It is public knowledge that Catamaran Investments, the Venture Capital arm of N R Narayanamurthy invested Rs 28 crores in SKS Microfinance, just a couple of months before its IPO.
What many people dont realize is that Catamaran invested in the IPO at just Rs 300/share - while the IPO price for the public was set at Rs 985/share. Just one week after the Catamaran investment, Standard Chartered and other investors invested in SKS at Rs 630/share.
The thing is, when Catamaran was setup, NRN announced with great fanfare that the ecosystem in India for small companies was very bad - and we desperately needed VC investments to encourage entrepreneurs, and help smaller firms raise much needed capital. When push came to shove, he did not invest in SMALL COMPANIES that really needed the capital - he invested in a company that was operational for a long term, and was ready for an IPO.
This is nothing but misuse of his standing in society to get a big chunk of shares at very low price before the IPO. When NRN was questioned on the propriety of this investment, he gave lot of justification - that there was 24 months lock-in, that this investment was required to help the poor people in India, etc. Even at that time, it was very obvious hogwash - and people in the know realized that this was a clear case of misuse of privilege. But Indian securities laws are such that we cannot do anything about such a blatant case of fraud.
Within a few weeks, Catamaran was crowing about its first investment, about how their money has already tripled, etc.
Within a year, all these issues in SKS have come to the forefront, and the shares have crashed big time. Today the share has fallen even below Catamaran's entry point.
Poetic justice indeed.
Even today, over a year after the fund was launched, Catamaran has made a few similar sham investments - but not even one single investment in a genuine small company desperately seeking money. So despite all the tall talk of NRN, his fund is nothing but an attempt to leverage his clout, his standing in society, and get chunky allocations at very cheap prices, in companies that are at "exit" stage.
Even today, the ecosystem for small companies does not exist. It is a shame that even a person who has made thousands of crores for himself through his Infosys shares, still wants to operate in such cheap ways. I think we should consider ourselves lucky that this man did not become the President of India, as was being considered some time back. Pratibha Patil might not have great credentials for being President - but at least we don't have any expectations from her.
It is for this reason that I think Azim Premji is an infinitely better human being than NRN.
http://articles.economictimes.india...s/27602817_1_catamaran-interest-rates-lending
Helping the poor indeed -- only shows how poor and how cheap NRN is.
What many people dont realize is that Catamaran invested in the IPO at just Rs 300/share - while the IPO price for the public was set at Rs 985/share. Just one week after the Catamaran investment, Standard Chartered and other investors invested in SKS at Rs 630/share.
The thing is, when Catamaran was setup, NRN announced with great fanfare that the ecosystem in India for small companies was very bad - and we desperately needed VC investments to encourage entrepreneurs, and help smaller firms raise much needed capital. When push came to shove, he did not invest in SMALL COMPANIES that really needed the capital - he invested in a company that was operational for a long term, and was ready for an IPO.
This is nothing but misuse of his standing in society to get a big chunk of shares at very low price before the IPO. When NRN was questioned on the propriety of this investment, he gave lot of justification - that there was 24 months lock-in, that this investment was required to help the poor people in India, etc. Even at that time, it was very obvious hogwash - and people in the know realized that this was a clear case of misuse of privilege. But Indian securities laws are such that we cannot do anything about such a blatant case of fraud.
Within a few weeks, Catamaran was crowing about its first investment, about how their money has already tripled, etc.
Within a year, all these issues in SKS have come to the forefront, and the shares have crashed big time. Today the share has fallen even below Catamaran's entry point.
Poetic justice indeed.
Even today, over a year after the fund was launched, Catamaran has made a few similar sham investments - but not even one single investment in a genuine small company desperately seeking money. So despite all the tall talk of NRN, his fund is nothing but an attempt to leverage his clout, his standing in society, and get chunky allocations at very cheap prices, in companies that are at "exit" stage.
Even today, the ecosystem for small companies does not exist. It is a shame that even a person who has made thousands of crores for himself through his Infosys shares, still wants to operate in such cheap ways. I think we should consider ourselves lucky that this man did not become the President of India, as was being considered some time back. Pratibha Patil might not have great credentials for being President - but at least we don't have any expectations from her.
It is for this reason that I think Azim Premji is an infinitely better human being than NRN.
http://articles.economictimes.india...s/27602817_1_catamaran-interest-rates-lending
Helping the poor indeed -- only shows how poor and how cheap NRN is.