Wanbury’s business was never a question mark, only its debt was and now that the company is addressing the debt problem , I believe its re-rating is due. As I had written in this blog, the company has some wonderful brands and on back of that, I was hopeful that they could solve the debt issue “if” they really wanted to. Now a couple of developments have happened. First they have addressed the debt problem by selling some brands to cipla and have got more than 88 cr for that and second, they have had Edelweiss Asset reconstruction company taken stake in it which basically means that this cash may not vanish – although in all honesty even if Edelweiss wasn’t in picture I wouldn’t have worried as there was no incentive for wanbury promoters to vanish this cash since Wanbury is not a simple manufacturing company but something with brands and if they at all wanted to dump the company they wouldn’t have carried on with this burden for so long.
Another interesting bit that I find is the valuation of the company. Now the company has sold 12% of its revenue generating bit at 88+cr, which roughly means that the promoters, even at distressed valuations think their company is worth more than 720cr and even if I give a discount of 1/3rd, then also at the current market cap its just around 10% of that distressed valuations. This, I personally find very interesting and therefore, I am once again very bullish on wanbury. Please note this is my own personal thoughts and is for academic purpose only.
Can this finally be the moment of wanbury ? Let’s see.
God Bless !!!