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Shree Rani Sati Investments and Finance


This appears to be an investment holding company with a few loans and advances.  Promoters hold 75% and the public holds remaining 25% of equity in the company.

The outstanding feature of the balance sheet is the market value of long-term equity investments in Modern India Ltd amounting to about 55 crores. (Another interesting point to note is that the promoters hold about 86% of this company when the law currently stipulates a maximum of 75%.  Perhaps the promoters will take it private or divest its stake).  It also holds shares in other publicly traded equities - but not as much in magnitude.  Moreover, there is practically no external debt financing of note.  Profits are largely comprised of passive dividend and interest income.

The value of this company is largely tied to its investment in Modern India Ltd, which may be overvalued and subject to impairment over the long run.  It is also subject to the risks of management over-reach to finance risky ventures and/or deplete the value with preferential issues of warrants, excessive compensation, bonuses etc.

Management hasn’t declared a dividend ‘in order to strengthen the internal resources of the Company’.  I would prefer that management came out and said it isn’t concerned with the interests of minority shareholders rather than put in a meaningless sentence.  The company isn’t doing anything the shareholders can’t do themselves (i.e. hold publicly traded equities) and it ought to rightfully distribute the excess liquid assets of the company to the shareholders in the interests of stewardship.
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