Metrochem Industries is currently engaged in the business of real estate activities. It formerly owned a dyes and intermediates division, which was demerged from the company in the last financial year. The proceeds from the demerger are currently deployed in real estate activities with the bulk of it tied up in advances for construction etc. Therefore, the past record of profitability is irrelevant to assessing future business prospects. It operated with a net cash position of about 30cr (as at 31 st March, 2010). The business is exposed to the risks of the real estate industry including construction material price rises, low availability of land for construction, high competition, vulnerability to economic downturns, increasing customer bargaining power (as a result of greater information availability etc.), greater government regulations on real estate activities etc. The lack of a decent track record in real estate activities would prevent the formation of further se...
An Individual Investor's Perspectives On The Indian Financial Markets