Balrampur Chini denies deal with Bajaj Hind
Talks between the two said to have fallen off over payment issues

Shubhashish & Nandini Goswami
Mumbai/Kolkata
Grapevine has it that the employees of Balrampur Chini, at its various factories, celebrated a "second Diwali" late evening on Monday.
Were they celebrating the failure of the much talked about deal by Bajaj Hindusthan to buy out the promoters' stake in Balrampur Chini?
Sources would have us believe they were.
In a statement to the stock exchanges on Tuesday, Balrampur Chini refuted media reports about its promoters entering into an agreement for sale of their stake.
"However, some discussions were held with Bajaj Hindusthan Ltd on future business strategies," it said.
Bajaj Hindusthan, too, put out a statement saying, "The board of directors of the company has not considered and/or taken any decision in regard to the matter relating to acquisition of stake in Balrampur Chini Mills Ltd from its existing promoters."
Sources hinted at disagreements between the parties over the mode of payment.
The promoters of Balrampur Chini are believed to have sought the entire payment in one go, whereas there were issues relating to Sebi clearances and part-payments from the other side.
Bajaj Hindusthan's stock ended the day flat at Rs 196.55.
However, Balrampur Chini's stock dropped 10% to Rs 134.30 after the announcements came in. The Sensex ended the day down or 3.09% at 15404.94. The stock had outperformed the market in the month to October 30, with a gain of 21.93% as compared with a 7.18% loss for the Sensex.
According to India Infoline, the current price of Rs 135 discounts the company's June quarter annualised earnings per share of Rs 10.38 by a PE multiple of 13.
An industry observer, though, said it was too early to write off a deal. "These deals take time to fructify and companies are always open to negotiations after the initial overtures to sell or buy, whichever case it may be," he said.



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