Wipro chief Azim Premji-owned investment entities have picked 4.68 per cent stake in Hyderabad-based Heritage Foods (India) Ltd, a packaged food company. The investments were made through open market transactions in the public listed company, promoted by Andhra-based politician N Chandrababu Naidu.
When contacted by VCCircle, a Heritage Foods spokesperson said, “Three companies in which Azim Premji is a director have collectively bought 4.68 per cent stake through open market deals. Institutional investor Kotak India Focus Fund has sold its 9 per cent stake and part of that was acquired by these entities.”
In a separate disclosure, the company has said on Wednesday that it is open to strategic partnership in retail business for accelerating its growth but the company is not looking for any strategic investor at the group company level and the promoters are not looking to sell their stake.
“The buzz in the market regarding open offer by a strategic player with a total transaction value of $100 million, is not true,” it added.
The news was first reported by Business Standard which said that PremjiInvest, the billion-dollar-plus private fund of the Wipro chairman, picked an undisclosed stake.
The entities involved in the transactions included Napean Trading Investment Co Pvt Ltd, Regal Investment Trading Co. Pvt Ltd and Vidya Investment Trading Co. Pvt Ltd. Although these are private investment vehicles of Azim Premji, PremjiInvest have been investing out of separate investment vehicles till now.
The deal gels with Premji’s recent interest in the consumer sector. PremjiInvest recently invested $25 million in JSM Corp, which runs Hard Rock Cafe and California Pizza Kitchen restaurants in India.
Earlier this year, it had also picked 4.9 per cent stake in Tata Group’s public listed retail firm Trent Ltd for Rs 122 crore.
It is estimated that 4.68 per cent stake in Heritage Foods would have cost somewhere around Rs 21 crore ($3.7 million), as per VCCircle. Kotak India Focus Fund sold bulk of its holding on Oct 31.
Since the stock exchange norms call for a public disclosure of holding when it crosses the 5 per cent mark, Premji is yet to disclose the investment in Heritage Foods.
The company’s share price has rocketed more than four times over the past seven months to hit a 52-week high in late November. The scrip hit the upper circuit limit for the day on the BSE, with the share price up 5 per cent at Rs 486.6 a piece in a strong Mumbai market on Wednesday.
Heritage Group is owned by former Andhra Pradesh chief minister Nara Chandrababu Naidu. It operates four business divisions – dairy, retail, agri and bakery – under its flagship company, Heritage Foods.
Its milk products under the Heritage brand have market presence in the home state besides Karnataka, Kerala, Maharashtra and Orissa. The food & grocery retail stores under Heritage Retail are located across Bangalore, Chennai and Hyderabad. The company has also entered the market with its own FMCG products under the mother brand for packaged food products.
Its agri operations (which include contract farming, packing units and greenhouses) are located in Chittoor and Medak districts, and serve as the backbone to retail operations and the bakery unit at Uppal in Hyderabad.
Dairy business is the mainstay of Heritage, contributing around three quarters of revenues and the only business unit generating profit.
Of late, there have been a slew of private equity deals in the dairy business including IDFC PE investing Rs 155 crore in Parag Milk Foods and Ahmednagar-based Prabhat Dairy raising funds from India Agri Business Fund, a fund managed by Rabo Equity Advisor.
(Edited by Sanghamitra Mandal)