Promoter shareholding in Eveready falls below 5% for first time

Promoter shareholding in dry cell battery major Eveready Industries, the flagship company of the Williamson Magor group, has fallen below 5% for the first time, with banks and financial institutions continuing to invoke and sell pledged shares for recovery of dues from debt-ridden group companies.

The Khaitans, promoters of Eveready, held a 27.39% equity stake at the end of the third quarter last fiscal.

After Vistra ITCL (India), the largest independent corporate trustee in the country, invoked 17,00,000 equity shares on October 7, promoter shareholding in the company now stands at 4.92% from the earlier 7.26%.

In a stock exchange filing last Friday, Williamson Financial Services, an investments company of the Kolkata-based group, said Vistra ITCL (India) had invoked 7,20,000 equity shares of Eveready held by it. Another holding company, Babcock Borsig, said 9,80,000 equity shares held by it were invoked from pledge by Vistra.

Vistra said it has invoked the equity shares in its capacity as a security trustee against the term loan facility availed by Williamson Financial Services, and as debenture trustee for the NCDs issued by Babcock Borsig. It has sold 8,96,906 invoked shares against the term loan facility availed by Williamson Financial Services.

The Burman family, the promoters of Dabur, are currently the single-largest shareholder of Eveready. The family acquired additional equity stake of 8.48% in the battery maker from open market operations in July, taking its holding in the company to 19.84%.

Last month, responding to shareholders’ queries during Eveready’s annual general meeting, managing director Amritanshu Khaitan said, “They (Burmans) have publicly mentioned that they found value in your company and thereby they have taken a position in the company. We value their investment as a shareholder … we value that they see value in your company and thereby they invest here.”

Mohit Burman, vice chairman, Dabur India, had termed it a portfolio investment by the Burman family. “It’s a personal investment and is not connected with Dabur India,” he had said.

The Khaitan family currently has two board seats in the company after group patriarch BM Khaitan resigned from the board of directors effective April 25, 2019. He passed away on June 1, 2019. The Burmans do not have a seat on the board at present.

In August, private sector lender IndusInd Bank had acquired 56,83,320 shares of Eveready, forming 7.82% of paid-up equity share capital, pursuant to the invocation of pledged shares. The lender said the shares held by Williamson Magor were pledged with the bank for securing the outstanding dues of Seajuli Developers & Finance, the borrower company. The bank had invoked the pledged shares for recovery of its dues from Seajuli.

Buoyed by improved gross margin and lower costs, Eveready reported net profit of Rs 24.99 crore for the first quarter this fiscal as against Rs 6.91 crore for the corresponding period last fiscal. This was despite a 20.5% year-on-year fall in its revenue at Rs 263.44 crore owing to disruptions of economic activity during the lockdown, restrictions on trade of non-essential items and weak demand.