Aditya Birla Capital has held discussions to shortlist 4 investment banks for its next fund-raising exercise via the QIP (qualified institutional placement) route as the firm looks to scale up aggressively under CEO Vishakha Mulye who was roped in a year back, multiple industry sources with knowledge of the development told Moneycontrol.
On May 11, 2023, Aditya Birla Capital said its board had approved fundraising of up to Rs 3,000 crore through equity or debt routes in one or more tranches. To be sure, refractory player RHI Magnesita India has raised Rs 900 crores in the biggest QIP so far this year.
"The firm has initiated discussions with Jefferies, ICICI Securities, BofA Securities and Axis Capital for the proposed QIP. Under Mulye, the company has expanded across multiple segments and is now eyeing the next stage of growth, especially in the lending and insurance verticals," said one of the persons above.
A second person confirmed the above syndicate of I-banks and said the QIP in the works could be launched in the next three to four months depending on market conditions.
"This is a classic growth capital deal," the person added.
" Though these are early days, and the quantum has not been finalized, Aditya Birla Capital may look to raise around Rs 2,000 crore via the QIP," said a third person.
A fourth person told Moneycontrol that over and above the fundraising from the market through the QIP, additional participation from the promoter group entities of Aditya Birla Capital via the preferential allotment route could not be ruled out.
All four persons above spoke to Moneycontrol on the condition of anonymity.
An email query sent to Aditya Birla Capital remained unanswered at the time of publishing this article.
Moneycontrol is also awaiting responses from Jefferies, BofA Securities and Axis Capital and has sent reminders. This article will be updated as soon as we hear from the parties. ICICI Securities declined to comment.
Also Read: Aditya Birla Capital: Strong business growth and improving profitability
Aditya Birla Capital's stock price has risen by 23 percent in the last six months on the back of improved profitability and business momentum.
In the financial year 2022-23, its consolidated profit surged 181 percent to Rs 4,796 crore and revenue from operations increased by 23.3 percent to Rs 27,416 crore compared to the previous fiscal.
Also Read: Aditya Birla Capital shares fall 4% despite sharp increase in Q4 profitability
According to the intimation to the stock exchanges by Aditya Birla Capital on May 11 2023, "The proceeds from the aforesaid proposed fundraising are intended to be utilized for meeting funding requirements and growth objectives of the Company and its businesses including but not limited to supporting growth in lending and insurance businesses, strengthening digital offerings, meeting capital adequacy and solvency related requirements and other business and general corporate purposes.
In September 2019, Aditya Birla Capital raised Rs 2,100 crore through preferential allotment to investors like Advent International, Premji Invest and promoter group entities.
Recently at a virtual press meet, CEO Mulye said the company, which had already announced the sale of its insurance broking arm, would continue to evaluate various stake sale options for other subsidiaries.
Aditya Birla Finance, Aditya Birla Housing Finance, Aditya Birla Sun Life Asset Management Co, and Aditya Birla Sun Life Insurance Company are among the key arms.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
