ITC keep­ing cards close to chest on EIH, Leela

Non-com­mit­tal af­ter Sebi ex­pands takeover trig­ger, says en­tire busi­ness spec­trum on radar for in­vest­ment; en­ters dairy biz

DNA (Daily News & Analysis) Mumbai Edition - - FRONT PAGE - Su­mit Moitra KOLKATA

It’s not just EIH or Ho­tel Leela Ven­ture, ITC’s other com­peti­tors, too, should now be scared of the di­ver­si­fied con­glom­er­ate pick­ing up stakes in them.

ITC has sig­nif­i­cant equity in­vest­ments in these two ho­tel com­pa­nies, and the com­pany may in­vest in a sim­i­lar way in other com­pet­ing com­pa­nies also, ITC chair­man Yo­gesh Chan­der Devesh­war in­di­cated on Fri­day.

ITC’s in­vest­ments in EIH have reaped sig­nif­i­cant fi­nan­cial gains as it could fore­see the prospect in a com­pany present in same in­dus­try, a strat­egy, that Devesh­war said could be used for other ri­vals too.

“We in­vested in EIH at a price of 35 while oth­ers in­vested at a much higher price. This is the rea­son our in­vest­ments are con­fined to in­dus­tries, by and large, where we op­er­ate. We think we know these in­dus­tries bet­ter than those who are not into them, and this makes us feel safer. So, there­fore, it’s not only that we would in­vest in these two com­pa­nies, we could also in­vest in other ho­tel com­pa­nies, we could also in­vest in other fast mov­ing con­sumer goods com­pa­nies. We could also in­vest also in agri-prod­ucts busi­nesses, even in­for­ma­tion tech­nol­ogy com­pa­nies,” Devesh­war told re­porters dur­ing a press con­fer­ence af­ter the 100th an­nual gen­eral meet­ing of the com­pany.

He added a dis­claimer though: “This is not to say we will not in­vest in in­dus­tries other than in which we are op­er­at­ing.” Devesh­war didn’t com­ment when asked if the new re­lax­ation in the takeover laws would lead to ITC rais­ing its stake in EIH, now at 14.98%, a tad less than 15%, the level, if breached, would trig­ger an open of­fer un­der present rules. Un­der the new takeover rule an­nounced on Thurs­day, that trig­ger level has been raised to 25%.

“If the op­por­tu­nity is good, price is good we would in­vest. If EIH’s prices have gone up, we may even sell,” Devesh­war said.

Af­ter giv­ing tough times to com­peti­tors in the branded pack­aged foods busi­ness, di­ver­si­fied con­glom­er­ate ITC is ready­ing it­self for a foray in the dairy busi­ness.

The foray would take off from Munger in Bi­har where ITC plans to set up a dairy farm, Devesh­war said.

“We want to be present in (sev­eral) fast mov­ing con­sumer goods busi­nesses and one of the busi­nesses un­der the um­brella of foods in dairy-based prod­ucts. In­dia is the world’s largest pro­ducer of milk and there is a great op­por­tu­nity to add value to it by mak­ing de­riv­a­tive prod­ucts and brand them and mar­ket them. Our first pro­ject would be in Munger where we have been en­gaged in an­i­mal hus­bandry pro­gramme, up­grad­ing the qual­ity of cat­tle lead­ing to im­prove­ment in yield of milk. Over a pe­riod of time we would like to es­tab­lish a dairy there. That would be the start­ing point for en­ter­ing the dairy busi­ness,” Devesh­war said.

When asked about the prod­ucts that ITC would be churn­ing out in the dairy space, Devesh­war said: “It could be pas­teurised milk, it could be skimmed milk powder, it could be cheese, but­ter and may be choco­lates.”

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