A brand that built its reputation on being an owner's pride, may ironically, have new owners very soon. Mirc Electronics, owners of the Onida brand and the second largest Indian consumer electronics firm, is in the midst of a ownership recast.
There is talk that one of the promoters, Sonu Mirchandani, wants to sell his stake. While the company denies of any such move, the buzz refuses to die down.
According to sources, JM Morgan Stanley has already got the mandate to find a buyer for Mirchandani's stake. Sonu Mirchandani however denied that he had decided to part ways with his family. "These are baseless rumours. We (the promoters — Gulu, Vijay and Sonu) have been associated with the company for decades and we continue to be together,"Sonu Mirchandani told TOI.
But a source said, this stake sale may be the first of many. "It all depends upon the valuation. If one of them gets a good price, the others may also look at selling their interest in the company."
Started in 1981, Mirc Electronics is promoted by Gulu Mirchandani, its chairman, his brother-in-law Vijay Mansukhani and elder brother Sonu Mirchandani. Though their shareholdings could not be ascertained, promoters hold around 54% stake through Guviso Holdings Ltd. While Vijay is a director on the board of Mirc, Sonu is not.
If the sale happens, it is likely to trigger the takeover code. As per Sebi rules, an open offer is triggered if the acquirer crosses the 15% stake limit. Sonu is believed to hold around 15% stake in Mirc Electronics although when asked about his holding, he declined to disclose it.
Mirc with its Onida brand has gone through many struggles to establish itself in the market. When it started off in the 80s, it faced pressures as the Rajiv Gandhi government had opened up imports and a spate of foreign brands entered the Indian market.
The late Manu Chhabria's Jumbo group seized the opportunity by flooding the market with Sony products.
The big turn in Mirc's fortunes happened with the launch of the controversial advertising campaign with the tagline, ‘Neighbour's Envy, Owner's Pride.'
The face of the devil became the face of the company, the campaign entered the consumer's consciousness and sales zoomed.
Onida not only gained ground over Videocon and BPL but also against some of the global giants that entered the Indian market.
Later in the mid-nineties, the family seperated and Sonu took over the Delhi factory. He looked after the operations of the North and East regions through Monica Electronics while Gulu handled West and south through Mirc.
While Monica and its subsidiary Onida Savak were into a host of durable products like washing machines, TV and audio, Mirc restricted itself to small screen.
Both sold products under the Onida name. Following a deal with Monica, in the early 2000s, Mirc in a bid to reduce its dependence on TVs, forayed into new categories like washing machines and air conditioners. Today, the entire consumer durable business vests with Mirc Electronics.
Another source points out the reason for exploring various options could be the changing dynamics in the consumer durable industry with increased pressure on margins.
With players like Reliance, Pantaloons and Tatas entering retail, balance of pricing power is expected to shift from manufacturers to organised trade.
http://timesofindia.indiatimes.com/articleshow/1967620.cms
:SugarwareZ-229:
There is talk that one of the promoters, Sonu Mirchandani, wants to sell his stake. While the company denies of any such move, the buzz refuses to die down.
According to sources, JM Morgan Stanley has already got the mandate to find a buyer for Mirchandani's stake. Sonu Mirchandani however denied that he had decided to part ways with his family. "These are baseless rumours. We (the promoters — Gulu, Vijay and Sonu) have been associated with the company for decades and we continue to be together,"Sonu Mirchandani told TOI.
But a source said, this stake sale may be the first of many. "It all depends upon the valuation. If one of them gets a good price, the others may also look at selling their interest in the company."
Started in 1981, Mirc Electronics is promoted by Gulu Mirchandani, its chairman, his brother-in-law Vijay Mansukhani and elder brother Sonu Mirchandani. Though their shareholdings could not be ascertained, promoters hold around 54% stake through Guviso Holdings Ltd. While Vijay is a director on the board of Mirc, Sonu is not.
If the sale happens, it is likely to trigger the takeover code. As per Sebi rules, an open offer is triggered if the acquirer crosses the 15% stake limit. Sonu is believed to hold around 15% stake in Mirc Electronics although when asked about his holding, he declined to disclose it.
Mirc with its Onida brand has gone through many struggles to establish itself in the market. When it started off in the 80s, it faced pressures as the Rajiv Gandhi government had opened up imports and a spate of foreign brands entered the Indian market.
The late Manu Chhabria's Jumbo group seized the opportunity by flooding the market with Sony products.
The big turn in Mirc's fortunes happened with the launch of the controversial advertising campaign with the tagline, ‘Neighbour's Envy, Owner's Pride.'
The face of the devil became the face of the company, the campaign entered the consumer's consciousness and sales zoomed.
Onida not only gained ground over Videocon and BPL but also against some of the global giants that entered the Indian market.
Later in the mid-nineties, the family seperated and Sonu took over the Delhi factory. He looked after the operations of the North and East regions through Monica Electronics while Gulu handled West and south through Mirc.
While Monica and its subsidiary Onida Savak were into a host of durable products like washing machines, TV and audio, Mirc restricted itself to small screen.
Both sold products under the Onida name. Following a deal with Monica, in the early 2000s, Mirc in a bid to reduce its dependence on TVs, forayed into new categories like washing machines and air conditioners. Today, the entire consumer durable business vests with Mirc Electronics.
Another source points out the reason for exploring various options could be the changing dynamics in the consumer durable industry with increased pressure on margins.
With players like Reliance, Pantaloons and Tatas entering retail, balance of pricing power is expected to shift from manufacturers to organised trade.
http://timesofindia.indiatimes.com/articleshow/1967620.cms
:SugarwareZ-229: