Chennai: India Cements Ltd will decide on exiting non-core businesses in the next two months to enhance shareholder value.
“We have been looking at divesting stake in unrelated businesses,” N. Srinivasan, managing director of the company, told reporters on Thursday in Chennai. The stock gained 3% to Rs.67.85 while the benchmark Sensex fell 0.25% to 19,519.49 points. On Wednesday, the share had touched a 52-week low of Rs.65 on BSE, having dropped 8.72 % since 25 May, when the news broke of the alleged involvement of Gurunath Meiyappan, Srinivasan’s son-in-law, in the Indian Premier League (IPL) controversy.
Srinivasan was forced to step aside as president of the Board of Control for Cricket in India until an internal investigation on spot-fixing in the IPL is completed. India Cements owns IPL franchise Chennai Super Kings.
Asked whether the stake divestment review would also cover the IPL team, Srinivasan said, “We are evaluating the businesses we are in and will make an announcement when we decide.”
The Chennai company holds less than a majority stake in companies engaged in unrelated businesses such as finance, securities, travel and sugar, besides the cricket team. It has 10 subsidiaries, while the shipping business set up last year and the team are a part of India Cements.
Exiting unrelated businesses will improve investor confidence, said a Mumbai-based analyst who did not want to be named.