Burman family may become the sole promoter of Eveready Industries

The Burman family – promoters of Dabur India – may become the sole promoter of the country’s largest dry cell battery maker, Eveready Industries India.

Burman Group entities announced the intent to take control of Eveready on February 28 and proposed an open offer for an additional 26 per cent of the company. On completion of the open offer, the Burman family wants to be a promoter.

A letter to the Eveready board from Burman Group entities in February had mentioned, upon the Burman Group acquiring control of Eveready, the Burman Group intends to be a “promoter”.

The Khaitans are the existing promoters of the company even after they relinquished their role from the management. They stepped down from the Board days after Burmans, the largest shareholder of Eveready, laid out the roadmap of their terms of engagement for the future.

Asked about a co-promoter role for the Khaitans, Mohit Burman, who has been spearheading the family’s interest in Eveready, said, “There will be only one promoter.”

The Burmans – who have been buying into Eveready since 2019 and became the largest shareholder in July 2020 – have made it clear that their offer is for control. Discussions around the change in Khaitan promoter tag may happen after the open offer is completed, indicated sources.

The Khaitan holding in Eveready stood at 4.90 per cent at the end of March 2022, down from 22.99 per cent two years back and 44.19 per cent in March 2019 as financiers invoked pledged shares (the shares were pledged to borrow funds for group firm, McNally Bharat Engineering).

Over the last two weeks, the Burmans have been scooping up shares from the open market in Eveready according to a mandate given to J M Financial Services at the time of open offer announcement. The mandate was to acquire 5.26 per cent share at a price not more than Rs 320 a piece, which is equal to the open offer price.

From April 13 onwards, Burman Group entities have purchased more than one per cent taking their holding to 20.96 per cent, according to the latest filing with the stock exchanges.

While the open market operation is going on, taking advantage of the slide in the Eveready scrip, the open offer in Eveready is awaiting approval from the Securities and Exchange Board of India (Sebi).  

The open offer, according to the tentative schedule was to open on April 26. On the timeline, Burman said, “We are awaiting the market regulator’s nod on this, post which we will proceed.”

The Eveready stock has been hovering around the offer price of Rs 320 a share. Asked whether the offer price could be revised upwards, Burman said, “We have tabled a fair price, we believe and have no intention of revising the offer price.”

On Monday, the Eveready stock closed at Rs 319.90 on the Bombay Stock Exchange (BSE).

But with the Burmans making it clear about the path ahead, for the Khaitans, it’s a long drop – from pipping the Wadias of Bombay Dyeing to acquire Eveready (then Union Carbide India) in 1993 in one of the biggest corporate takeover of its time to losing grip over it.