Around 95% of NBI’s assets are accounted for by its holding in Shree Cement shares and NBI does not appear to have any operating business. What is the purpose of maintaining the company’s listing on the National Stock Exchange?
We note that NBI was incorporated in 1936 and is categorised as a Non-Bank Financial Company (NBFC) under the Companies Act, 1956. However, in contrast to many other listed NBFCs, it does not appear to have conducted any real business for a very long time. Despite the company’s name, NBI Industrial Finance does not conduct any “financing” of any “industry”.
Around 95% of the company’s assets are represented by its holding in Shree Cement. And most of the non-Shree Cement investments are also listed stocks that any investor could go out and purchase by him/herself. Yet compared with holding these stocks directly as an individual investor, NBI is highly disadvantaged due to the requirement to pay National Stock Exchange listing fees, auditing fees, annual report preparation fees, dividend taxes (from fiscal 2020), long-term capital gains taxes, employee salaries, directors’ fees, office rent and so on.
It is hard to understand the purpose of NBI maintaining its listing on a public stock exchange when almost every investor would be better off buying shares of Shree Cement directly.