Institutional EYE

Commentary on Corporate Governance Issues

Deepak Fertilisers: Preying on the market price?

Deepak Fertilisers’ promoters recently let their warrants lapse but may subscribe to the company’s rights issue. The fall in the company’s stock price will enable the promoter group to increase their shareholding for the same quantum of equity infusion. Is this another case of opportunistic behaviour from promoters? The board and SEBI need to take heed of promoter behaviour and intervene. The board of Deepak Fertilisers & Petrochemicals Corporation Limited (Deepak Fertilisers) (Exhibit 2) is scheduled to meet today to consider a rights issue. Deepak Fertilizers has a dominant market share (over 70%) in the manufacture of technical ammonium nitrite (TAN), and isopropyl alcohol (IPA). The comp

State Bank of India: weighed down by its own Act

The State Bank of India (SBI) is modernizing itself. It is leveraging technology, improving the quality of disclosures in its annual report, and behaving as any market leader should. But its ability to become a beacon of good corporate governance is being scuttled by the half-century old State Bank of India Act 1955. It is compelled to hold a physical EGM in June, contradicting the rationale behind national lockdowns to contain the spread of COVID-19. IiAS believes that the Bank’s board needs to draw the Government’s focus on refreshing the State Bank of India Act 1955,so that public shareholders can enjoy the same shareholder rights as in any other listed company. State Bank of India, in i

Vedanta’s delisting: Yet another replay

Vedanta’s promoter group’s debt repayment pressures have driven corporate actions in the past: we argue that delisting Vedanta Limited is one more of such actions. Vedanta Limited’s board of directors need to take a decisive step in guiding shareholders on the proposed delisting and not shrug their shoulder in saying that as the reverse book build will determine the price, we leave it to shareholders.As in the past, this announcement too, seems to suggest,that minority shareholders are a hindrance to the promoters’ambition. Vedanta Resources Limited’s (VRL) proposed delisting of Vedanta Limited (Vedanta) at a floor price of Rs.87.50 is opportunistic. The stock is currently trading close to i

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