Kolkata-based Emami Ltd’s promoters have offloaded a 10% stake in the fast-moving consumer goods maker in the second such sale within five months as part of efforts to reduce debt.
The promoters of the diversified conglomerate Emami Group sold the stake for Rs 1,230 crore ($177 million), the company said in a statement on Monday.
L&T Mutual Fund, SBI Mutual Fund and Aditya Birla Sun Life Mutual Fund were among the buyers, according to a person familiar with the transaction.
The group said it has also initiated a process to identify assets for divestment with the goal of reducing its debt. It is looking to pare its debt in a six- to eight-month period through both stake sales and potential asset sales.
After the latest sale, the promoters own a 52.74% stake in Emami, the statement said, adding that there was no plan for any further divestment in the company.
“The deleveraging of debt is a priority for the promoters of Emami Group,” group director Aditya Agarwal said. “The promoters are committed towards being proactive in addressing business and industry challenges and working in the best interests of all Emami Group stakeholders,” said Mohan Goenka, another director.
Shares of Emami Ltd ended the day 7.59% down at Rs 267.30 apiece.
News of the stake sale comes around four months after the promoters sold 10% of Emami to a clutch of investors including PremjiInvest, the family office of Wipro chairman Azim Premji, and non-banking financial company IDFC in February. At the time, Emami said the transaction had fetched Rs 1,600 crore (around $224 million).
SBI Mutual Fund and L&T Mutual Fund had also taken part in that transaction.
Emami Ltd is the group’s flagship business. Some of the personal care and healthcare brands under its umbrella include Zandu pain balm, BoroPlus antiseptic cream and Navratna hair oil.
In January, it acquired German personal care brand Creme 21 GmbH as part of its inorganic growth strategy. At the time, VCCircle estimates showed the deal to be worth around €12 million, or Rs 97 crore.
In February last year, it agreed to pick up a 26% stake in professional beauty care products manufacturer Brillare Science Pvt. Ltd. In June that year, it bought a 7.54% stake in US-based beauty care products firm Loli Beauty Inc.
The Emami Group was founded in 1974 by RS Agarwal and RS Goenka. It owns businesses in diverse sectors ranging from FMCG and personal care to healthcare, cement, newsprint and paperboard, biodiesel and edible oil, real estate, solar power, writing instruments and pharmacy retail.