The Khaitans — among the earliest business families in Kolkata — are witnessing a steady decline in promoter share holding across their flagship group firms Eveready Industries and McLeod Russel.
While their stake in Eveready Industries, the country’s largest dry cell battery-maker, has gone down below 10 per cent, the promoter shareholding in McLeod Russel — once considered to be India’s largest tea planter — has slipped to around 18 per cent.
However, the Khaitans continue to be in management of both the entities.
The latest round of decline took place when IndusInd Bank invoked pledged shares to the tune of 7.82 per cent (56,83,320 equity shares) in Eveready, and around 7.5 per cent (78,32,253 equity shares) in McLeod Russel, according to data available in the bourses.
“Equity shares of Eveready Industries (and McLeod Russel), held by Williamson Magor and Co, were pledged with the bank for securing the outstanding dues of Seajuli Developers & Finance Limited. The bank has invoked the pledge held on the aforesaid shares for recovery of its dues from Seajuli,” it said in a filing to the bourses.
Burman’s hold majority in Eveready
Incidentally, the Burmans, promoters of Dabur India Ltd, are majority shareholders in Eveready, with a near-20 per cent stake.
The Khaitans have steadily lost their majority hold.
From 42.17 per cent stake in Q1FY20 (June quarter last fiscal), the promoter holding dropped to 22 per cent a year later to Q1 FY21. The holding slipped further after IL&FS offloaded over 7 per cent stake in July, and IndusInd Bank invoked the pledge on shares in its custody. Promoter stake now stands at around 7.5 per cent (approx).
Amritanshu Khaitan, Managing Director, Eveready, could not be reached for comments.
On the positive side, the battery-maker received a credit rating upgrade from India Ratings & Research, with the outlook being changed to positive.
Meanwhile, the company’s stock has been on the rise. From about ₹60 in March, it hit a 52-week high of ₹157.60 on Monday.
“The promoters can take a call on the buyback when the trading window opens,” said one analyst, who did not wish to be named.
Resolution on cards for McLeod Russel
Meanwhile, McLeod Russel, in a stock market notification maintained that operations have resumed at its tea estates even as the supply chain is functioning normally with no disruptions.
It has also maintained that the demand for tea is robust. An apparent shortage of tea in the domestic market and increased consumption have led to a rise in demand for McLeod’s tea, it maintained.
The company has, over the last few years been selling off its tea estates in a bid to reduce debt.
McLeod has been looking at a debt resolution plan, and is in advanced stages of discussions with lenders. According to an industry insider, the company is in a “slightly better position in terms of operations” given the improvement in tea prices on lower production this year. This is likely to work in favour of the company.
“Except one or two lenders most of them have come on board with a resolution plan as they have understood that going through IBC may take longer and may not be economically very viable. This is because tea companies usually possess no fixed assets other than their estates and it makes sense to take over gardens only if you have the working knowledge of its operations. So, banks have not been too keen,” the analyst said.
This company too has seen its stock price rise. It was traded at a 52-week high of ₹13.96 on Monday.