The Hindu : Business : Stanford keen to pick up stake in GM Pens

Online edition of India's National Newspaper
Tuesday, May 16, 2006

Business

Business

Stanford keen to pick up stake in GM Pens

Special Correspondent

CHENNAI: Stanford Group of the U.S., the owners of Reynolds brand of writing instruments, is keen to pick up an equity stake in G. M. Pens International Pvt. Ltd.

G. M. Pens has for two decades been the exclusive licensee in India of Reynolds of France, which was taken over by the Stanford Group some time ago.

GM signs up Sachin

Addressing a press conference here on Monday to announce the signing of cricketer Sachin Tendulkar as a brand ambassador for three years, K. Mohamed Meeran, founder and Managing Director of G. M. Pens, said Stanford had indeed expressed its desire for a stake in the company. The company had not yet taken a call on this, he added.

Stanford's keenness on financial participation in G. M. Pens stemmed from the fact that writing instruments from India were bombarding the Chinese market. In the light of this, "they (Stanford) are re-looking at India,'' he said.

The closely held G. M. Pens has an equity base of Rs. 5 crore.

Fielding a volley of questions, Mr. Meeran said Stanford had already a plant near here to make tips for exclusive supply to G. M. Pens. More than making writing instruments, their selling could prove a daunting task in India. G. M. Pens had perfected selling expertise over the last 20 years, he said.

To a question, he said the company could think of listing its shares once a decision on giving stake to Staford was taken. The allotment of stake to Stanford could happen in two to three years, he clarified.

This is the first time that the Rs. 175-crore company is coming out in public to announce its game plan. The company has two plants — one each in Pondicherry and Chennai — and employs over 300 professionals.

R&D spend

Vishwadeep Kuila, Vice-President (sales and marketing), G. M. Pens, said the company earmarked 8-10 per cent of its revenue to marketing spend. Roughly five of per cent of its revenue went into research and development, he added.

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