The draft offer document of Inox Green Energy Services Ltd (IGESL) has a peculiar disclosure. The company has listed five people as Key Managerial Personnel. Of these, two are the whole-time directors namely Manoj Shambhu Dixit and Mukesh Manglik. The other three are `consultants’ hired without remuneration! Strangely, none of the Inox-Jain family member is on the board of IGESL. Promoter-family member Devansh Jain is named as one of the consultants along with Kailash Lal Tarachandani and Jitendra Mohananey.

Management Organisation Chart

The 2012-incorporated IGESL proposes to float an IPO of Rs 740 cr.  Though loss-making with an accumulated deficit of Rs 367 Cr, the company has managed to raise a huge share premium amount of Rs 920 Cr based on which it may even ask the IPO investors to shell out hefty premium. But, is the management capable of rewarding the investing public? The track record of the parent company, Inox Wind Ltd (IWL), would surely advise caution.

IWL floated an IPO of more than Rs 1020 Cr in March 2015, offering Rs 10 paid up shares at a price of Rs 325 a piece. In the first year, the company posted record revenue and profit of Rs 4414 Cr and Rs 452 Cr respectively and the stock scaled a peak of Rs 495 in the secondary market. But, in the very next year, the stock lost more than 33% as profit dipped considerably.

Since fiscal 2018 IWL has been posting losses and the stock price hit a bottom of Rs 17.90 in fiscal 2021 inflicting a whopping capital loss of 95% on the IPO investors.  Operationally, the company’s loss is mounting up while revenue has been declining since fiscal 2020. In contrast to the company’s working results, the price has however looked up in 2022 obviously to boost the sentiment for the subsidiary’s impending IPO. Even at the current price, IWL’s 2015-IPO investors are still at a loss of over 55%.

IGESL has six directors and three consultants. Of these, as many as five directors are also on the board of IWL. What’s more IGESL’s three consultants are full time executives of IWL. While Devansh Jain is a whole-time director of IWL, Kailash Lal Tarachandani is the CEO and Jitendra Mohananey is senior vice-president.  Will these people do for IGESL what they could not do for IWL?

In the so called `disclosure era’, the dismal performance of IWL under the same management should have been the main risk factor that the market regulator should have insisted on for the benefit of the prospective investors of Inox Green. Sebi, are you listening?