InvestorQ : Can you tell me about what is happening in Eveready and have the Burmans taken control from the Khaitan family?
ishika Banerjee made post

Can you tell me about what is happening in Eveready and have the Burmans taken control from the Khaitan family?

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2 months ago
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The Burman group (which owns Dabur), had previously held 19.84% stake in Eveready. On the last day of Feb-22, Burmans bought additional 38.22 lakh shares or 5.26% stake in Eveready via JM Financial. Now with this purchase, the Burman family’s stake goes above 25%. This was done with the intent of making the statutory open offer to the shareholders of Eveready so as to acquire another 26% in Eveready and take full control of Eveready.

First a quick background to the Burman involvement. In 2020, McNally Bharat Engineering of the Khaitan group, got into financial troubles. Khaitans had taken loans by pledging shares of Eveready Industries as security. When the loans could not be repaid, creditors started selling the shares. As a white knight, Burmans had then hiked the stake in Eveready to 19.84% but allowed Khaitan to continue to run the affairs of the company.

However, with just 4.84%, the Khaitans running the company was never feasible. Now, after nearly 2 years, the Burman family wants to take charge and start handling the day to day affairs of Eveready. In deference to the wishes of Burman family, Khaitan family members have stepped down from the board. For now, Khaitans will continue to hold 4.84% in Eveready while the management will be taken over by the Burman group.

The idea of a new leadership is to give new direction to Eveready. It is already struggling with debt and has been monetizing its assets to raise funds. Burmans were keen on control and nominating 3 non-executive directors on the board of Eveready. For the shareholders, the shift should be positive as the largest stakeholder takes charge. This also allows Eveready to work on market share and also on the high impact EV battery business.

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