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Kumar Mangalam Birla tightens grip on grandpa BK's empire

Monday, 23 June 2014 - 6:35am IST | Place: Kolkata | Agency: dna

ZAfter buying majority stake in Kesoram Industries, the AV Birla group chairman is raising stake in Century Textiles

Kumar Mangalam Birla is fast strengthening his grip over the B K Birla Group companies.

The chairman of AV Birla group has started taking ownership control of companies of at least two companies belonging to his grandfather BK Birla -- Kesoram Industries and Century Textiles.

Kumar Mangalam has significantly raised stake in BK Birla's flagship company Kesoram, and is now adding to his holdings in Century Textiles, in a precursor to his ultimate takeover of these and other companies from his grandfather.

IGH Holdings Pvt and Aditya Marketing and Manufacturing Ltd, two investment companies owned by KM Birla, have picked up 1.86 crore preferential warrants, or 16.77% stake, in Century Textiles at a price of Rs 354.89 a share against Friday's closing price of Rs 525.30 a share, Century Textiles disclosed to the stock exchanges on Friday.

Incidentally, BK Birla, through his investment company Padmavati Investment was supposed to hike his stake in Century during the current placement with promoters, according to an earlier disclosure made in the notice issued to get shareholders' nod.

In the final allotment of warrants, BK Birla's investment firm stayed away, allowing KM Birla to hike his stake further.

Before the issue of warrants, Aditya Marketing was controlling just 60,900 shares of total 3.74 crore shares held by promoters, or about 40% stake, in Century Textiles.

The majority promoter holding has been in the hands of Pilani Investment & Industries Corp having 3.42 crore shares, or 36.78% of the equity.

Pilani Investment has been holding large stakes in several BK Birla companies as well as outside companies like Tata Steel.

KM Birla now controls Pilani, with his investment arm Aditya Marketing holding 34.59% of its capital.

Though Pilani, KM Birla has also silently hiked his stake in Kesoram Industries, the diversified flagship of the BK Birla, during last fiscal to 24.91%, or just below the threshold 25%, from a low of 5.28% at the beginning of the year, taking effective control of the company where promoters' holding is 48.23%.

These acts of hiking promoter stake in the companies stems from a decision made in 2007 by BK Birla, the Kolkata-based octogenarian industrialist to bequeath his interests in cement, textiles, chemicals, tyres and tea held through seven listed manufacturing companies in the group among his daughters Manjushree and Jayashree, grandson KM Birla and grand-daughter Vidula Jain.

While KM Birla will get companies like Century Textiles and Century Enka, the management of Kesoram is likely to remain with Manjushree, though Kumar Mangalam may have the controlling stake, sources in the Birla family said.

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