Rallis Set To Acquire Voltas Agro Unit

Chartered accountant firm S P Billimoria and Company have valued the agrochemical division at between Rs 35-40 crore. Voltas would expect an upfront payment and would accept the remaining amount in instalments, sources added.

The Tata group has, in a major restructuring exercise for the loss making Voltas, decided to spin off its white goods and chemicals businesses into separate subsidiaries. This is a precursor to the sale of these businesses. Voltas posted a loss of Rs 18 crore in 1996-97. It makes sense for Rallis to acquire the agri-business which is located at Hyderabad. The division manufactures an insecticide, Phorat. A part of this is currently sold to Rallis which in turn sells it under its brandname after formulating it.

Through this purchase, Rallis will acquire a manufacturing base for Phorat. Rallis has already factored in this acquisition in its expansion plans. The major part of the funds will be raised through internal accruals, sources added.

However, Rallis alone is not in the fray. The Tatas are expected to invite bids for the sale of the agri division. Its main competitor is Cyanamid India. Besides, the Tatas are considering Tata Chemicals to take over the division.