Emami's dilution of stake to infuse confidence among investors, says family

Emami logo. (Photo: Wikipedia)

The promoter's decision to pare 10 per cent stake in Emami Ltd was has been taken in order to infuse confidence among the investors and intends to raise its stake in future.

"This round of 10 per cent divestment was not desired and not planned. But this was necessitated due to sudden sharp erosion of stock value. We decided to sell our stake to infuse confidence among the investors," an Emami group promoter family member told PTI on condition of anonymity.

"We can always raise our stake in future once the current storm settles. We are already exploring all options including strategic divestment, IPO or exit in group assets in 6-8 months," he said.

The second 10 per cent dilution since February has helped promoters to raise Rs 1,230 crore to reduce debt. Promoters lost over Rs 350 crore compared to last round of stake sale when the promoter family raised Rs 1,600 crore for same 10 per cent.

Post-dilution the promoters holding now stands at 52.73 per cent stake in Emami Ltd.

The promoters aim to pare the entire Rs 2200 crore debt raised pledging shares of Emami to invest in other group investments.

Emami had already engaged merchant bankers for divestment in Emami Paper and AMRI Hospitals while IPO process for Emami Cements is also under progress. The group also has land parcels internally valued at about Rs 4500 crore.

In AMRI hospitals Emami group holds 98 per cent, while it holds 74.9 per cent in Emami Paper Mills.

Emami shares rose 9.07 per cent to close at 291.50 on BSE on Tuesday.

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