Gharda Chemicals, the second-largest domestic agro-chemical company, is likely to be sold within a few months. Discussions are on with private equity funds and some of the largest Indian agro chemical companies to sell the promoter stake of 63 per cent in the Rs 950-crore turnover company.
Chairman and Managing Director Keki Gharda, a veteran chemical scientist, and his wife, Abaan, floated a public trust a few weeks earlier to use the sale proceeds for philanthropy and to promote industrial research.
Sources said private equity funds like Carlyle, Kotak and Blackstone were in discussions with Gharda for a takeover. Agrochemical majors United Phosphorous and Tata Chemicals were also interested, but now the Tata group is not pursuing the acquisition. International player Dupont, which tried to acquire Gharda in early 2000s, had then valued the company at over Rs 1,200 crore. Considering the current asset base, the valuation of the privately held company could be in the range of Rs 2,000-3,000 crore, they said.
Gharda said he would not reveal the names of the players in the acquisition race, as discussions are still at a primary stage. “I hope to share some news on this within a few months,” he said.
Godrej Chemicals is currently engaged in a legal dispute in the Bombay High Court over the ownership of a 6-7 per cent stake in Gharda, which the Adi Godrej-led company claims to hold. The dispute had its origin around 1992, when some of the minority shareholders of Gharda availed a loan worth Rs10.34 crore, pledging their 6-7 per cent stake. When Godrej Chemicals tried to transfer the shares, Gharda Chemicals opposed it, saying the share sale was done without its knowledge. This case is likely to come up for hearing this week in the High Court.
Research and development driven, Gharda is mainly into supply of agro chemicals, dyes and intermediates and industrial polymers. It has four plants, at Dombivli and Chiplun in Maharashtra and Panoli and Ankleswar in Gujarat. The company employs over 1,200 people. Over half the production is exported and in several products it has global leadership position behind innovator multinational companies such as Bayer, BASF, Solvay and Dupont.
Gharda had started the company in 1965, after he could not realise his ambition of joining as a professor with the US-based University of Michigan or the University of Oklahoma, where he studied for his postgraduate and doctoral degrees.
“ I should admit that I will be 80 years old within a few weeks. The fate of employees and Gharda Chemicals as a company will be secured by transferring my baby (Gharda Chemicals) to safe hands. I will devote the rest of my life to continue my innovations through the activities of the trust,” the veteran Parsi scientist told Business Standard.
Apart from Gharda and his wife, a close friend of Keki Gharda will also contribute his shareholding in the company worth many crores of rupees to the trust, named Abaan and Keki Gharda Memorial Trust. The rest of the share holding of Gharda Chemicals are with some employees, relatives and friends of Gharda. The trust has got all clearances and is awaiting a green signal from the income tax department to start operations.
The trust will be run by a group, led by four leading personalities in the society. It will have two arms, Gharda Foundation, which will run a string of hospitals and schools and undertake social activities, and Gharda Advanced Technologies Ltd (GAT), which will promote innovation among young scientists. Gharda Institute of Science and Technology (GIST) at Dombivli, an advanced research and development centre which houses about 30 scientists, will become part of GAT. This will also have a pilot plant to make samples, said Keki Gharda.
At present, Gharda and his scientists are working to develop high-grade cement from the ash of coking coal furnaces, two highly advanced fire-fighting polymers and its raw material to make fire-proof clothes.
“We lead a simple life and our monthly expenses are less than Rs 10,000, and the luxuries we use are the car and phone provided by the company,” said the visionary scientist, who pioneered to develop over 50-60 off-patent molecules in the agro-chemical, veterinary and polymer sectors.
The company had also developed an off-patent drug for humans, which was sold to Parke-Davis. Earlier, Gharda Chemicals had sold off some of the products at its polymer division to Belgium-based Solvay for Rs 190 crore.
