Companies conduct analyst meets at the rate of two a day as markets soar

Banking and lending institutions top in terms of number of such meetings

Reaching out to their investors seems a major priority for companies during this bull run, also the first one in which data on meets has been made available.

Companies are conducting analyst and investor meets at the rate of up to twice or thrice a day, shows an analysis of investor meet disclosures collated by corporate tracker Prime Database (nseinfobase.com).

Companies often meet with analysts and investors who wish to gain clarity on results or gain a deeper understanding of the working of the company. Stock market regulator, the Securities and Exchange Board of India’s listing regulations requires companies to make a disclosure whenever companies have such meetings.

Banking and lending institutions seem to be meeting investors the most often. They have conducted 1600 meets in approximately the first four months of the financial year so far. They had conducted 5672 such meets in 2017-18.

Other financial services and investment companies are close behind. They’ve also conducted over 1000 meets already this year. Other top sectors in terms of such meetings include information technology, cement and construction material companies, as well as real estate and civil construction companies.

At its highest, single companies alone can conduct over 1000 analyst meets. This translates into more than two meets a day, including holidays.

Shriram Subramanian, founder and managing director of proxy advisor InGovern Research Services said that companies tend to communicate more during good times, and are less willing to interact during times of poor earnings. This seems borne out by the fact that most meetings have been called by private sector banks, which have done better in dealing with bad loans than their public sector counterparts.

Shriram added that not all investor meetings the same. The objective of some is to understand the sector in general, other meetings may be for those who wish to invest in the company.

“The nature of the investor also matters,” he said.

Research does appear to show that greater disclosures help companies gain better valuations.

There is a positive impact on factors including liquidity and valuations, according to a paper entitled ‘Stock Performance and Intermediation Changes Surrounding Sustained Increases in Disclosure' by authors Paul M. Healy Amy P. Hutton and Krishna G. Palepu.

“…results are consistent with disclosure model predictions that expanded disclosure leads investors to revise upward valuations of the sample firms' stocks, increases stock liquidity, and creates additional institutional and analyst interest in the stocks,”  said the paper published in ‘Contemporary Accounting Research’ in 1999’s fall issue.