Pilani exiting other group firms

BK-Kumar Mangalam entity pulls out of Mysore Cem, Xpro and Sutlej Cotton.

Pilani Investment and Industries Corporation, in which Basant Kumar Birla and Kumar Mangalam Birla had acquired majority stake last year, is in the process of pulling out of companies run by other Birla factions.

The market value of the quoted and unquoted investment of Pilani stands at Rs 3,223 crore as on March 31, 2006.

Pilani is the Birla family's investment arm and holds stake in all major group companies, with about 37 per cent in Century Textiles. As an initial step, the company has pulled out of S K Birla group companies Mysore Cements and Xpro India, and K K Birla group firm Sutlej Cotton Mills Supply.

A top source in Pilani said: "The company has decided to move out of the other Birla companies. However, it will take some time to complete the process." Once it is over, Pilani will hold shares in the companies of BK Birla and Aditya Birla group firms.

According to the annual report, during 2005-06, Pilani sold 26.61 lakh shares or 3.1 per cent stake in Mysore Cements and 2.30 lakh shares or 2.28 per cent in Xpro India. During the period, it sold 10,564 shares in Sutlej Cotton Mills Supply.

Apart from the 37 per cent stake in Century Textiles, Pilani holds stake in a handful of Aditya Birla group companies, including Bihar Caustic, Grasim Industries, Hindalco Industries and Aditya Birla Nuvo.

The B K Birla group companies in which Pilani has investment include Jay Shree Tea, Kesoram Industries and Mangalam Cements. Among K K Birla group firms, Zuari Industries and Hindustan Times are the companies in which Pilani has investment.

It also has investment in GP-CK Birla group (Orient Paper) and in a host of unlisted companies, namely Birla Buildings, Birla Consultants, Bangkok-based Indo Thai Synthetics, Manila-based Indo-Phil Mills, Eastern Economist and Industry House. It continues to hold 45.31 lakh shares, or 0.81 per cent stake, in Tata Steel.

Last year, the B K Birla-Kumar Mangalam combine acquired 7 per cent stake from SK Birla group and 20 per cent from GP-CK Birla group to scale up their holding to around 50 per cent stake in Pilani.

K K Birla group now holds 8 per cent and M P Birla group holds 25 per cent in the company. The remaining stake is widely held by the public. The M P Birla group's holding is reportedly transferred to the R S Lodha group which is being legally fought by the Birlas.