The sweet and juicy story around the country’s only pure-play listed beverages company, Manpasand Beverages, has now left a big stain in investors’ portfolios. The Vadodara-based juice maker, known for its Mango Sip brand, has fallen from grace after its auditor for nearly eight years, Deloitte Haskins & Sells, abruptly ended its assignment with the company.
The stock, which listed three years ago, plunged more than 42% in just three sessions after the company informed the exchanges that its auditor had resigned just days before the board was to approve its quarterly and annual results. The stock is now trading below the issue price of Rs.160 (Rs.320 pre-1:1 bonus) at Rs.157 as of June 15. The stock had hit a high of Rs.512 in September 2017. With the stock hitting a new low every day, it has now been placed under additional surveillance by the exchanges with a daily 5% circuit limit.
While the company didn’t disclose the reason to the exchanges, in a letter to the Registrar of Companies the auditor has stated that the management didn’t provide “significant information” despite repeated requests. Though the company issued a statement terming the resignation “coincidental and a minor hiccup”, it’s yet to respond to a query sought by the stock exchanges; it did not reply to queries sent by Outlook Business either. This is not the first instance where there was a hiccup before the results were announced. In FY17, the Q4 result date was postponed from May 29 to June 13, a delay of 15 days. Incidentally, the results were announced without any qualification by the auditor.
Though the stock has less than a sensational debut after it fell below its listing price of Rs.320, over the ensuing years it caught the fancy of well-known institutional investors as the company showed some impressive growth and its founder, 55-year-old Dhirendra Singh found himself in the limelight as the media wrote extensively about his rags to riches story. While the twist in Manpasand’s tale was sudden, it wasn’t exactly unexpected given that in the past some market participants had raised doubts over Manpasand’s too-good-to-be-true story.