How the Burmans of Dabur plan to add value to Eveready

Abhishek Law Kolkata | Updated on July 31, 2020

Mohit Burman, Vice-Chairman of Dabur India,

Mohit Burman, VC of Dabur India, outlines the family's plans for the battery maker

The Burmans, promoters of Dabur India, have emerged as the white knights for debt-laden Williamson Magor group (also known as the BM Khaitan Group) firm Eveready Industries.

In a series of investments made through Guardian Advisors over the last few quarters, the Burmans now own nearly 20 per cent in the Kolkata-based company and the country’s largest dry cell battery maker.

Eveready’s stock price which fell from ₹440 apiece in January 2018 to around ₹63 in March 2020, closed at ₹124.80 at the BSE on July 30.

In an interview to BusinessLine, Mohit Burman, Vice-Chairman of Dabur India, talks about what the Eveready investment means, plans of a further stake hike, a Board berth possibility, and the way forward. Excerpts:

What prompted the Burman family to pick up stakes in Eveready?

We feel that the company and the brand represent value and that’s why we invested in it. The family felt that the business is undervalued and the brand (Eveready) is very strong. Therefore, we took a decision to invest in it.

Are you planning to further hike the stake in Eveready?

At this point, we are happy with our current stake. However, hiking stake will all be a function of the share price, going forward. As the (share) prices have gone up recently, we are not looking at hiking stakes. However, if the price settles, we may relook at it.

There are rumours that Burmans want a Board berth or will jointly run Eveready. Your comments.

We have not asked for any Board representation yet. Burmans are financial investors as of now.

So, does the option for a Board berth remains open in the future?

For the future, it depends on whether we acquire more shares and take up significant stake. If we do hike stake, then we may. But, as of now, we have no intention.

If outright acquisition or joint management are not options, then what is the way forward?

We will evaluate options depending (on) how the company is doing, based on fundamentals.

What are the plans to handle Eveready’s high debt levels?

Too much leverage is never good, but we believe the company can sustain itself given its present leverage. However, we feel that the company will need a cash infusion sooner than later.

Will a stake in Eveready help get synergies for Dabur India?

The family has made a financial investment in Eveready in its personal capacity. However, both are FMCG businesses, and if we were to get involved we believe that we could add a lot of value to Eveready.

Is there a plan to pick up stake in other Williamson Magor Group entities?

We are only shareholders in Eveready and have no plans to take up stake in any other group entities.

Published on July 31, 2020

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