| Budhia: New quest
Calcutta, Jan. 2: After Arun Kumar Bajoria and Ghanshyam Sarda, there’s a new corporate raider in town — Sanjay Budhia of the Patton group known for its plastic water storage tanks.
Over the last one-and-a-half years he has accumulated substantial stakes in two Tata group companies — Tinplate Company of India Ltd and Tata Metaliks Ltd, both headquartered in Calcutta.
Budhia has acquired 5 per cent in Tinplate and 4.9 per cent in Tata Metaliks, but says he has no intentions of upsetting the management of the companies. Budhia informed the bourses today that his stake in Tinplate had crossed 5 per cent.
“We see these companies as undervalued. They have benefited from the successive revisions of steel prices, and have turned themselves around. We hope to profit from the upswing in the steel sector.
“What is more we are confident about the management of the companies. The Tatas, too, see us as friendly investors. We have no intentions whatsoever of seeking management control of these companies,” Budhia added.
The Tata group holds its stake in these firms through Tata Iron and Steel Company (Tisco), which holds 32.23 per cent in Tinplate and 46.66 per cent in Tata Metaliks.
Tinplate manufactures cold rolled flat products and electrolytic tinplate used in packaging of food products. The company provides 36 per cent of the total tinplate consumption in India. Tata Metaliks, on the other hand, is a manufacturer of pig iron and its by-products. The company intends to tie up with a joint venture partner.
Though Budhia said these were “value investments”, he would consider buying the companies if the Tatas seek to exit. “We like the businesses.”
“Our interest in these companies stemmed from our close association with them. We buy substantial quantities of hot rolled and cold rolled steel products from these companies,” Budhia said.
Besides manufacturing plastic water storage tanks, the Patton group exports engineering products. Its exports generate Rs 50 crore in revenues.
Budhia’s investment in the shares of the two companies is not too big in terms of cash. In Tinplate, which closed at Rs 10.25 on the Bombay Stock Exchange (BSE) today, Budhia’s investment is around Rs 1.75 crore. On Tata Metaliks, which closed at Rs 26.75 on the BSE, Budhia has spent around Rs 3.1 crore.