Hope to provide fresh impetus to Eveready: Mohit Burman

The Burman family's move to acquire the country's largest dry cell maker Eveready is to push the strong consumer brand in emerging battery categories such as remotes for smart televisions and air-conditioners, and flashlights, Dabur vice chairman Mohit Burman has said.

"As a family, we like to invest in consumer centric businesses," Burman told ET in an email interview, elaborating on why the group, with interests across packaged goods, restaurant chains and financial services, is investing in batteries. The buy is a "personal investment of the Burman family", he added.

The Burman family, the single largest shareholder of Eveready Industries with 19.85% stake, had last month made an open offer to acquire an additional 26% share of the Khaitan family-owned Eveready for ₹604.76 crore.

Since then, the family has increased its stake to 20.09%. It bought 0.02% in Eveready from the open market on Thursday after buying 0.23% on Monday. This is part of the family's plan to acquire up to 38 lakh shares, representing 5.26% of Eveready's voting capital, in addition to the open offer.

"How much stake we end up owning depends on the response to the offer," Burman said.

Eveready Industries' non-executive chairman Aditya Khaitan and managing director Amritanshu Khaitan had stepped down from the company board following the open offer from the Burman group.

Traditional battery usage categories such as torches, transistors or Walkmans are becoming obsolete as mobile phones are replacing transistors and torches even in rural India.

"But Eveready remains a very strong brand and we believe it has great potential; all it needs is some push and direction," Burman said. "As the largest shareholder, we hope to provide that fresh impetus and direction to the company."

He said the new owners will focus on fast-growing segments like alkaline. "We plan to go after that segment, besides upgrading our range. Our strategy is to consolidate our current position in the dry cell and flashlight market, and look for newer business opportunities in the medium term."

The dry cell market is estimated at about ₹1,500 crore.

On street speculation that the deal is a case of "understanding" between two close business families with roots in Kolkata and one bailing out another, Burman said: "There is no such understanding. This is not a structured deal. Since this is not a negotiated transaction, there is no agreement between us, the company or the current promoters."

On speculation that the open offer is aimed at preventing possible hostile takeover of Eveready by a third party, he said: "We are the largest shareholders and have made an offer for control at a price that we thought is fair... If someone wanted to show up to acquire the company, they would have over the past two years when we were passive shareholders."

Eveready Industries, part of the Williamson Magor Group, had a debt of Rs 418 crore, according to its annual report for FY21.

Burman said the leverage of debt per se is not a challenge. "Currently, the leverage in the company is around Rs 350-400 crore; ideally, we should pay down this in due time, but first we would like to put the house in order," he said. "We hope to also bring our financing costs lower with time."