Ruia Group bids to acquire Birla Tyres

BTL – the business known as Birla Tyres prior to its demerger from Kesoram Industries in 2020 – is insolvent, and a Corporate Insolvency Resolution Process is now reaching the final stage. Two companies are in the running to acquire the tyre maker. One is the Ruia Group, former owner of the Dunlop brand in India; the other is the Dalmia Bharat Group, a conglomerate not currently active in the tyre industry.

Kolkata-based newspaper The Telegraph reports that the Ruia Group’s bid is led by Sakchi Ruia, daughter of group founder Pawan K. Ruia and manager of Singapore-based firm Dunlop Tyres Pte Ltd. According to The Telegraph, sources within Ruia Group say Sakchi Ruia “plans to revive the company if she gets it,” however the newspaper notes that the “odds will be stacked against the Ruia Group given its chequered history of failed attempts to revive sick units such as Dunlop and Jessop.”

In India, a company is considered sick if its accumulated losses at the end of a financial year equal or exceed its entire net worth, and this was the fate awaiting Dunlop India after Pawan Ruia acquired the business in 2005. Comments made by government minister Purnendu Basu that “Ruia was only interested in Dunlop’s real estate” and that “no meaningful production has ever happened at Dunlop’s Sahaganj factory” sum up a tale of production stoppages and labour issues that resulted in the Dunlop tyre brand disappearing in India. Ralson India acquired rights to the brand in 2021 with the intention of producing premium segment Dunlop tyres for the powered two- and three-wheeler segments.

From Pirelli to insolvency

Established in 1991 as part of Kesoram Industries, Birla Tyres initially collaborated with Pirelli and built up a product portfolio that included tyres for two- and three-wheeled vehicles, light commercial vehicle tyres, cross-ply and radial truck and bus tyres, agricultural and off-highway tyres. The company’s main plant is in the city of Balasore and used to employ up to 3,000 people. Birla sold its second, more modern plant in Haridwar to JK Tyre in 2016 to combat rising debt.

Birla Tyres has incurred losses since the 2019-20 financial year and became BTL to protect Kesoram Industries from these losses. In May 2022 creditor SRF Ltd. filed a case against BTL with the National Company Law Tribunal.