3M India Limited

“3M India possesses real moat characteristics — licensed parent IP, industrial switching costs, zero debt, and ~30% ROE — but these qualities are overwhelmed by three compounding negatives: (1) valuation at 92x trailing / 47x forward earnings for a business growing revenue at only 6% leaves zero margin of safety; (2) the majority parent has demonstrated structural willingness to extract value from minorities through royalties, related-party transactions, and a 2020-21 below-fair-value delisting attempt; and (3) capital reinvestment into India's long-term opportunity is minimal, with FCF routinely returned to the parent via dividends rather than deployed for growth. The business is not a fraud, but the governance structure permanently impairs minority shareholder returns, and the entry price makes even a bullish scenario yield mediocre long-term IRR. For new investors, the risk-reward is unattractive. For existing holders, trimming or exiting and redeploying into better-governed MNC peers is the rational choice.”