Question
The company in choice here is Ruchi Soya which was recently acquired by Pantanjali Ayurved. Find out the following for this company. Business Structure and
The company in choice here is Ruchi Soya which was recently acquired by Pantanjali Ayurved. Find out the following for this company.
Business Structure and its Governance
Is this a company where there is a separation between management and ownership? What is the breakdown of stockholders in your firm - insiders, individuals and institutional and the historical pattern?
What are the other potential conflicts of interest that you see in this firm?
How does this firm view its social obligations and manage its image in society?
o Investing Decisions
To develop a risk profile for your company, estimate its risk parameters and use these parameters to estimate costs of equity and capital for the firm
What is the risk profile of your company? (How much overall risk is there in this firm? Where is this risk coming from (market, firm, industry or currency)? How is the risk profile changing?)
What is the performance profile of an investment in this company? What return would you have earned investing in this companys stock? Would you have under or outperformed the market? How much of the performance can be attributed to management?
How risky is this companys equity? Why? What is its cost of equity?
How risky is this companys debt? What is its cost of debt?
What is this companys current cost of capital?
What are the firms competitive strengths and differential advantages, if any? o Financing Choices
What are the different kinds or types of financing that this company has used to raise funds?
How large, in qualitative or quantitative terms, are the advantages/ disadvantages to this company from using debt?
From the qualitative trade off, does this firm look like it has too much or too little debt?
The historical Capital Structure pattern for the firm.
o Pay-out Policy
How has this company returned cash to its owners? Has it paid dividends or bought back stock? How much cash has the firm accumulated over time?
Given this firms characteristics today, how would you recommend that they return cash to stockholders (assuming that they have excess cash)?
Historical Pay-out Pattern for this firm.
Given this dividend policy and the current cash balance of this firm, would you recommend the firm to change its dividend policy (return more or less cash to its owners)
How does this firms dividend policy compare to those of its peer group
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