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Kamdhenu Group likely to list demerged paint business by September-end

Abhishek Law | | Updated on: Jun 20, 2022

Under the scheme of demerger, the company will issue one equity share of Kamdhenu Ventures having face value of ₹5 each; against every existing share of Kamdhenu Ltd having a face value of ₹10 each

Gurugram-based Kamdhenu Group plans to complete listing of its recently demerged paints entity – Kamdhenu Ventures – by September-end.

The Chandigarh Bench of the National Company Law Tribunal (NCLT) had earlier allowed demerger of the steel and paints business of Kamdhenu Ltd, the listed company.

Post demerger, Kamdhenu Ltd will focus on the steel business; while Kamdhenu Ventures, which will be listed separately, will focus on the paints business.

According to Harish Kumar Agarwal, CFO, Kamdhenu Group, the company will make soon make an application for availing the certified copy of the NCLT order, following which the listing process of the demerged entity will be initiated.

“Within next quarter-end, that is during July to September period, we intend to complete the listing of Kamdhenu Ventures. The effective date of the demerger will be from when we start invoicing our client; while April 1, 2022 will be considered as the appointed date,” he told BusinessLine.

Under the scheme of demerger, the company will issue one equity share of Kamdhenu Ventures having face value of ₹5 each; against every existing share of Kamdhenu Ltd having a face value of ₹10 each.

The ownership structure of Kamdhenu Ventures will be the same as Kamdhenu Ltd.

Kamdhenu Ltd, a manufacturer and seller of branded TMT bars in the retail business, reported a turnover of ₹841 crore in FY22, of which the steel business contributed 71.3 per cent.

₹1,000-crore potential

According to Agarwal, the idea behind the demerger of the paint business is to scale up operations; while exploring the possibility of roping in a “strategic partner” or an investor. The target is to have a turnover to ₹1,000 crore in a three-year-period in paints.

The business contributed 28.7 per cent of FY22 revenues; and sales stood at ₹241 crore, up 19 per cent y-o-y vs ₹202 crore in FY21. Water based products contributed 79 per cent, powder based were 11 per cent, and solvent-based at 10 per cent of the vertical’s revenues. The average selling price for a litre increased to ₹76 in FY2022, from ₹63.

“The decision to hive off the paint business is aimed to decouple the paint business. The paint industry in India has been witnessing around 18-20 per cent annualised growth, whereas the company is expecting to grow at a much faster rate at 30-40 per cent in the coming years in view of its wide presence and large network across the country,” he said.

The Chopkani plant, in Rajasthan, manufactures interior and exterior emulsions, stainers, colorants, designer paints, construction chemicals, waterproofing chemicals and other water-based speciality products; whereas it also outsources median and low-range products like distempers, enamel and putty.

Published on June 20, 2022
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