Financial Daily from THE HINDU group of publications
Tuesday, Oct 05, 2004
Financial Daily from THE HINDU group of publications Tuesday, Oct 05, 2004 |
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Corporate
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Performance Pilani knows its Investment
Kohinoor Mandal
Kolkata , Oct. 4 The first family of India's business world - the Birlas - has remained as market savvy as ever and its investments have kept on appreciating as expected. Nothing proves this more than the treasury skills honed by Pilani Investment & Industries Corporation Ltd, the innocuously-named outfit that is better known as the company through which the Birlas hold critical stakes in many of their ventures. Pilani Investment has managed to reap a solid harvest of profits from a burgeoning stock market and juggled an assortment of mutual funds to optimise returns. Thanks to an actively managed investment strategy, its portfolio has grown at a scorching pace over the past one-year. Going by the latest annual report, the aggregate market value of the quoted shares held by it has nearly trebled from around Rs 460 crore (as on March 31, 2003) to roughly Rs 1,200 crore at the end of the last fiscal. As a quick review of the latest numbers suggests, the company parked funds in such well-known equity funds as Birla Advantage and HDFC Growth. It also sought to somewhat de-risk its portfolio by investing in hybrid schemes like Birla Balance and Prudential ICICI Monthly Income Plan. Further, it moved out of the conservative Birla Income Plus (as against a plus position as on March 31, 2003), lending credence to the view that corporate investors are not in favour of pure debt schemes any longer. A number of schemes, including HDFC Income and Birla MIP, were purchased and sold during the year. Pilani Investment has continued to hold stakes in a host of Birla companies. These range from biggies such as Hindalco (2.45 per cent) and Grasim (4.69 per cent) to relatively smaller ventures like Kesoram Industries and Jay Shree Tea. Besides, it remained invested in Tata Steel, holding over 30 lakh shares. It also continued to be the main shareholder of Century Textile & Industries, part of the BK Birla group, where it held over 36 per cent of the equity base. According to Birla family insiders, unquoted shares held by Pilani Investment tell an interesting tale, no less interesting than the information that may be found in the public domain. The balance sheet has referred to little-known names like Birla Consultants and Gmmco Ltd as well as overseas companies like Indo-Thai Synthetics of Bangkok and Indo-Phil Textile Mills of Manila. Baggage of liquidated shares
DESPITE the bluechips in its portfolio, Pilani Investment carries a baggage of liquidated shares, some of them belonging to hallowed names of yesteryears. Jiyajeerao Cotton Mills, Mckenzies Ltd and Hind Cycles Ltd are part of the group of names that figure prominently in its books too. Two subsidiaries, PIC Properties and Atlas Iron & Alloys have been liquidated; the company held 100 per cent of the former and 98.8 per cent of the latter. The balance sheet also mentions that loans worth Rs 1.13 crore had become non-performing assets (NPA) against its total loan portfolio of Rs 33.96 crore. Pilani Investment, however, had made a provision of Rs 56.99 lakh to tackle the NPA account.
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