The number of times companies communicated with investors and analysts through meetings, calls, and presentations saw a surge as the coronavirus (Covid-19) took hold of the economy.
The latest numbers (for March) were the highest in the five years, for which data is available. The total number of investor outreach programmes rose from 2609 in March 2019 to 2728 in March 2020, show numbers released by corporate tracker nseinfobase.com.
Investors might reach out for information on issues including any shutdown in operations, how many days it may last and supply chain issues among other things, suggested Amit Tandon, founder and managing director of Institutional Investor Advisory Services India (IiAS), which advises on corporate governance issues and helps investors vote on company decisions. "A number of questions come up because of the novelty of the situation which has struck across geographies at the same time," said Tandon
“What you are seeing is completely unprecedented,” he said.
Such meetings typically involve companies reaching out to analysts or investors to speak about the company and resolve any queries related to operations. More such queries come up during such periods which were seen since the countrywide lockdown announced on March 24.
"Another factor could be issues surrounding YES Bank. This may have contributed to an increase in the number of meetings in the early part of March, but Covid-19 and subsequent actions taken by the regulator led to greater uncertainty, thus necessitating more number of investor engagements", said Pranav Haldea, managing director at Prime Database, which manages nseinfobase.com.
"We're going through a very turbulent and volatile period. During such times, it becomes even more critical to engage with investors. The highest increase has been in banks and other financial services,” he said.
The Reserve Bank of India had imposed restrictions on withdrawals from YES Bank on March 5. The bank was falling short of capital after failing to raise money from investors.
This had triggered fears of similar issues at other banks.
Banking, term lending, financial services, and investment companies accounted for around two-thirds of such meetings or calls. Banking and term lending institutions had 631 meetings in March 2019. This doubled to 1,263 in March 2020. Financial services and investment companies saw such instances increase from 409 to 577.
The longer-term trend has also been one of increasing meetings. There were under 2000 meetings in March 2017. It was up 42.6 per cent to 2728 by March 2020. Another segment that saw an increase in the number of meetings compared to last year was the automobile. This sector had to shut down operations due to lockdown. The number of investor outreach programmes rose from 148 last year to 160 in March 2020.
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