Latest news with #Vadilal
Mint
21-05-2025
- Business
- Mint
Is the ‘Vadilal' brand worth ₹1,000 cr? Its minority shareholders don't think so.
Mumbai: Several minority shareholders of Vadilal Industries Ltd have opposed the ice cream maker's plan to buy the eponymous trademark from a promoter entity for about ₹1,000 crore, hobbling the group's restructuring just as it emerges from a longdrawn family dispute. Insisting that the valuation for the 'Vadilal' trademark is unrealistically high, some shareholders have written to the Securities and Exchange Board of India, the ministry of corporate affairs, and India's two leading bourses requesting intervention, said two people in the know. They have also written to Vadilal's newly appointed independent directors to oppose the transaction. Mint has reviewed a copy of this letter. The 'Vadilal' brand is a strategic element of the group's restructuring plan that was arrived at after the fourth generation of the promoter family reached a truce in March. Three promoter entities, including Vadilal International Pvt. Ltd that owns the trademark, are to be merged under Vadilal Industries and the brand brought under its direct ownership. The flagship companyVadilal Industries and fellow group companyVadilal Enterprises Ltd have a 15-year non-exclusive agreement with Vadilal International for brand usage, which expires in 2028. Vadilal Industries manufactures ice cream and other frozen food products while Vadilal Enterprises markets and distributes them. Both the companies are publicly listed. The valuation math As part of the restructuring plan, audit firm Grant Thornton assessed the 'Vadilal' trademark to be worth ₹990 crore based on royalty payment projections. Separately, PricewaterhouseCoopers valued the brand at ₹974 crore. In their reports, filed independently, both the audit firms have stated that Vadilal International's income from royalty is projected to surge to ₹251.2 crore in 2033-34 from ₹7.8 crore this financial year, with royalty charges set to increase from 0.5% of Vadilal Group operating companies' revenues currently to 5% starting 2028-29. According to the audit firms' reports, Vadilal Industries' royalty payments to Vadilal International would jump from ₹1.8 crore in FY28 to ₹50 crore the following year, and Vadilal Enterprises' from ₹9.1 crore in FY28 to ₹107.4 crore in FY29. 'VEL's total turnover in the past 10 years has been about ₹7,500 crore, on which it has made about ₹25-30 crore profits. How will it possibly pay ₹107 crore royalty? It makes 2% margins, which is projected suddenly to become 15%," said Kush Katakia, a Mumbai-based investor in Vadilal Enterprises. 'VEL shareholders are getting shortchanged," he said. Jagdish Hiroo, a shareholder in the two listed Vadilal companies since 2013, questioned the rationale behind valuing the 'Vadilal' trademark based on the projected royalty payments when the projections hadn't been ratified by the shareholders. An email sent to Vadilal Industries managing director Rajesh Gandhi on Monday went unanswered. Grant Thornton and PwC declined to comment on client specific queries. Also read | Could Vadilal's big family truce be a gamechanger for shareholders? Truce among warring promoters In late March, the three Gandhi families who are promoters of the Vadilal Group buried the hatchet after a decade-long feud. As part of a family agreement, the families decided to merge three promoter-owned companies—Vadilal International, Vadilal Finance Co. Pvt. Ltd, and Veronica Constructions Pvt. Ltd—into Vadilal Industries. As per the merger terms, the promoters will be awarded shares of Vadilal Industries in lieu of their stake in the three privately held companies. Promoter shareholding in Vadilal Industries will increase to 72.34% post amalgamation from 64.73% at present, regulatory disclosures show. Vadilal Industries said in a stock exchange disclosure on 9 April that direct ownership of the 'Vadilal' brand by the company would eliminate the need for royalty payments, thereby improving profitability and supporting its growth. Further, the merger of the three companies with Vadilal Industries would simplify and streamline the promoter holding of the group, the company said in the same disclosure. The merger is subject to approval from shareholders and creditors of the respective companies and from statutory and regulatory authorities, including stock exchanges, Sebi, and the National Company Law Tribunal. Also read | Shield minority shareholders from business family feuds The promoter families have agreed to appoint a professional chief executive officer for Vadilal Industries and induct new independent directors. The agreement stipulates that the company will have at least seven directors, three of whom will be independent and three will be nominees of each of the three branches of the family. Similar professional management will also be brought in at Vadilal Enterprises. 'While there is some positive for the minority shareholders that the brothers have settled their dispute, the shareholders have a valid reason to feel aggrieved. The valuation seems to be on the richer side," said Shriram Subramanian, managing director of proxy advisory firm InGovern and a corporate governance expert. 'This is not a sprawling conglomerate with multiple businesses leveraging a common brand. This is a single business which has invested in the brand over the years," he said. Shares of Vadilal Industries have gained about 47% and that of Vadilal Enterprises about 32% since 29 March, when the promoters made public their truce. On Wednesday afternoon, both the stocks were trading nearly unchanged from the previous day's close, with Vadilal Industries at ₹6,749.70 and Vadilal Enterprises at ₹13,350.00 on BSE.
