Kumar Birla is interested to be a part of the ARC business and is awaiting approval of the RBI.
According to the Group Chairman, Mangalam Birla, Kumar’s plan is yet to be implemented and nothing has been finalized. Capital allocation is also taken into consideration.
Aditya Birla Group which has many verticals succeeded in listing the amalgamated financial services arm, Aditya Birla Capital today. The plan is to enter the asset reconstruction business as it may contribute towards business growth. The amalgamation was proclaimed last year and the listing follows with the increase in the shareholder value as high as Rs. 1.2 trillion. The estimated rise is twice the vertical’s market cap that was Rs. 60,000 crore. The situation would be much better before the merger took place.
Moving ahead, the Chairman said that the company desires to grab the opportunity because assets have accumulated in the economy and are arriving in the market. As transpired to the reporters, asset construction is an industry where the firm is seeking to grow. But, as mentioned earlier, the plan is in its nascent stage and has yet to be finalized.
Last year, the group came up with a composite scheme under the Aditya Birla Nuvo- Grasim Industries merger and the financial services undertaking. Post the announcement, both the companies were demerged and were known by the name, ‘Aditya Birla Capital’.
With regards to the entry, Chief executive of Aditya Birla, Ajay Srinivasan said that the company has forwarded an application to the RBI and is expecting regulatory approvals ahead within six months. Before procuring the assets which are in trouble, the company would be careful in observing the stressed assets.
When the question of seeking a foreign partner aroused, Birla stated that the group is speaking to someone. As for the payment bank venture, the Chairman spoke that post the Idea-Vodafone merger announcement, the activities would be managed by a joint venture between Vodafone and the group, Grasim and Idea. Idea and Vodafone would be associated with a single payment bank and two separate licenses would no longer be into existence. Either of the entities would be requested to surrender the license.
It would also be a time to chalk down a plan all over again. This is because now the company is supported by a partner. While both have come up with the initial plan, the firm would be working closely to draw a new plan.
In August 2016, Aditya Birla Group had planned to merge Grasim and ABNL and separate the financial service business into a unique entity. The scheme involved in the merger and transferring the financial service business was to Aditya Birla Group formerly known as ‘Aditya Birla Financial Services’.
As the meeting progressed, Birla happily said that every financial vertical supports to grow stronger. The team is experienced enough to benefit from the headroom and become even better in the forthcoming years.
As far as the logical reason is concerned, Mr. Birla said the entire programme pertaining to reconstruction would bring in value. For the first time, the group’s market cap has shot above USD 50 million.
Way back in July 2017, Wipro Chairman, Mr. Azim Premji had chosen 2.2 percent stake in Aditya Birla Capital. The stake was equivalent to somewhere around Rs. 703 crores.