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Manu Chhabria plans delisting of group firms

Bhupesh Bhandari

Manohar Rajaram “Manu” Chhabria plans to make his business in India a closely-held one by getting the group companies delisted from the stock exchanges.

“We want to make it a closely held group,” Chhabria told Business Standard, though he did not mention a timeframe within which he wants to achieve it.

The companies controlled by Chhabria in the country include Shaw Wallace, Dunlop India, Falcon Tyres, Mather & Platt and Hindustan Dorr-Oliver. The combined turnover of these companies is in excess of Rs 50 billion.

According to the rules laid down by the Securities & Exchange Board of India, if the promoter’s shareholding in a company crosses 90 per cent, the promoter can get the company delisted from the bourses.

With low share prices, Chhabria can delist his companies for less than Rs 1 billion at current prices.

While Chhabria’s direct shareholding in Shaw Wallace is 39 per cent, he controls over 50 per cent of the company along with his friends and associates.

In Dunlop, which is on the operating table of the Board for Industrial & Financial Reconstruction, he has a 39 per cent stake. The promoter group shareholding in Falcon Tyres is 78.05 per cent, while the shareholding in Mather & Platt is 51 per cent and in Hindustan Dorr-Oliver, 73.01 per cent.

It is worth noting that last year, Chhabria had pumped in Rs 320 million into Dunlop through a loan of Rs 260 million and a line of credit of another Rs 60 million.

This was supposed to be converted into equity. “If I bring in another Rs 320 million, my stake will be good enough to get the company delisted,” Chhabria said.

Shaw Wallace, at the moment, is being split into three companies- one each to handle the beer and liquor businesses and a third company for the residual businesses.

When asked if he would like to continue with the residual businesses, Chhabria said that he would be looking at an exit option.

The intent to raise his stake in the companies stems from the bright prospects Chhabria sees for the companies.

According to him, Falcon Tyres, which makes tyres under the Dunlop brand and had recently launched rubber mattresses and pillows under the Dunlopillo brand, is looking at expanding its production capacity to cope with increased demand.

“We are studying how to increase the capacity of the plant,” Chhabria said. Both Mather & Platt and Hindustan Dorr-Oliver, as per him, have received huge orders.

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