Burman family increases holding in Eveready Industries to over 5%

At a time when the Williamson Magor Group-owned Eveready Industries is reeling from financial crisis at the group level, the Burman family of Dabur has increased its stake in the firm to 5.01 per cent.

Since the past four months, Guardian Advisors has been gradually increasing its shareholding. This portfolio management firm, owned by Arjun Lamba and others, manages investment for the Burmans, besides others. Sources said Guardian Advisors had invested in Eveready on behalf of the Burman family.

In a regulatory filing this month, Guardian Advisors said its investment in Eveready was on behalf of its clients and the equity stakes are owned by the investors, while Guardian Advisors has the power of attorney to manage the investment. “We believe it (Eveready) is a strong brand and a market leader in its domain, and hence, we have built a stake in the company,” Mohit Burman, vice-chairman at Dabur India, said.

An investor in his own capacity, Burman has been the driving force behind the family’s foray into several high-growth and sunrise sectors. He played a pivotal role in expanding the group’s financial services business into asset management, life insurance and pension by setting up Aviva Life Insurance India in partnership with the UK’s largest insurance Company Aviva. 

At a time when the Williamson Magor Group-owned Eveready Industries is reeling under financial troubles at the group level, the Burman family of Dabur has increased its stake in Eveready to 5.01 per cent.

Since the past four months, Guardian Advisors has been gradually increasing its shareholding. This portfolio management firm, owned by Arjun Lamba and others, manages investment for the Burmans besides other families. Sources said Guardian Advisors investment in Eveready on behalf of the Burman family.

In a regulatory filing this month, Guardian Advisors said that its investment in Eveready is on behalf of its clients and the equity stakes are owned by the investors while Guardian Advisors has the power of attorney to manage the investment made in Eveready.

“We believe it (Eveready) is a strong brand and a market leader in its domain, and hence we have built a stake in the company”, Mohit Burman, vice chairman at Dabur India told Business Standard.

An investor in his own capacity, Burman has been the driving force behind the Burman family's foray into several high-growth and sunrise sectors. He played a pivotal role in expanding the group's financial services business into asset management, life insurance and pension by setting up Aviva Life Insurance India in partnership with UK's largest insurance Company Aviva.

In the recent past, he also stepped into another burgeoning industry acquiring over 14% stake in Punjab Tractors Ltd and was instrumental in acquisition of Balsara's home and hygiene business by Dabur India.

Asked about the investments at a time of stress in WMG and Eveready, Burman said, “The group is going through a tough time and this has even reflected on its stock price. But the company, brand and its core business remain intact”.

In fact, owing to inter-corporate deposits to group companies and the uncertainty of repayment, Eveready suffered a huge erosion in its stock price. The scrip, which hovered around Rs 394 apiece on February 18, 2018, fell to around Rs 38 per share during October 15 last year and since has been recovering. 

However, after the sale of its loss-making tea business to Madhu Jayanti International last year, the firm that holds over 50 per cent market share in the battery market in India has been focussing on its core battery business besides focussing on other verticals like flashlights, luminaires and appliances.

During the third quarter of the current fiscal year, Eveready's EBITDA margin for the core battery business stood at around 23 per cent despite registering a 16 per cent decline in its operating revenue at Rs 317 crore. The EBITDA margin for flashlights also stood at 14 per cent.

The company is of the view that reduction in dumped imports from China after the Bureau of Indian Standards (BIS) standards will further improve the business and “initial signs are encouraging for the domestic industry”.

Sources said Eveready might consider approaching the Burman family in case it needs to raise funds.

The WMG firm is looking to pare its debt of around Rs 400 crore by means of asset monetisation and is also on the lookout for strategic investors. Sources said while an outright sale of the battery business was considered, the company is now also open to investors and might look at building partnerships.

Asked if the Burman family intends to further its stakes in Eveready, Burman said, “We will wait and watch and see how events unfold”.

Recently Eveready concluded sale of its Chennai and Hyderabad lands for a total consideration of Rs 200 crore.

“The proceeds of these transactions have mostly been utilized for repayment of debt which would reduce overall leverage of the company”, Eveready said in a statement after the declaration of its Q3 results.

• Dabur’s Burman family now owns a 5.1 per cent stake in Eveready
• The Khaitans of WMG own 27.39 per cent in Eveready
• Sources said Khaitans might approach Burmans if it needs to raise money
• Eveready share price has been recovering since October last year after hitting an all-time low of Rs 36.20