Aditya Birla Group has decided to merge Aditya Birla Nuvo (ABF) with Grasim under a grand plan stitched by them to beef up shareholder value. The proposal is expected to simplify group cross-holdings and deliver value from a diverse range of businesses to shareholders. The combination of Nuvo and Grasim would create a company with a combined market cap of Rs 62,767 crore and a turnover of around Rs 59,766 crore with operating earnings of Rs 11,961 crore. While AB Nuvo will cease to exist after the merger. All financial services businesses, including insurance and payments bank, will be listed on stock exchanges.
Meanwhile’ Grasim April-June quarter results show net profit jumped 64 per cent. Total consolidated income also rose by nine per cent to Rs 9,088.55 crores quarter from Rs 8,365.70 crores during the same quarter in 2015-16. Expenses were higher at Rs 7,500.41 crores as against Rs 7, 272, 84 crores during the period under review.
The company will continue to focus on expanding the viscose staple fiber market in India by partnering with the textile value chain and better customer connect. Enriching the product mix through a larger share of specialty fiber in the portfolio will be yet another focus area. Grasim is part of the Aditya Birla Group. Its core businesses are viscose staple fiber and cement, contributing over 90 per cent of its revenues and operating profits. It is also present in chemicals.
The Aditya Birla Group is the world’s leading producer of VSF, commanding a 16 per cent global market share. Grasim has a global market share of eight per cent. in July 2004, Grasim acquired a majority stake and management control in UltraTech. One of the largest-of-its-kind in the cement sector, this acquisition catapulted Grasim to the top of the league in India. Subsequently Grasim demerged its cement business into UltraTech in July 2010. The merger has created the largest cement company in India, providing a platform that will help in pursuing aggressive growth going forward.
Last year, the $41-billion Aditya Birla Group consolidated its garments business into a single entity by carving out premium apparel maker Madura Garments Lifestyle Retail Co Ltd from AB Nuvo and merging it with Pantaloons Fashion and Retail India to create India's largest branded clothing company with annual sales of Rs 5,290 crores. With holdings in the group's financial services, telecom, fashion and lifestyle, and divisions of fertilisers, insulators, linen manufacturing and rayon, AB Nuvo so far was positioned as a diversified conglomerate within the group as well as an incubator of new businesses.
