Dcm Consolidated To Pick Up 92% Dsel Pie
The Ajay and Vikram Shriram promoted DCM Shriram Consolidated (DSCL) has decided to pick up a controlling stake in DCM Shriram Exports (DSEL), a closely-held shell company. According to sources, DSCL will pick up a 92 per cent stake, making DSEL a subsidiary of DSCL.
Sources said DSCL will buy the shares at par. "Due to some technical reasons, DSCL is not able to buy the entire shareholding of the company," the source added. DSCL has informed the Bombay Stock Exchange of its intent.
At present, some executives of DSCL are shareholders of DSEL. According to the sources, DSCL is planning to put its polymer compounding and value added business into DSEL. "This will help the Shriram brothers give a better focus to the business. The new company can have its own pay scales etc," the source added.
The brothers are known to be keen on eventually getting a foreign partner into the business. The subsidiarisation of DSEL, as per the sources, can be seen as the first step towards this.
However, the sources added that there is no proposal to put the basic polymer business of PVC into DSEL. "It will continue to be in DSCL. Only the value added business will be transferred to DSEL," the sources said.
DSCL has one of the leading PVC compounds manufacturing facilities in the country. It was the first to make profile-grade PVC compound which is being used by Maruti Udyog Ltd in its vehicles. It has also developed a special grade footwear compound for Bata.
To take the business further, the Shriram brothers are known to be talking to some companies in the US, Europe and Asia to either get them to invest in the business or buy the technology from one of these.
The PVC compounds plant is located at the sprawling DSCL complex spread over 791 acres at Kota which also houses the company's naphtha-based urea plant, an 85 mw power plant, a cement plant, a chemicals plant and a plastics plant which makes calcium carbide and PVC resin apart from PVC compounds. The company has recently forayed into the field of energy conservation by setting up a new division called DSCL Esco.