1:1 bonus, Preference share redemption by Mar 31, 3rd ... - Marico

Media Release dated March 15 th 2004
Marico announces -
1:1 bonus, Preference share redemption by Mar 31, 3rd Interim 25 %
The Board of Directors of Marico Industries Limited (Marico) in its meeting held today announced :
• an issue of bonus equity shares in the ratio of 1:1 aggregating Rs. 29 Crore,
• a third interim dividend of 25 % on the equity capital of Rs. 29 Crore and
• early redemption of 8% Bonus Redeemable Preference Shares (RePS) of Rs. 29 Crore.
Elaborating these shareholder friendly measures, Mr. Harsh Mariwala, Chairman and Managing Director, said:
“Marico has been delivering consistent financial performance for the past 17 quarters now. It has made strategic
shifts in its product portfolio in order to drive growth up the value chain. The new product/business turnover has
been rising, now at to about 20% of total. Many prototypes are currently running and will be scaled up based on
progress against action standards. The medium to long term outlook on the business is Positive.
Against this backdrop, Marico is confident of both, servicing the larger equity arising from the bonus and
continuing its progressive Distribution Policy, while exploring other innovative avenues of distribution to
shareholders. This would strengthen Marico’s endeavor towards shareholder value enhancement, to complement
the pivotal area of consistent and sustainable success of its FMCG Brands.”
Marico has been declaring dividends every quarter for the past 11 consecutive quarters. The interim dividend
declared today is the 12 th consecutive dividend declared by Marico. The aggregate dividends declared during
the last 3 years (FY 02 to FY 04) have been Rs. 60 Crore (including the dividend of 8% on the RePS), about Rs. 200
per share. This is in addition to the equity Bonus issue (Rs. 14.5 Crore) in FY 03 and Bonus Redeemable Preference
Shares issue (Rs. 29 Crore) in FY 03.
The proposed bonus will ensure that more equity shares are available in the market for trading. The last equity
bonus issue by Marico in April 2002 had led to an increase in the floating stock (non-promoter shareholding) from
about 50 Lac shares to about 1 Crore shares. Improved liquidity contributed to higher trading and interest in the
scrip. Since March 31, 2003, Marico’s market capitalisation has increased by about 87% from about Rs. 425 Crore
to about Rs. 800 Crore, while the average number of daily trades on BSE + NSE has moved from 70 to 260.
Marico had in September 2002 issued 8% Redeemable Preference Shares aggregating Rs. 29 Crore as a Bonus to
its equity shareholders. This innovative financial tool was aimed at distributing profits to shareholders in a tax
efficient manner, while providing flexibility to the company through a deferred payout.
These RePS are due for redemption on or before October 1, 2005. The terms of the issue provided that the Board
of Directors or any committee constituted by the Board would have the right to redeem the RePS on a date earlier
than October 1, 2005. Directionally the company has been holding a “war chest” in the region of Rs 25 Crore. The
Company has a very comfortable liquidity position well beyond this war chest. With limited requirements for
investments foreseen for the business in the near future it makes sense to redeem the REPS earlier than
scheduled.
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The record date for both, the redemption of RePS as also the third interim dividend is 23rd March 2004. The
Bonus Equity Shares would be allotted after shareholders’ approval at the Extraordinary General Meeting (EGM)
convened on April 21,2004, the record date for which will be soon after the shareholder approval.
Some forward looking statements on projections, estimates, expectations, outlook etc. have been included in this Release to help
readers get a better comprehension of the business in terms of facts and prospects. Actual results may, however, differ
materially from those stated on account of factors such as changes in government regulations, tax regimes, economic
developments within India and the countries within which the Company conducts its business, exchange rate and interest rate
movements, impact of competing products and their pricing, product demand and supply constraints.
Marico’s Investor Relations Efforts are co-ordinated by
• Milind Sarwate, Chief Financial Officer and B. Ramakrishna, General Manager (Corp. Finance).
For further information / clarification, Marico may be contacted on:
• Tel: (91-22) 2644 37 11 Fax no.: 2641 01 06;
• E-mail: milinvrel@maricoindia.net; Website: www.maricoindia.com;
Other related Websites are www.healthykhana.com; www.kayaclinic.com; www.sundari.com
Marico is a leading Indian Group operating in Consumer Products, Skin Care Services and Global Ayurvedics businesses.
Marico’s FY 2002-03 Turnover was about Rs.7755 million (USD 163 Million) from 12 brands - Parachute, Saffola, Sweekar, Hair
& Care, Shanti, Mediker, Oil of Malabar, Mealmaker, Sil, Revive, Kaya and Sundari. In Consumer Products, Marico’s brands and
their extensions occupy leadership positions with significant market shares in all categories- Coconut Oil, Hair Oils, Anti-lice
Treatment, Refined Edible Oils, Fabric Care etc. Marico has entered the Skin Care segment through Kaya Skin Clinics in India
and Global Ayurvedics segment through Sundari range of Ayurvedic skin care products in the US.
Marico has leveraged its four core sources of competitive advantage viz. Branding, Distribution, Cost Management and
Innovation to set up a fast growing franchise of new products and businesses – their share in turnover has moved up sharply
from 3% in FY00 to 18% in H1FY04.
Every month, over 4.6 crore consumer packs from Marico reach approximately 10 crore consumers in about 1.8 crore
households, through a widespread distribution network of about 17 lac outlets in India. The Overseas Sales franchise of Marico’s
Consumer Products is one of the largest amongst Indian Companies.
Marico’s shares are listed under the scrip name “ MARICO INDUS” on BSE (Code 531642) and “MARICOIND” on NSE (Code
31642).
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