Promoters divest 10 per cent stake in Emami

The promoters of Emami Ltd. have sold 10 per cent stake in the company for a sum of Rs 1,600 crore. Some of the purchasers involved in the transaction include SBI Mutual Fund, PremjiInvest, Amundi, IDFC, L&T Mutual Fund, PI Opportunities Fund and Pioneer Investment Fund.

The promoters intend to utilize the proceeds from the stake sale toward easing their liquidity position and lowering their debt, which was used in the creation of assets like cement and solar power.

Upon divestment of the stake, the promoters' holdings in Emami Ltd. will stand at 62.74 per cent.

However, Mohan Goenka, the director of the company, stated that the promoters are certain to maintain significant majority stake in the company as they do not foresee any further dilution of stake in the near future.

According to data shared by Bloomberg, the Emami Group’s debt stands at Rs. 284 crore as of December 2018.

A few days before the stake sale announcement, Economic Times had reported that the US private equity firm KKR was in advanced talks to invest approximately Rs. 2,000 crore in the Emami Group.

The shares of Emami Ltd. have tumbled nearly 14 per cent so far this year in comparison to the 5 per cent fall registered by the NSE Nifty FMCG Index.

On Tuesday, the shares of Emami Ltd. opened at Rs. 365.90, and hit a high and low of Rs. 417.70 and Rs. 358.00, respectively. At 2:44 pm, the stock was trading at Rs. 411.20, up 15.81 per cent.