Promoters sell 22% stake in Bajaj Consumer Care for Rs 700 crore

The Shishir-Kushagra Bajaj family, the promoters of Bajaj Consumer Care, on Tuesday sold their 22 per cent stake in the company for Rs 700 crore to pay off debt and remove the pledge on stake from the banks.

With this transaction, the promoters’ stake will fall to 38 per cent and their pledged stake will come down to zero from 63 per cent.  

The stock has lost close to 36 per cent of its value in the past three months and had lost 47 per cent of its value since January this year. The company’s stock fell by 15 per cent to Rs 195.55 apiece as the company’s shares were sold to a clutch of investors, including mutual funds and foreign institutional investors.  Its  market capitalisation (m-cap) fell to Rs 2,885 crore, taking into consideration Tuesday’s closing. The m-cap was Rs 5,415 crore as of January 1, 2019.

Edelweiss was the sole banker for the stake sale, said a source. The promoters are planning to list the power business and have started road shows and, a source said, they did not want any overhang of pledged shares of the promoters during the road shows of the share sale.

The IPO road shows are on for Bajaj Energy after the company got the Securities and Exchange Board of India’s nod in September for the Rs 5,450 crore initial public offering. Bajaj Energy will use the proceeds of the share sale to buy equity shares of Lalitpur Power Generation Company from Bajaj Power Ventures and Bajaj Hindustan Sugar for Rs 4,972 crore. 

Bajaj Power owns 100 per cent in Bajaj Energy, which operates a coal-fired power plant with installed capacity of 2,430 mega watts.