Goenka is looking at acquiring companies in the FMCG space which he has just entered
Power utility CESC Ltd, the flagship firm of RP-Sanjiv Goenka Group has undertaken a major restructuring exercise that would see the company splitting into four entities.
CESC would see the demerger and listing of generation and distribution businesses, the listing of subsidiary Spencer's Retail and the creation of a new vertical CESC Ventures that would house currently listed BPO entity First source Solutions and new businesses like real estate and FMCG brands Too Yumm, 2BeMe and the newly-acquired Apricot Foods.
The restructuring process, in the making for sometime and first reported by DNA Money in October, would result in three new listed entities apart from the existing CESC Ltd which would now house only the distribution business.
Interestingly, instead of reacting positively to the supposedly value unlocking of CESC's diversified portfolio, the shares of the company tanked 15%, partly because of latest turmoil concerning US President Donald Trump and partly because of lack of clarity about the impact of new businesses being brought under the fold of listed entities that might need capital infusion and time to turn around.
"Post restructuring, a CESC shareholder of 10 shares would get 18 shares in resultant four companies including five shares each in distribution and generation, six shares in the retail company Spencer's and two shares in CESC Ventures. Retail shares will be of Rs 5 face value while rest would be of Rs 10," Sanjiv Goenka, group chairman said.
The generation business would house the thermal power stations in West Bengal, Dhariwal Infrastructure based in Maharashtra and Noida Power.
The distribution business would have the old license for Kolkata and adjoining areas plus the several recent distribution licenses acquired in several areas of Rajasthan.
While the listing of Spencer's was in the works for some time as the modern retailing ventures inches towards becoming bottomline positive, it is the new ventures entity housing the newly-launched brands that would see most investment activity.
With an ambitious plan to pump in close to Rs 10,000 crore within the next five years via Guilt Free Industries, Goenka is now looking at acquiring companies in the FMCG space which he has just entered by offering healthy snacks, latest being the Apricot Foods.
More acquisitions in manufacturing facilities, distribution network, logistics and also brands are in the works to reach out pan-India with FMCG products like snack foods, juices, dairy products and also products in healthcare and personal care space.
This apart, Spencer's Retail would see aggressive store expansion in West Bengal, Jharkhand and Andhra Pradesh, he said.
GAME PLAN
- The listing of Spencer’s was in the works for some time as the venture inches towards becoming profitable
- Goenka is looking at acquiring companies in the FMCG space which he has just entered
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