Hikal Limited at the centre of the bitter battle between Baba Kalyani and Sugandha Hiremath

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The battle between Bharat Forge Chairman, Baba Kalyani and his sister Sugandha Hiremath has now taken a fresh turn after the latter’s family has filed a suit in a Pune court. They have now sought a division of the Kalyani family assets to cover eight listed companies and unlisted entities as well.

Last year, the Hiremath family moved the Bombay High Court on the grounds that Kalyani was not honouring a family arrangement to transfer all Hikal Limited shares to them. This is a listed entity, where the Baba Kalyani group holds 34% in the company, while the Hiremath family’ share is 34.84%. The other 31.15% is public shareholding.

So what is the relatively unknown Hikal Limited all about?

It is a diversified company manufacturing active pharmaceutical ingredients (APIs) apart from having a presence in crop protection and animal healthcare. For FY23, it had a total revenue of Rs 2,028 crore with a net profit of Rs 78 crore; for the previous fiscal, revenue was at Rs 1,948 crore and a net profit of Rs 161 crore.

A note put out by ICRA on Hikal early this month specifically brings up the issue of the dispute and Baba Kalyani resigning from his position as non-executive non-independent director from the board of Hikal. “Based on the discussion with Hikal’s management, ICRA understands that these developments have not had any adverse impact on the company’s operations or its banking arrangements. However, ICRA will continue to monitor the developments in this regard and its possible impact on the credit risk profile of the company, if any,” it stated.

According to the note, which is a reaffirmation of the company’s ratings, Hikal has undertaken a sizeable debt-funded capital expenditure (capex) of more than Rs. 700 crore over FY22-24 for multipurpose crop protection and animal healthcare facilities in addition to capacity enhancement in its pharmaceutical business.

“Since this capex was partly funded through long-term debt, the overall debt position of the company has remained elevated with total debt (including lease liability) of Rs. 773.5 crore as on September 30, 2023. Coupled with moderation in the company’s internal accruals, this has resulted in moderation of its coverage indicators,” it said. The animal healthcare facility was commissioned in December 2023, while the multipurpose crop protection facility will be commissioned over the next few quarters. “Thus, Hikal’s coverage metrics are expected to strengthen with improved financial performance of the base business and scale up of revenues from these new facilities.” The Hikal stock has, however, not stood out – on a year-to-date basis it is down 12% and in the last one year has dropped a little over 2%, when the Sensex has seen an increase of 28%.



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