Tide Water’s ‘major shareholder’ in a flood of funds

As Mumbai-based Standard Greases & Specialities Pvt Ltd closes in on Kolkata-based Tide Water Oil, new opportunities may open for large public shareholders like PQR Consultants Pvt Ltd.

A recent acquisition of a 1.6 per cent stake in Tide Water from the market utilising a creeping acquisition window takes STandard Greases’ total shareholding (including that of Janus Consolidated Finance) in the Kolkata company to 30.98 per cent. This is just 6 percentage points less than the combined 37.33 per cent held by Andrew Yule (26.23 per cent), state-owned FIs, United India Insurance (6.88 per cent) and Life Insurance (4.22 per cent) in Tide Water.

Kolkata-based PQR is currently the largest and only major public shareholder in Tide Water with a 4.31 per cent stake. ‘Bodies corporate’ hold another 4.06 per cent.

What makes the story interesting is Nilanjana Datta, wife of former Andrew Yule and Tide Water chairman Kallol Datta, is one of the two largest shareholders in PQR.

PQR, which reported a turnover of ₹1.79 crore in 2015-16 through ‘contract service charges’ and sale of tea, was incorporated in 2008, a year after Kallol Datta became Chairman of Andrew Yule, which was then the sole promoter of Tide Water.

According to Tide Water’s stock market disclosures, PQR emerged a major shareholder in the company holding 40,200 shares, or a 4.61 per cent stake, in the January-March 2014 quarter. At the prevailing market price (₹2,044 a share of Tide Water on March 31, 2014), the investment should have cost PQR a little over ₹8 crore.

The investment, however, proved extremely beneficial, as Tide Water announced a share-splitting into two and also offered a 1:1 bonus in March 2016, to thwart a takeover bid by Standard Greases. PQR’s shares in Tide Water quadrupled to 1,60,800. Standard Greases upped the ante from 2015. By the time Tide Water announced a bonus issue, in 2016, Standard Greases had increased its own stake (excluding Janus’s 1.69 per cent) from 23.24 per cent to 27.69 per cent through an open offer and became a co-promoter in Tide Water.

Throughout these two years — from PQR acquiring a stake to Standard Grease emerging as the single-largest shareholder — Kallol Datta was at the helm of Tide Water.

According to Bloomberg, Datta was an independent non-executive director in Tide Water since 2004 and retired as Chairman in August 2016. According to the PQR website, two months down the line, on November 1, 2016, Nilanjana became an additional director in PQR.

According to disclosures with the Registrar of Companies, till FY17, PQR had six shareholders including Bapi Sikder, Kaiser Ekhlas, Anjali Roy, Pradip Kumar Das, Soumen Das and Srati Bhattacharya holding 5,000 shares reach.

Ekhlas, who was a director since inception, resigned from the board in March 2017. Also, the company decided to issue 15,000 shares afresh each to Nilanjana and Nupur Bhaskaran from Bengaluru. Subsequently, in August 2017, the firm decided to buy back 15,000 shares. If successful, the buyback will lead to the exit or stake dilution of some of the early shareholders.

In a nutshell, Nilanjana (and Bhaskaran) are now the two largest shareholders in PQR and their stakeholding should increase once the share buyback is complete. Post the sale of 10,000 shares at an estimated ₹5.5 crore, PQR now holds 1,50,800 Tide Water shares. At a price of ₹6,301 a share, their value stands at ₹95 crore.

When asked, Nilanjana only said she is one of the directors in PQR. She was not available for further discussion. Repeated calls to her mobile were answered by a company executive, who claimed complete ignorance on company ownership and future action.

Kallol Datta, now away from corporate glare, doesn’t see any conflict of interest in his wife investing in a company that holds stake in Tide Water.

Speculation is rife in Andrew Yule about the future of Tide Water. Andrew Yule has already sold ‘good’ assets like power distribution agency DPSC, and is left with either loss-making (electrical and engineering) or unattractive (tea plantation) assets.

Tide Water is the only money spinner left with the group. But Andrew Yule has already lost major managerial control in the company following the inclusion of Standard Greases as a co-promoter.

“Another 2 per cent creeping acquisition by Standard may take the game permanently away from us,” a source said. “There may be restrictions on bulk deal of Tide Water shares, but who can control the takeover by a large investor in Andrew Yule?”

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