Y. C. Deveshwar, Chairman, ITC, addressing shareholders at the company’s 100th annual meeting in Kolkata on Friday told,It’s not just EIH or Hotel Leela Venture, ITC’s other competitors, too, should now be scared of the diversified conglomerate picking up stakes in them.
ITC has significant equity investments in these two hotel companies, and the company may invest in a similar way in other competing companies also,
ITC’s investments in EIH have reaped significant financial gains as it could foresee the prospect in a company present in same industry, a strategy.On investments in rival hotel companies he said that ITC had ‘temporary liquidity' with funds to the tune of around Rs.5,000 crore.
Deveshwar told,“We invested in EIH at a price of Rs35 while others invested at a much higher price. This is the reason our investments are confined to industries, by and large, where we operate. It’s not only that we would invest in these two companies, we could also invest in other hotel companies, we could also invest in other fast moving consumer goods companies. We could also invest also in agri-products businesses, even information technology companies,”
He told, if the new relaxation in the takeover laws would lead to ITC raising its stake in EIH, now at 14.98%, a tad less than 15%, the level, if breached, would trigger an open offer under present rules. Under the new takeover rule announced on Thursday, that trigger level has been raised to 25%.
ITC would invest (in East India Hotels) further if the price was good or it might even sell if the price went up further.
He told,“We want to be present in fast moving consumer goods businesses and one of the businesses under the umbrella of foods in dairy-based products. India is the world’s largest producer of milk and there is a great opportunity to add value to it by making derivative products and brand them and market them. Our first project would be in Munger where we have been engaged in animal husbandry programme, upgrading the quality of cattle leading to improvement in yield of milk.