BK Birla tweaks succession plan

Kumar Birla to get Kesoram Industries in its entirety.

Diversified B K Birla group company Kesoram Industries Ltd will not be demerged and will be instead "handed over" to Kumar Mangalam Birla, B K Birla's grandson, once the succession process comes into effect, S K Parikh, director and company secretary of Kesoram, said here today.

Calling off Kesoram's demerger will be the second change in the succession plan of B K Birla, the grand patriarch of the Birla clan and majority owner of companies like Century Textile, Century Enka, Mangalam Cement, and Jay Shree Tea.

Parikh, who is also a close associate of B K Birla, said the earlier demerger plan has been called off after some "family issues" cropped up.

B K Birla in August had hinted at a possible demerger of Kesoram and had said units other than tyre and cement may be demerged and given to his younger daughter Manjushree Khaitan. 
 

B K Birla companies
Name	Market Cap (In Rs cr)
Century Textiles & Inds	6765.40
Kesoram Inds	1753.67
Mangalam Cement	397.20
Century Enka	215.04
ECE Inds	151.56
Jay Shree Tea & Inds	135.35
Mangalam Timber Products	37.85
Hindustan Everest Tools	5.12
As on April 9, 2008

"There has been a change in the succession plan of B K Birla as far as Kesoram is concerned. There wouldn't be any demerger as thought about earlier after some family issues came up," Parikh said.

Following the announcement of B K Birla's succession plan, the market also started speculating on a possible demerger of Kesoram by the Birlas in a bid to unlock values in tyre and cement divisions.

Parikh refused to elaborate what the "family issues" were.

"The whole of Kesoram Industries as it stands today would now go to Kumar Mangalam after B K Birla's succession plan is put into effect," Parikh said.

B K Birla had first tweaked his plan in August when he announced that most units of Kesoram would go to his grandson after his retirement, and daughter Manjushree would not get the whole of the company as was initially announced.

The August plan was to happen by demerging the spun pipes business of Kesoram Industries located in West Bengal and then giving it to Manjushree Khaitan while the rest of Kesoram, consisting of cement, tyres and rayon would go to Kumar Mangalam Birla.

Shares of Kesoram rose 1.84 per cent to close at Rs 384.50 on the NSE on Wednesday.