Oriental Aromatics to buy more in Camphor

Mumbai: Promoters of the country’s largest exporter of specialty aroma chemicals, Camphor and Allied Products Ltd, have agreed to sell their 32.6% stake in the company to closely held Oriental Aromatics Ltd.

The exact worth of the stake sale could not be ascertained, but an institutional investor in the company said the deal values Camphor at Rs80-90 crore, much above the company’s current market capitalization of about Rs60 crore, based on Friday’s closing stock price.

The stake sale, once announced, could lead to an open offer for another 20% in Camphor, said the investor, who did not want to be identified. Under Indian laws, an acquisition of more than 15% stake requires an open offer for another 20%.

A Camphor executive confirmed the development, but refused to divulge details or the value. Mumbai-headquartered Oriental could not be contacted for comment.

Camphor’s stock has rallied this week, gaining 21.4% in four trading sessions on the Bombay Stock Exchange (BSE).

At the stock’s closing price of Rs117.30 on Friday, the stake sale would be worth about Rs20 crore.

Settlement in Camphor shares are on a trade-to-trade basis. The company reported net sales of Rs114.81 crore for fiscal 2007.

Oriental Aromatics earlier had a 2.6% stake in Camphor, according to its shareholding pattern available on BSE.

The main promoters own a 27.27% stake in Camphor through a holding company. Among the promoters, Harshul Dalal, Nina Dalal, Stuti Dalal and Punya Dalal each own more than 1% stake.

Institutional investors with more than 1% stake include Life Insurance Corp. of India with more than 6% stake, United India Insurance Co. Ltd with 1.3% and SB Securities Pvt. Ltd with 1.1% holding.

Camphor has manufacturing facilities in Bareilly (Uttar Pradesh) and Nandesari (Gujarat). Its product range includes fragrance chemicals such as amberone, pharmaceutical products such as camphor and terpineols, aromatic chemicals such as citwanene, as well as industrial chemicals such as alpha pinene.

These products are chiefly exported to Europe, the UK and the US for use in flavours, fragrances, pharmaceuticals, soaps, cosmetics, tyres, paints and varnishes.

Oriental, founded in 1955 by the Bodani family, creates flavors and fragrances for both domestic and international brands, for products as different as tea and perfume.