The Boards of Aditya Birla Capital Limited (ABCL) and Aditya Birla Finance (ABFL) on Monday approved the Scheme of Amalgamation (Scheme) of the two companies, to further create a large unified operating NBFC.
It is to be noted that while, ABCL is a listed systemically important non-deposit taking core investment company (NBFC-CIC), ABFL is a non-deposit taking systematically important NBFC (NBFC-ICC).
The company’s proposed amalgamation, which subject to regulatory and other approvals as required, has quite a few benefits including the one that the merger will result in reduction of legal entities and simplification of the group structure of Aditya Birla Capital.
“The proposed amalgamation will result in compliance with the Scale based Regulations of RBI which require mandatory listing of Aditya Birla Finance by September 30, 2025,” ABCL further said.
Post the merger, Vishakha Mulye, currently the CEO of ABCL, will take the role of MD & CEO and Rakesh Singh will serve as Executive Director and CEO (NBFC) of the amalgamated company, which again is subject to regulatory/statutory approvals as may be required.
Aditya Birla Capital will get converted from a holding company to an operating NBFC after the said amalgamation.
“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 maximise its share of opportunities by efficient utilisation and allocation of capital,” the company said in a press release.
The proposed merger also leaves a good chance 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,” ABCL said in a media statement.
Kumar Mangalam Birla, Chairman Aditya Birla Group, said that the merger will enable creation of a strong capital base for Aditya Birla Capital, while lauding the contribution of financial services sector in India’s growth.
“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,” he said.
According to the company, Aditya Birla Capital Limited, as of December 31, 2023, it manages aggregate assets under management of about Rs 4.1 lakh crore with a total lending AUM of Rs 1,15,139 crores and gross written premium of Rs 13,500 crore in Life and Health Insurance businesses.
Furthermore, it reported consolidated revenue of Rs 26,791 crore and a profit after tax of Rs 2,090 crores for 9M FY 2024.
