The Board of Directors of Aditya Birla Capital Limited on March 11 approved amalgamation of Aditya Birla Finance Ltd., its wholly-owned subsidiary with itself to "create a large unified operating NBFC". The amalgamation is subject to regulatory approvals, the company said in an exchange notification.
Upon the scheme becoming effective, Vishakha Mulye shall assume the role as MD & CEO and Rakesh Singh will assume the role as Executive Director and CEO (NBFC) of the amalgamated company, the group said in the statement.
Post completion of the amalgamation, Aditya Birla Capital will get converted from a holding company to an operating non-banking finance company (NBFC), the company said in the release. Also, this will create a unified large entity with a greater financial strength and flexibility enabling direct access to capital, the company said.
"This will also help the Company to maximise its share of opportunities by efficient utilisation andallocation of capital," it said.
Aditya Birla Capital, which oversees assets under management worth about Rs 4.1 lakh crore is a listed, systemically important non-deposit taking core investment company while Aditya Birla Finance is a wholly owned subsidiary and a non-deposit taking systemically important NBFC.
Commenting on the announcement, Kumar Mangalam Birla, Chairman Aditya Birla Group said the group's 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,” Birla said.
According to Vishakha Mulye, CEO, Aditya Birla Capital, the proposed amalgamation will help the group serve customers better, achieve efficient utilisation of capital, enhance operational efficiencies and holds the potential to create long-term value for all our stakeholders.
"Aditya Birla Capital, we follow a ‘One ABC, One P&L’ approach and are committed to drive quality and profitable growth by harnessing the power of data, digital and technology,” Mulye said.
On March 11, Aditya Birla Capital's scrip on BSE closed 1.1 percent lower at Rs 179.95. As per the company, the rationale of the proposed amalgamation include rationalisation and simplification of group structure, improved financial stability, likely stakeholder value enhancement and increased operational efficiency.
The proposed amalgamation will result in reduction of legal entities and simplification of the group structure of Aditya Birla Capital, the group said in the release.
Further, the proposed amalgamation will lead to consolidation of the businesses and operational synergies and resulting in the expansion and long-term sustainable growth, enhancing the value for various stakeholders of the Company, the company added.
"The proposed amalgamation will lead to seamless implementation of policy changes and reduction in the multiplicity of legal and regulatory compliances. 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," the company said.
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