K M Birla divests Kesoram stake in BK Birla firms

Industrialist Kumar Mangalam Birla on Monday made a series of transactions related to the acquisition of B K Birla Group flagship firm Kesoram Industries, the latest addition to his group of companies.

Birla has sold off most of Kesoram's cross-holdings in other B K Birla Group companies and also disposed of its stakes in his own group outfits like Aditya Birla Fashion at one go, netting close to Rs300 crore.

These deals are believed to be part of Kesoram's ongoing restructuring exercise which would help Kumar Mangalam, B K Birla's grandson, to manage Kesoram efficiently, removing it from inefficient business units and group cross-holdings.

To trim its diversified business operations, Kesoram Industries on Saturday hived off its rayon and transparent paper business to a wholly-owned subsidiary for Rs480 crore. In September, it had sold truck and bus radial tyre plant at Haridwar to JK Tyre.

Monday's transactions, carried out in the open market, reduced to zero Kesoram's holdings in several B K Birla Group companies like Century Enka, Century Textile, Mangalam Timber Products, Mangalam Cement and also in K M Birla's own group outfit Aditya Birla Fashion.

While the biggest deal in monetary terms is the sale of 2.46 per cent in Century Textile for Rs142.86 core, the most important transactions have been those involving companies like Mangalam Cement and Mangalam Timber.

These companies are being managed by Manjushree Khaitan's daughter Vidula Khaitan as per her grandfather's will.

Kumar Mangalam has now sold off Kesoram's entire 14.31 per cent in Mangalam Cement for about Rs81.35 crore and 13.8 per cent in the much smaller Mangalam Timber Products for Rs4.55 crore.

Kesoram also sold 6.4 per cent in Century Enka for about Rs22.96 crore.

A back-of-the-envelope calculation shows a realisation of about Rs295.21 crore for Kesoram from these open-market sales based on Monday's closing prices.

Additionally, Candem Industries, to which Kesoram had earlier transferred its spun pipe and heavy chemicals divisions, has picked up 3.44 per cent in Aditya Birla Fashion.

K M Birla now effectively controls Kesoram. In February, the company made referential allotment to a K M Birla-owned investment company Manav Investments which raised its stake in the company from 7.87 per cent to 12.93 per cent. K M Birla-controlled group investment company Pilani Investments had earlier hiked its stake in Kesoram to 24.91 per cemt from 5.28 per cent.