8%. Since Mar’22 their combined holding is down by more than 10%
Was it something they had annouced before? I can’t find anything in earlier concall.
2 Likes
Aditya puri resigned.
Have seen a lot of resignations. Any red flag you feel after which the resignations got triggered.
1 Like
An interesting note I chanced upon from a FII Investor firm.
9 Likes
Lets take a step back and evaluate the entire Solara Aurora transaction. It comes as a surprise to me that a man who is held in high regard in investing circles exhibits such ordinary levels of Corporate Governance
Image 1 shows the shareholding of Aurore Life Sciences as on 31/3/22. To note is majorly owned by Hydra Active & Rajender Rao (92% in total).
Now, let us see who owns Hydra Active, the shareholding of which is attached in Image 2. It is owned by surprise, surprise - Equally by Arun Kumar + PAC AND a Hyderabad based family office. Note the name of Spiracca Ventures here, it is going to be of good use going ahead.
-
Firstly, I dont think there were any categorical discloures made by Arun Kumar regarding his significant vested interest in the transferor co. (Aurore Life)
Secondly, lets now look at the financials of Aurore b/w 2020-22.
Seems evident to me that Aurore was banking to ride on one time gains from its COVID led business (Favipiravir orders) which would have vanished in due course. Here is a credit rating snip on the same
Now, lets take a glance at Spiracca. Spiracca ventures is the investment arm of Deepak Calian Vaidya, an erstwhile director in the Strides group of companies. He has been associated with Arun Kumar since 1998, and in 2021, post the merger announcement of Solara-Aurore, he tendered in his resignation as Director of the co in August 2021, and subsequently as director of Strides, on Nov 2022.
Since Nov 2022, let us have a look at what he has been upto. In these past 14 odd months, he has bought a total of 10.5% of Solara’s equity from guess whom! the promoter himself 
(txns have taken place at an avg price of 350)
Now,this could be due to the following
A) He is just simply still acting as a PAC for Arun Kumar and hence, this change of 10.5% equity should be considered a non event
B) There are other plans he has which might be strategic in nature. To just give our boarders a quick background of him, he is most renowned for his 12 year stint as head of Schroder Asia funds.
I am inclined towards point 2, as very clearly, Arun Kumar has an extensive ecosystem of his outside Solara in Strides (whom he rejoined as executive director in March 2022) and the eventual listing of Stellis. The man anyway is not involved in an executive role at Solara.
Would love to hear ya’ all and your feedback and thoughts.
10 Likes