Is 'Vadilal' brand worth ₹1,000 cr? Investors differ

Several minority shareholders of Vadilal Industries Ltd have opposed the ice cream maker's plan to buy the eponymous trademark from a promoter entity for about ₹1,000 crore, hobbling the group's restructuring just as it emerges from a protracted family dispute.

- Nehal Chaliawala

Insisting that the valuation for the 'Vadilal' trademark is unrealistically high, some shareholders have written to the Securities and Exchange Board of India, the ministry of corporate affairs, and India's two leading bourses requesting intervention, said two people in the know.

They have also written to Vadilal's newly appointed independent directors to oppose the transaction. Mint has reviewed a copy of this letter.

The 'Vadilal' brand is a strategic element of the group's restructuring plan that was arrived at after the fourth generation of the promoter family reached a truce in March.

Three promoter entities, including Vadilal International Pvt. Ltd that owns the trademark, are to be merged under Vadilal Industries and the brand brought under its direct ownership.

The flagship company Vadilal Industries and fellow group company Vadilal Enterprises Ltd have a 15-year non-exclusive agreement with Vadilal International for brand usage, which expires in 2028.

Vadilal Industries manufactures ice cream and other frozen food products while Vadilal Enterprises markets and distributes them. Both the companies are publicly listed.

As part of the restructuring plan, audit firm Grant Thornton assessed the 'Vadilal' trademark to be worth ₹990 crore based on royalty payment projections. Separately, PricewaterhouseCoopers valued the brand at ₹974 crore.