Eveready to spin off packed tea business

KOLKATA: Battery maker Eveready Industries India Ltd on Monday said its board has approved a plan to restructure the company’s packet tea business, which could be spun off into a separate subsidiary in future.

The company said in a regulatory filing that its board had authorised MD Amritanshu Khaitan to evaluate all possible ways of strengthening the packet tea business, which in fiscal 2016 clocked ₹72 crore in revenue.

“While the packet tea business will continue to leverage (Eveready’s) widespread distribution network, we shall examine all other options (such as) induction of a strategic partner,” Khaitan said in a statement.

Eveready’s shares on Monday rose 2.34% to ₹253.65 on BSE.

Post-restructuring, “the standalone remaining business will represent only the Eveready branded product verticals”, the company added in its statement.

The ₹10,000-crore market for branded tea is dominated by HUL and Tata Global Beverages Ltd.

The Williamson Magor group, promoter of Eveready, is the controlling shareholder in McLeod Russel India Ltd—the world’s biggest tea plantation company.

One of the possibilities being considered is to align Eveready’s packet tea business with McLeod Russel’s operations, according to a key official at Eveready, who asked not to be identified.