The Hindu Business Line : To ward off takeovers — Promoters hike stake to 49 pc in BSL

IN a bid to ward off a takeover threat from the Kolkata-based Sarda Group of companies, promoters of BSL Ltd claim to have increased their holding in it to 49 per cent. "We have increased our stake in BSL from 41 per cent to about 49 per cent over the last one-and-a-half years. We are now comfortable and do not see an immediate takeover threat to the company," the LNJ Bhilwara Group Chairman, Mr Ravi Jhunjhunwala, told Business Line.

Meanwhile, the Chairman of the Sarda Group, Mr Ghanshyam Sarda, said he continues to hold "close to 15 per cent" stake in the textile company, having invested Rs 5 crore in acquiring these shares from the open market over the last one-and-half years and has no plans to offload these shares.

"We continue to hold close to 15 per cent stake in BSL. I still believe it (the BSL scrip) is a good buy. And while I am keeping plans to launch another open offer for BSL on the backburner for some time, there are no current plans to exit the scrip."

About two years ago Mr Sarda had put in place plans to take over BSL while asserting that he had no interest in managing the company's day-to-day affair but wanted to have a say in its operations. After an abortive bid to take up his stake in BSL to about 45 per cent through a conditional open offer in late 2002, Mr Sarda continues to hold about 15 per cent stake in the company.

However, Mr Jhunjhunwala said there has been no communication on Mr Sarda's intentions to stage another takeover bid. In fact, according to him, the gradual increase in promoter stake in BSL has been to prepare the company for any takeover attempt. "We do not think BSL is any longer a lucrative buy for a takeover," he said.

On the company's proposed expansion plans, Mr Jhunjhunwala said the group would invest over Rs 30 crore in BSL this fiscal. "We will invest Rs 20 crore in putting up our own spinning plant of 7,000 spindles at Bhilwara, Rajasthan. This will reduce the company's dependence on outside yarn supplies."

Also, another Rs 11 crore will be invested in setting up a 2 MW wind power plant, he said. The company deals in two suiting brands - Mayur and BSL. The group has already announced plans to begin exports of Mayur Suitings (the finished product) and set up a manufacturing plant near Bangalore at Rs 5 crore investment for expediting exports.

In 2003-04, BSL Ltd posted Rs 53 lakh net profit, down from Rs 88 lakh in the previous fiscal, while sales turnover was also lower at Rs 137.44 crore.

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