Salman's blackbuck case: Being Human licensee Mandhana's stock ends flat

Mandhana Retail Ventures manufactures and sells Salman Khan's 'Being Human' brand of apparel products

Mandhana Retail Ventures ended flat at Rs 116 levels on the National Stock Exchange (NSE), after a Jodhpur court found actor Salman Khan guilty in the 1998 Black buck poaching case.

The counter had slipped 3.4% lower to Rs 112 in intra-day deals, falling 14% from its morning high (of Rs 132), soon after the verdict was made public. Mandhana Retail Ventures manufactures and sells Salman Khan's Being Human brand of apparel.

The development had also swung the fortunes of ace investor Rakesh Jhunjhunwala in intra-day trade, who according to the latest available shareholding data (December 2017), holds 12.74% stake in Mandhana Retail.

Analysts say the fall is a knee-jerk reaction to the development and investors should not read much into the development.

“I think it is a knee-jerk reaction to the verdict and this was expected. Investors should not read much into the development. Though we do not track the stock very closely, the company, as per our assessment, has now diversified into other business segments as well. This augurs well for the overall business interest,” says A K Prabhakar, head of research at IDBI Capital.

Mandhana Industries Limited (MIL), the Demerged Company had entered into global exclusive Brand License Agreement with “Being Human – The Salman Khan Foundation” on December 23, 2010 effective from January 1, 2011 to use trademark & logo of “Being Human” for all clothes range / clothing lines.

Post approval of Scheme, MIL and The Salman Khan Foundation agreed to terminate the erstwhile Brand License Agreement vide Termination Agreement dated August 24, 2016 and simultaneously our Company entered into global exclusive Trademark License Agreement on the even date to design, manufacture, retail and distribute men’s wear, women’s wear and accessories under “Being Human” trademark until March 31, 2020.

The actor also endorses brands such as Thums Up, Yatra.com, soap detergent Wheel, Britannia' s Tiger biscuits, Ranbaxy' s Revital, Rotomac Pen and SF Sonic Batteries, Astral Poly Technik and CP PLUS - company engaged in manufacture of advanced camera security and surveillance solutions. 

“The development will not have any significant impact on the stock. The markets are already discounting this, as the case has been going on since the last 20 years. The company’s financials and/or image will not be impacted due to the conviction. That said, there has not been much growth in the company in the last nine months. Sales during the nine-months ended December 2017 have been stagnating as compared to the previous corresponding period. Even the profits have dipped around 50% year-on-year. The fall the stock is merely a knee-jerk reaction,” says G Chokkalingam, founder and managing director of Equinomics Research.