The Board of Directors of Aditya Birla Capital Limited, in a decision made on March 11, has greenlit the amalgamation of its wholly-owned subsidiary, Aditya Birla Finance Ltd., with itself. The aim is to form a unified, large operating Non-Banking Financial Company (NBFC). This move is contingent upon regulatory approvals, as stated in an exchange notification by the company.
Upon the successful implementation of the scheme, Vishakha Mulye will step into the role of MD & CEO, while Rakesh Singh will take on the position of Executive Director and CEO (NBFC) in the amalgamated entity, as highlighted in the group’s official statement.
Following the completion of the amalgamation process, Aditya Birla Capital is set to transition from a holding company to an operational NBFC, which, as stated in the release, will pave the way for a unified, robust entity with enhanced financial capability and flexibility, facilitating direct access to capital.
“This strategic move will optimize capital utilization and allocation, empowering the Company to seize a larger share of opportunities efficiently,” the statement elaborated.
Aditya Birla Capital, overseeing assets under management valued at approximately Rs 4.1 lakh crore, is a listed, systemically important non-deposit taking core investment company. On the other hand, Aditya Birla Finance operates as a wholly-owned subsidiary and a non-deposit taking systemically important NBFC.
In response to the announcement, Kumar Mangalam Birla, Chairman of Aditya Birla Group, emphasized the significant growth of the group’s financial services sector, marking it as a key driver for the group’s expansion. He expressed confidence that the proposed merger would fortify Aditya Birla Capital’s financial foundation, enabling it to actively contribute to India’s economic progress while fulfilling its commitment to empower millions of Indians in achieving their financial goals.
According to Vishakha Mulye, CEO of Aditya Birla Capital, the proposed integration aligns with the group’s objective of enhancing customer service, optimizing capital utilization, streamlining operations, and fostering long-term value for stakeholders.
“At Aditya Birla Capital, our ‘One ABC, One P&L’ approach underscores our dedication to driving quality and profitable growth through the leverage of data, digital, and technology,” Mulye affirmed.
On March 11, Aditya Birla Capital’s stock on the Bombay Stock Exchange (BSE) concluded 1.1 percent lower at Rs 179.95. The rationale behind the proposed merger includes streamlining and simplifying the group structure, bolstering financial stability, potential enhancement of stakeholder value, and augmenting operational efficiency.
Furthermore, the amalgamation is expected to reduce the number of legal entities and simplify the group’s structure, leading to consolidation of operations and synergies, thereby fostering expansion and sustainable long-term growth, to the benefit of various stakeholders.
“The amalgamation will facilitate the seamless implementation of regulatory changes and a reduction in the complexity of legal and regulatory compliance. Additionally, it will ensure compliance with the Scale-based Regulations of the Reserve Bank of India, necessitating the mandatory listing of Aditya Birla Finance by September 30, 2025,” the company added.
