When Brij Mohan Khaitan, the de-facto founder of the Khaitan family empire, left for heavenly abode on 1 June, 2019 - the family’s presence across its key businesses was significant. The empire that once used to be spread across dozens of sectors and some 25 companies, had shrunk since but the promoter group’s holdings in two of its prime enterprises - Eveready Industries and McLeod Russel - were intact.
The decline since, however, is sharp. Soon after the senior Khaitan passed away, the family’s promoter holdings in the two listed entities began to dwindle. From over 44 per cent holding in Eveready and 42.71 per cent in McLeod Russel in March, 2019 quarter, Khaitans’ holding in the two entities fell to some 27 per cent each by December that year.
The latest move by the Dabur’s Burman family to takeover Eveready and the exit of the two Khaitans from the board of the company has shifted the spotlight back on the Kolkata-based business family that once used to be one of the largest in the country. The beginning of the saga, incidentally, coincides with BM’s departure, when Burman’s entered the fray. About that time, the Burman family took up their first stake in Eveready.
Rising debt had been a major concern for the Khaitan family for quite some time but it was after June, 2019 when various stakeholders began to stake claim. Take IndusInd Bank, for instance. Nearly a year after BM left, the lender invoked pledged shares - 7.82 per cent in Eveready and 7.5 per cent in McLeod Russel. “Equity shares of Eveready Industries and McLeod Russel, held by Williamson Magor and Co (Khaitan Group entity), were pledged with the bank for securing the outstanding dues of Seajuli Developers & Finance Limited. The bank has invoked the pledge held on the aforesaid shares for recovery of its dues from Seajuli,” it said in a regulatory filing.
Since then, Khaitans’ holdings in two firms have slipped further. As of 31 December, 2021 the promoter group owns only 4.84 per cent and 6.25 per cent in Eveready and McLeod, respectively. While at Eveready, Burmans’ have raised their stake to 19.85 per cent, with an additional bet for 5.26 per cent through JM Financials, apart from the 26 per cent open offer against Rs 604 crore that is has made recently. At McLeod, a bunch of investors led by Mumbai-based Niraj Rajnikant Shah (5.04 per cent stake) owns 29.35 per cent, while retail investors now own 36.02 per cent.
While it is unclear, whether after Burman family’s takeover of Eveready (if completed successfully), Khaitans would manage to hold on to the last front - McLeod Russel -- their steady decline since mid-2000s is equally intriguing as their rise in mid-1960s.
Calls and messages to Aditya Khaitan (former Chairman of Eveready) and Amritanshu Khaitan (former Managing Director), who resigned on 3 March, remained unanswered.
If the final decline of the family’s fortunes began with BM Khaitan’s demise, it was his entry into the arena that had boosted it on the first place. It was the takeover of Williamson Major & Company in early-1960s, in a fierce battle against investor B Bajoriaa, that had placed BM under the limelight in 1964, when he took charge of its MD. Three years later, his successful deal for McLeod Russel India not only gave the Khaitan family control of 54 tea estates but also made it the world’s largest private tea producer.
By 1995, apart from tea, the family’s interests were spread across batteries (Eveready Industries, Standard Batteries), engineering (Macneill Engineering, McNally Bharat, Kilburn Engineering, Worthington Pumps, Deutsche Babcock), packaging (India Foils), and financial services (Williamson Financial Service).