Singhanias set out to uncross holdings

The Lakshmipat Singhania business empire is being restructured to park cross-holdings in group companies in standalone investment firms.

According to sources, the rearrangement is within the Lakshmipat branch of the Singhania family and among the families of his four sons: Hari Shankar, Bharat Hari, the late Sripati and Raghupati.

This branch has companies with a combined turnover of close to Rs 5,000 crore. These include JK Industries, JK Paper, JK Sugar, JK Agri Genetics, Fenner India and JK Lakshmi Cement.

The move to restructure group investments is an effort to have more focussed manufacturing companies and will also help untangle cross-holdings.

One of the group companies has already completed the restructuring process. JK Lakshmi Cement (under Vineeta Singhania, widow of Sripati Singhania) has hived off all its investment activity to Ashim Investment Ltd. JK Lakshmi Cement used to hold 12 per cent in JK Industries, 14 per cent in JK Agri and close to 9 per cent in JK Sugar.

JK Lakshmi Cement has a turnover of close to Rs 600 crore and has a capacity of 3 million tonnes, at two locations in Rajasthan.

The group is now demerging the investments by tyre-manufacturer JK Industries, which has 35 per cent equity in JK Sugar and 9 per cent in JK Paper, into a separate company called Netflier Technologies Ltd. After the demerger, Netflier Technologies will be renamed Netflier Finco Ltd.

A third group company is set to embark on the exercise soon. The seeds business of JK Agri Genetics will be hived off into a separate company called Florence Alumina Ltd.

The residual JK Agri Genetics will be renamed Florence Investech Ltd to hold a 16.11 per cent stake in JK Industries and a 2.7 per cent in JK Sugar. Thereafter, Florence Alumina will be renamed JK Agri Genetics.

"We are demerging in a way that the manufacturing companies do not have cross-holdings. We want the manufacturing companies to concentrate on their core businesses," said top sources in the group.

They, however, did not say whether this pointed to a formal division of the family's assets. Each group company is being run by one family member.

Hari Shankar Singhania is the chairman of JK Paper and JK Industries, while Bharat Hari is chairman of JK Sugar and JK Agri Genetics. Raghupati Singhania, the youngest brother, is in charge of Fenner India and is vice-chairman of JK Industries. Vineeta Singhania is looking after JK Lakshmi Cement and Ashim Investment.

The two sons of Bharat Hari Singhania, Harshpati and Vikrampati, are also running units. Harshpati is looking after JK Paper while Vikrampati is handling JK Sugar and JK Agri.

The Singhania family has a separate branch, under the brother of Lakshmipat Singhania, comprising Kailashpati Singhania, his son Vijaypat and grandson Gautam Hari, promoters of the Raymonds empire.

Other old corporate houses like the Birlas and Thapars have already completed restructuring their tangled group holdings.