Aditya Birla Unites for Large NBFC Creation

Aditya Birla Capital Limited (ABCL) and Aditya Birla Finance (ABFL), two entities of the Aditya Birla Group, have approved a scheme of amalgamation to create a large unified operating non-banking finance company (NBFC). The merger will result in a reduction of legal entities and simplification of the group structure of Aditya Birla Capital, which is currently a listed systemically important non-deposit taking core investment company (NBFC-CIC). Aditya Birla Finance is a wholly owned subsidiary and a non-deposit taking systematically important NBFC (NBFC-ICC).

Benefits of the merger

The proposed amalgamation will have several benefits for the stakeholders of both the companies. Some of the benefits are:

• The merger will enable Aditya Birla Capital to comply with the scale-based regulations of the Reserve Bank of India (RBI), which require mandatory listing of Aditya Birla Finance by September 30, 2025. As a result, Aditya Birla Capital will get converted from a holding company to an operating NBFC after the amalgamation.
• The merger 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. The amalgamated company will have direct access to capital and greater financial strength and flexibility.
• The merger will also help in achieving operational synergies and efficiencies, as well as consolidation of the businesses under one entity. This will enhance value for various stakeholders of the company and drive expansion and long-term sustainable growth.

Leadership changes

As part of the proposed amalgamation, Vishakha Mulye, currently the CEO of ABCL, will take the role of MD & CEO, and Rakesh Singh will serve as Executive Director and CEO (NBFC) of the amalgamated company, subject to regulatory/statutory approvals as may be required.

Chairman’s statement

Kumar Mangalam Birla, Chairman Aditya Birla Group, said that the merger will enable creation of a strong capital base for Aditya Birla Capital, while lauding the contribution of financial services sector in India’s growth.

“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,” he said.

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