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Eveready to utilise GDR funds for completing BPL unit acquisition

Our Bureau

Approximately 20 per cent stake has been offloaded to FIIs based in Europe and Far-East Asia through this GDR.

Kolkata , Nov. 30

EVEREADY Industries India Ltd, the flagship company of the B.M Khaitan Group, has raised $33 million through its first GDR (global depository receipts) against a target of $30 million.

Mr Deepak Khaitan, Vice-Chairman and Managing Director, told Business Line that approximately Rs 150 crore had been raised and it would be utilised for completing BPL's battery unit acquisition.

"We would also use these funds for bringing down our debts. The GDR would not only help us transform our balance sheet, but also strengthen our activities. We have got a superb set of quality investors in our company," Mr Khaitan said.

According to him, the shares were offered at $2.06 or Rs 95, approximately. Though he preferred not to disclose the names of the investors, still it was learnt that they are institutional investors based in Europe and Far-East Asia.

Approximately 20 per cent stake has been offloaded to these foreign institutional investors through this GDR. The board had earlier approved a GDR of $40 million. Later, the management scaled it down to $30 million.

Last month, Eveready Industries acquired the ailing BPL Soft Energy System at a cost of Rs 45 crore. The Bangalore-based company has an annual production capacity of 240 million pieces.

Price rise: Mr Khaitan also said the company has decided to go in for a price hike of around five to seven per cent from December 1. It would be effective on all products including the BPL range. Prices of torchlights would be increased too.

According to him, the management was forced to raise prices because of the increase in input costs. When queried whether other producers are following the same, he said they have been informed about Eveready's decision.

"We may go in for another price increase in February, and it will again be around five to seven per cent. A final decision on it will, however, be taken later," he said.

On Monday, Eveready launched the paper jacket batteries under the BPL Shakti brandname. Earlier, BPL was producing only metal jacket batteries under this brand name. With this move, BPL Soft Energy System will succeed in cutting down its production cost tremendously.

Expected results: Mr Khaitan is extremely upbeat about the performance of Eveready Industries. According to him, the volumes are steadily growing. Moreover, the price increase will further boost the company's bottom line.

"The rural economy is thriving. Our sales are growing. We are hopeful of presenting a better and healthier balance sheet in 2006. After the BPL acquisition, our combined market share has increased to 55 per cent," he said.

On Tuesday, the Eveready scrip opened at Rs 109 on the BSE and touched a low of Rs 106 and closed at Rs 106.30.

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