How billionaire investor R.K Damani fought ITC, insurers, banks over a cigarette
company & made ~25x returns by investing net Rupees ‘Zero’ over 20 yrs!?

The Story:
Back in Feb 2001, R.K D decided to launch a hostile bid to takeover VST

He already acquired 14-15% stake in VST via his investment company – Bright
Start Investments. R.K D aggressively cornered shares of VST for next few years

In those years, VST was trading at ₹85-₹90 per share, R.K D was willing to pay
premium of 26% for ₹112 a share for more 20% stake.

British American Tobacco (BAT) owns major stakes in both ITC (29%) & VST (32%)

BAT launched bids via ITC for 20% stake in VST at even 30% premium for ₹126 a

Damani upped his bid to ₹151 a share for more 30% stake

A chunk of 22% was controlled by banks & insurers who refused to give into R.K
D’s demands (probable political reasons), the attempt fell apart.

Today, R.K D owns 30% of VST and his total shares are valued at ~₹1,823 Cr!

VST Industries is among top 3 cigarette makers in India, sector's fastest
growing entity.

How R.K D paid effectively "Zero ₹" for these stakes acquired over 20 yrs?
- Only ‘dividends’ received by R.K D from VST till 2016 netted ~₹175 Cr and
total stake purchases costed him <₹65 Cr!

The Representative

Posted by Rony Saha on LinkedIn