BK Birla group firm Kesoram Industries Ltd. said Tuesday it will spin off its tyre business into a separate entity, which will then become a publicly traded company.
The board of directors of the company at its meeting held on Tuesday approved the proposal to demerge the tyre business into a new entity, Birla Tyres Ltd., Kesoram Industries said in a regulatory filing. “The demerger proposed is part of an ongoing exercise undertaken by Kesoram over the past few months in further realigning and recalibrating operations.”
For BTL, the company said the move would open new growth vistas as it looks at opportunities with renewed vigour, it added. “The process is expected to act as a stimulant for further investments into BTL,” the filing said without elaborating.
Upon grant of requisite approvals, BTL will also become a listed company with its shareholding pattern mirroring Kesoram, it said.
As on quarter ended September 2019, promoters held 53.18 percent stake in Kesoram Industries and public shareholders had 46.82 percent stake.
“With the proposed spin-off, Kesoram's focus on the both its businesses -- cement and tyre will get even further sharpened and pave the way for their robust growth,” it added. In the first half of the ongoing fiscal, the company's tyre business had clocked a revenue of Rs 709.6 crore, while that of cement stood at Rs 1,148.23 crore.
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