Aditya Birla Capital Ltd, overseeing assets valued at Rs 4.1 lakh crore, has disclosed that its board of directors has given the green light for the merger of its wholly-owned subsidiary, Aditya Birla Finance Ltd, with the company. Aditya Birla Capital, a listed systemically important non-deposit-taking core investment company (NBFC-CIC), is merging with Aditya Birla Finance, a non-deposit-taking systematically important NBFC (NBFC-ICC).
The group stated that the planned merger would lead to a decrease in legal entities and streamline the group structure of Aditya Birla Capital. Following the completion of the merger, Aditya Birla Capital will transition from being a holding company to becoming an operational NBFC.
“This will create a unified large entity with a greater financial strength and flexibility enabling direct access to capital. This will also help the company to maximize its share of opportunities by efficient utilization and allocation of capital”, the company said in an exchange filing. “The proposed amalgamation will lead to consolidation of the businesses and operational synergies and resulting in the expansion and long-term sustainable growth. This will enhance value for various stakeholders of the company”, it said.
The amalgamation is expected to lead to the seamless implementation of policy changes and a reduction in the multiplicity of legal and regulatory compliances. “The proposed amalgamation will result in compliance with the Scale based Regulations of RBI (Reserve Bank of India) which require a mandatory listing of Aditya Birla Finance by September 30, 2025”, it said.
Kumar Mangalam Birla, Chairman, Aditya Birla Group said, “The financial services sector is the bedrock of India’s growth story. Our financial services business has scaled smartly to emerge as a core growth engine for the Aditya Birla Group. The proposed amalgamation will create a strong capital base for Aditya Birla Capital to grow its business and participate in India’s growth story, successfully fulfilling its commitment to empower the financial aspirations of millions of Indians”.
Upon the scheme's effectiveness, Vishakha Mulye is set to take on the role of Managing Director and Chief Executive Officer (CEO), while Rakesh Singh will assume the position of Executive Director and CEO (NBFC) in the merged entity, subject to regulatory/statutory approvals. As of December 31, 2023, Aditya Birla Capital oversees aggregate assets under management totaling approximately Rs 4.1 lakh crore, with a total lending asset under management of Rs 115,139 crore and gross written premium of Rs 13,500 crore in life and health insurance segments. For the nine months ending FY 2024, the company reported consolidated revenue amounting to Rs 26,791 crore and a profit after tax of Rs 2,090 crores. With a nationwide presence, the company operates 1,462 branches across all its business sectors as of December 31, 2023.