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Fizz is back for Aditya Birla Group, says KM Birla as group prepares to invest over $2 billion

Aditya Birla Group has unveiled plans to invest in about $2.4 billion across businesses in the past few weeks, as according to Kumar Mangalam Birla 'the vaccines roll out, and governments and central banks provide stimulus, India will be among economies to rise above pre-pandemic levels'.

January 28, 2021 / 11:43 PM IST
Kumar Mangalam Birla, Chairman of Aditya Birla Group

Kumar Mangalam Birla, Chairman of Aditya Birla Group

With India slowly recovering from the economic shock of the COVID-19 pandemic, Indian business tycoon Kumar Mangalam Birla is all set to revive investments.

His Aditya Birla Group has unveiled plans to invest in about $2.4 billion across businesses in the past few weeks as according to Birla “the vaccines roll out, and governments and central banks provide stimulus, India will be among economies to rise above pre-pandemic levels”.

“Economists were throwing many letters at us - V, W, X - all sorts of things to describe the possible economic recovery. For us, it’s pretty much been a V,” said Birla in a Bloomberg Television interview on January 27.

“It’s been a very sharp recovery, a very huge surprise for all of us,” he added.

India has been able to restore activity faster than many economies: Gita Gopinath, IMF Chief Economist

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COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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Though the Indian economy is set to contract 7.7 percent in FY21, Birla’s expectations for a rebound stem from the fact that the Reserve Bank of India expects the Indian economy to sharply rebound going ahead, as some of the country' key indicators, including manufacturing, demand for loans and consumer purchases, showed signs of strengthening.

Barring a second wave, the “worst is behind us” with India kicking off a vaccination drive against COVID-19, the RBI said in its January bulletin.

Aditya Birla Group, which employs over 120,000 employees across 36 countries, earns more than 50 percent of its revenues from overseas.

Birla, however, said the recovery of the Indian economy will be "little patchy", adding that China may surpass European Union this year.

He added that the US, Japan and some countries in Europe are unlikely to bounce back to pre-pandemic levels this year.

Grasim Industries, Birla’s flagship firm, said last week that it was entering the paints business and plans to invest Rs 50 billion ($685 million) over three years.

UltraTech Cement said in December that it will spend Rs 54.77 billion to increase capacity by 12.8 million tons annually while the group’s metals unit, Hindalco Industries Ltd will spend Rs 70 billion to double its aluminum downstream capacity over the next few years.

“We are looking to grow very large in these companies,” he said, adding that he was open to growing them organically or through acquisitions. “For Aditya Birla Group, the fizz is back.”
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