Investing Reflections On India

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 conserv