Aditya Birla Capital Limited ("ABCL" or "the Company"), is the holding company of the financial services businesses of the Aditya Birla Group.
ABCL has received approval from its Board of Directors to raise primary equity capital of Rs 2,100 crores through a preferential allotment to certain marquee investors and the Promoter / Promoter Group entities. The equity capital will be raised at Rs 100 per share, which is at a 10.62% premium to the ABCL closing price of Rs 90.40 as of 4th September 2019, and is subject to customary closing conditions, including regulatory and shareholder approvals. The extraordinary general meeting of shareholders ("EoGM") is scheduled for October 5, 2019. The primary equity capital will be raised through an investment of:
- Rs 1,000 crores by an entity affiliated with Advent International ("Advent"),
- Rs 100 crores by an entity affiliated with Premji Invest, and
- Rs 1,000 crores in aggregate by the Promoter, Grasim Industries Limited (Rs 770 crores) and by Promoter Group entities (Rs 230 crores). This is in proportion of the Promoter's and Promoter Group entities' inter-se shareholding in ABCL. The subscription price of Rs 100 per share is at a premium of 5.79% over the floor price as per SEBI ICDR Regulations.
ABCL has entered into definitive share subscription agreements with Jomei Investments Limited, an affiliate of Advent International ("Advent"), one of the largest and most experienced global private equity investors, and PI Opportunities Fund, an affiliate of Premji Invest. Upon the completion of the issuance, Advent, through its affiliate, will hold approximately 4.15% of ABCL's equity capital, while Premji Invest, through its affiliates will hold approximately 4.11% of ABCL's equity capital. The Promoter and Promoter Group entities will hold about 70.54% in ABCL upon the completion of the issuance. The funds raised will be utilised to fund the future growth of the Company's businesses as well as to repay outstanding debt.
ABCL, through its subsidiaries, has created a large and high quality financial services franchise with a track record of consistent execution. In the current market environment, this transaction is testament to the quality and size of business created by ABCL, and its consistent and solid performance over the years. With aggregate AAUM (across asset management and insurance businesses) of over Rs 3 lakh crores, a lending book of Rs 62,000 crores across its NBFC and Housing Finance businesses, and gross written premium of over 8,000 crores, ABCL, through its subsidiaries, is a significant fund manager, lender and insurer in India.
ABCL, through its subsidiaries, enjoys a strong presence across NBFC, asset management, life insurance, housing finance, health insurance, general insurance broking, wealth management, equity, currency and commodity broking, pension fund management and asset reconstruction businesses.
ABCL Chief Executive Ajay Srinivasan, said: "This investment reflects not only the commitment of the Aditya Birla Group to our financial services business, but also the partnership and recognition of a marquee global investor such as Advent International and the continued commitment and conviction of Premji Invest. We recognize and value the trust being placed on us and are committed to remaining focused on creating value for all our shareholders."
Advent International Managing Director and Head of India Shweta Jalan, said: "Advent International's long-term commitment to India remains robust and today, we believe that there is an exciting opportunity to invest into the financial services sector. ABCL is a leading financial services company in India, operating across four key verticals - insurance, lending, asset management and advisory. We are excited about investing in the strong platform created by ABCL, which offers a unique and diversified model to serve the Indian financial services consumer."
Premji Invest Managing Partner & CIO T. K. Kurien said: "Premji Invest is pleased to enhance and deepen its existing partnership with ABCL, a company that has remained focused on creating a unique franchise through a profitable and scalable business model. We are confident about the value that the Company is creating for all stakeholders."
Advent International has been investing in India since 2007 and opened its Mumbai office in 2009. Over the past 12 years, the firm has deployed more than $1 billion in several companies with headquarters or operations in India across sectors such as financial services, consumer products, healthcare, industrial and technology. Advent also has significant investment experience in the business and financial services sector. In the past 28 years, the firm has invested more than $9 billion in over 75 companies in the sector worldwide.
Shares of Aditya Birla Capital Ltd was last trading in BSE at Rs.90.4 as compared to the previous close of Rs. 87.55. The total number of shares traded during the day was 253573 in over 2467 trades.
The stock hit an intraday high of Rs. 91.35 and intraday low of 88.35. The net turnover during the day was Rs. 22757686.