Charge of price manipulation is a serious charge. Also, when a lot many seemingly related parties are involved, a lot of eyebrows are raised. To be fair, management has tried their best to answer questions but has not been able to quell the fire as yet. MD & CEO, Mr. Dinesh Nandwana put up a brave face giving explanations but seemed quite perturbed by the questions from media and the sequence of events. On a lighter note, I think he is badly in need of some PR lessons 🙂
Well, regarding price manipulation, it is very difficult to opine but given all the information in public domain one would say that there are more aspects against, than in favour of the management. On the other hand, looking at financials of Vakrangee Limited, there appears nothing wrong with them. On the contrary, they appear to be pretty robust. Cumulative PAT of last 10 years almost in line with the cumulative CFO, receivables position improving over the years and currently at good levels, average tax rate of 33% over the last 10 years, comfortable dividend policy, falling levels to debt over the years and zero debt as on date etc.
My view is that a manipulator is always a manipulator. It is not that after many years of outstanding operational/ financial performance, the management suddenly decides to do something about the price via unscrupulous means. I mean it is possible but not probable. When performance is there for all to see and the price already appreciated by a hell lot in the last 10 years (from Rs. 5 per share), it seems very improbable that management will indulge in something like this.
Again, this is my view, backed by seemingly solid financials. Also, to me valuations appear to be a bit below fair but not low. And clearly, I am not even close to being sure about this. But yes, sure enough to take a small position in the speculative portion of my portfolio. Lets wait and watch 😉