After two decades, Khaitans may give up driver's seat in Eveready

A source says Amritanshu Khaitan is unlikely to seek reappointment as firm's MD. Khaitan declined to comment

Battery maker from the Brij Mohan Khaitan stable, Eveready Indus­tries India, is gearing up for a slew of changes as it recharges for the next phase of growth.

The Khaitan family with less than five per cent holding in the company may give up the driver’s seat after more than two decades with the term of Amritanshu Khaitan, managing director, coming to an end in May 2022.  

A source close to the development said Khaitan is unlikely to seek reappointment as managing director. Khaitan declined to comment.

But sources said the Burman family — promoters of Dabur India — were in favour of the company being run professionally and in sync with that philosophy Khaitan may not seek another term. The Burmans are the largest shareholder in the company with a holding of about 19.85 per cent. 

The Khaitan family, however, will retain the promoter tag with its minority holding and continue having board representation.

The promoter shareholding in Eveready stood at 4.84 per cent in the quarter ending September, down from 7.26 per cent a year back and 30.83 per cent in 2019, as financiers invoked pledged shares (the shares were pledged to borrow funds for group firm, McNally Bharat Engineering).

As promoter holding dropped, Eveready started making moves to professionalise the management and the first step came in August when it appointed a joint managing director.

Suvomoy Saha, a non-executive director, took charge as a joint managing director with effect from August 10, 2021, to “enhance leadership” in seeking “re-orientation” of processes in the post-pandemic world and for “new growth avenues”.

Sources indicated that if Khaitan doesn’t seek reappointment, a new managing director or chief executive officer would be appointed sometime next year.

This would not be the first time that Eveready would have had an outsider as managing director. Eveready came under the Khaitan fold in 1993 when it acquired Union Carbide India (renamed Eveready Industries India). For the first four years, C P Raman was the managing director till Brij Mohan Khaitan’s elder son, Deepak Khaitan, took charge. The baton passed to Deepak Khaitan’s son, Amritanshu Khaitan, in 2014. Currently, on the board of Eveready, the family is represented by Amritanshu and Aditya Khaitan who is the chairman in a non-executive capacity. 

Though the Burman family has been the largest shareholder in Eveready for more than a year now, they don’t have representation on the Eveready board.

But sources said they could be evaluating the next steps in the company, which may include an open offer or board representation even though they pointed out no decision has been made.

Mohit Burman, vice-chairman, Dabur India, did not comment on a possible open offer or board representation.

While Amritanshu Khaitan said, “We value the Burmans as stakeholders. So far, they have not asked for a board seat.”

Any decision in this regard, however, may be subject to the outcome in a pending legal case. An interim Delhi High Court order prevents a change in the capital structure and sale of assets of Eveready, McLeod Russel India and other Williamson Magor group companies. The case was filed by KKR India against the Williamson Magor group to recover a Rs 200-crore loan and the order is awaited.

Even as larger shareholder issues wait to get sorted, the company is understood to be looking at roping in a major consultant for charting out the next phase of growth, or Eveready 2.0.  

On the appointment of a consultant, Khaitan said, “We are always looking at opportunities to enhance growth prospects and keep looking at various options. The aim is to significantly grow the company’s turnover and profitability as well as expand the product range.”

Eveready has a more than 50 per cent share in the Indian dry cell battery segment and more than 70 per cent in the organised flash light market. But it is also looking to grow newer verticals such as lighting and appliances. 

EVEREADY AT A GLANCE:

2020-2021 Financial Performance

• Revenue from operations: Rs 1,236.94 crore

• Profit from operations, before depreciation, finance costs and tax: Rs 228.90 crore

• Loss after tax: Rs 309.13 crore

Brand salience:

• 70%+ share of India’s organized flash light market

• 50%+ share in the Indian dry cell battery segment

Source: annual report