Karnataka plans KSDL sell-off, firm talks diversification

EVEN as the Karnataka government proposes to disinvest Karnataka Soaps and Detergents (KSDL), the state-owned company has floated an ambitious Rs 3,000 crore proposal to diversify into information technology, biotechnology, telecom and healthcare.

This proposal was presented before the state government last month and awaits clearance.

Elaborating on the proposal, MG Halappanavar, managing director, KSDL, said the idea is to capitalise on the company’s infrastructure in terms of fixed assets and workforce to float a theme park on global levels, where KSDL can lease out its assets to private parties engaged in the software sector either as development centres or call centres and multiply the turnover to Rs 1,000 crore in another 4-5 years.

“We can reiterate Karnataka as the pioneering state in IT, biotechnology and healthcare sectors and without any monetary support from the state government since it can raise funds from the market leveraging on the company’s intrinsic brand and asset strengths. There is tremendous opportunity to raise funds exceeding Rs 3,000 crore globally under the Mysore Sandal India International brand and through projects relevant in technical services through global alliances and foreign direct investments,� he said.

However, these efforts could be seen as an immediate fall-out of the privatisation efforts initiated by the state government, where it plans to offload 74% stake in the company.

Already trade unions and employee unions have made representations before chief minister SM Krishna opposing the disinvestment move.

Meanwhile, the disinvestment department of the Karnataka government has shortlisted five global investment bankers — Ernst & Young, PwC, SBI Caps, UTI Bank and Deloitte Touche — for advising the state on selling its majority stake in KSDL.

Only technical bids have been opened till date and financial bids will be opened soon, said sources. Several consumer companies, including Wipro, are keen to bid for the company which owns the Mysore Sandal brand, they added.

KSDL has one of the largest production plants in the country with an installed capacity of 26,000 tonnes per annum and its detergent plant has an installed capacity of 10,000 tonnes per annum.

KSDL’s products are exported to UAE, Bahrain, Saudi Arabia, Kuwait, Qatar, South East Asian countries, Europe, North America and South America.