Indian Syntans Doubles Pie In Bayer To 11.2%

The city-based Indian Syntans Pvt Ltd has more than doubled its stake in Bayer (India) to 11.2 per cent in the last six months.

The company had acquired 1,85,000 shares of Rs 100 each in Bayer at an average price between Rs 800 and Rs 850 per share in the secondary market. The total cost of investment is Rs 15.72 crore.

In June 2001, Indian Syntans announced that it had acquired more than 5 per cent in Bayer (India) at an approximate investment of Rs 6 crore. At that time, Indian Syntans declared that the acquisition was intended purely for investment purposes.

India Syntans chairman N Naraynan told Business Standard, "We are not averse to increase our stake in Bayer (India) further. Mobilisation of resources will not be a constraint, the only hurdle being the availability of shares."

Bayer AG, the German parent of Bayer (India), holds 58 per cent and insurance companies hold around 17 per cent stake in the company.

Commenting on the reasons for the increasing the stake, Narayanan said the stock price at the current level was 'grossly undervalued', adding that Bayer AG after purchasing Aventis CropScience would become a dominant player in crop protection.

"The present management of Bayer (India) for reasons known to them were not showing proper results," he added. However, he hoped the company would end the current fiscal with a net profit of Rs 80 crore on a turnover of Rs 800 crore.

Bayer India for the quarter ended September 2001 reported a net profit of Rs 6.03 crore on a total income of Rs 214.87 crore. Thus, the Earnings per Share (EPS) being Rs 37.18 per share on a total equity capital of Rs 16.22 crore comprising of shares of face value Rs 100.

In another development, Indian Syntans has also picked up stake in Aventis Agro, the Indian subsidiary of Aventis CropScience, though it has not crossed the 5 per cent mark.

"At the moment, I wish to concentrate only on Bayer India", Naraynan replied when asked whether he would increase its stake in Aventis Agro.

Apart from the above-mentioned investments, Indian Syntans hold 5 per cent equity amounting to Rs 5.5 crore in MetLife. It has also committed to infuse further capital requirements in the insurance joint-venture company. MetLife had predicted an incremental capital expansion of Rs 340 crore over a period of 6 years from the present equity capital base of Rs 110 crore, he added.

Indian Syntans Pvt Ltd was formerly involved in leather chemicals which were sold to Bayer in 1996. After that, the company according to it's chairman had transformed into an investment company.