We all know that the primary objective of any business is to make money for the owners. In corporate finance it is called maximization of shareholders' wealth. There is inherent expectation of increasing the firm value so that both debt holders and equity holders see their wealth grow.
This is the standard rule. Can this rule be broken? Sure; but then you have to come up with another objective which should satisfy stakeholders, say, capital providers, capital markets, employees, customers, suppliers, government and society. It is not easy, unless you are a not-for-profit company. I mean your primary objective is not to make money for the owners but to meet some social objective. An example: utility provision. Money-making becomes a secondary objective in this case. Typically, the government or the trusts carry out this kind of venture.
What if we can pick some publicly listed firms, whose primary objective is in sync with corporate finance, but in reality meets the objective of a not-for-profit firm, instead? Sounds weird; but it is actually true. Take a look at the following (incomplete) list:
These are the top loss-making companies in 2012 as presented in ET 500. (Click on PAT to get the list. LL means loss in both the years). These are what I call social service companies. Ignoring some who are exceptions and might turnaround, and those who fail to pay their dues all the time (social burdens), we can argue that these companies do at least some service to the economy, primary being providing employment. If it were not the case, why do they continue as going concerns? Optimism in capitalism is alright; but the shareholders should be wealthier if they shut down loss-making ventures and put their money in some other venture which would give them a decent risk-adjusted return.
The list is only illustrative; there are probably much more of this type listed on the exchange.
The sarcasm is rather a reminder of basic principle of corporate finance: if you can't make it, don't venture it.
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