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10-August-2016

Aditya Birla Group is mulling a merger of Grasim and Aditya Birla Nuvo, followed by the hiving-off of the financial services business of AB Nuvo into a separate company.

As part of another round of corporate reorganisation, the company is contemplating a two-step restructuring which involves the merger of Grasim Industries and parts of Aditya Birla Nuvo (ABNL), which is likely to be followed by the hiving-off of the financial services business of ABNL viz. Aditya Birla Financial Services (ABFS) into a separate company. ABFS is currently a 100 per cent subsidiary of ABNL. The merger and the complete reorganisation could involve a number of steps.

A direct merger of ABNL and Grasim Industries and the simultaneous spinning-off of financial services business into a separate company is among the options, reports suggested. A final announcement could be expected as early as this week, reports added.

Grasim Industries two main businesses are viscose staple fibre (VSF) and cement. The company is set to announce Q1 June 2016 results on August 11. On consolidated basis, the company's net profit rose 37.4 per cent to Rs.696.09 crore on 13.7 per cent rise in net sales to Rs.9896.43 crore in Q4 March 2016 over Q4 March 2015.

ABNL is a business conglomerate. It commands leadership position across its financial services, telecom, linen and manufacturing businesses. On a consolidated basis, the company's net profit fell 1.5 per cent to Rs.326.69 crore on 9.2 per cent decline in net sales to Rs.6318.41 crore in Q4 March 2016 over Q4 March 2015.

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