Grasim-Nuvo merger gets clearance from NCLT
MUMBAI: The merger of Grasim Industries Ltd and Aditya Birla Nuvo Ltd will be completed by the beginning of the next quarter, a top executive at the Aditya Birla group said. Separately, the National Company Law Tribunal (NCLT) has approved the restructuring which was announced in August.
“We expect to complete the merger process of Grasim and Nuvo and the separate listing of Aditya Birla Financial Services by the end of the current quarter or latest by the beginning of next quarter” said Sushil Agarwal, group chief financial officer of Aditya Birla group, in an interview.
The union is expected to create an entity with revenue of ₹54,824 crore and a net profit of ₹4,076 crore as of March 31, 2017, said the Aditya Birla group.
“All of these businesses have capacity expansion plans to further strengthen their leadership position,” said Kumar Mangalam Birla, group chairman, in an emailed statement.
After the merger, Grasim will be the holding company for the group’s various businesses such as cement, chemicals and textiles. Nuvo was created as a vehicle for the group’s diversification into new areas like apparel, telecom and financial services. Many of these businesses have since reached a stage where they have been spun off, even listed in some cases (such as Idea Cellular Ltd, the group’s telecom company that is now merging with Vodafone India).
As part of the merger, Grasim will issue three shares for every 10 shares of Aditya Birla Nuvo held by investors. After the merger, Grasim investors will get seven shares of Aditya Birla Financial Services for every one equity share they own. This will ensure that Grasim and Aditya Birla Nuvo investors own 25% of Aditya Birla Financial Services.
Promoter holding in Grasim will rise to 38.8% from 31.3 % and will have 57.2% in the newlyformed financial services firm. Grasim will continue to hold 26% in the merged entity of Idea Cellular and Vodafone India, which was announced in March.