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Deepak Fertilisers, which made a surprise entry into the Vijay Mallya-controlled UB Group’s Mangalore Chemicals & Fertilisers (MCF) on Wednesday, might now approach Saroj Poddar to buy out his stake in MCF.
Poddar, chairman of the Adventz Group, acquired a 10 per cent stake in MCF in April with the intent of eventually taking over MCF.
“We can approach him in the days to come, but it will depend on how things move in the next few days. We are also hoping to have some discussions with Mallya,” an official of Deepak Fertilisers told Business Standard on condition of anonymity.
‘The smarter guy’
Deepak Fertilisers, as it turns out, had set its sight on MCF long back and wanted to buy shares in the firm in April, when Saroj Poddar bought it via Adventz Group’s arm, Zuari Agro. “We wanted those shares then. But some things did not work out well enough and Poddar came out as the ‘smarter’ guy. This time we are sure about how to make this work,” the official added.
The person confirmed the Delhi-based Burman family had sold its shares to Deepak Fertilisers.
With Wednesday’s block deals, Deepak Fertilisers stands as the holder of the largest block of shares in MCF with a 24.5 per cent stake.
The UB Group has 22 per cent stake in the company, followed by Poddar’s 10 per cent stake.
Apart from being just a strategic fit, Deepak Fertilsers is eyeing a board berth with an intent that signals towards management control.
“Of course, we want a board berth as a 24 per cent stake is substantial,” the official said.
Another official of the company said, “We are in the same line of business and it makes sense to buy a competitor.”
When contacted, Poddar did not comment on whether he would exit the company by selling his stake, as the situation was still ‘fluid’.
“I can only say, I am in touch with Mallya and a meeting should happen sometime this month,” said Poddar.
“There has been speculation that Deepak has been planning to enter the urea business. So, this can be an ideal foray for them via MCF as the latter has been doing good business,” a sector analyst said.
The MCF scrip on Thursday fell by eight per cent on the BSE during afternoon trade, but later settled at Rs 54.9, down by 2.3 per cent since Wednesday.
The stock of Deepak Fertilsers was up 1.9 per cent at Rs 95.3 on BSE.
Publicly listed Deepak Fertilisers And Petrochemicals Corporation, set up in 1979 as an ammonia manufacturer, makes industrial chemicals, bulk and speciality fertilisers, farming diagnostics and solutions, technical ammonium nitrate and has an annual turnover of over $300 million, according to its website.
