In India governance is key, and that is why only a handful of companies are worth investing.The risk of a ‘chor’ promoter is indeed very high. Latest case in point is the UPL issue where KPMG resigned as auditor of its subsidiary. Anil Aggarwal is a chor promoter, and the sooner one exits the Vedanta group companies, the safer one’s hard earned money is.
Disclosure : Invested, planning to exit soon
Sterlite Tech is a case of Good business with wrong promoters. The promoter is a perennial chor, it is deeply ingrained in their psyche & blood to short change investors, partners, etc, etc. One cannot create wealth in Sterlite Tech, it is at best a trading stock
Sold my remaining Sterlite holdings @156 and allocated the fund in FMCG sector …
I agree with the above thoughts that Promoter / Governance is a major risk …waiting for my break-even to arrive ( mistake of 2018 ) to get out of this co. …as with this Promoter you never know what new shenanigan he will throw at you …one of the most investor unfriendly Promoter group ( amply made clear in other co Vedanta de-listing fiasco recently , do not invest in any Vedanta Co. no matter how good the story or stock price is …as you will not be able to prepare a long term wealth creation story due to untrustworthy Promoter --my humble 2 cents
If you are so bearish on the company (because of the corporate governance issue), then whats stopping you to exit now? You have held it all through the pledge, de-pledge process and just because of your anchoring bias you are waiting for your buy price. I see risk reward in favour of sterlite tech at present times because of developments in 5g and our technology and telecom depencence increase post covid. Plus mutual funds are continuously increasing holdings. Rest do your own due diligence.
My story is not that unique or new …i am sure many go through the same cycle of self discovery to say the least !..I bought it like many first time investor who are new to the market ( way back in 2018) as it was a media covered ( frequent stories / analyst reports / future projections etc etc ) …as you gain experience you start discerning the good from the seemingly good ! that’s in nutshell my story 
…and i am perfectly fine if somebody has a different opinion …there is no one truth in the market …but its not for me !
Additionally , i am aware that there has been a renewed focus and cycle is starting to turn for this co., aided by pandemic in great measures & its getting reflected on charts and all the future development news items around new order inflows , tie-ups , tech R&D achievements etc have started flowing again after 2018 … so will exit when i cross my buy price , i have nothing to gain by exiting now when i have held on to it for so long and when i know its steadily coming closer to my price …so a wait of few more months will not affect me in any way …
i hope you wont mind reading a contrary view …its just my little experience or thinking which i am sharing so that it adds to the collective wisdom of this forum , maybe somebody new who is not aware of the risks involved might have some more food for thought to research on !!
I’m also new to investing (almost 9m) and found Sterlite to be a solid play for the 5G infra cycle up to 2025 and beyond. Even though the opportunity is too-good-to-miss, I concur with @rajguleria that promoter related risks are quite high.
What I’m more sceptical about is the capital allocation policy where dividends are being given out for 140 crores (fy19-20) but there’s a term loan rollover of around 280 crores. As such, it appears that dividends are being paid out of loans which is quite cynical considering cost of equity is so low during growth phase. Note that 50% shareholding is by one of Vedanta’s holding company i.e. 70 Crores
My theory is that from the POV of promoter, this is quite possible as Sterlite being a strong fundamental company, can get loans at a very competitive rate as compared to its other entities.
As a simple concept, it’s illogical, poor capital management to see loan AND dividend on the cash flow statements. Great companies are those with best capital allocation actions. I’m an extremely high roe business like Sterlite’s execution, it’s criminal not to invest every penny back into growing the business. I remember reading / watching Anand Agarwal mentioning that they have given dividend to please the shareholders. I am sure that is true but for Vedanta. Also, it is apparent that the management is unable to make real long term decisions which are in the long term interest of the shareholders (even if they don’t recognise / understand it).
Long term value is created by reinvesting incremental capitals that generate incremental cash flows and returns over a loong horizon. That is the underlying crux of Warren Buffet’s stock picks.
All this noted, this stock is also one of my first finds and I do sto have some bias towards it. I bought it around 125 levels last year and sitting on good profits but the more and more i read and understand, my infatuation for Sterlite keeps going down.
With that said, I won’t be surprised if I end up liquidating my entire position soon. It is still my biggest direct stock holding today.
Is this 1000cr raise when are they gng to do ??
Not mentioned as yet.
Promoter - Mr. Pravin Agarwal has disposed a significant portion of his stake. (0.3% in 2020 to 0.07% in Jul,2021). Is this a thing to worry about? Other individual promoters have also reduced their stakes.
Disc: Tracking
I came here to report on some observations I have been noticing for some months now but I think the poster before has already alluded to it which is that there is a constant sale of small quantities by the promoters of this co. over the past many months & on the other hand the mgmt is conducting presentations etc on the bright future and what all investments they have made for the future , these 2 things are not aligned .
I am a simple retail guy , dont have the deep knowledge of the internal workings of the co. or the industry but just sharing what all I have been observing & one of the promoter as Robinsroy has pointed out has sold off almost 75 % of his stake ( from 0.28% in Sep2018 to 0.07% now ) source --screener.in.
Disclaimer : I am not invested currently but I was invested earlier for almost 3 years but exited now but still tracking the company out of curiosity.
Anybody who has some insights etc can enlighten on what is happenings or this could be a normal practice and nothing to worry about for this co. , I will be happy to hear a counter argument.
Link for the inside trade :
Yes it’s alarming but the main promoter twinstar there is no such reduction . Infact they did buyback in aug 2020 and bought back nearly 90L shares at just 112rs .
Sell off in Sterlite today …I heard the concall last night …inscrutable commentary from the mgmt about provisions made despite Analyst asking pointed Questions , very hard to decipher !
I sold last Year when i saw the Promoter constantly selling his stake and the ex CEO ( Dr Anand Agarwal also sold a big chunk in Dec21 )
I am still tracking this co. out of curiosity as the sector is too good and sunrise But for the intentions of the Mgmt. I could sense that most analyst were surprised at the loss as it was never seen coming !!
The performance metric of this company is not encouraging even though I think that it has a good business. Not sure what is stopping this company from posting good numbers. Any insight would be appreciated.
SterliteTech.pdf (216.1 KB)
There is only Talk and good fancy presentation noticed…but not noticed good progress either in bottom line or top line… Since 8 quarters…
Just my thoughts…i may be wrong also.
Can anyone knowledgeable clarify if satellite internet is a threat to fiber optic companies?
There are no research report on STL which mentions this subject. Thank you. 
You might find this as an interesting read…
