Calcutta, Oct. 15: The Calcutta-based Ruia Group — owner of Dunlop and Jessop — is planning to restructure its businesses to create three separate holding companies for engineering, tyre and sugar.
The move is aimed at bringing greater transparency in the system and focus in each line of business through a proper distribution of powers and controls.
Each sector will have a head taking care of the growth of the businesses, group chairman Pawan K. Ruia said.
The process will also involve untangling the crossholdings between the sugar and engineering companies.
In future, the structure may mirror the Tata group. The ownership of the three separate holding companies will be vested with one entity. Pawan Ruia will be the chairman of that company while the three heads of engineering, tyre and sugar will be directors.
There are four units under the engineering division — Jessop, Hirakud Industrial Works, Idcol Rolling Mills and Pallavi Manufacturers. The sugar division is represented by Kamlapur Sugar & Industries Ltd.
Ruia said Raghav Industries Ltd would be the ultimate holding company for the engineering division.
S.C. Saxena, a Tata Steel veteran, will head this division while search for sugar and tyre chiefs is on.
Indo Wagon Engineering Ltd has a 94 per cent stake in Jessop & Co, the flagship of the engineering division that was bought in 2003 under the Centre’s divestment programme. In turn, Raghav Industries, which is named after Ruia’s son, holds 75 per cent in Indo Wagon Engineering Ltd. The rest is held by Ruia Cotex. Jessop is now being headed by ex-Tata Steel senior P. Roy.
Pallavi Manufacturers is a 100 per cent subsidiary of Jessop. Named after Ruia’s daughter, it is setting up a steel foundry at Durgapur.
In July, Hirakud and Idcol were acquired from the Orissa government through a special purpose vehicle, which owns a 100 per cent stake in these two units. The SPV is again held by Sukharam Marketing Ltd, a group company.
Ruia said he was exploring the possibility of transferring the shares to Raghav Industries as soon as possible if there is no regulatory problem.
Once Hirakud and Idcol are brought under Raghav, which is listed on the Bombay Stock Exchange (BSE), the re-organisation in engineering business will be complete.
The other exercise related to Raghav would be to transfer its holding in Uttar Pradesh-based Kamlapur Sugar & Industries Ltd to some other entity.
Ruia said he was eyeing acquisition of a sugar mill of 5,000 tonnes crushed per day (TCD) capacity in UP. “Once that is done, the new structure will emerge,” he added.
In contrast to engineering and sugar, a holding company is already in place for the tyre business. DIL RIM and Wheel Corporation is the holding company for both Falcon and Dunlop.
Ruia acquired Mauritius-based DIL RIM and Wheel Corporation through a special purpose vehicle Wealth Sea Pte, set up in Singapore. Two group finance companies owned the shares of this SPV.
Ruia recently acquired Monotona Tyres in Maharashtra. In future, it will be merged with Falcon.