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Winro Commercial


Winro Commercial is an investment company – primarily trading securities and disbursing loans and advances.

The balance sheet discloses stock-in-hand worth about 67 crores, cash of 18 crores and long-term quoted shares with market values well over 33 crores (Mar ’10) aggregating liquid assets worth over 120 crores.  It has practically no debt (1 crore).  The nature of its business, however, doesn’t permit consistent earnings.  Nevertheless, it generated net profits in each of its last six years.

The business is dependent on the vagaries of the Indian financial markets – particularly the stock markets; and is exposed to the risk of material impairment in its holdings.  Furthermore, a rapid deterioration in market sentiment and/or credit conditions could put its not insignificant amount of pledged securities (totalling over 21 crores at Mar ’10) at risk of complete loss.

Management, as is consistent with other shareholder-unfriendly companies, have not declared dividends ‘to conserve the resources for future’.  At the risk of repeating the issue, this is not a logical argument to make when dealing with publicly traded securities since shareholders can execute this activity without the aid of management and the logical course of action would be to distribute the shareholders’ assets for profitable deployment elsewhere as shareholders see fit.
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