Saturday, October 27, 2018

Akshay Kumar doesn't guarantee a company or brand's success

A long time back (almost 4 years back in 2014), I had prayed to God to save the Indian banking sector in Beware of Frauds post. Now that the banking sector is being saved by RBI and Indian Government, another thing that I want to highlight is the mention of a company named "Kwality" in the same post. I had mentioned that my mother-in-law called me to check if she can buy the shares of "Kwality". The price at that time was hovering around INR 50. I pleaded my mother-in-law to not invest blindly.

I also looked at the company's brand at the website. This is the same company that had ice-cream brand "Kwality Walls" which was acquired by Hindustan Unilever in 1994.

The company then signed up Akshay Kumar as brand ambassador in 2015 and renewed him again in 2017. The advertisement also show an actress Asimah Mirza whose instagram account you can see here. Due to good revenue growth and profits, the share price went up from 50 to INR 160 in March 2017 and I was depressed that I gave wrong advice to my mother-in-law. By March 2018, the price came down to INR 80 and I was thinking that I may have been wrong but not completely wrong.

What is the situation now? The price is hovering at INR 7 and hitting lower circuit of 5% daily. The latest news says that the company has defaulted on its 1200 crore loan and is going to go to NCLT (National Company Law Tribunal).

Strange are the markets!
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