March 13, 2023
New Delhi, India
Aditya Birla Capital and Aditya Birla Finance Unite to Form a Powerhouse NBFC
Scheme of Amalgamation Paves Way for a Unified Operating NBFC
Aditya Birla Capital Limited (ABCL) and Aditya Birla Finance (ABFL) have set the stage for a significant transformation in the non-banking financial sector with their recent announcement of a Scheme of Amalgamation. The move, approved by the boards of both entities, aims to create a formidable unified operating NBFC, subject to regulatory approvals.
Key Highlights:
Purpose of Amalgamation: The proposed merger seeks to streamline operations and simplify the group structure of Aditya Birla Capital, while also ensuring compliance with regulatory requirements, including the Scale based Regulations of RBI. This move is expected to lead to the mandatory listing of Aditya Birla Finance by September 30, 2025.
Leadership Transition: Following the completion of the merger, Vishakha Mulye, the current CEO of ABCL, is slated to assume the role of MD & CEO of the amalgamated entity. Additionally, Rakesh Singh is set to serve as Executive Director and CEO (NBFC), pending regulatory/statutory approvals.
Operational Enhancements: The amalgamation presents an opportunity for consolidation of businesses and operational synergies, paving the way for expanded capabilities and sustainable long-term growth. This strategic alignment is expected to enhance value for stakeholders and maximize opportunities through efficient capital allocation.
Strengthening Financial Base: Kumar Mangalam Birla, Chairman of Aditya Birla Group, emphasized the significance of the merger in fortifying the capital base of Aditya Birla Capital. He underscored the role of the financial services sector in driving India’s growth trajectory and affirmed the commitment to empowering the financial aspirations of millions.
Financial Snapshot: As of December 31, 2023, Aditya Birla Capital Limited disclosed that it had amassed aggregate assets under management totaling around Rs 4.1 lakh crore. The total lending AUM stood at Rs 1,15,139 crores, with gross written premium of Rs 13,500 crore in Life and Health Insurance businesses. Notably, the company recorded consolidated revenue of Rs 26,791 crore and a profit after tax of Rs 2,090 crores for 9M FY 2024.
Conclusion:
The amalgamation of Aditya Birla Capital and Aditya Birla Finance heralds a new era of strength and resilience in the non-banking financial sector. With a shared vision of growth and innovation, the unified entity is poised to leverage its enhanced capabilities to navigate evolving market dynamics and contribute significantly to India’s economic landscape. As regulatory approvals progress, stakeholders eagerly anticipate the realization of the synergistic potential of this strategic merger.
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