In a significant corporate development, the 106-year-old Kesoram Industries, once the flagship company of the storied BK Birla Group, is poised to change hands. The Kolkata-based industrial giant, with which the legendary B.K. Birla began his entrepreneurial journey before India's independence, is being acquired by Frontier Warehousing, a city-based storage and logistics solutions provider.
The Landmark Deal: Structure and Financials
The total acquisition value, as detailed in stock exchange filings, is close to Rs 100 crore. The transaction unfolded in two key parts. First, Frontier Warehousing entered into a share purchase agreement with key promoter group entities, including Aditya Birla Real Estate, Pilani Investment and Industries Corporation, Manav Investment and Trading Co, and Birla Group Holdings. Through this agreement, Frontier acquired approximately 42.8% of the voting share capital, amounting to over 132.9 million equity shares, at a price of Rs 4 per share, for a consideration of a little over Rs 53 crore.
This purchase triggered a mandatory open offer for an additional 26% stake in the company. Frontier Warehousing proposed to acquire up to 80.7 million shares at Rs 5.5 per share, aggregating to a total consideration of over Rs 44.2 crore. On the day following the announcement, Kesoram's stock price on the BSE surged by 19%, closing at Rs 6.5 per share.
End of an Era for a Birla Legacy
Kesoram Industries holds a special place in Indian corporate history. It is one of the oldest continuously running companies across all Birla family factions. The late Basant Kumar Birla, grandson of the group's founder, had famously stated that Kesoram was "very close to his heart." However, in its later years, the company lost much of its former strength due to strategic divestments. Its cement business was demerged and transferred to UltraTech Cement, with the appointed date being April 1, 2024. Earlier, its tyre division was spun off into Birla Tyres, which later faced insolvency proceedings and was eventually acquired by Himadri Chemicals and Dalmia Cements.
Presently, Kesoram operates in transparent paper, rayon, and chemicals, with two units located near Bandel. It also holds a significant 250-acre land parcel. The company reported a turnover of close to Rs 300 crore in the last fiscal.
Future Plans Under New Ownership
Gautam Agarwal, the owner of Frontier Warehousing, has outlined his vision for the historic firm. In conversations with the media, Agarwal expressed his intention to inject fresh capital and drive growth. "We shall put in more money to grow the company. It has the potential to grow. There is scope to do a lot of things, and we are evaluating all of them," he stated.
Agarwal, who has business interests in infrastructure and logistics, aims to multiply Kesoram's turnover manifold. He also noted that his group had previously acquired Hindustan Heavy Chemicals from the B.K. Birla Group, which had a unit in Khardah. This acquisition marks another strategic step in Agarwal's expansion within the industrial landscape formerly dominated by the Birla empire.
The takeover of Kesoram Industries by Frontier Warehousing signifies a pivotal transition, closing a celebrated chapter in India's industrial history while opening a new one focused on revival and growth under new stewardship.
