Burmans of Dabur hold 9.26% in Eveready after second stake hike in a month

Family picks up 3.34% in India's largest battery maker with latest move, may consider further investments depending on how the company performs

The Burmans of Dabur have increased their holding by another 3.34 per cent in Eveready Industries in the past two days. After the transaction, the Burman family’s holding in India’s largest battery maker stands at 9.26 per cent.

The investment in Eveready has been furthered via Guardian Advisors. This portfolio management firm, owned by Arjun Lamba and others, manages investment for the Burmans and other families. Sources said this investment in Eveready was on behalf of the Burman family.

In a regulatory filing with the BSE, Guardian Advisors, while disclosing the deal, said the acquisition of the stake was via open market and 2,429,068 shares accounting for 3.34 per cent of the total were acquired.  Earlier, asked about the Burman family’s interest in Eveready, Mohit Burman, vice-chairman at Dabur India, had stated the family believes Eveready is a strong brand and a market leader in its domain which is the primary factor behind increasing its stake. “The group (Williamson Magor) is going through a tough time and this has even reflected on its stock price. But the company, brand and its core business remain intact,” Burman had stated earlier.

Eveready is part of the Williamson Magor Group (WMG), which also owns firms such as McLeod Russel, McNally Bharat Engineering, and others.

Sources said the Burmans might consider further investments into Eveready depending on how the company performs. The source pointed out that the Burmans are yet to decide if the investment would be strategic in nature or will be long-term investment. The stock saw erosion from around Rs 405 apiece during March 2018 to the current level of Rs 61, mainly because of inter-corporate deposits to group companies and the uncertainty of repayments.

After the sale of its loss-making tea business to Madhu Jayanti International last year, Eveready, which has over 50 per cent market share in the battery market in India, has been focusing on its core business, besides focus on other verticals like flashlights, luminaries, and appliances.

During the third quarter of the current financial year, Eveready registered a 16 per cent decline in its operating revenue at Rs 317 crore, and its Ebitda margin for the core battery business stood at 23 per cent. The Ebitda margin for flashlights also stood at 14 per cent.

The company also sold land in Chennai and Hyderabad to raise money worth Rs 200 crore primarily to pay off debts of around Rs 400 crore.