On Dec 5, SEBI dropped a bombshell: an Interim Order cum Show Cause Notice against Mishtann Foods (MFL).
Here's a thread 🧵
Mishtann Foods is not just cooking rice, it's cooking its books.
#Redflags #corporategovernance #mishtannfoods
The Rise and the Red Flags 🚩
Market cap: ₹1600 Cr as of Dec 4, 2024(Before SEBI Order)
2 Lower Circuit of 20% in last 2 days
Public shareholders surged 800x in 6 years
(FY18: 516 → Sep 2024: 4.23 lakh)
Promoter Hitesh Patel sold ~3 Cr shares (₹50 Cr) in Jul-Aug 2024.
Before Analysing,
Some Suspicious Metrics 📊
₹1288 Cr sales with just ₹3 Cr in fixed assets (Asset T/O: 400x!)
Margins jumped from 2% to 28% in 4 yrs
Operating cash flow? Negative for 6 yrs
₹16 Cr inventory for ₹1288 Cr sales?
Just 5 permanent employees.
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Fund Diversion
Beat The Street have raised multiple concerns on fund diversion at Varanium Cloud - some of those have been noted by even SEBI also.