Cricket or no cricket, N. Srinivasan makes news. The former boss of the Board of Control for Cricket in India (BCCI) has built a brand around himself, especially during his aggressive stint as the chief administrator of the country’s sporting body. This time around, Srinivasan is in the media spotlight for non-cricketing reasons. He was all over the pink press when Radhakishan Damani, who built a fortune rolling out his supermarkets across the country, and his family picked up close to 20% stake in The India Cements. Damani is the owner of Avenue Supermarts Ltd., which operates the DMart retail chain. The story became more intriguing last week when rumours began to set in. The share buying by Damani set off speculation, which gained further currency after a foreign news service suggested — relying on “people familiar with the matter” — that the DMart boss was looking to increase his and his family’s stake and consider taking over control of the company. This created quite a buzz in South Indian corporate circles. On Wednesday, Srinivasan, who is the Vice-Chairman and Managing Director of The India Cements Ltd., asserted at a virtual media conference, which was held to announce the annual results of the firm, that the management in the company was stable and would continue to focus on cement business. Also read: Cement Tycoon N. Srinivasan Calls for Return of Nehruvian ‘Freight Equalisation’ Policy“We have already clarified to the Securities and Exchange Board of India (SEBI). There is nothing to say. Stability of management will be ok. He (Mr. Damani) is a respectable person who has chosen to invest in The India Cements. I should not say more. This company has been around for more than 70 years. We will continue to make cement,” Srinivasan said in his matter-of-fact tone. It is true – Damani and his family have been picking up shares of The India Cements for some months, and their holdings quadrupled this year to about 20% as of March 31, according to filings with the stock exchanges. In the meanwhile, the shares of the company surged over 70% on the bourses. The shareholding pattern in The India Cements as on March 31, 2019 (as per the annual report) is given below: Promoters: 87421448 shares (28.21%) Mutual funds: 71220869 shares (22.98%) Alternate investment funds: 18000 shares (0.01%) Foreign portfolio investors & foreign institutional investors: 41069484 shares (13.25%) Financial institutions/ banks: 481249 shares (0.16 %) Insurance companies 16290034 shares (5.26%) Bodies corporate: 30431589 shares (9.82%) Resident individuals: 54479564 shares (17.5%)Damani is well-known as an investor. With the latest hike, the question naturally becomes whether he plans on driving his investment further up in the company. If so, how far will he go? If his investments breach the SEBI takeover guidelines, he may have to make an open offer to the public shareholders. These are, nevertheless, in the realm of speculations only at the moment.Usually, such share buying into a company triggers counter-action. At the moment, there isn’t any. Nothing overtly at least. After all, making an investment in a company is one thing , but taking management control is quite another – a tough call at that. And, it borders on very many variables. Also read: Why the SC Verdict on N. Srinivasan Is Important, Not Least Because of BCCI’s Pseudo-ProblemsOne thing is sure though. Damani the investor has pushed up the market valuation of The India Cements.The holdings in The India Cements are widespread. It will require quite a consolidation effort on anybody’s part to satiate any higher aspiration levels. And Srinivasan is absolutely passionate about cement. If he holds cricket dear to his heart, he breathes cement. There are no two views on that. At the same time, he always plays his cards close to the chest. In the 1990s, a spate of acquisitions led by Srinivasan, including the well-known hostile takeover of B.V. Raju’s Raasi Cements, significantly boosted the company’s capacity, even while sparking debt woes. The Damani speculation, which may or may not end up being true, could be seen as matters coming to a full circle. What we do know is that as an inscrutable strategist, Srinivasan does his business in an extremely workman-like manner. After all, sometimes staying calm also makes news. K.T. Jagannathan is a senior business journalist based out of Chennai.
