Vijay Mallya's resistance against giving away control in Mangalore Chemicals and Fertilizers (MCF) has caused Saroj Poddar's exit from the takeover drama in MCF. But that is just the end of one episode as the battle between Mallya and heavyweight suitor Deepak Fertilisers is likely to escalate to a new level as the latter is still keen to acquire what is said to be one of the last jewels in the liquor baron's crown.
"We went into the MCF battle with our plans intact and our intent remains to acquire the company as it will provide a great foray into the urea business. Priority is still to gain control," said a senior official of the Pune-based company, which has over 24 per cent stake in MCF.
On July 3, Deepak Fertilisers' Shailesh Mehta bought a 24.46 per cent stake in MCF at Rs 61.75 apiece, totalling Rs 180 crore via open market. Many termed it overvalued price. Though Mallya is maintaining that he has got the ability to buy back shares from Poddar and also Deepak Fertilisers, a fierce battle is on the cards between Mehta and Mallya.
MCF is the first solid acquisition attempt made by Mehta after he took over as the chairman of the company. Under Mehta's new styled leadership, Deepak has also readied its own expansion plan at its Taloja unit worth investment of Rs 360 crore.
While the market had termed Mehta's move as overrated, gains for Mehta from MCF are more than handsome. MCF has the capacity to produce 380,000 tonnes of urea annually, which can be scaled up further. This is said to be one of the best vehicles for any company in the sector to gain a firm foothold in the urea business, indicated a fertilser analyst. The prospects, too, of the urea business in India are bright as India's annual requirement for urea is at around 30 million tonne, but domestic industry is capable of meeting only 22 million tonne of this demand.