Rs 60cr Prop From Indian Rayon Shares
Grasims net profit for the year is higher by Rs 60 crore due to the sale of Indian Rayon shares to sister company Hindalco Industries in March this year.
As a result, the net profit of Rs 274.56 crore should actually have been between Rs 215 crore. Senior Grasim executives admitted to being sellers at the analysts presentation in Mumbai yesterday.
Done through Birla Marlin Securities in March, the sale cut Grasims holding of Indian Rayon shares from 4.2 million shares to two million shares. Hindalco bought the shares at Rs 330 per share and hiked their stake in Indian Rayon by four per cent.
The transaction was announced by the Bombay Stock Exchange, (BSE), in March last week, but the identity of the seller was not disclosed. Grasim president, Shailendra K Jain and senior president, S K Saboo confirmed the sale yesterday.
The disclosure is significant as Grasim posted one of its worst-ever results yesterday for 1996-97. Net profit dropped 17 per cent to Rs 274.56 crore from Rs 331.8 crore. The profit from the sale helped shore up profitability in a year and stop further erosion.