Kesoram Industries set for makeover, promoters hike stake

B K Birla group company Kesoram Industries is set for a major corporate identity makeover and has engaged a consultant for it, even as the company's promoters hiked their stake in the company to 49.28 per cent.

"We have engaged Grey Worldwide Singapore to do the branding exercise," Kesoram Vice-Chairperson Manjushree Khaitan told reporters after the annual general meeting.

The mandate is not just restricted to corporate branding but on individual business and brands also, officials said.

The process of re-branding has begun with its website kesocorp.com.

Asked whether the company is trying to create a mother brand identity or brand Kesoram would be changed, company officials said the talks with the consultant is just at a preliminary stage so nothing can be said.

On the operational front, the company is planning to hike cement capacity and resume its production interest in the passenger car radial tyre plant over the next 12-18 months.

"A 1.5 million tonne capacity cement grinding unit in the first phase will be commissioned in the next 18-20 months at Sholapur, at a cost of Rs 310 crore," Kesoram CEO A K Singh said.

The company is also trying to revive the passenger car radial plant at Balasore with an additional investment of Rs 200-250 crore, he said. The capex in the plant is Rs 600-650 crore.

Currently, the company's focus is mostly on the commercial tyre market both domestic and international.

Singh said the company is trying to explore new markets in Europe and Latin America for commercial tyres to boost revenue.

"We are aiming at Rs 1,000 crore from export from Rs 600 crore by 2014-15," he said.

Meanwhile, for the Q1 period ended June 2013, Kesoram posted a loss of Rs 100 crore from a revenue of Rs 1,279 crore.

Promoters of the company have also hiked their stake to 49.28 per cent from 27.22 per cent through its recent Rs 416 crore rights issue.

"The total infusion would be around Rs 200 crore from the promoters to subscribe to their portion and the additional shares remaining unsubscribed raised the promoter's stake to 49.28 per cent," KIL company secretary Gautam Ganguli said.

Since B K Birla's daughter Manjushree Khaitan joined the company as vice-chairperson promoters began to consolidate their holding for absolute control in the Rs 6,000 crore company.

The rights issue was of Rs 6.4 crore shares of Rs 10 each at a premium of Rs 55 a share.

Rekha Jhunjhunwala, wife of investor Rakesh Jhunhunwala, subscribed to the rights issue. Her present holding stands at 6.83 per cent, up from 3.28 per cent, a company disclosure to the stock exchanges said.

Kesoram said the proceeds would be utilised to reduce debt on the books.