The Burmans of Dabur have made it clear that they would take a board berth in Eveready “if and when” they take control of the company.
The Burman family is the largest shareholder on the board of the dry cell battery maker with close to a 20 per cent stake compared with the promoters’ 4.92 per cent stake. However, they are not represented on the board yet.
On January 28, Eveready inducted two new members on the board, including Utsav Parekh, who is also a significant minority shareholder in the company. Sources said the promoters of Eveready , the Khaitan family of Calcutta, had invited Parekh to sit on the board.
The Burmans said they are “neutral”to the new inductions, but noted that having shareholders’ representation on the board is “good”.
Asked why the largest shareholder is not on the board, Mohit Burman, vice-chairman of Dabur India, said: “We will get on the board if and when we take control.” He reiterated that such a scenario would only play out if the Khaitans decide to exit.
The stand indicates that the Burmans may not force a change in the management but would not jointly manage/control with the existing promoters of Eveready either.
As of now, the Burmans said they were happy to be only a financial investor in the company.
“We are a significant financial investor in the company and we’re happy with that... we in any case believe companies should be professionally run,” Burman added.
The Burman family bought shares in Eveready via investment companies and not through Dabur. The family has investments in multiple sectors and entities, notably Aviva Life Insurance, Taco Bell and Kings XI Punjab IPL franchisee among many others. All of them are professionally managed, with the Burman family members on board.
There has been no indication that the Khaitans have any plans to exit the company, which they acquired in 1993 from Union Carbide.
The Calcutta family has the right on the brand name Eveready for India, Nepal and Bhutan. Sources said they would look at every opportunity to claw back or beef up holding.
Amritanshu Khaitan is the managing director of the company while his uncle, Aditya Khaitan, is the chairman (non-executive). Parekh joined as a non-executive and non-independent shareholder in the company.
He is also the co-owner (minority) of ISL Calcutta franchisee ATK Mohun Bagan with Sanjiv Goenka, chairman of RP-SG Group, which also has interests in FMCG. Goenka’s cousin was married to late Deepak Khaitan, Amritanshu’s father.
The Burmans bought into Eveready at an average price of Rs 80-100 per share. The stock closed at Rs 233.50 on the NSE on Monday. They started picking up shares when the promoters’ stake, pledged with creditors, were invoked and sold off in the open market as they defaulted in loan payment obligations.
The Burmans holding provided stability to the stock as investors hoped that they would eventually take up control. The company’s performance also added to the shine in a broader buoyant market.
Asked if the family would look at exiting after making a killing in a short span of time, Burman said that they are a “patient financial investor”.
They first bought into Eveready in March 2019 and scaled their stake up to 19.84 per cent in July 2020, where the holding stands now.
