Akai will be spending Rs 8 crore to hike its stake in Akai Baron International Ltd to 17 per cent from 10 per cent this year. This will be followed by a further increase to 27 per cent by the first quarter of 1998.
The entire exercise for Akai is to consolidate holdings in key companies to exploit future opportunities, said Akai Baron managing director Kabir Mulchandani, who, along with family members, now hold 90 per cent in the company.
In the first phase, Akai will pick up 10 lakh shares at the rate of Rs 80 to increase its holding to 17 per cent. If the stake is to be picked up ex-bonus, the rate will be Rs 80 per share, and if it is picked up at pre-bonus rate, the price will be Rs 160 per share.
This would enable Akai to have 22 lakh shares in the company and increase its presence on the board. Akai now has five members on the board of Akai Baron.
In the first quarter of 1998, Akai will further increase its stake to 27 per cent by buying 10 lakh shares at a price to be decided later.
Initially in 1995, the total equity of the company was Rs 6 crore with Rs 60 lakh paid up capital. Akai then held 10 per cent stake with 6 lakh shares. This year the company declared 1:1 bonus share doubling the equity base.
Akai could increase their stake gradually even upto 51 per cent in the next 3-4 years, said Kabir Mulchandani.
He said the promoters of the company, also being the majority shareholders were interested in maximum yield and therefore did not mind management control passing on to Akai.
"If it was logical and profitable, then why not?'' asked Mulchandani.
For the 15-month period ending June 30, 1997, Akai Baron International posted a net profit of Rs 32.41 crore on sales of Rs 489.4 crore. Profit before tax was Rs 38.91 crore.
