Super-Exclusive: What GMM Pfaudler MD Tarak Patel told Anil Singhvi today

There are very few companies in India which buy stake in their foreign promoters, said Zee Business Managing Editor Anil Singhvi even as he complemented GMM Pfaudler Managing Director Tarak Patel in an exclusive chat today. Among the most critical questions that he fielded in a freewheeling chat with the Market Guru was - what was the hurry for DBAG to sell shares at discounted rates, given that Pfaudler is a very good company? Patel gives his take to the Managing Editor. 

Patel said that DBAG has completed six years in Pfaudler and Private Equity firms generally sell their shares within 5 years. The company waited for six years, he said adding that DBAG has already sold 25 per cent shares. 

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He said that both promoters DBAG and Patel Family are now locked in for three years. There is no further selling or dilution of shares on the horizon. Patel said that DBAG wanted to monetise some of its stake. The remaining will remain untouched for 3-4 years.  

Patel said that the family’s stake will become over 22 per cent from over 24 per cent now after a 2 per cent stake sale, while DBAG shareholding will come down to 30 per cent. The public shareholding will increase to more than 50 per cent, he said.  

He said that institutional investors will also come in.  

On pricing, the MD said that this has already been finalised to around Rs 3500 per equity share. On the discount aspect, he added that at Rs 3500, the Price-To-Earning is still 72 times the FY20 earning numbers. He said that it was a rich valuation. 

As for the benefit of retail investors to remain more informed, Patel said that investors should try to join investor calls which is done quarterly. 

He said that the investors should have faith in the company and it will continue to create value for the investors.