Birla Corporation slips 9 per cent after HC bans Harsh Vardhan from group cos
Published On: Monday, September 21, 2020 | By: Team KnowMyStock
Shares of Birla Corporation (Birla Corp) slipped 9 per cent to Rs 662 on the BSE in the intra-day trade on Monday after the Calcutta High Court (HC) on Friday restrained Harsh Vardhan Lodha from holding any office in M P Birla group entities. With this Lodha, who has fought for almost a decade to retain control of cement maker Birla Corp and the MP Birla group companies, will be removed with immediate effect from all company positions. The court’s ruling is a significant victory for the extended Birla family, which is contesting the legal validity of Priyamvada Birla’s Will, according to a Mint report. The two sides have been locked in a battle for 18 years over the Will in which Priyamvada Birla bequeathed her estate and control of the now Rs 25,000 crore MP Birla empire to her Chartered Accountant RS Lodha and his second son Harsh Vardhan Lodha.
According to market experts, although the order is likely to be challenged, it creates uncertainty among investors about the company's management. Concerns are that it may impact the company's expansion plans.
The company is looking to increase its capacity by 25% over the next 12 months. Currently, more than 50% of the company's volumes are derived from central India. The company also plans to expand its Kundanganj grinding unit by 1.2 million tonnes, however, until COVID-led demand uncertainty is out of the way, this has been put on hold to conserve cash.
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