vadilal promoters to shut down in India

The promoters of Vadilal, India’s oldest ice cream brand, may be looking to exit the company, two years after a conflict erupted between them, two people aware of the development said.

The eight-decade-old Vadilal is maintained by the Ahmedabad-based Gandhi family and owns one of highest market shares in the frozen food business. The promoters collectively hold about 65% in BSE-listed Vadilal Industries.

Vadilal Industries, managing director Devanshu Gandhi and Chairman Rajesh Gandhi did not evoke any responses in the email queries to Lincoln International.

According to another person familiar with the growth; “The promoters could be looking at an estimated valuation of Rs 600 crore for their stake in Vadilal Industries.” As of now, only one promoter, Virendra Gandhi, could be looking for an instant exit, the person said.

Vadilal promoters plan to exit company

Vadilal Icecream Promoters Ahmedabad latest stocks. | Via: ET

In 2015, the Vadilal family got involved in a dispute that took them to the Company Law Board, with each side faulting the other of mismanagement and economic impropriety. The petition was filed by Virendra Gandhi, who alleged that his brother and cousin had joined hands and illegally taken over Vadilal Chemicals from him by eliminating him from the position of chairman and managing director as well as from the committee.

Although they’ve agreed to settle the matter out of court, the argument hasn’t been resolved yet. It was reported by Economic Times for the first time, about the family fight of Gandhi Family on December 29, 2015.

The origin of the conflict lies in a memorandum of understanding (MoU) signed in 1999 among Gandhi family members. As per the contract, late Ramchandra Gandhi’s sons Virendra and Rajesh, and his brother Lakshman’s son Devanshu would have similar and equal shares of the total promoter stake in all Vadilal Group companies, including the Vadilal Chemicals which was not listed then.

The MoU, which was part of the petition registered in the Company Law Board in Mumbai in 2015, said: “The joint venture will be equally owned and none of the parties can directly or indirectly improve stake in any of the listed firm or partnership firm without written permission.” by Virendra Gandhi.

The promoter shareholding in Vadilal Industries reached 64.84%, comparable to 46,60,370 shares, at the end of September, according to a corporation filing with the BSE.

Virendra Gandhi held 2,78,333 shares, Rajesh Gandhi had 2,90,132 shares, and Devanshu Gandhi had 3,41,450 shares. The rest was with other members of the family.
Vadilal Industries reported 14% rise in net profit to Rs 16.33 crore in the year ended March 2017 and total revenue of Rs 482.34 crore. Shares of Vadilal Industries rose 0.3% to Rs 1,029.55 at the close of the BSE on Friday, with a market capitalisation of Rs 740 crore.

Stats and inputs taken from The Economic Times.

vadilal promoters to shut down in India
Anshumaan Vishnu
Inspired By Entrepreneurship.

The YouTube App is Preparing for a Dark Watch Mode Soon

Previous article

11 Companies That Tried But Failed to Acquire The Facebook

Next article

You may also like


Leave a reply

Your email address will not be published.

More in Business