MUMBAI – Aditya Birla Capital on Tuesday said the company has invested Rs 750 crore in its wholly-owned subsidiary Aditya Birla Finance by subscribing to the share on a rights basis.
“ABCL is making the investment in ABFL to meet its growth and funding requirements and improve its leverage ratio,” Aditya Birla Capital said in a release.
Aditya Birla Capital was allotted shares on rights basis on Tuesday, the company said.
Aditya Birla Finance’s assets under management (AUM) as of June 30, stood at Rs 85,891 crore, up 49% from the year-ago period. The fund infusion by the Aditya Birla Group company comes just a day after Bajaj Finance said its board will meet on October 5 to consider raising funds through preferential issue of shares or a qualified institutional placement.
Bajaj Finance hasn’t mentioned the amount it plans to raise, but analysts believe that the fundraising exercise could be worth around $1 billion.
While one would say that this fundraising is to bolster growth, Bajaj Finance may be building a warchest to fight the competition that is likely to emanate from the entry of Jio Financial Services.
On similar heels, Aditya Birla Capital could be beefing up the balance sheet to strengthen its position in the fast growing non-bank finance industry ahead of Jio’s entry.
In the last quarter, Aditya Birla Capital had raised Rs 3,000 crore via preferential allotment of shares to promoter group and a QIP.
In trade on Tuesday, shares of Aditya Birla Capital ended 1.1% down at Rs 174.55 on the National Stock Exchange.
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