Shareholder support to depose Tirupati Graphite management builds

Pressure is building on the Tirupati Graphite (LON: TGR) board with former non-executive directors backing the requisitioners of the general meeting to be held on 11 June. The plan is to remove the three existing directors and appoint four new ones.

The latest declared backer is Tirupati Graphite chief executive Shishir Poddar’s brother and company co-founder Hemant Poddar, who resigned as a non-executive director at the end of January. He backs the plans of the four proposed directors. He says that his attempts to change the organisation were dismissed by the executives. He also criticises investor communications over the past year in particular.

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He highlights conflicts of interest, including the supply of processing plant equipment to Tirupati Graphite by companies related to management. There are also a range of services, such as accounting, provided by related companies. He describes the value of these transactions as “humongous”.

He also points out the failure of the company to become an integrated producer of natural flake graphite all the way through to the manufacture of value-added products. Tirupati Graphite had ambitious plans when it floated on 14 December 2020. There appears to have been a disappointingly small amount achieved since then.

The overall strategy relied on becoming a fully integrated graphite and graphene producer. Instead, a related company called Pranagraf, where Hemant Poddar has a 35% stake, has been used to process graphite and it has grown separately on the back of this. He was keen for the business to be acquired by Tirupati Graphite and that was the plan in 2020.

An early announcement concerned the development of flame-retardant polyurethane foam. This was developed by Tirupati Speciality Graphite, which subsequently changed its name to Pranagraf.

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The relationship was always confusing. In the press release notes when Tirupati Graphite floated it was stated that: “In India, the Company processes and produces speciality graphite for use in hi-tech applications like lithium-ion batteries, fire retardants and composites. Its specialty graphite processing operations include the 1,200 tonnes p/a Patalganga Project, which was successfully commissioned in July 2019…”. It is made clear in the press release that the Company refers to Tirupati Graphite. Yet, it planned to acquire these operations, but they were not strictly part of the group. This confusion has not helped the company or confidence in the management.


Tirupati Graphite has been mining graphite in Madagascar. There are two projects at Vatomina and Sahamamy and the latter was already in production in December 2020.

In a press release on 17 December 2020, the company stated that it planned to increase graphite production to 81,000 tonnes per annum by 2024. In the most recent year production was 7,096 tonnes. The annual target production has been reduced to 30,000 tonnes per annum.

Progress has been hampered by a shortage of cash, but management still acquired additional projects in Mozambique. Although the purchase was mainly in shares with a small amount of cash, there is not enough cash to properly invest in the current producing projects let alone further ones.

Tirupati Graphite has the feel of a family company that has gained a listing but has not really changed its governance. There has been a lot of talk and very little delivery – although plenty of excuses in the recent Investor Meet presentation.

It is a bad sign that so many non-executive directors have come and gone in less than five years. Two of these directors – Murat Erden and Isabel de Salis – are being put forward for election. The other two proposed directors Leo Koot and Mark Rollins have local expertise in Africa and resources experience.

Optiva Securities has resigned as joint broker – CMC remains as broker – following its boss Christian Dennis’s resignation as non-executive director of Tirupati Graphite. He is likely to vote against the board and other non-executives may also.

There are currently three executives. In the Investor Meet broadcast, the company set out plans to find non-executives and a chairman to replace Shishir Poddar so that he can concentrate on his other role as chief executive. A finance director is also required. This has been talked about previously, but progress has been slow.

Tirupati Graphite raised £6m at 45p/share when it floated and that valued it at £33.6m. The share price has fallen to 7.25p, which is just above the all-time low. The executive directors have been buying shares in recent weeks.

It is unclear whether the company has reached a point where it will be difficult to turnaround by either party. The tangled web of companies related to management could confuse and delay plans to improve operations.  

Certainly, more cash will need to be raised. The current board will find it difficult to raise cash through a share issue because of its record, while the requisitioners will need to put forward a strong case to gain investor backing. It does appear that they may have a better chance of success than the existing management.

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