Foundation to sell Gharda stake for funding R&D

Dr. R. A. Mashelkar’s Gharda Medical & Advanced Technologies Foundation (GMATF) is reportedly planning to will sell its 57.5% in agrochemicals maker, Gharda Chemicals, and use the proceeds to build a pipeline of innovative products and technologies for the chemical and metal industry.

The not-for-profit organisation, which already has many patents including for extracting titanium from a waste material generated during production of aluminium from bauxite, has appointed US boutique bank Martywolf to scout for a buyer. Going by other similar transactions, bankers said, the debt-free company could rake in a valuation of more than 14 times its operating profit. Gharda Chemicals posted an operating profit of Rs. 683.16-crore on revenue of Rs. 2,608-crore in fiscal 2018. Based on that, the valuation could be more than Rs. 9,500-crore.

Around 10% of the Gharda Chemicals is owned by its employees and the rest by minority shareholders. The stake sale is said to be aimed at ensuring the sustainability of the company and helping the foundation ramp up development and research work. Gharda Chemicals’ technocrat founder, 90-year-old Keki Gharda, does not have successor in his family to run the business.

The sale could help GMATF ramp up R&D work on various technologies much faster without taking outside financial help. Currently funding is restricted to dividends from Gharda Chemicals. Even after the stake sale, the foundation is said to be keen on supporting the technological needs of the company to maintain itself as a technology-based company.