B M Khaitan family’s shareholding in Eveready Industries India (EIIL) and McLeod Russel India has dipped further to 7.25 % and 18.32 % respectively with IndusInd Bank invoking pledged shares following a loan default.
The private sector bank informed the exchanges, it has acquired 56,83,320 shares (representing 7.82% of paid-up equity share capital) of dry cell battery maker EIIL and 78,32,253 shares of McLeod Russel (translating to 7.50%) upon invocation of pledge to recover its outstanding dues of Seajuli Developers & Finance, the borrower company.
Seajuli is a holding company and the funds were raised for group company McNally Bharat Engineering. Most of the pledging of promoter shares in EIIL and McLeod was to support McNally and in the last one year, share selling by pledge holders has dragged down promoter holding significantly. A year back, promoter holding in Eveready Industries was at 42 % and in McLeod 31 %.
Banking sources claim their exposure to the group was roughly Rs 110 crore. “The bank may offload the EIIL and McLeod Russel holding in the equity market, if it gets a good price,” a bank official said on conditions of anonymity.
Post the development, the Khaitans have become minority shareholders of EIIL, and the Burmans of FMCG major Dabur India, largest shareholder with 19.84% stake in the dry cell battery major picked up through market operations over the last 12-15 months.
While the Burmans have claimed that they are financial investors as of now, analysts tracking the group feel a deal is in the making.
The Khaitans refused to comment on market speculation when contacted by ET. Since the trading windows are closed, the Khaitans will not be able to scale up their holding through market operations.
Both Eveready and McLeod, insiders claim, are looking at tie-ups with investors to tide over the debt situation at promoter level and jointly manage the companies.
Incidentally, EIIL’s battery business has been experiencing good demand as dumpinh from China has reduced. The company posted a net profit of Rs 16.74 crore in the fourth-quarter of the 2019-20 fiscal. It has also reduced its debt by Rs 200 crore from Rs 550 crore by selling its Chennai and Hyderabad properties.