Even as the AV Birla group spokesperson stated firmly that the Birlas will not exit from L&T, an analyst with a leading brokerage firm, commented that Grasim Industries could still consider an exit option at this early juncture as, historically, L&T has been a tough bet. Reliance could not succeed here, so will the Birlas questioned another analyst.
The Birlas have already invested close to Rs 1,000 crore in L&T, and analysts feel that before they pledge more funds into the diversified conglomerate, they could sell of their holding. Given the track record of Kumar Mangalam Birla, it will not be surprising if he took such a decision, the analyst added.
While the Birlas have an over 15 per cent stake in L&T, the financial institutions (FIs), put together have a majority holding of about 40 per cent. Ever since the Birlas made an entry into L&T after buying out Reliance Industries 10.05 per cent stake at Rs 306.60 per share in November 2001, there have been subtle undercurrents which hint at an apparent rift between the L&T top management and the Birlas.
L&T seemed to be averse to change of such kind. This was also visible, when the cement demerger issue was quietly revived by L&T at a recent board meeting, though L&T says that there was no connection whatsoever.
The price at which the Birlas offered to acquire the additional stake of 20 per cent in L&T, was also questioned by the FIs and some minority shareholders, who demanded the original price paid by the Birlas to mark an entry into L&T.