Grasim-Adiya Birla Nuvo merger approved, ABFSL listing soon

The Aditya Birla Group said it got the approval of the Company Law Tribunal for the merger of Aditya Birla Nuvo Ltd and Grasim industries Ltd and the listing of Aditya Birla Financial Services Ltd.

The approval was obtained from the Ahmedabad bench.

“The approved Scheme has been filed with the BSE and the NSE. It is expected to become effective during the second quarter of the financial year 2017-18,” it said.

The business are among the oldest and biggest in the diversified group, which is also the parent of Idea Cellular.

“This merger marks a milestone, bringing together, the financial strength provided by the debt free balance sheet of Grasim and the growth opportunities offered by ABNL’s financial services business,” said Kumar Mangalam Birla, Chairman, Aditya Birla Group.

“This combination of Grasim’s cash generating manufacturing businesses and ABNL’s high growth service sector businesses, is a win-win for the both the set of shareholders,” said Sushil Agarwal, Group CFO, Aditya Birla Group.

“Grasim commands the pole position in the VSF, Cement and Chlor-alkali businesses in India. All of these businesses have capacity expansion plans to further strengthen their leadership position,” Birla said.

He also said the listing of the financial services arm will give a boost to its growth.

“Having built a broad based portfolio and a leadership position in the sector, Aditya Birla Financial Services is well placed to grow rapidly, given the underpenetration of financial products and services in India. We will soon be listing the Financial Services business,” he said.

The Financial Services business of Aditya Birla Nuvo is among the top 5 fund managers in India.

Aditya Birla Financial Services has scaled up its assets under management at a CAGR of 23% to USD 38 billion and lending book at CAGR of 61% to USD 6 billion during past five years.

“Grasim’s strong parentage will enable financial services business to continue this growth momentum and enhance its competitive advantage. The listing of financial services business will further enhance the shareholder value,” the CFO said.

The merged entity, will have pro forma Consolidated Revenue from operations of Rs 54,824 Crore, EBITDA of Rs 12,259 Crore and a Net Profit after tax and minority interest of Rs 4,076 Crore for the year ended March 31, 2017.

The new company will be the No.1 Cement manufacturer in India, the No.1 VSF and Caustic Soda manufacturer in India and among the top five fund managers in India with funds under management of Rs. 246,759 Crore.

It will also be among the top 5 diversified private NBFCs in India with a lending book (including housing finance) of Rs. 38,839 Crore, and will also count among the top 5 private sector life insurers and top 4 asset management companies in India.