Netrika Consulting India Pvt. Ltd.
Plot no.-2, Industrial Estate, Udyog Vihar, Phase – IV Gurugram, Haryana 122015
Phone: 0124-2883000


Due Diligence 120 Sep 2017

Due  Diligence 1



Assignment:An investment bank wanted to carry out a reputational due diligence on a group of companies in steel manufacturing, flagship company being listed, and its three Promoters. Netrika was assigned the task and the scope of the project was to carry out detailed background checks on the subjects, identify sources of funds, political affiliations, reputation of the subjects, other business interests, if any, litigation, regulatory, criminal and bankruptcy checks, any negative concerns associated with the subjects and any other relevant information.

Findings:Team Netrika first profiled the group in detail and noted that the company was in existence for more than 20 years. The group had many negative media associated with it and sources also spoke negative about them in terms of: promoters not declaring goods worth INR 8,00,000 to Custom authorities brought from overseas. The group was named in Coalgate scam in 2012. It was under CBI scanner for linkages with Reddy brothers of Karnataka in 2013. In 2016, their factory in Pune came under the scanner of pollution control board. The groups rating was downgraded and bankers have warned them to bring down the debt or be ready to face action. Due to some family feud, the Managing Director (son of the Chairman) resigned from the position. The group had diversified into new line of businesses in flour mills, trading of good, real estate and infrastructure development due to which they were not focusing much on steel business. Independent sources (internal and external) did not speak highly about the group and the promoter family. Senior industry sources stated that the group is in a bad shape and does not enjoy a good reputation in the market. Sources mentioned that the group is under tremendous pressure from banks due to mounting loans. Sources of funds, as mentioned by various informants, were promoters’ own investments, banks, private equity firms and some foreign investors. Sources added that the major funding regions for the group remained Dubai, London and some parts of US. Earlier Mauritius was also one region for funding.
Solution/ Conclusion:Since client was interested in knowing everything about the group, we submitted our report with all positives and negatives that helped the client to take more informed decision of acquiring the subject group.

digital forensics company in india