As I said before, these (the Grasim-Nuvo merger) are very complex transactions and the markets take time to understand them and hence, the initial negative reaction. Finally, today’s listing has proved that we were on the right track. It’s the end result that matters.
ABCL is the holding company of the group’s financial services business. Do you plan to list other companies like life insurance separately as many life insurance peers are getting good valuations?
We are excited about the financial services business, which was nurtured over the past 10 years by our team and has performed extremely well across its various verticals. Today’s listing has given us a currency but as of now we are not looking at listing other companies
Srinivasan: Despite demonetisation, the life insurance business alone grew at more than 30 per cent in the last financial year and in the first quarter of the current fiscal year. The NBFC (non-banking financial company) would continue to remain the largest business and is growing at 44 per cent per annum. The assets under management of our mutual fund business are well over Rs 2.5 lakh crore and the money is coming in.
As the base of our older businesses grows, the growth rate may slow but we will certainly do better than the industry. ABCL’s new businesses (such as housing finance) are set for a takeoff. The health insurance business will be another big pillar, going forward.
Would you be looking at a merger of your NBFC business with a bank on the lines of the IDFC-Shriram merger?
Birla: As I said before, the ship has sailed for us as far as banking licence is concerned. We are not looking at a banking licence via any back-door entry. We want to be compliant with all the Reserve Bank of India regulations. I don’t see any opportunities for us there.
With the Indian economy showing signs of a slowdown, what are the prospects of the group’s businesses in the coming quarters? Will your group companies be able to meet the growth targets?
Birla: Our businesses are not facing the brunt of any slowdown. Given the fact that we are leaders in almost all businesses, it always gives us an advantage. The leadership position insulates us from slow growth in the economy. Cement growth at one per cent is certainly slower than what we had anticipated. But going forward, higher spending on infrastructure by the government and incremental demand from rural India for house construction would be the growth triggers.