Not in talks with anybody for stake sale: Bisleri

Ramesh Chauhan, Chairman of Bisleri informs that the company is not in talks with any body for sale of Bisleri.

He adds that Bisleri is not in talks with any players, though various players have shown interest. Chauhan expects to work at growth rate of 85% this year and do not needs funds.

Excerpts of CNBC-TV8’s exclusive interview with Ramesh Chauhan:

Q: Could you confirm for us at this point in time whether you are in talks with players such as Danone, Coca-Cola and Wipro for a possible stake sale or a complete sell-out?

A: No, we are in talks with nobody. I don’t know why the media is playing so much hype on this transaction of Bisleri.

I do appreciate that various people have shown interest in the brand Bisleri, because I think the brand has enormous strength, and it is the only profitable brand in the water business.

But there are no talks with anybody. Let me make that very clear.

Q: No talks and anybody would completely discount the fact that you as a company also want to go out and find somebody at this point of time or does that completely discount that aspect as well?

A: It discounts all things.

Q: Could you at least tell us as to what Bisleri sales currently stand at, at this point of time?

A: No, we are a private limited company. We don’t disclose sales figures, nor profit figures, nor the balance sheet.

Q: If I was to use the Tata Tea-Mount Everest deal that happened as a benchmark and just going by media reports of about close to about Rs 500 crore of what your company has done is the last reported turnover, between Rs 300 crore and Rs 500 crore, is it reasonable to assume that the valuation of your company could be pegged close to about Rs 1500 crore or Rs 1600 crore, if indeed you consider a complete sell-out?

A: This is an academic thing. Unfortunately, because of this Glaceau deal and Himalaya, everybody seems to be excited about talking about water. I wish that people leave water alone and worry about other businesses, which have more infrastructure and which are more relevant to the economy, than to be worrying about the water business.

Q: Without considering a sell-out, would you be considering any sort of joint venture with any sort of partner right now because your business as a whole over the last few years has been growing at an average of about 40% odd? Would you at any point of time consider a joint venture partner to actually up the investments and the growth for the company?

A: We don’t need any investments. We are working on a growth of 85% for this year. We have cash reserves which are with various companies like Merrill Lynch.

Q: Could you at least share with us what your cash reserve position is at this point of time?

A: The thing is we don’t need cash, we don’t need finance. The market is huge, the brand is doing very well and the new positioning and new advertising has resulted in tremendous growth.

I want to concentrate on cashing in on the momentum that we have got, rather than worry about selling the company partly, wholly et cetera.

Q: You yourself as a company though, are investing close to about Rs 100 crore in the natural packaged water part of the business. Can you give us a sense of how you are expecting the business growth to be hereon?

A: The business growth as I told you, 87% growth is what we are working on. And the working capital requirement is not really that much because we are cash-nice.

Q: Would you at any point of time consider at a later stage, of course you said that you don’t need to at this point of time. But any stage this year or next, would you at any point coming out with an initial public offering at all for Bisleri as a brand because you are saying that the company is healthy and you don’t need a partner. So maybe a couple of years down the line or maybe some time this year, would you consider an IPO?

A: Make an IPO for what? To raise capital, right?

Q: That is correct.

A: But we don’t need the capital.

Q: So your current existing capacity will be enough to serve you for the next couple of years to maintain that 85% growth rate that you spoke about?

A: No. Existing capacity is being increased at all times. Every month some new equipment is being put in, some new factory is starting. At the end of this month, a new plant is starting in Uttaranchal for the mountain water.

Q: And you will fund all of this internally?

A: That is what is happening right now. And not only internally, we’ve got surplus lying around with Merrill Lynch and some other investment companies.

Q: You are not even in talks with any private equity or strategic partners at any point of time over the last few weeks that may have led to media reports actually suggesting that you may have been considering a stake sale?

A: No, we are not talking to any of these people and particularly private equity players. They have only money to offer and we don’t need money.

Q: And you are an absolutely zero-debt company as things stand right now?

A: That’s right. We have no bank borrowing.

Q: Could you just give us a sense of what sort of plans you have for the natural bottled water segment, the spring water segments and where you see business growth coming in over the next couple of years?

A: Business growth is coming from India itself. There is a very large demand for the water business. The only problem is, distribution is a very tough part in the water business, because it is very bulky, weighty and of low value. So transport costs become formidable. We are tackling the issue of trying to get our product into every nook and corner of India and we have a long ways to go.

Q: As an industry watcher, how did you view the deal that happened between Mount Everest and Tata Tea because, should at any point of time a deal happen in your company, whether you choose to accept or deny it at this point of time, people would look to benchmark it against the valuations of that deal. Do you think valuations were fair the way Tata Tea went ahead and bought out Mount Everest?

A: I have no idea and it is of no interest to me.

Q: What about the succession plans at the company. You have been running this business for the better part of so many years now, what is the plan going ahead in terms of succession?

A: There is still time. I think I can still enjoy running the business for two to five years.

Q: Just one final word, just for the benefit of our viewers and to recap at this point, there is absolutely no truth to any of the reports that you may be in joint venture talks, strategic partner, private equity, for a part or a complete sale of your company at this point. That is a categorical denial from your part, is that correct?

A: Absolutely true.