Aditya Birla Capital To List On Stock Exchanges Today
Aditya Birla Capital to list on Friday. Here’s all you need to know.
Aditya Birla Capital, the financial services business of the Aditya Birla Group, will list on stock exchanges on Friday as part of the group’s restructuring.
The company has 220.1 crore total outstanding shares, of which more than 27 percent or 60 crore are held by public shareholders. The rest are with promoters, including Grasim Industries Ltd. and the Birla family. Its shares have been placed in the trade-to-trade segment, which does not allow intraday trading to curb speculation. Which means, investors will have to either give or take delivery of the shares sold or bought.
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Aditya Birla Capital was hived off after the merger of Aditya Birla Nuvo Ltd. and Grasim Industries Ltd. in a rejig to create a combined entity with a revenue of about Rs 59,000 crore. Besides unlocking value by listing the financial services businesses separately, the Kumar Mangalam Birla-led group seeks to consolidate fast-growing businesses and simplify the structure by removing cross-holding.
The group’s financial services business spans corporate lending to asset management and retail broking. The non-banking financial services business contributes 72 percent of the profit before taxes of Aditya Birla Capital. Here’s a snapshot of its key businesses.
- The NBFC business grew at a compounded annual growth rate of 44 percent in the last four years. Brokerage Investec expects a 22 percent CAGR over the next three years for the segment. It grew at 31 percent in the quarter ended June.
- Birla Sun Life Asset Management Company Ltd. is fourth largest in India with Rs 2.1 lakh crore worth of assets under management. Its AUM rose 38 percent in the first quarter and the domestic market share stands at 10.7 percent.
- Birla Sun Life Insurance’s business grew at 35 percent in the quarter ended June, after declining over the last seven years.
- In its recent investor presentation, Aditya Birla Capital said affordable housing, digital lending and asset reconstruction will be the key growth opportunities.
Valuation Estimates
PremjiInvest, the family office of Wipro’s billionaire chairman Azim Premji, picked up 2.2 percent stake in Aditya Birla Capital at a post-money valuation of Rs 32,000 crore or Rs 145 per share.
Axis Capital, in its report dated July 17, expects a valuation of at least Rs 33,800 crore, or about Rs 154 apiece, and expects it can go up to Rs 42,000 crore or close to Rs 190 per share.