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Dabur's promoters may soon become strategic partner of Eveready Industries

The Burmans had already picked up 19.8-per cent stake in the dry cell battery major through market operations in the last 12-15 months. The last tranche of share purchase of 8.8 per cent took place recently through a block deal

twitter-logoPTI | July 21, 2020 | Updated 17:04 IST
Dabur's promoters may soon become strategic partner of Eveready Industries

FMCG major Dabur's promoters, the Burman family, may soon become a strategic partner of the BM Khaitan group controlled Eveready Industries India Ltd (EIIL), as part of an ongoing restructuring, sources said on Tuesday.

The Burmans had already picked up 19.8-per cent stake in the dry cell battery major through market operations in the last 12-15 months. The last tranche of share purchase of 8.8 per cent took place recently through a block deal, they said.

The BM Khaitan family have been controlling the company for 25 years. It currently holds a little over 22 per cent stake in the Kolkata-based company, down from 44 per cent a year ago.

"Burmans have renewed their interest in Eveready and a strategic tie-up with the Khaitan family is inevitable. The deal is in the making and finer contours will be worked out.

"But, the Burman family becoming the largest shareholder and entering Eveready's board room is not ruled out. The company might be jointly managed by both the familes," sources aware of the developments said.

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There had been strong speculations that MNC battery makers were in talks with the homegrown battery major for takeover of the core business. The new partnership will help retain Eveready Industries as an Indian company, they said.

The Burman family had recently said, "We find value in the stock and hence, we have bought it and the purchases were investments in nature."

No comments were available from the Burman family on the proposed strategic tie-up till the filing of this report. The battery business has been experiencing good demand with a fall in dumping from China, which helped the company improve its cash flow.

It had reduced debt by Rs 200 crore from Rs 550 crore by selling its land property in Hyderabad and Chennai. Despite group-level debt issues, Eveready Industries had also successfully diversified into the appliances business.

The company posted a net profit of Rs 16.74 crore in the fourth quarter of the 2019-20 fiscal compared with Rs 5.48 crore in the previous year.

Eveready Industries India was incorporated in 1934 and was a subsidiary of Union Carbide Corporation, US. The BM Khaitan-controlled Williamson Magor group of companies acquired it in 1993.

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