May I know what is the issue with Gujarat Ambuja exports?
I was shocked to go in to the website of venkys. It first asks whether you are an investor when you enter. If you select investor, then it brings a page with an analysis report of some small time share broker who justifies the current share price and also goes on to compare this stock with FMCG stocks and why any amount less than Rs20,000 for this stock is undervalued. In my mind it was very cheap and deceiving of the management to cheat minority shareholders of why it is an FMCG stock and current share price being one tenth of its value. In reality, it’s only a commodity stock with very little control over the price it can command on the product it sells and it will have its high and low cycles.
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Thanks for sharing…is there no regulation around buybacks? Usually shareholder has to act to tender and not vice-versa…really such scenario is unheard and scary to me from a reputed organisation
In 2010 the promoters went ahead and bought one EPL team. Parallels with Deccan Chronicle who bought an IPL team. I don’t remember any more red flags as I stopped tracking them. You may want to search if promoters have private businesses in the same area. One I remember is Venkateswara Food Products Pvt Ltd owned by the same promoters of Venky’s India.
All - I have deleted my list of negative companie since its very difficult to answer each and everyone’s questions and justify. These subjective assessments can become heated debates. I would request you to please do your own due diligence.
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Good or bad corporate governance gets blurry beyond a point, and does not remain as binary as fraud.
A very personal instance for me was Procter & Gamble India, my employer long long ago. The firm was impeccably honest inside and outside, to a fault. But when I turned investor I found that they hoarded cash and lent it to sister companies at low rates. Clearly the cash belonged to all shareholders, but the controlling shareholder decided how it would be used, and would use it solely for its benefit. To me it was a case of bad corporate governance (using resources of the firm for benefit of the majority at cost to minority), but I don’t think there will be any takers.
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Reading instances like above makes be wary of MNC subsidiaries…however still the share has given great results and is valued richly, why? Are big investors ok with such instances or in long run it does not matter because these companies have great brands or is it because investors focus on these companies vision for India?
I feel Aditya Birla group should also be added to the negative list. One example of Group’s poor attitude towards minority shareholders: The dividend by Pilani Investments (Birla Group Holding company) have stayed the same at Rs20 for the last 10 years wherein the dividends received by the company from group companies has been growing consistently.
In this case the cash reserve with the company should have been growing which is not the case either.
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Where can one get a list of all the Indian companies / individuals mentioned in the Appleby list? Can you please share the link.
Godrej group remains one of the best.
Bajaj group nad Mahindra group are good and ethical.
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Prominent Indian corporates in Appleby database leak include Jindal Steel, Apollo Tyres, GMR Group, Havells, Hindujas, Emaar MGF, Videocon, the Hiranandani Group and DS Construction
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Kalyani group is one such group with very good track record and good corporate governance.
Interesting to know. I had a very different experience of investing with one of their group firms that I wrote about here - Identifying Value Traps
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All are good till they are not caught 
They had came out with Company named,Kalyani Thermal Systems Ltd in OTC exchange. Subsequently when it start making decent profits,it was compulsorily delisted at Rs: 60 per share & without asking for shares ,simply sent cheques to shareholders.
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What to avoid ? I felt @hitesh2710 Sir’s post in another thread worth referencing here for benefit of future readers of the thread.
In case of proc and gamble , most of products seem to be in unlisted entity basket while listed entity has just 3 products of which only 1 is major I.e whisper . What’s the reason for this when hul, Nestle , Colgate etc launch all products through listed companies?
The parent, Procter and Gamble, USA, which owns the brands/products and has the capital is expected to act to maximise value for its shareholders, not for the shareholders of a subsidiary.
Just like you would want a company you have invested in, to use its resources to maximise wealth for you and not for shareholders in its subsidiary.
As for Unilever, Unilever India had enough capital to launch global brands of Unilever and has compensation arrangements like royalty, possibly service charges etc for the same. The parent would have ensured its shareholders’ value is not lost in any such arrangements.
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My recent experiences say below groups are looking fair in terms of corporate governance.
If any one has spotted issues , do tell
Diageo Group (United Spirits) - the way they disclose everything fairly without caring about share price movement.
CESC (R P Sanjeev Goenka Group) - track record
Strides - Sequent - Solara : Nearly all three are similar as Sequent and Strides merged their human API and demerged it into Solara.
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I dont know if this the right thread. But if you look at the value destruction in the recent past, there is a pattern of management talking too much etc. In this context, I thought it would be good to make a list of companies that dont try to give only rosy picture in con calls, claim they dont see any issues, not focused on market cap etc. A few names that come to my mind are, Asian Paints, Titan,Kotak and Cera. ( I may be wrong here. Its based on my interpretation only) . Can others add to this thread?
@hitesh2710 Would you like to add?
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