O P Jindal Divests 11.23% Shalimar Stake To Partner

The Rs 4,500 crore OP Jindal group has diluted 11.23 per cent in Shalimar Paints Ltd in favour of joint venture partner, Girish Jhunjhunwala. The move puts both the partners on the same platform with equal stake.

S L Aggarwal, managing director, confirmed the development and said the process of dilution was carried out in the form of inter se transfer as both happen to be promoters in the company.

Both Jindals and Hong Kong-based Jhunjhunwalas hold around 31 per cent each of the shareholding pattern of Shalimar Paints, while financial institutions have 18.43 per cent, PCB 1.15 per cent, NRI/ OCBs 0.03 per cent and the Indian public 18.03 per cent.

 

Jindal Strips offloaded 4,25,482 shares in Shalimar at Rs 36 per share.

Industry sources said, the move is a precursor to Jindals' pulling out of the company. "The Jindals plan to exit from non-core operations and focus solely on their steel business" said sources.

Sajjan Jindal declined to comment on the issue as the company is under the jurisdiction of Ratan Jindal, promoter of Jindal Strips. However, Ratan Jindal was unavailable for comment.

The rumour of Jindals wanting to exit the paints business gains ground as the company has not been investing substantially in its brands or expanding distribution network which is what the paints industry primarily thrives on, said an analyst.

In the last few years many companies evinced interest in the company but the deal didnot fructify on pricing grounds. Johannesberg-based Barlow with interest in paints, pharmaceuticals, varnish and coal mines was also one of the suitors for the company.

Shalimar has brands like Superlac (first quality syenthetic enamel), Diamond (second quality synthetic enamel), Superlac Acrylic Premium (premium synthetic enamel) and of course Hussain named after the famous painter, M F Hussain.

In the organised Rs 2,500 paints industry Shalimar has a meager market share and is primarily known for its marine paints in the industrial paints segment.

Shalimar scrip opened at Rs 25 but lost 4 per cent and closed at Rs 24 on the Bombay Stock Exchange (BSE). The company's 52 week high and low are at Rs 72.55 and Rs 22 respectively.

Shalimar touched an all time high at Rs 440 in 1992 and all time low at Rs 20.99 in 1999.