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Pallonji had eye on Forbes realty

Arijit De & Reeba Zachariah

Trust a jeweller to know his diamonds. Construction baron Pallonji Mistry, who now has management control of textile and engineering company Forbes Gokak, says one of the biggest attractions of the Tata group's stake in Forbes Gokak was the diversified company's huge real-estate assets.

Mistry, in his first interview to the press in five years, told Business Standard: "Forbes Gokak has a good asset value and we would like to unlock the value in these assets."

The group sees great opportunities in developing the huge real-estate properties of Forbes Gokak and in selling these at a later date. Citing an example, Mistry said: "The company has a huge property in the center of Baroda city. Remember, construction is our core business."

Even the sick Swadeshi Mills holds a lot of property within Mumbai. Mistry feels the problems faced by the textile mill can be resolved. "Even there, we can make money because of the land it owns," he said.

However, this does not mean Mistry is not serious about Forbes Gokak's textile business. "Textiles will be the main focus and we will invest whatever it takes to develop the business. We will also develop brands because that is where the margins are the highest," he added.

Forbes Gokak will continue to be run by the professional management, and the Mistrys will not have any say in the day-to-day management of the company. Mistry's younger son, Cyrus, also a director of Tata Power, would soon join the Forbes Gokak board, Mistry said.

Currently, the group holds around 70 per cent in the company through Sterling Investment Corporation, Shapoorji Pallonji & Company and Cyrus Investments. The new promoters do not have any plans to delist the company from the bourses even though the Shapoorji Pallonji group has traditionally been closely held.

The Forbes Gokak group, which has been undertaking a restructuring exercise, has shut its Vadodara spinning unit as it was totally uneconomical, given the rising cost of labour, power and raw materials.

In the optics business, the company has been looking for options to put to remunerative use the property and plant of this division at Aurangabad.

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