Aditya Birla Capital to merge with Aditya Birla Finance

The board of directors of Aditya Birla Capital and Aditya Birla Finance, its wholly-owned subsidiary, on Monday approved the scheme of amalgamation of Aditya Birla Finance with Aditya Birla Capital. The amalgamation is subject to regulatory approvals.

Aditya Birla Capital is a listed systemically important non-deposit-taking core investment company. Aditya Birla Finance, a wholly owned subsidiary of the company, is a non-deposit-taking systemically important NBFC.

The proposed amalgamation will result in compliance with the scale-based Regulations of the Reserve Bank of India (RBI) which require the mandatory listing of Aditya Birla Finance by September 30, 2025.

The proposed amalgamation will result in rationalisation and simplification of group structure, Aditya Birla Capital says in a regulatory filing. It will result in reduction of legal entities and simplification of the group structure of Aditya Birla Capital, the filing says.

Post completion of the amalgamation, Aditya Birla Capital will get converted from a holding company to an operating NBFC. “This will create a unified large entity with a greater financial strength and flexibility enabling direct access to capital. This will also help the company to maximise its share of opportunities by efficient utilisation and allocation of capital,” it says.

“The proposed amalgamation will lead to consolidation of the businesses and operational synergies and resulting in the expansion and long-term sustainable growth. This will enhance value for various stakeholders of the company,” the release says.

The proposed amalgamation will lead to seamless implementation of policy changes and reduction in the multiplicity of legal and regulatory compliances, it adds.

“The financial services sector is the bedrock of India’s growth story. Our 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,” says Kumar Mangalam Birla, chairman of Aditya Birla Group.

Upon the scheme becoming effective, Vishakha Mulye will assume the role as MD & CEO and Rakesh Singh will assume the role as executive director and CEO (NBFC) of the amalgamated company.

“At 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. The proposed amalgamation will help us to serve our customers better, achieve efficient utilization of capital, enhance operational efficiencies and holds the potential to create long-term value for all our stakeholders,” says Vishakha Mulye, CEO, Aditya Birla Capital.

As of December 31, 2023, Aditya Birla Capital manages aggregate assets under management of about ₹4.1 lakh crore with a total lending AUM of ₹1,15,139 crore and gross written premium of ₹13,500 crore in Life and health insurance businesses.