Tata Chem to increase stake in Rallis India

MUMBAI:Tata Chemicals has decided to significantly increase its equity stake in Rallis India, a crop protection firm, by acquiring the entire shareholding of the promoter group.

Tata Chemicals on Wednesday said it intended to buy a 35.8% stake in Rallis India from other promoter firms at a price not exceeding 850-a-share. Post this transaction, which will cost a maximum of around Rs 365 crore, Tata Chemicals will hold the entire promoter stake of 45.2% in Rallis India.

Currently, it holds a 9.4% stake. The list of other Tata companies with equity stake in Rallis India includes Tata Tea (24.5%), Tata Sons (7.5%), Tata Investments (2.4%) and Ewart Investment (1.3%). The transaction is expected to take place over the next few days.

In a press statement, Tata Chemicals said its board had approved the proposal to buy shares in Rallis India. ���Tata Chemicals has a strong presence in crop nutrition business, and Rallis is among the leaders in crop protection business in agri-sector���, the statement said without divulging the rationale for the move. ���The offer to buy shares in Rallis is regarded as an inter-se transfer among the qualifying promoters and being eligible for exemption from an open offer obligation,��� Tata Chemicals added.

Industry sources said the move might be a precursor for merger of Rallis with Tata Chemicals. ���Both the companies have operational synergies and hence, it makes sense to have only one merged entity,��� said an analyst, requesting anonymity. The Tata Chemicals spokesperson declined to comment. In addition to fertilisers, Tata Chemicals is the world���s second-largest soda ash company, and the country���s largest branded salt maker. The Rallis stock gained 6.8% to close at Rs 736.95 in a weak Mumbai market on Wednesday.