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The focus is really to be in B2C businesses, says Dabur’s Mohit Burman – today news

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The Burman family, promoters of the Dabur group, which has presence ranging from the fast-moving consumer goods sector to financial services, intends to prioritize the development of business-to-consumer ventures and undertake operational turnarounds, said Mohit Burman, Chairman of Dabur India at the Mint India Investment Summit 2024, on Saturday.

The group has interests in packaged consumer goods, financial services, healthcare, sports and the food services sector.

“Our diversifications are focused on B2C businesses. We try to be in businesses where we can establish a brand, where we can have distribution. If you look at the sectors that we’ve entered, they are more or less related to the consumer, healthcare and pharma (sectors),” Burman said at a fireside chat titled ‘How large businesses think about diversification’ at the summit.

Burman highlighted the group’s investments in the healthcare and hospitality sector to emphasize their foray into diverse sectors. “We have a bunch of investments in the healthcare sector; we have a joint venture with a UK company called Healthcare at Home, where we provide specialized services for discharged patients. We have investments in the hospitality sector too; we have the Taco Bell franchise in India, apart from restaurants at airports across India,” Burman said.

Apart from investing in and sitting on the board of several companies, such as Aviva India, and Universal Sompo, the Burmans also acquired Kolkata-based Eveready Industries in 2022. That apart, they own a stake in Indian Primier League (IPL) franchise Kings Punjab, and more recently, the family has increased its stake in non-banking financial company Religare Enterprises to 25.18%, with plans to acquire more.

The family already has exposure to the financial services sector via their stake in life insurance company Aviva Life Insurance Co., apart from their general insurance business, Universal Sompo General Insurance Co., in what Burman describes as a “wide range” of business interests.

“Over the last 20 years, we’ve spent a lot of money and time growing our financial services businesses, because historically financial services in India was, sort of, government regulated. Most of the multinationals who wanted to come into India, had to have an Indian joint venture partner—insurance, banking, etc. So, we’ve done a host of financial services investments, all with joint venture partners,” he said.

But now, the company is focussing towards B2C businesses as well. Burman said, “The focus is really to be in B2C businesses; and recently, with the acquisition of Eveready Industries India, we are now trying to be players in the FMEG (fast moving electrical goods) industry”.

Not only diversification, the Burman family has also proved its mettle in turning around distressed businesses. They have turned around a number of businesses after picking up stakes in them. “As a family, we can’t compete with private equity funds, so we have to really do things which private equity funds can’t. That means sometimes getting into situations which are distressed,” Burman said.

“15 years ago, we acquired Punjab Tractors, which we turned around in three years. We eventually sold that to the Mahindra’s… Even with Eveready Industries, the Khaitan family was having problems—the business had been going downhill, so it needed capital infusion and a somewhat new professional team,” he explained.

Earlier this year, the Burman family raised their holding in Religare Enterprises to 25.18%, securing veto rights on special resolutions at the financial services company. Explaining the rationale behind trying to acquire a majority stake in the company, Burman said that it had been happening gradually. “In Religare, we were investors for the last 10 years. So, every time there was capital infusion needed, the management came to us. With the money we kept on putting in, eventually we ended up at 23-24%,” he said.

“It was just normal for us to take a call on whether this is going to be an asset which we want to own, or we should get out of.”

The Burman family has already got approval from the Competition Commission of India to increase its stake in the company. It is now awaiting approvals from markets regulator SEBI and banking regulator RBI. “These two should come in the next two to three months.”

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Published: 30 Mar 2024, 02:47 PM IST



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