BK Birla to up promoter stake to 40% in group cos

Will increase stake in three group companies where promoters’ holding is around 26-27%.

The B K Birla group is looking at raising its stake to more than 40 per cent within the next three years in all the group companies where the promoters’ holding is around 26-27 per cent.

Speaking on the sidelines of the annual general meeting of Century Enka Ltd, BK Birla said: “We are looking at increasing the promoters’ holding in all the companies where it is 26 or 27 per cent. In future, it will be advisable to have 50 per cent holding in all the group companies. I would be mentally satisfied to maintain about half or 50 per cent share in the group companies.”

The octogenarian pointed out that the promoters’ holding in a majority of the companies was close to 48-49 per cent.

In two companies, it was around 26-27 per cent, which would be increased to 40 per cent in three years. One of them is Century Enka Ltd where the promoters’ holding is 24.5 per cent.

According to the shareholding pattern information filed with the Bombay Stock Exchange, the other two group companies are Kesoram Industries and Mangalam Cements.

In Kesoram Industries, the flagship firm of the B K Birla group, the promoters’ holding is 26.36 per cent and in Mangalam Cements it is 27.07 per cent, as on March 31, 2009.

“Keeping in mind the fact that the promoters can only raise their holdings by 5 per cent every year, we will require at least three years to raise the holding to 40 per cent,” he said.

The process has already begun in some of the companies.

Commenting on the performance of Century Enka, Birla said: “All the losses made in the previous fiscal because of recession, fluctuation in the Indian currency and crude prices will be recovered this year. The plants are running at full capacity and demands have started picking up.”

The company had to cut down on its automobile tyres’ production last year due to a slump in demand due to the slowdown, but the situation had revived now, pointed out G M Singhvi (whole-time director), Century Enka Limited.