Emami soars 12% after promoters set timeline to reduce debt

Emami shares rose 12 per cent to Rs 299 per share on the BSE on Tuesday after the company said its promoters intended to maintain their controlling stake in the company and not dilute it further. The promoters have also set a timeline of 6-8 months to bring down the debt.

"The promoters of Emami Group have more than adequate pool of diverse assets of value. With a view to further reduce the debt and reap benefits of such investments, the process of identification for divestment of such assets has been initiated," Emami said in a press release.

On Monday, promoters of the personal products' company sold 10 per cent stake to raise about Rs 1,230 crore to reduce debt at the promoter level. Post the stake sale, the promoter-holding in Emami stands at 52.74 per cent. SBI Mutual Fund had bought 13.7 million or 3 per cent stake through block deal. The name of other buyers could not be ascertained immediately.

During an earlier stake sale, in February, the promoter group had sold their 10 per cent stake for Rs 1,600 crore to reduce its debt. The raised fund was used for creation of assets like cement, solar power etc. Funds like SBI Mutual Fund, Premji Invest, Amundi, IDFC and others were the buyers thereby reducing the promoter holding in Emami to 62.74 per cent from 72.74 per cent as on December 31, 2018.

The stock has been under pressure in the past month, falling 26 per cent on a disappointing set of financial numbers for March quarter. In comparison, the S&P BSE Sensex was down 0.80 per cent till yesterday.