Ahmedabad: The board of directors of Nirma Ltd Sunday approved the proposal made by chairman Karsanbhai Patel and other promoters for acquiring 3.63 cr equity shares of the company, being all the equity shares not held by promoters in the company and seek delisting of equity shares from the Stock Exchanges pursuant to and in accordance with the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations), 2009, the company said in a corporate announcement.
Presently, Nirma’s equity shares are listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited.
Incorporated in 1984, Nirma Limited paved way for consolidation of operations leading to listing of the company in 1994. The company’s main line of business is soaps and surfactants. The company recently diversified to pharma and processed minerals and cement businesses.
Total income and gross fixed assets of the company, on consolidated basis, for the financial year ended on 31 March 2010 is Rs4696 crore and Rs5032 crore, respectively. Share capital and reserves of the company as on 31 March 2010, on consolidated basis, is Rs79.57 crore and Rs2746 crore respectively. As on date promoters hold 77.17% of the paid up equity share capital of the company.
“The acquirers believe that it is this changing nature of the business of the company that has led to market valuations of the company to be valued as diversified conglomerate, rather than as a consumer products company or at a valuation that reflects the sum of its parts. The acquirers believe that given the low trading liquidity in the stock, the delisting offer should provide investors with an opportunity to get an exit at a fair value, while according the company the flexibility to carry on its operations,” the company said in a press statement.
The acquirers are of the view that a price of Rs235 per share is an attractive price for the public shareholders of the company under the present circumstances. The price represents a premium of approximately 19% to the price determined as the average of the weekly high and low of the closing prices of the equity shares of the company as quoted on NSE, during the 26 weeks preceding the date of the decision, the company said. The share price of Nirma Ltd stood at Rs224.45 when the markets closed on Friday.
The success story of Karsanbhai who started manufacturing phosphate-free detergent powder in his backyard and sold it while cycling to work has already become business folklore.
With $1 billion revenue, today Nirma is the seventh largest soda-ash maker in the world.
In 2004, the Nirma group expanded into pharmaceuticals by acquiring an IV fluid factory in Ahmedabad. It also acquired US-based Searles Valley Minerals to become one of the top producers of soda ash in the world.
Today, nine manufacturing locations of the company serve four continents globally and 37% of total income is generated overseas.