Eveready Industries India Ltd. (EIIL) is planning to monetise some of its land by next year, according to a top company official.
“The company will evaluate all the possibilities and also the surplus assets that can aid its growth,” Amritanshu Khaitan, managing director, EIIL, told The Hindu.
Land parcels at Kolkata and Hyderabad may be first put on the block.
The EIIL board had given its approval for the proposal, resolving to sell surplus and unutilised land/assets within 12 to 18 months.
Unlocking value
Six years back, EIIL had planned to sell some of its properties in a bid to retire debt. It had also identified two land parcels.
However it changed its mind, deciding instead to wait for better time to unlock the value. In 2005-06, EIIL sold its land at Guindy in Chennai for ₹72 crore.
Nandu Belani, Bengal president of CREDAI (Confederation of Real Estate Developers Association of India) told The Hindu that this was not the best time to sell properties as the implementation of RERA and GST had depressed the market.
At the same time, both the reforms had led to an improvement in the market, he added.
“Real estate market is actually entering a new era and this is a transition phase,” said Mr. Belani adding, “the transparency and the accountability that these two reforms have ushered in will translate into long-term gains for the sector and overseas funds are looking to invest in the Indian real estate segment now.”
He felt that a revival was slowly taking place and EIIL’s 12-18 month timeline seemed right.
Known best for its dry cell batteries and flashlights, EIIL had, over the years, diversified into rechargeable batteries, energy-efficient lighting, small household devices and into confectionery. It also has a packet tea business through a joint venture with another B. M. Khaitan Group company.
However, the new ventures had entailed higher costs — on employees, advertising and promotion (A&P) and distribution.
EIIL ended the fourth quarter with a ₹16.1 crore net loss against a ₹10.5 crore net profit a year ago. During the quarter, employee cost increased by 18% as the company “needed to front-end expenditure on resources for diversification.” Similarly, A&P spend was 66% higher. EIIL also incurred a ₹3.1-crore management consultancy cost to identify cost-saving areas. Mr. Khaitan said the higher expenditure was only for a quarter (January to March 2018). EIIL also carries a debt of about ₹250 crore (2017-18).