&w=3840&q=100)
Business Standard
22-04-2025
- Business
- Business Standard
This smallcap stock zooms 105% from March low. Do you own?
Vadilal Industries share price today: Shares of Vadilal Industries hit a new high of ₹7,374.70, surging 12 per cent on the BSE in Tuesday's intra-day trade. The stock price of the ice cream and frozen dessert manufacturing company has doubled or zoomed 105 per cent from its previous month's low of ₹3,600, it touched on March 3, 2025, on the favourable resolution of ongoing issues at the promoter level and a healthy business outlook. Vadilal Industries sells all of its products in India through Vadilal Enterprises. Meanwhile, the share price of Vadilal Enterprises also hit a new high of ₹13,671.90, gaining 5 per cent on the BSE in intra-day trade today. It soared 70 per cent from the March 3, 2025, level of ₹7,860. Memorandum of family arrangement The promoters of Vadilal Industries — the Gandhi family, which includes Rajesh R Gandhi, Janmajay V Gandhi, and Devanshu L Gandhi, heads of their respective family branches — have signed a new memorandum of family arrangement to resolve internal disputes. On March 29, 2025, the families agreed to settle their inter se disputes and expressed their intent to restructure the company's management, according to a stock exchange filing. The agreement is solely between the family members, with the company not being a party to it. The company also said that it is appointing independent professional management personnel to oversee business operations. The move is aimed at strengthening corporate governance, professionalising leadership, and ensuring the long-term ownership of the iconic 'Vadilal' brand. The above resolution plan is likely to result in the disposal of the ongoing National Company Law Tribunal's (NCLT's) litigation pertaining to the prevention of oppression and mismanagement of funds at Vadilal Enterprises; India Ratings and Research (Ind-Ra) said in rating rationale, adding it will continue to monitor the developments regarding the same. 9MFY25 financial earnings Vadilal Enterprises' revenue grew 10 per cent year-on-year (Y-o-Y) to ₹930 crore in the first nine months (April to December) of the financial year 2024-25 (9MFY25), supported by healthy volume growth owing to an increase in demand for existing products and in the premium ice cream segment in India. Vadilal Enterprises launched many variants in the premium segment and added several unique products with a focus on different formats, tastes and innovation, leading to an increase in demand and healthy volume growth in India. Brand Presence Vadilal is one of the top ice cream brands in India, with a strong presence in northern and western India, especially Gujarat, Rajasthan and Uttar Pradesh. Vadilal Enterprises is the domestic selling arm of Vadilal Industries. Vadilal Enterprises procures all of its ice cream requirements from Vadilal Industries and then sells it across India. All marketing decisions, such as geographical presence, and pricing of stock-keeping units (SKUs) are taken by Vadilal Enterprises. As per Vadial Industries FY24 annual report, the brand Vadilal has a 16 per cent organised market share against the total organised Indian ice cream market, which is estimated at ₹20,000 crore. Vadilal has a robust and extensive pan-India distribution network with more than 175,000 dealers and trade partners that cater to every nook and corner of the country. About Vadilal Industries Vadilal Industries is engaged in the business of manufacturing ice cream, flavoured milk, frozen desserts, processed foods, and other dairy products. It is also engaged in the export of ice cream, dairy products, processed food products such as frozen fruits, vegetables, pulp, ready-to-eat and ready-to-serve products, etc.
